Deputy Leonard was in possession but is not resuming. Deputy Hegarty has half an hour.
Estimates, 1980. - Vote 3: Department of the Taoiseach (Resumed).
Debate resumed on the following motion:
That a sum not exceeding £3,638,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1980, for the salaries and expenses of the Department of the Taoiseach, and for payment of certain grants-in-aid.
—(The Taoiseach).
On a point of order——
Let us see if we can have some order first.
On a point of order, I was offering as well.
Sorry, that is my mistake, it is Labour's turn. Deputy Myra Barry spoke last. Deputy Horgan.
This is an important adjournment debate. We are more or less over the halfway mark in the life of this Dáil. It is the first adjournment debate in which we have to scrutinise the activities and performance of a new Fianna Fáil administration. Of course the degree to which it is a new administration and the degree to which it is merely a cosmeticised phoenix-like rebirth of the former administration has yet to be seen. For my part I do not see as many distinctions between the economic policy pursued by this administration and the one immediately preceding it as certainly supporters of the present Taoiseach within his own party had been led to believe would be the case.
The Taoiseach is walking on a political and economic tightrope. The problem about it is that it is sagging in the middle and fraying dangerously at either end. The problem might not be so serious were there anything like a decent safety net, but we all know what kind of safety net stretches underneath the tightrope on which the Taoiseach is walking. The only effective safety net that is there is probably the International Monetary Fund. We all know what will happen if and when the tightrope finally collapses sending the Taoiseach and his economic policies plunging towards the ground. The International Monetary Fund will step in to bail them out at the cost of severe chastisement for his sins against the gospel of Keynes and other economic crimes. Of course the cost of those failures will be paid for not necessarily by the Taoiseach and his Government but by other people within the Community. It would not be so serious if the Taoiseach on this tightrope were only carrying on his shoulders some other acrobat, but he is carrying not just one other acrobat, he is carrying not merely the 14 other acrobats that make up the present Fianna Fáil Cabinet; he is carrying in some respect the economy and the entire future of the country. That is why it is so alarming that the political and economic policies he is pursuing carry the risk they do. That is why it is so alarming that their failure would have the dire results it gives us on this side of the House no pleasure to predict.
In his opening speech the Taoiseach made considerable mileage of the question of inflation and gave us several different aspects of the problem. For example, he noted that basically the acceleration in inflation rates was due to the high increase in oil prices in 1979 and 1980. Earlier on he had pointed to the fact that we were a very open economy and imported a great deal of price increase from other countries. We did not hear much about our being a small, open economy from Fianna Fáil in 1975, 1976 or 1977. We did not hear from Fianna Fáil in those years much about the volume of price rises that were imported, because it suited them to lay the blame at that time for what was happening solely on the shoulders of the administration of the day. Now that they are in power they are grabbing for an excuse which they denied that administration at that time, not alone that but they are grabbing at the same excuse at a time when the external economic factors to which they refer are still substantially less serious than they were during the period about which I have been talking.
At the same time there is something of a conflict in what the Taoiseach has said because he suggested in his speech, following a review of the Common Market summit, that our own actions and behaviour and the measures we take will determine our success in overcoming our difficulties. The House is owed an explanation by the Taoiseach as to which of these two lines of argument he regards as definitive. Are all our problems self-inflicted, to be cured solely by our actions, or are they all imported from outside and are we powerless to cope with them, especially in regard to inflation? Any honest politician or economist would have to admit that there is some truth in the analysis which indicates that we import some of our problems, whether we want to or not, but we cannot put up tarrif barriers against certain kinds of inflation. However, the Taoiseach cannot blame inflation as he did in his speech solely on imported factors and particularly on the increase in the price of oil.
If one considers the situation in West Germany in 1974-75 and to some extent today, we can see that there is not a necessary correlation between a very substantial increase in the price of oil, even in such a country which uses huge amounts of imported oil, and the rate of inflation there. During the 1974-76 oil price crisis the rate of inflation in West Germany certainly did not leap as it did in other countries. While we must accept that the price of oil is an element in inflation, we cannot lay all the blame at its door. A very substantial amount of inflation has been generated by this Government by their applying a stimulus to the economy when it was moving very nicely and they have now run out of economic steam at a time when it is important to get the engine moving again. They cannot deny the fact of inflation however much they try to explain it away.
I will single out one item in the whole inflation index because it indicates more than anything else where the difficulties are and where the price is being paid for the Government's economic policies. In 1977 the average working man with an average family who bought an average house on a first mortgage of about 80 per cent from a building society had to work for 15½ hours every week to meet his weekly mortgage repayments. In 1980 a man in exactly the same position will have to work for 22 hours to pay the weekly mortgage bill. We have more or less achieved the 40-hour week but under Fianna Fáil we have also reached a situation where more than half of those 40 hours must be worked to pay for that most basic of human necessities, a roof over one's head.
One of the key groups in the next election, one of the largest in terms of voting strength and certainly one of the groups most prone to exercising their franchise, will be those young married people between the ages of 25 and 35. It is these young married people, many of them on their first mortgages, who will be particularly hit by the increase in the cost of housing in real terms, that is, in terms of the number of hours which must be worked to pay for the roof over their head. They will also be hit in many other ways. If the wife has been working it is almost certain that her job will be one of the first to go in the economic recession which is upon us, regardless of the fact that many couples simply must have two incomes in order to pay the mortgage on their modest house. They will also suffer because their young children will be going to schools which are not as well maintained, cleaned or heated as in the past. The present Government's economic policy has its costs, but they are not paid by the people who impose that policy or in whose interests it is imposed. The costs are paid by the rising tide of unemployed, by the poor who see their real standard of living whittled away, and by the children who have no votes.
I was particularly interested in the Taoiseach's suggestion that one of the main problems in relation to the economy and to job creation was the level of wage settlements. In speaking about the job creation problem he suggested two major factors contributing to our lack of competitiveness, namely, our unrealistic pay settlements and intransigent attitudes to restrictive practices and productivity. We should not be fooled by this glib use of the word "unrealistic". We must be on our guard when anybody, especially in Government, uses a word like "reality" because reality is not always as Government would like it to be. When a Government use the word "reality" we must ask who is defining it and whose interests are being served by the definition. We have to guard against the assumption that all Government interventions, whether in negotiations about income levels or anything else, are in some sense disinterested with only the welfare of the nation at heart. Governments are composed of politicians and politicians represent interests. The interests represented by the elected representatives on the Government side of the House are sectional interests in this community and that fact should be made perfectly clear. When Government politicians define "reality" they do so in the interests of those sections of the community which they represent. They do not represent, as a Fianna Fáil Deputy laughably claimed during a recent debate, all sections of the community. Like it or not, the interests of some sections of the community conflict with the interests of other sections, and to attempt to persuade people that in one great umbrella organisation called "Fianna Fáil" all these conflicting interests can be reconciled is absurdity itself.
The Taoiseach has to be asked, in relation to what he has said about the standard of living, income increases and reality, what is unrealistic in a situation where a man or woman who works for a wage expects to be able to purchase reasonably the same amount of goods and services next year as were obtained this year. I would not be so naive as to suggest that inflation could be reduced to zero. Of course oil price rises and other such things must be paid for, but it is certainly unrealistic to expect working people to embark on a process in which the amount of work they have to do and the amount of productivity they have to deliver has to expand indefinitely in order to maintain their living standards even at their present level. Whatever Euclid may say, work time is not infinitely divisible, and neither are wages.
There is a general imputation in what the Taoiseach told us that belts have to be tightened all around. That is all very well if there are the same number of spare notches in everyone's belt. Of course there are not. Some people are in a much better position to tighten their belt than others. Under this Government people with least flexibility in this regard are being asked to tighten their belts to the greatest possible extent.
Hear, hear. That is the whole point.
The Government are keen on a new national understanding. I remember the first adjournment debate on which I spoke in this House. I suggested to the trade union movement that when they were negotiating new national agreements they should, in addition to looking for pay elements, make an attempt to get structural changes in our society which would defend the interests of the people they represent. The then Minister for Foreign Affairs, Deputy O'Kennedy, who is now Minister for Finance, came hot foot into the Dáil at the end of my speech and made a speech of his own in which he accused me of fomenting class war. It is ironic to look back on the last national understanding in the light of that contribution by him. It is also ironic to look at the Taoiseach's and Government's obvious desire for a new national understanding in the light of the way they have reneged on so many of the commitments in the old one.
The two basic things we need to say in relation to the adjournment debate on the economy are, firstly, when the axe falls it must not fall on those who cannot afford to bear its edge but on those who can. We have seen no sign from the Government that this is the objective of their policy and it is not the way their policy is turning out in practice. Secondly, we must have a more radical look at our economic policy and job creation programme that this Government or any Government in the recent past have had. We must have a look at the way in which huge amounts of public money are pumped into private enterprise with a little or no accountability. We must look at the way in which our public sector enterprises are starved of funds or are required to invest productive capital, as far as they have it, outside the country so as not to compete with domestic private vested interests. We all know how many jobs have been created by private industry in the last couple of years, but we do not know how much profit is being exported by way of capital or how much is being used lining bank accounts in pockets and how little is being put back into business to create more jobs.
When we on these benches talk about the public sector we do not mean adding to the army of, in the popular mind, faceless civil servants who are reputed—very often wrongly—to work for very high wages. We talk about the need for public sector investment in productive jobs, industrial jobs and in jobs that create real wealth in our community. It is already being done despite the heavy hand of Government. Anyone who doubts that only has to read the recently published official report of the activities of the State sector and the effect of the heavy hand of Government on initiative in the public area. It can be done and it should be done.
What I missed most in the Taoiseach's speech was any sense of the future. He seems to be unaware, except in a brief reference to the electronics industry and its role in the Ireland of today, of the fact that between one-third and one-half of our work force will be affected by the micro-chip revolution within the next decade or so. There are signs already in society at large and in many of its institutions that the implications of the micro-chip revolution, which is the third industrial revolution to hit us in a couple of centuries, will mean that to have a job in the future may be a luxury. There are signs that society is gearing itself to divide its members into drones and workers. In the past the lucky ones were those who got the better jobs but in the future the lucky ones may well be those who get jobs of any description. If this revolution is not to create a society of drones and workers, if its benefits are to be harnessed for the benefit of the entire community and not just multi-nationals, who are now apparently responsible for over half the new jobs created in this State since 1977, if we are to have a society in which the benefits of production are spread globally and not concentrated in a few hands and pockets, we will have to look at Government policy in relation to the pattern of industrial investment, incentives offered to private industry with little or no sense of accountability and at the importance of providing a service industry which can be supported by a healthy, public sector and by progressive taxation both on incomes and institutions to help pay for the costs of these services.
I was in the North last weekend and I feel bound to inform the House that the Taoiseach's name was not exactly on everyone's lips. The problems they have in the North are savage and severe. There are security and economic problems and one tends to compound the other, as it does on this side of the Border although, to a less visible extent. What will solve the Northern problem eventually are deeds rather than words. We can talk all we like but until we have a society here that people in the North not only feel they would like to join but can perceive themselves as having an economic interest in joining, then we are spitting in the wind. In 1933 a predecessor of the present Taoiseach, Deputy de Valera, said:
The only policy for abolishing partition that I can see is for us, in this part of Ireland, to use such freedom as we can secure to get for the people in this part of Ireland such conditions as will make the people in the other part of Ireland wish to belong to this part.
It might have been expressed in a more sophisticated fashion but—
It was one of his lucid intervals.
It was most definitely one of his lucid intervals and one which can be set against the economic policies pursued by the Government and ask them: to what degree do those economic policies match up to the dictum of one of the fathers of Irish republicanism in the modern age?
I should like to make a special plea for education. Deputies on all sides of the House will have got in the last couple of weeks a letter, suspiciously similar in character for persons with such high educational and social standing, relating to the problems of financing in education, particularly in the primary school sector. It is here that the cuts are being most severely felt. As Professor Tussing warned more than a year ago, the consequences of failure to plan for social development is that when the cuts come they will fall hardest on those least equipped to bear them. They are falling at present on the children in the schools. That is partly because the cut-backs are taking place in education and it is partly because the Government have constantly relegated social expenditure to second place. It is part of the fundamental belief of this party that social expenditure and industrial investment must go hand in hand and cannot be put in a tandem arrangement in which one is forced to rise behind the other. There are more young people here than ever before. Many of them who might have emigrated in the fifties or sixties are now staying here because they believe, with justice, that the country owes them a living. I doubt very much that many of them voted for Fianna Fáil in the last election, despite the propaganda. I believe many of their parents did in the misguided belief that Fianna Fáil would provide jobs for their sons and daughters. I hope that that group of people in particular will become radicalised in the years ahead and will realise that under Fianna Fáil their future cannot be guaranteed. I hope they will realise that under Fianna Fáil the future is not what it used to be.
As the Taoiseach said when opening this debate yesterday morning, the development of the agricultural sector is a top priority for the Government. It is only a few weeks ago that the House dealt with the Estimates for my Department and that gave me an opportunity to discuss the agricultural situation generally as well as the various measures and schemes operated for the benefit of the farming community. On this occasion I want to look at the wider aspects of the Government's agricultural policy and to consider the major issues which now confront us.
One of the basic aims of our agricultural policy is to ensure that the agricultural sector makes the largest possible contribution to the social and economic progress of the nation. This would of itself not only ensure the prosperity of the farming community but at the same time integrate even more fully the rural and urban sectors. To achieve this aim requires the maximum co-operation between all concerned—farmers, agricultural organisations, processors, marketing organisations and the Government. We are determined to see that everything possible will be done to realise this co-operation in full. In the next week or two the Taoiseach and I will be meeting the leaders of all the main agricultural organisations to review the overall situation and to see what further steps could be taken to accelerate progress in agriculture. Meetings such as this, together with those which the Taoiseach and I have already had with the leaders of some of the organisations, help to ensure that every potentially worthwhile development is examined at the highest level.
Our immediate objectives are to encourage the maximum efficiency in the production, processing and marketing of farm products, to see that we get the best return from the markets for farm products and to ensure that we realise the full benefits of the CAP. These objectives are interdependent and together are designed to maintain the maximum number of people on the land in economic security and with the highest standards of living that can be achieved.
Progress in the agricultural sector depends, of course, not only on the measures taken by the Government but also upon the extent to which the farming community respond to the opportunities which exist or can be created. Progress also depends on the efficiency with which agriculture is serviced by the industries supplying farm requirements or processing farm produce.
The Government have a wide range of measures to provide the means for improved efficiency at farm level. For all the criticism against it, the Farm Modernisation Scheme has proved a tremendous success. Since 1975, £300 million has been invested in modernising Irish farms, with the aid of grants from Exchequer and EEC funds of £100 million. Almost 100,000 farmers are now participating in the scheme. Most of the investment has been in land improvement, building and machinery—investments that were badly needed in order that we can compete effectively on the European market.
The lean years of the fifties and sixties had left many of our farms severely under-capitalised. In order to expand output and improve productivity, marginal land had to be improved, farm buildings brought up to modern standards and modern labour saving machinery installed. While many farmers still have their investment programme to complete, we now have a very substantial number of modern efficient production units. The investments under the Farm Modernisation Scheme have given a return that compares favourably with the return from investment in other sectors. Investment in land improvement is increasing still further. particularly with the improved rates of grant provided under the Western Drainage Scheme.
In the light of some of the pessimistic and depressing comments that have appeared in the media, it may surprise some Deputies to learn that approvals for new investment projects this year show a significant rise as compared with the corresponding period of last year. In the first quarter of 1980 over 3,700 approvals have been issued for land improvement works representing an investment of about £9 million and an area of around 18,000 hectares as against 2,500 approvals representing an investment of about £6.5 million and an area of 14,000 hectares in the same period last year.
Similarly in the case of farm buildings nearly 8,500 approvals have issued in the first quarter of this year representing an investment of over £37 million as against around 6,000 approvals issued in the same period last year representing an investment of about £26 million. This 50 per cent increase in planned investment shows that there has been no loss of confidence by the farming community in the future of the agriculture industry. Indeed it represents a positive attitude and one which I have detected from farmers myself in recent times.
At the present time Irish agriculture is being affected by high interest rates which, coupled with inflation, are operating to discourage some farmers from undertaking the kind of investment that development of our agricultural industry requires. In other cases farmers are unable to get enough working capital to operate their enterprises at the most effective level. The Government have been considering this situation and I am glad to be able to announce that it has been decided to assist the provision of funds to agriculture at attractive interest rates.
The total sum that will be made available under the new scheme is £50 million. This will be raised abroad and will be made available at an attractive rate. Depending on the precise terms on which the money is borrowed abroad, this rate should be in the range of 13 per cent to 14 per cent as compared with rates in the neighbourhood of 20 per cent which apply to similar type loans at present.
Full details of the new scheme are being worked out in consultation with the ACC and will be announced shortly. The general intention is that the loans should be for expansion purposes. The main types envisaged are: (1) Loans for financing increases in breeding stocks; (2) Loans for such purposes as working capital to young farmers taking over holdings for the first time; (3) Loans to provide working capital in cases where a farmer's own funds have been seriously depleted because of investments already made, and; (4) Loans to provide working capital for small and medium sized agricultural business, probably on similar lines to those proposed for industry.
I should like to stress again that the aim is to assist expansion. It is not intended that the loans should be used simply to enable a farmer to switch from existing borrowing at the higher current rates. They should represent genuine additional capital. A maximum loan of £25,000 per farmer is being envisaged and the farmer must be operating to a plan drawn up in consultation with his agricultural adviser. No loan will be provided to assist the purchase of land directly or indirectly or, as I have said, merely to replace or restructure existing borrowing. Expansion of breeding stock, the provision of working capital and land improvement will be given priority.
This new scheme is yet another demonstration of the Government's efforts to assist agriculture and stimulate production. I am confident that it will be welcomed by farmers and that it will prove most useful in helping to alleviate the difficulties arising from the current high cost of credit.
There is a large volume of investment currently being undertaken on farms—and we have a very large number of farmers now completing their investment programmes. It is important that all new investments should be part of a carefully planned development programme. This applies as much to the smaller farmer as to the large one. Every farmer is entitled to avail in full of the farm advisory service to help in drawing up a farm plan. The advisory service is now at sufficient strength that any farmer can get advice on a person to person basis, or as members of a small group.
From 1 July, the agricultural advisory service, as well as agricultural education and training, will be the responsibility of the newly established An Chomhairle Oiliúna Talmhaiochta (ACOT) which will be taking over the work on these matters which has hitherto been discharged by my Department and the County Committees of Agriculture. When the new body is fully operational, Irish farmers will have available to them a highly modern system of advice, training and education, designed to meet their needs and enable them to realise the full potential of their farms.
It is clear that on a large proportion of Irish farms considerably higher incomes could be earned through better farm management programmes. What is required is that standards already reached by the efficient farmer be attained by those who, for one reason or another, are not using their resources as effectively. This does not mean that the farmers must work longer hours, but rather than the system of labour utilisation must be rationalised and planned, in the knowledge that the farm work force is the most valuable resource on the farm. It is here that the advice and help of ACOT can have the greatest benefit.
At the individual farm level, the best prospects for increasing farm incomes lie in a substantial improvement in the productivity of the basic resources of labour, land and capital which are employed in farm production. It is essential that full recognition be given to the fact that incomes earned by the individual farmer are primarily a consequence of the business policy followed on his own farm. In other words, farm incomes are basically the responsibility of the farmer and the result of his decisions in the use he makes of the resources available to him. The Government provide grants to assist farmers improve their efficiency and the Common Agricultural Policy gives a guarantee on markets and prices, but it is the farmer who brings his own skills and effort into play in determining the use he makes of his resources and the income he generates for himself and his family.
The need for higher efficiency in agriculture applies not only at the production stage, but also at the processing and marketing stages. The development of processing and marketing efficiency has been directly helped by grants to processors and by the establishment of State-sponsored marketing agencies. In connection with marketing, I should like to express once again the Government's support for the concept of centralised export marketing. We are a small country and by international standards the quantities which we have to export are small. If these small quantities are exported by a large number of competing exporters, the result is that our products realise less than they otherwise might and at the end of the line the losses from the haphazard unco-ordinated approach fall on the farmer. In the case of dairy products. Bord Bainne has been a great success as a marketing organisation. The position in the case of pigmeat has been less satisfactory. This week's High Court decision in the matter of levies by the Pigs and Bacon Commission has been awaited with anxiety by all interests in the bacon industry. Now that the court has given its decision, we should all get our heads together to see how best to mend our fences and decide where we go from here. I will be inviting all interests in the bacon industry to have talks with me about the future, and I would hope that we will succeed in finding sufficient common ground among the various interests to enable us to decide on the steps needed for further development.
A special effort is called for to raise the level of processing intensity in the agriculture-based industries and should help to provide the additional employment that the country needs. Such an effort requires not only the identification and development of products which are labour-intensive and have a high value-added content, but also the development of a corresponding marketing capacity. The increasing industrial processing of agricultural commodities has highlighted the importance of consistent quality of farm output on a year-round basis, so that output meets processing requirements.
This problem is of particular significance in the dairying industry. If that industry is to maximise its contribution to the realisation of the national objective of increased job creation, a growing proportion of milk output will have to be diverted to the manufacture of products with greater employment content. The IDA strategy for the industry aims at diversifying milk output into products with greater employment potential and for which market opportunities are likely to be available. As a result of this strategy, the number of new jobs in the dairy processing industry could be increased significantly.
In the cattle sector, the gap between the price levels for cattle in other EEC member states and those in Ireland shows that there is scope for further increases in our prices. Export marketing and transport costs account for part of this gap but it can be narrowed appreciably by improvements in the quality of our cattle. The beef carcase classification scheme which has recently come into operation is aimed at improving the quality of our cattle by creating an awareness of the financial benefits obtainable in the market for quality beef. IDA assistance to the beef industry has the objective of improving efficiency and increasing production in the growth areas of boning-out of carcases into vacuum-packed and portion-controlled cuts and processing into frozen and canned products. Such diversification would give rise to higher employment and value-added for any given volume of meat input. Improvement of efficiency is, of course, desirable in itself but it should also lead to improved returns for producers.
To maximise the contribution of the agricultural based industries to prosperity in agriculture and to employment, it is necessary to ensure consistently high quality of output, more intensive processing, more vigorous marketing, and greater all round efficiency. State investment through the IDA's development strategies for these industries, the expansion of the role of CBF, the introduction of the beef carcase classification scheme and an increase in the State guarantee for borrowings by An Bord Bainne are all geared to meeting these necessities. The achievements of the maximum added value is not only important for exported agricultural produce; it is equally important for produce sold on our home market.
I should like now to consider briefly the situation in each of the wider sectors of agriculture. The future for beef is good. We have natural advantages which make us a low cost producer and beef is not in structural surplus in the Community.
Following this year's price package, we are nearer than we have been for many years to an unpartitioned common market in agricultural produce. If we leave the exceptional situation of Germany to one side, MCAs have virtually gone. Substantial opportunities for development exist and will continue to exist, but in order to exploit these enterprise and innovation will be called for. We will have to reach beyond the limits which traditional trading patterns place on us. New markets will have to be sought, both inside and outside the Community, and a vigorous marketing policy pursued. Over-reliance on intervention sales, which is coming under increasing criticism within the Community, is not the way to good marketing.
From the end of last year the beef industry was under threat of suspension of intervention during the summer months. This would have seriously damaged the industry and have upset producers' confidence. Fortunately we were able to ensure that the suspension was not implemented this year. However, it would be foolish to regard the danger as having disappeared completely for ever. There is, as I have said, increasing criticism of intervention and the cost of operating that system is under continuing attack. Our industry here should use the time available to reduce their dependence on intervention. I fully appreciate that this cannot be done overnight and that it is necessary to avoid upsetting producer prices. However, it would only be prudent to take precautions against the possibility of further efforts to restrict intervention purchases, particularly during those weeks when supplies are seasonally low. The Government are fully committed to defending the basic principles of the CAP. Their work in doing this will be more effective if we can show that our exporters are sparing no efforts to dispose of as much of our production as possible on commercial markets and that intervention is used for the purpose for which it was designed, that is as a floor support for producers and not as a market outlet in its own right.
In the milk sector we have to accept that the Community's pricing policy will be more stringent in future than it was in the past. During the transitional period we could of course also look forward to price increases resulting from our alignment to the Community price system. Higher productivity must compensate for the slow down in the rate of price increases. There is no reason why our dairy farmers cannot achieve increased yields per cow to place us on a par with average Community yields. We are still 200 gallons a cow behind some of our main EEC competitors. To achieve better milk yields we will need to avail fully of the many natural advantages which make Ireland particularly well suited to milk production.
The scope for development is clearly there. The return per acre which most Irish farmers can get from dairying is far better than they can get from other types of farming. The progress of dairying since we joined the EEC is a clear example of the ability of the milk sector to grasp the opportunities presented by the Common Agricultural Policy. I have every confidence that the milk sector will continue to progress and cope fully with the demands of the future. As far as I am concerned, milk is still the best possibility that the smaller farmer has of making an adequate income for his family. The fact that our milk output has continued to grow in a period which has not been an easy one for the industry is an indication of the confidence of the dairying sector in the security provided by the Community support system and in its own ability to meet any short-term difficulties that occur. The Government are acutely aware of the need to develop our dairying industry to its fullest potential. This year we succeeded in securing an increase of 4 per cent in the support price for milk in the prices package negotiated for the current year. This was against a background of Community budgetary constraints and proposals to reduce the cost of the milk policy arising from the substantial surplus supply situation for milk within the Community. Most important, in these negotiations, we successfully opposed the super-levy proposal, as indeed we will continue to oppose any similar proposal in the future. If some of the cost of disposing of surplus production is to be met by producers, then all who produce milk must share in the cost and not just those who happen to have increased production at a particular time. The Government are adamant that the legitimate development expectations of the Irish dairying industry must not be unfairly impeded.
There is still considerable scope for expansion in the sheep sector. We have shown that we can produce the quality lambs demanded by the French market. The current temporary restrictions on access to the French market, due to a severe oversupply situation on that market, are a source of concern to me. I have raised the matter with the French Minister for Agriculture and my officials have had talks with French officials. I am still pursuing the matter and I am hopeful that we will be able to maintain our traditional level of exports of quality lamb to the French market.
As an indication of my own confidence in the future of the industry, I reintroduced the mountain lamb extension scheme earlier this year in order to boost the morale of producers of mountain lamb who had experienced particular difficulties in 1979. There is a great need for higher standards of feeding and management in mountain and hill areas so that more profitable lambs are produced. Yesterday I announced that this scheme would be continued in the final four months of the year. This will give added confidence to the mountain producers who account for such a high proportion of our total output.
There has been a substantial growth in pig supplies over the past year in spite of the tight margins during recent months. Pig production has become an increasingly specialised business, demanding a high level of management expertise. There is still room for improved efficiency in production—particularly in the improvement of efficiency of feed utilisation. A more orderly approach to marketing can help to improve profitability by raising prices realised on our export markets. Returns for our export bacon have suffered because of the weak UK market and fragmented selling. Our quality bacon is on a par with the best but we must ensure that our marketing will assure us of prices which will more closely reflect this. As I have already stated I shall be going into the marketing system with the various interests concerned, in the light of this week's High Court decision.
The poultry sector has been experiencing problems arising from the growth of imports particularly of eggs from the North. While we do not complain about fair and reasonable competition, I am concerned that there should be no selling below cost of production and that our market should not be used as a dumping ground for surplus production. This is something which I have raised with the EEC Commission and the UK authorities.
The weather this year has been much more favourable to tillage than 1979, and I expect to see an increase in total crop output. I understand that the experts take the view that the total acreage is up, in spite of a reported slight fall in seed sales. Both winter and spring sown cereal crops look exceptionally well, and are now more forward than at this time in 1978 and 1979. The outlook for tillage is good, and there is certainly scope for putting more land under crop production.
In regard to disease eradication I think that at last the message is getting across that it is in all our interests to wipe out the two major bovine diseases, in TB and brucellosis, which have bedevilled our national cattle herd down through the years. These diseases can, and I am determined that they shall, be eradicated, but this can only be achieved by unrelenting vigilance and strict adherence to the rules and regulations laid down by my Department. Some herdowners and other interests may find these regulations irksome, but they were devised solely for the farmers' and the national well-being.
Over the past couple of years good progress has been made towards the goal of eradication. The percentage of TB reactors disclosed during the round of testing just ended was the lowest on record. A further round has just started and I look forward with confidence to an even better set of results. However, there is no room for complacency. The incidence of TB is still far too high, especially in the southern dairying counties, and we are around the bottom of the league among the EEC member states. All the interests involved must, therefore, keep up an all-out campaign to ensure that this disease is eliminated, thereby safeguarding our valuable export trade in cattle, beef and dairy products.
Full scale eradication measures for brucellosis now operate in 16 counties. These include Cork where compulsory measures were introduced last August. The disease incidence encountered there was somewhat less than we expected, and the experience gained in taking on this large county with such a high cattle population will be a great help in tackling the remaining counties.
Farmers and their organisations have adopted an enlightened attitude towards disease eradication over the past couple of years. This is a praiseworthy development, and the momentum and zeal which is so evident must not be dissipated but rather built on and developed. The minority who flagrantly abuse the regulations must be identified and subjected to the full rigours of the law. This week I have made an order adding Galway and Roscommon to the brucellosis free area. This step, which resulted from the improved disease incidence in these counties, will facilitate trade within the area and broaden the base for live cattle exports.
Nearly 90 per cent of our farms do not have brucellosis. We must push on towards the 100 per cent mark. Farmers and their co-operatives have put a lot of effort into the pre-intensive campaign in the ten southern and south-eastern counties over the past few years, and this year's milk ring test results in those counties show a significant drop in the level of brucellosis among dairy herds. Encouraged by these results and the positive attitude of farmers we are now at a stage when we can contemplate taking the final major step in the eradication campaign by bringing these ten counties into the brucellosis clearance area. I visualise this happening towards the end of Autumn. Given the determination and enthusiasm which now exists, I am confident that we are very definitely on the way towards getting rid of brucellosis from our national herd within a reasonable time.
The recent debates on the Land Bond Bill and on the Estimates for my Department afforded Deputies an opportunity to express their views on land policy and on the operations of the Land Commission. The Government have devoted a considerable amount of time to considering the major issue of a new land policy. They are very conscious of the importance of land restructuring both from the economic and the social aspect, and they have accordingly decided that their views as to the action which should be taken should be set out in a White Paper. Work on the preparation of this White Paper is already under way with a view to early publication. This will give an opportunity for interested parties to express their views on the Government's ideas and enable due regard to be given to those views in the drafting of the new legislation which will in any event be going ahead at the same time. While I do not propose to give details now of the Government's thinking, the basic objective of future policy will be to promote the efficient use of land and to ensure that the deserving family farmer who needs more land, and will be prepared to work it, will be able to compete more effectively for the extra acreage he needs. I am committed to having a Bill before the House by the end of the year.
Yesterday I announced increased cattle and sheep headage rates for the disadvantaged areas for 1980 as well as the new higher limit for off-farm income for participants in the headage scheme. Other measures which I announced were the continuation of the hogget ewe scheme in the lowland areas, an increase of 5p per gallon for producers of liquid milk and a grant of £75,000 for agricultural export promotion measures recommended by the Agricultural Exports Co-ordinating Group. I also indicated that we are examining how the benefit of the increased FEOGA recoupment under the Disadvantaged Areas Scheme can be passed on to producers. In the coming months we shall be taking steps to bring into operation the new comprehensive EEC package for the west, the new beef suckler scheme and the new market organisation for sheepmeat. All these measures constitute very positive evidence of the Government's commitment to the further development of agriculture and in particular the Government's concern for the smaller farmers in the disadvantaged areas.
On a point of order, I do not mean to interrupt the Minister and nobody on this side would wish him to cut his speech short, but the Minister has now exceeded his time. While we have no objection to him going over the agreed time it will be on the understanding that every other Deputy who follows him will get the same elasticity.
The Chair was asked two days ago to provide a little latitude in cases of this kind. I will shoot down the Minister this moment if the Deputies wish it.
Nobody wants to shoot the Minister down. We are anxious that he speak his piece so long as the same latitude is given to others.
For instance Deputy Harte got 34 minutes last night and if Deputy Kelly has to get an extra minute or two we will give it to him. Actually, the Whip asked the Chair to be that little bit lenient.
Is my time up now?
Nobody wants to stop the Minister.
I appreciate the Deputy's point.
Ministers should not come in with statements that are four or five minutes longer than they can hope to deliver them.
I could have put in a lot more and it is difficult. I can give a commitment——
Has the Chair seen the type face used in the script? It looks like a very long telegram.
I can give the commitment that the next speaker on this side will deduct the time that I have exceeded from his time.
Will the Minister finish as quickly as he can?
It has been said from time to time that the west of Ireland has not really benefited from EEC and Government measures. Nothing could be further from the truth. One only has to look at farms in the west to see the vast improvements which have taken place in the west during the last decade. This is not to say that difficulties have been eliminated or overcome for all time. Disadvantaged areas will always be at a disadvantage vis-á-vis the more fertile regions and that is why we operate measures to supplement incomes in those areas. The increases in the headage payments in disadvantaged areas and the Mountain Lamb Extension Scheme which I announced yesterday is yet another illustration of this Government's continuous commitment to farming in the west of Ireland. The implementation of the special western package will continue to display this commitment over the next ten years as accelerated improvements to roads, water supplies, electricity, education, land improvement, on-farm investments, beef fattening, forestry and agricultural marketing and processing take place.
Before concluding I should like to refer to reports in the press recently of statements about the dire position of farmers, with forecasts of further gloom and doom to come. I am fully aware that farmers had a difficult year in 1979 and this has been widely recognised by me on a number of occasions. However, I entirely reject the notion that farmers are faced with impending disaster, or that the recent Brussels price package was of no value to the agricultural industry. What would be the position if there had been no Brussels price package? Producers would certainly be very much worse off.
It has also been stated that the agreement reached in Brussels after long sessions of hard bargaining will not result in any increase in farm gate prices. EEC prices are, of course, not fixed at the farm gate but relate to ex-creamery or ex-factory sales. As a large part of our creameries meat and bacon factories and so on are owned by farmers, it is up to them to decide what prices will actually be paid to producers from the total receipts for sales of their products. Our recent Brussels agreement will result in better prices to the primary producers, though of course it takes a while for the effects of any Council decisions to be fully apparent.
In the negotiations in Brussels I was concerned to ensure that we got the best possible deal for the agricultural sector as a whole. The final outcome gave the lie to the gloomy predictions that were being made earlier about the outcome of this year's discussions. The compromise package finally agreed was important to all sections of agriculture. The key intervention support for beef remains unchanged, there is no super levy on milk, there is a Community scheme to support beef suckler herds, there is to be a common regime for sheepmeat, and finally the average increase of about 5 per cent is double the original proposal. To suggest that on top of this agreement farmers might expect national aids on prices is totally unrealistic. Our whole agricultural sector is dependent on maintaining the common agricultural policy, and we will not only do nothing ourselves to undermine that policy but will fight to see that it retains its present role in the European Community in the future.
In spite of the problems farmers have had to face over the past year, there has been a resurgence of confidence in the industry over the past few months. No doubt the better weather this year has been an important factor, but the Government's determination to give every possible help to the industry has been equally significant. In this connection the measures which I announced yesterday and the others that are in the pipeline should certainly stimulate farmers' faith in their own industry and in their ability to expand and develop. Farmers now know clearly where they stand on the taxation issue and can concentrate on planning the development of their farm enterprises. For their part the Government will not be found wanting. Our determination to support and aid the agricultural sector has been amply demonstrated by us in recent months.
I will start by doing two things which may seem rather dull because I have done them before, but I will relate them clearly to the situation which was described in the opening speech yesterday morning. I wish to demolish the myth, by reference to official figures, that the country had been left in a sorry state by the National Coalition Government; and, secondly, the myth that in some way the difficulties that the Government are facing have been largely caused by the level of oil prices.
The National Coalition Government fought the 1977 election with weapons which were perhaps unsophisticated, electorally speaking. I would be sorry if we were ever forced to use other kinds of weapons. We were essentially in a situation of a Government using short Lee-Enfield rifles against an enemy willing to use poison-gas. We were prepared to offer a certain number of reforms, but we were not prepared to make promises that could not be fulfilled. In that respect our techniques were old fashioned. I do not apologise for them, but they were certainly old fashioned compared with the techniques with which we were then confronted.
"Four years of Coalition misrule have left the country in a sorry state"—those were the opening words of the manifesto which elected Deputy Nolan and all his friends. I want to contrast the figures of 1976 and 1977 with the figures which are available today. I repeat: these are not my figures: I did not pull them out of the air, invent them or cook them or dress them. Any member of the press or the public who wants me to supply those figures—not in my handwriting but in the print of the Central Statistics Office and the Central Bank—has only to give me a call and I will provide them for him. There are some things in the country not yet corrupted or cowed. The Central Statistics Office is one, and the Central Bank is another. I propose to go on trusting their figures, as I did when they showed things that were unwelcome to me also.
In 1976-77 the growth rate of this economy was 5.2 per cent, the highest growth rate in the EEC in the very year in which the Irish people were invited to regard their economy as in a state of disaster in consequence of the efforts of Deputy Tully. Deputy Liam Cosgrave. Deputy Garret FitzGerald and the rest of us. It was 5.2 per cent then. What will it be this year? The Central Bank's forecast is 0.5 per cent, the lowest growth figure in the Community by a long shot.
In 1976 our adverse trade balance was £479 million—too much. In 1977 it was £572 million—also too much, taking into account the change in the value of money. Certainly, these figures were too high. But the 1979-80 trade balance, counting the 12 months to the end of May 1980 is £1,398 million. It is almost three times the worst figure the Coalition ever achieved in adverse trade balance.
The balance of payments deficit in 1976 was £157 million. That is the balance left after the trade balance has been improved by the addition of invisible items such as tourism and remittances. It was calculated by the Central Statistics Office and the Central Bank as £157 million in 1976. It was marginally better in 1977 at £155 million. The Central Bank's forecast for 1980 is £747 million; and it was almost as bad in 1979—five times the Coalition's worst.
The average rate of inflation in the 12 months ended 15 May 1977 was 13.9 per cent—far too high—but the measures we took, as Deputies opposite will recognise, brought it down within a time in which the measures contributed by the succeeding Government scarcely could be said to have much contributed, to 6 per cent or 7 per cent in the following year. But it was too high in May 1977 at 13.9 per cent. Three years later to the day it is 20.2 per cent.
The average price of a new house in 1976—I have the sensation of looking at an old advertisement or shopping list from the time of the First World War when I look at these figures—was £12,258. These are not my figures, but figures provided by the Department of the Environment. In Deputy Tully's day he was quite happy and proud to be Minister for Local Government. That was not trendy or grand enough for Fianna Fáil; it had to be the Department of the Environment. All it has succeeded in doing is putting pot-holes in roads that once were driveable on. It is the "Environment", not Local Government, now. Its figures show that the average price of a new house only four years ago was £12,258. In the following year, 1977 —and this is the average spread over the whole year for all areas—the price had risen to £14,770, an increase to which I have no doubt the £1,000 new house grant which won Fianna Fáil many votes somewhat contributed, because instantly, as we predicted, it resulted in builders raising their prices. The average price of a new house in the first quarter of 1980, according to the figures of the same Department, is £25,605, over twice what it was in 1976. That is not the Stone Age; it is only the day before yesterday; it is only the time of the National Coalition that had the country ruined, that had us beggared. But we were able to get new houses for less than half what they cost now, not to speak of the situation in regard to interest rates to which new house purchasers are subject if they want to put a roof over their heads.
The change in the volume of investment—always regarded as an important thing—is also a significant figure that is calculated by adding from one year to the next the total of buildings, total purchases of equipment and plant and subtracting whatever in the way of equipment and plant has been demolished or exported—was plus 12.2 per cent. The change in 1977 was plus 10.5 per cent. These were the dark ages in the Fianna Fáil mythology, the years the National Coalition should apologise for. What is the change in the level of investment this year, in the Central Bank's forecast? When they made the forecast, put the figures together and sent them to the printers in March they forecast a negative change, a change with a minus figure to denote it, minus 1¼ per cent. But that was three months ago, and things are moving very fast. They have now revised their figures—downwards, by a further five points—and it is going to be minus 5 or 6 per cent.
If those were black days four years ago, in Deputy Cosgrave's time, Deputy Jim Tully's time and Deputy Paddy Donegan's time, what are we to say about 1980? What can we say about those geniuses opposite? We have 30 of them. You can throw in the Attorney General and make it 31. We have 30 of them in Ministerial offices of one kind or another. All that extra brain power throbbing away has produced that result compared with ours. We have 15 ministers of State with 15 cars, 15 private secretaries and I suppose an establishment of 60 or 70 other civil service staff, all turning out the very same quantum of work as seven parliamentary secretaries did in Deputy Cosgrave's day. They have far grander titles—yes, and a much bigger output of letters around the constituencies and departments and much more back-slapping in the constituencies. But what is the result when the smoke blows away? Those are the figures, and anybody who wants those figures will have them from me with not one line of my handwriting on them, but photocopied from official documentation. That is an invitation that I offer to any member of the public or the press.
It may be said that I have forgotten about unemployment and that this is an area in which Fianna Fáil have really scored—"you must hand it to them there". I will hand it to them. I shall give the figures. In 1977 at the end of May the seasonally adjusted unemployment was 106,800 persons. In 1980, at the end of the same month it was 94,700, an improvement of 12,100 persons. I do not want to be accused of over-simplifying this: I realise that individual persons and jobs do not correspond. That figure is almost identical with the number by which public service employment has been recklessly pushed up by this Government. Compare that figure with their target, which was a reduction in unemployment of 5,000 in 1977, plus 20,000 in 1978, plus 25,000 in 1979, plus 30,000 in 1980, giving a grand total of 80,000 reduction in unemployment at the end of this year. We are now half way through the year and the reduction, which exactly corresponds to the additional desk employment which is costing the country, in my estimate, £120 million a year, is 12,000—some achievement.
The State debt figures show that in 1976 the external indebtedness of the Government to foreign countries was just over one billion; it was £1,039.5 million. In the following year it was reduced by a marginal sum to £1,038.5 million. This year it is £1 billion 800 million.
The total national debt in 1977, at the end of that year—it had been pushed up very fast in the second half of 1977 —was £4,228 million and it is now £6½ billion.
If the situation of 1976 and 1977 was the apocalypse, an economic Armageddon, what is one to say about 1980? Is there anything to be said about it, except that the people are ten times more ungovernable now than they were then, ten times less willing to take advice, let alone the empty bleating we got from the Taoiseach yesterday, ten times more ungrateful and ten times more unwilling to recognise the efforts which all Governments have to put into trying to run the country. They have been defrauded and deceived by the Government now sitting opposite. They do not believe me when they hear me saying so because they say: "That is only Deputy Kelly, who wants to get back to the far side of the House if we let him. We cannot believe it from him". I accept that. That is part of politics. Any person interested in this can get the figures from me but they are not my figures. They are the figures provided by the State agencies which have not yet been cowed by the Government.
The Central Statistics Office have not yet gone the way of "Hall's Pictorial Weekly". We were able to endure the black statistics of 1974 and 1975 just as we endured week in and week out the lampooning by "Hall's Pictorial Weekly". We endured; and enjoyed it. I often went home from this House in those days, tired and sweaty after a day as Government Whip, and was able to sit back and enjoy the depictions of Deputy Liam Cosgrave and the Cruiser. I was able to laugh at my colleagues and once or twice at myself. But the skins of the Soldier of Destiny are for too thin for that. Once there was any talk about Judas Mac Sleeveen, that was the end of "Hall's Pictorial Weekly". One might as easily get me to believe that the earth is flat as that the demise of that programme had no political content in its motivation.
Those are the figures, and those are the black and stark facts after three years of this Government. Before I pass to the second myth I want to say a few words about the confidence with which the first myth was propagated. It was propagated by a team led by Senator Eoin Ryan, a quiet, respectable looking man who presided over the formulation of that fraudulent election campaign. Where is Senator Eoin Ryan now? When did anyone last hear from him? It reminds me, as I think I said on another occasion about somebody else, of Hamlet's reflection when he found the guts of Polonius behind the arras:
Now is that councillor most still, most silent and most grave That was in life a foolish, prating knave.
Where are all the other experts with their fraudulent advertising, which told the people there were 160,000 people unemployed in the very months when the Labour Force Survey of the EEC subsequently showed that that figure was exaggerated by 60,000? Where are they all now? They are now busily trying to pretend to the people that the difficulties about which the Taoiseach spoke here yesterday are attributable to oil prices.
I want to give the House a few more figures which, again, are not mine. They are again the figures from the Central Statistics Office. They will have to do a Frank Hall job on the CSO if they are to change those figures and if they want different ones. Those figures show a classification of product and commodity sectors, and they show the total import picture over the year. It is quite true that oil imports have played over the last years, during the last two-thirds of the seventies, a disturbingly heavy part and role in our imports scene. It has to be said that the big jump took place in 1973 and 1974. In 1973 our oil imports cost £67 million and the total import bill was £1,137 million. One's brain, and mine most of all, tends to flicker with the constant repetition of figures. If the House will believe me that I have not made false transcriptions of these figures and will trust my mathematics and computing of percentages, I will tell the House those percentages. Any member of the public or press who wants to work it out for himself can go back over those figures and see if I am wrong. If I am wrong I will apologise.
To the best of my ability to compute, the percentage of total imports represented by oil in 1973 was 5.9. In 1974 it had jumped to 12.8, which is much the biggest jump this entire decade shows. In 1975, 1976 and 1977 it remained at that relatively high level. The figures in those years are respectively 13.2 12.4 and 11.4. The total sank a bit in 1978 but the real significant feature in the sinking of the percentage was the enormous boom in consumer imports from abroad, triggered off by the reckless handing out of money by the Government in response to their election promises. It sank to 9.1 per cent and in 1979 was back to 10.8 per cent. In the first five months of 1980 it is 13.6 per cent again, exactly the same figure as it was in 1975.
I do not mean to offend the Minister for Energy, for whom I have a lot of sympathy and a great deal of respect for the courage and resilience he has shown in recent months. I am prepared to recognise him as the nearest thing the Fianna Fáil party have to a saint. He is inclined to say that the oil figures are a terrible burden on the economy, that they represent so much grabbed out of the national product and scattered abroad. That is quite true. The same story is in the mouth of the Minister for Industry, Commerce and Tourism. It was said no less than four times yesterday by the Taoiseach in regard to its bearing on the adverse balance of payments; but its bearing in percentage terms is exactly the same as it was in 1975. Nobody regarded it as an excuse for us. It is exactly the same, to within a few tenths of a percentage point. It is of the same order as it has been all through the latter two-thirds of the Seventies.
The Minister for Energy, to stick to the slightly ecclesiastical image which I introduced a moment ago, seems to have the old fashioned view, if I may compare it with the theological view I was brought up in at school, that there are different kinds of sin. He seems to think that a £ spent on oil compared with a £ spent on something else is like a sin against purity which, for some reason never well explained, one is supposed to be more ashamed of than a sin against any other virtue—that somehow money spent on crude oil dirties the spender in a way that money spent on consumer goods, which the people have been recklessly encouraged to import and buy, does not dirty them at all. I am simple enough to think that a £ note spent abroad is a £ note spent abroad no matter what it is spent on. If the proportion spent on oil has been too high the proportion spent on other things, on consumer goods particularly, is also too high.
That myth must be completely put out of court. It plays absolutely no part whatsoever in this picture. There is no difference between money spent on oil and money spent on anything else. The proportion represented by oil imports has been pretty well constant all through the latter end of the Seventies. I cannot say that the picture will not change. Perhaps it will change but, most certainly, it cannot be pleaded as a reason why the economy is in any special difficulties now.
Those are the myths. I had hoped—I have left myself short of time even with a measure of indulgence—to try and make it clear that the reason why those myths are material, not merely to history, not merely to a justification of the National Coalition Government but to what is happening now, is because they are material to an indictment of the Government for having stood the Keynesian axiom on its head. That is what they did in 1977, 1978 and 1979. We are all paying the consequences now. The economy is in a far weaker position to do it. They stood the Keynesian axiom on its head. The recession was over in 1976 and 1977. The figures I have shown to the House prove it; or if it was not over, what have we to say about 1980.
Every single economic indicator was climbing upwards where upwards was the good direction, or downwards where downwards was the good direction, as from early 1976 and in some cases as from late 1975. That was the time to put the reins on public expenditure. It was the time not to fling revenue away, but to save for the rainy day by cutting down on foreign borrowing and not to lead people to a situation of inflated expectations which, because they could not be met, would cause the people to become rebellious—and we will be lucky if they do not turn out revolutionary as well as rebellious. What was done was to fling revenue away recklessly. Car tax and rates were abolished. There were income tax allowances on all sides: handouts of every kind by way of making it clear to the people that Deputy Cosgrave and the other members of the National Coalition had been not only incompetent but malicious in making times hard for the people. We see now where we are. I admit that we are experiencing the effects of an international recession, that world trade is very bad. Fianna Fáil cannot be blamed for that; but this is the time for which they should have left themselves some leeway for throwing into wage negotiations the kind of makeweights that the National Coalition were able to throw in.
One is reminded almost of the nineteenth century or of some other vanished age in looking at figures such as those produced by the Coalition, and which we are supposed to apologise for, compared with the figures we are confronted with now. Let us consider the figures at which the national wage agreements of 1976 and 1977 were achieved, the figures at which the working people were willing to settle and who, despite all their grumbling, had sufficient confidence in and respect for the then Government to have settled for these agreements.
In September, 1976, a seven-month agreement was concluded for the period 31 April to 31 October. The figure was 3 per cent of basic pay plus £2 per week subject to a maximum of £5 per week. But who would thank us for suggesting such a deal now? In 1977 the settlement which was ratified on 23 February was for a 14-month period and consisted of a first phase of 10 months and a second phase of four months. The terms of each phase were identical. They were 2½ per cent of basic pay plus £1 per week subject to a minimum increase of £2 or a maximum of £4.13p. Who would dare to talk in those terms now, when people are seeking increases of 30, 40 and 50 per cent? They are doing so because they have been led to suppose that all they need do is vote themselves an increase, that all they need do is to put in that rotten crew over there and the increases will be given.
While in Government we made enemies. The people grumbled. We were over-worked and we lost our tempers. We made mistakes, but the people had a certain feeling that we were trying to do justice. We may have been mistaken on the wealth tax. We may have been mistaken, too, on the capital acquisitions tax. We may have got the thresholds wrong; but instinctively we were trying to reach a situation of equity, and that is vital to trust; because unless a government have the people's understanding and acceptance of their determination to be fair, there will not be any chance of achieving reasonable wage settlements.
We were all supposed to believe that the Taoiseach is the most experienced man in the Government, but for him to pretend now that the situation in which we find ourselves is one that has been wished on us from the outside world is the greatest fraud of all. For as long as this party have strength left, we shall make that fraud apparent to the people.
Now that the Chair has an opportunity of interrupting the Deputy, I would ask him to withdraw the charge that the people on the other side of the House are a rotten crew.
It is a political charge.
It is a charge that I would not allow any Member on the other side of the House to make either. Will Deputy Collins please stay out of this? I am not talking to him at all.
I am sorry for having used that expression. At the conclusion of his speech yesterday, the Taoiseach gave a guarantee that the poorer sections of the population will be protected in the situation that confronts us. The people of Ireland, both rich and poor, need to be protected against the Government over which the Taoiseach presides. What this party require is a general election now—not another budget or a wage settlement—so that the people may be given the opportunity of putting into power a government in which the people, no matter how much they may grumble, will have some confidence.
I intend to concentrate on the more important aspects of the activities of my Department. This year the Department and the local authorities together will spend an estimated £754 million. The local authorities will spend £714 million of this amount while about £480 million of that £714 million will come from central Government by way of grants and special issues from the Local Loans Fund. The balance will be raised by local authorities from rates and the other sources of Revenue available to them. The massive injection of funds by the Government into the local authority sector emphasises the sector's important contribution to national economic and social progress. The local authorities are the providers of many vital services, the absence of which would seriously affect the ordinary living of the whole community. It should also be remembered that the local authorities make an important contribution to economic advancement in the area of employment.
The contribution of local authorities to the economic and social well-being of the community is not by any means limited to their participation in the major development programmes which go to make up the public capital programme. The every-day activities of our local authorities involve the operation and maintenance of a whole range of services which affect our daily lives. We sometimes take these services for granted, at least until some breakdown or weakness in the services brings them forcibly to notice. The value of these services to the community cannot be measured in money terms alone. Nevertheless, finance is an important aspect. Local authorities this year were able to budget for expenditure of nearly £510 million. This is for their ordinary non-capital services which are covered in their annual rates estimates. The £510 million represents an increase of almost £73 million or 17 per cent on the corresponding figure for 1979.
The amount of money which can be made available to local authorities must be balanced against the provision being made for other public sector activities. The Government have held that balance very fairly. An increase of £73 million in 1980 over last year cannot by any stretch of the imagination be considered less than fair in present circumstances.
I would like to say a few words about housing. In this regard I think it noteworthy that, despite the gloomy forecasts made by speakers from the other side of the House, last year saw the completion of 26,500 houses and indications for this year are also very encouraging. New house completions for the first five months at about 13,300 are the highest on record. The figure for the same period in 1979 was 11,900. Last year, an all-time record of 20,300 new private houses were completed.
One of the key items in determining the well-being of the private housing market is the availability of mortgage finance. The principal source of finance for the purchase of houses is, of course, the building societies. Last year, the societies advanced £200 million in the financing of houses. In the first quarter of this year, £66 million was paid out by the societies in respect of new and other houses.
During 1979 the societies held their investment and mortgage rates at 9 per cent and 14.15 per cent respectively—this, despite the fact that other financial institutions had significantly increased their rates. The societies maintained those rates until May of this year but when the associated banks announced in April that they were increasing their minimum investment rates, the societies informed me that they felt they would have no option but to increase their investment and mortgage rates. Following a meeting attended by the Taoiseach, the Minister for Finance and myself, it was decided to establish a working group to examine the problem faced by the societies.
The working group found that the proposed increases were justified and the Government decided to subsidise the societies' investment rate. In coming to this decision the Government were extremely conscious of the heavy additional burden which would otherwise have fallen on borrowers. The subsidy, which will cost the Government about £1.4 million in 1980 and about £18 million in a full year, will have the effect of preventing an increase of about £30 per month on loan repayments of £16,000 which is a fairly typical loan for new borrowers. The need for the subsidy will of course be kept under constant review. I would like to record my appreciation of the help and co-operation given by the Irish Building Societies Association in the consideration and the implementation of this decision.
Has the Minister given a wrong figure? Did he say £1.4 million this year and £18 million in a full year?
That is what I said. It is the correct figure. The reason is that it is paid in arrears every six months, as the building society themselves pay their interest rates. Therefore, the only month this year in which the Government will have to foot the bill is June. The remainder of the year would fall to be met next year. The subsidy has a purpose and a very worthy one.
I introduced a much better one.
I would like to refer to local authority housing. With 8,924 dwellings under construction and with 6,644 men employed at 31 March 1980 the local authority housing construction programme is, despite what our critics like to say, in a healthy state. Completions in each of the last three years have ranged between 6,100 and 6,300 and I am hopeful that completions this year will again be of that order.
It is important to remember that despite sharply increased costs the Government consistently have pursued a policy of maintaining high standards of layout, design and construction for local authority housing. Specific improvement measures include the provision of greater floor space, better quality of finish and improved insulation. These improvements have to be paid for.
Housing authorities are also required to include adequate landscaped open spaces in all their housing schemes and to reserve suitable land on their major schemes for essential amenities and community facilities, such as churches, schools and shops. My Department have encouraged local authorities to pay greater attention to the provision of these amenities when planning their new housing developments.
In talking about the financial aspects of the local authority housing programme one must refer to the subsidies payable by the Exchequer in respect of the provision of local authority houses.
The total direct State subsidy for the provision of local authority housing for letting is expected to amount to £62 million this year. Another £300,000 will be paid to local authorities as a contribution towards the cost of the graduated subsidy on house purchase loans in accordance with the low rise mortgage scheme and a further £130,000 will be paid as a contribution towards the costs incurred in providing developed building sites for sale to qualified applicants. The total Exchequer subsidy bill of £62.5 million compares with £31 million in 1977. These amounts are high but are inevitable having regard to the commitment of this Government to provide housing accommodation for those who cannot do so for themselves from their own resources.
As I have already informed the House, road grants totalling more than £53 million have been allocated to local authorities this year which is double the amount allocated in 1977. This Government, since taking office three years ago, have allocated road grants totalling £144 million whereas the Coalition Government, in the three years 1975 to 1977 made available grants totalling £68 million. Even when account is taken of inflation it must be recognised that the Government's performance leaves no room for criticism by the Opposition.
We are all aware that legal responsibility for public roads is vested in the road authorities and it is their statutory duty to maintain and improve the roads for which they are responsible. While my Department reimburse a large proportion of the expenditure incurred on road works by way of annual road grants, nevertheless it is the road authorities who decide the extent of the overall investment in the annual road works programme.
There has been a lot of criticism recently about the standard of maintenance of some roads. I fully recognise that there are many compelling reasons for assigning a high priority to road maintenance, and the Road Development Plan for the 1980s assigns particular importance to it. When measured in terms of road accidents, wear and tear of vehicles and waste of time and energy, the cost of inadequate road surfaces is considerable. Furthermore, the neglect of a road leads to a cumulative process of deterioration resulting in the loss of much of the capital invested in building and improving it.
It must also be realised that the performance of local authorities in the maintenance of their roads is readily apparent to the public, and it is on their performance in this area that the overall quality of local authority operations is most likely to be judged. For those reasons I arranged some time ago that the city and county managers be asked to pay special attention this year to the question of road maintenance, particularly in relation to the principal roads which are those most used by the public. The matter was taken up also by the chief engineering adviser of my Department with the city and county engineers. I am glad to say that, on the whole, the response of the managers and their engineers has been positive and constructive. Indeed there is evidence already of the extent to which the problem is being tackled.
This year I have allocated grants totalling £9.3 million for the specific maintenance of the national routes which compares very favourably with the corresponding grants amounting to £5.2 million made in the last year of the National Coalition's term of office. This indicates also the Government's commitment to maintaining and improving our roads. As regards other roads, the funds available this year to the authorities from their own resources, including the rates support grant and the general road grant, is sufficient to enable them to carry out a satisfactory programme of road upkeep.
Essential to the development of any area and the protection and improvement of its amenities is the existence of adequate water and sewerage services. Local authorities have a major responsibility in ensuring that existing schemes are properly maintained, and new schemes formulated and planned in good time, so that development is not unduly inhibited by a lack of services. From the Government's point of view I am glad to say that the level of investment in the public water and sewerage programme has increased considerably in the past few years, from a level of £25 million in 1977 to £40 million in the current year, representing an increase of 60 per cent. This has made it possible for me to approve some 132 schemes estimated to cost £85 million over the last few years. These schemes are required to meet many different needs but all have one broad purpose in common, that is, to cater for economic and social development at local level.
Members of the House will be familiar with the role played by group schemes in bringing piped water to rural houses and adjoining farms. Last year, group scheme domestic water installations reached an all time record level of nearly 10,950, bringing the total number of houses served by group schemes to 78,500. The future prospects for group schemes are bright.
I want to express my appreciation of the excellent co-operation given by county councils to my Department and groups in relation to the planning and execution of these projects. Without such co-operation the local people would find it difficult to maintain their enthusiasm so vital to the success of those group schemes.
Fire services are provided and maintained by local authorities and they have the primary responsibility to see that a reasonable service is provided. I am concerned to ensure that the standard of the service keeps pace with the growing demands on it. I have initiated various measures to promote standardisation and efficiency of the services and generally to support the development of the service by local authorities. I have strengthened the capacity in my Department to deal with fire service matters to enable these measures to be pursued and to provide an ongoing appraisal and advisory service.
Among the more important measures being taken at present are the local reviews of the strength and adequacy of the service which are at present being carried out by local authorities with guidance and support from my Department.
There must be an adequate level of investment in the fire service and I am happy to say that the capital provision for the fire service has been increased significantly in the last few years. This year's provision will enable local authorities to press ahead with their programmes for the building of much needed fire stations and the acquisition of modern fire-fighting equipment. As a measure of the progress being achieved I should mention that 12 new fire stations or extensions were completed during the last two years, nine are at present under construction and a further 12 are expected to commence this year. In addition, proposals for financing the purchase of 34 new fire appliances were approved by my Department in the last two years.
In my speech on the Estimates earlier this year I referred to the Environment Council's preliminary report entitled "Towards an Environment Policy". This report was published last year and contains a useful review of the present position and the issues concerned in developing policy. The need for an environment policy has been outlined in this report and becomes more pressing as social and economic development proceeds.
In general Ireland has a good environment although there are areas where improvements can be made. It is true to say also that for some aspects there are disturbing trends. In addition, with a rising standard of living, people are rightfully demanding that there should be an improvement in the overall quality of life of which the physical environment is an important element. We must ensure, therefore, that economic development and the provision of more jobs is not obtained at a cost in environmental terms. The Environment Council's initial report has drawn our attention to this issue. It has suggested, and I would agree, that there is no inherent conflict between development aims and the needs of a healthy and good quality environment.
The environment must receive greater recognition for what it is, a major national resource, which is to be used but not abused. In addition to its importance for tourism, which is very frequently stressed, there is a growing recognition of the importance of a good environment for industrial development and job creation. Resources such as clean water, clear air, adequate and well managed waste disposal facilities and a pleasant natural environment are important developments for attracting foreign investment. If we should allow our national resources to become polluted and depleted we may quickly find it more difficult to attract foreign investment.
It is widely recognised that it is cheaper to prevent environmental damage than to remedy such damage in the future. In fact, a small country such as ours, might find it difficult, if not impossible to generate the considerable funds that would be necessary to undo serious environmental damage or pollution. With our growing population and continuing development in the industrial and agricultural sectors it is now more than ever important that a national policy be prepared in order to ensure adequate protection and improvement of environmental resources.
The implementation of an environment policy will have a cost for both protection and improvement measures. This is a matter that will have to be considered in relation to the benefits and the potentially greater costs of pollution and environmental deterioration if a policy is not implemented.
The Minister has five minutes remaining.
That is allowing for the fact that the Minister for Agriculture meant what he said. He said the speaker following him would reduce his time by five minutes.
I accept that, but some Deputies have taken a lot less than their full 30 minutes and one or two others from both sides have exceeded that.
I want to hear the Minister for the Environment because he is helping me as he goes along.
Deputy Tully will have his opportunity in a moment.
An environmental matter with which I am particularly concerned and to which I have frequently referred, is the problem of litter, graffiti, fly posting and the abuse of public amenities. The Environment Council's report on this matter entitled "Litter and the Environment" has recently been published. In this report the litter problem is described as having the proportions of a national scandal, and this is a description with which I must agree. Indeed, the evidence to support this conclusion is everywhere to be seen, both in rural and in urban areas. The council's recommendations are being examined in my Department in consultation with the other Departments concerned, in order to determine appropriate action. For my own part, I will be renewing my request to local authorities to extend their afforts in this matter and to ensure high standards in the operation of their own services and in the maintenance of public facilities. I am aware of the good work that has been done in the past by many local authorities, State agencies and private organisations in this matter. I appreciate also the frustration that can arise when there appears to be no appreciable result. But efforts in this area must be continued and renewed.
The importance of a good environment to the tourist industry and in attracting foreign investment cannot be overstressed. We will need, therefore, to channel our efforts into solving the various environmental problems I have mentioned if the country's rich environmental assets are to be exploited to their full potential.
The Taoiseach in his speech yesterday stressed the importance of infrastructural development in relation to the maintenance and creation of employment. I have shown during my contribution to this debate that the amount of capital which the Government have provided for housing, sanitary services and roads during the past few years leaves little room for criticism. Not alone will this massive injection of capital provide employment during the construction of these projects but it will also be of significant assistance to industrial development in the years ahead and to job creation.
Debate adjourned.