Dáil Éireann díospóireacht -
Tuesday, 18 Nov 1980

Vol. 324 No. 4

Private Members' Business. - Employment Policy: Motion.

Mr. B. Desmond

I move:

That Dáil Éireann considers the latest unemployment total of 111,000 for 31 October 1980, announced on the 11 November, to be a massive indictment of the Government's employment strategy and calls on the Government immediately to introduce policies to reverse this disatrous trend.

This motion of the Parliamentary Labour Party underlines the fact that in the Republic of Ireland at present there is no coherent economic policy. The present Government do not have any economic planning strategy. We urgently need a set of national economic objectives. We urgently need effective institutions for economic planning. These we do not have now. We urgently need a central economic structure to deal with incomes policy. This we do not have at present.

We do not have a co-ordinated strategy of industrial development. The State sector does its own thing with very few guidelines. The Industrial Development Authority do their own thing by and large, and let it be said do it rather well. The other State bodies involved in industrial development such as Córas Tráchtála, the IIRS, the NPC, AnCO, all are separate empires with very little central co-ordination at national level between these sectors. We are promised a national enterprise agency, yet three-and-a-half years towards the conclusion of the present term of office of the Government this body has yet to surface. Perhaps it will be christened FIDO — something called a fast industrial development organisation which we will probably see after the next general election. We need a national development corporation, yet this concept is still quite embryonic. Worse still, in terms of industrial development we need a detailed regional policy dovetailed into a clear strategy of economic planning throughout the country. This basic feature we do not possess. Because we do not have effective economic planning in this country and because there is not a coherent strategy of industrial development, the process of job creation and the maintenance of employment in specific regions have suffered.

We urgently need a policy towards better industrial relations in this country. We urgently need to extend the present experiment of worker democracy into the private sector. We urgently need structures to convince workers in key industries that they too have a national responsibility to discharge in their employments. In many respects, all of this is related to the employment question. We need much better and far less class conscious management training and education in this country. These characteristics we do not have even in fair measure to meet the tensions of industrial relations quite evident in our economy right through the 1970s.

Our country does not have what one might call a domestic monetary policy. The Central Bank have their own guidelines. The commercial banks proceed to do their own thing. The building societies proceed to implement their own policies. Our State-sponsored financial institutions such as ACC and ICC try to do their best but they lack a coherent place in the credit creation framework of the State. This is so because successive Governments have failed to get to grips with the contribution towards economic and social development which our monetary. institutions should be making, and are capable of making, in the national interest. As a consequence employment has suffered and this is mirrored in the total number of unemployed today.

Our country urgently needs an agricultural development policy. Four out of every ten productive acres in Ireland make no contribution to national development. Our country needs a policy of maritime development. Of course to fund such an economic policy one has to have a system of taxation which is capable of making a contribution towards job creation. We do not have a taxation policy in this country. We have introduced and abandoned so many taxes and so many varieties of taxes in the past decade that there is a rich source of material for 2,000 PhD theses on our taxation system. As a consequence our whole Exchequer budgeting has gone through the roof with current deficits piling upon deficits together with massive foreign borrowing — all because we do not have any taxation policy whatsoever in this country. With almost 140,000 people unemployed, all we have to show at the end of the year is a budget deficit which the Minister is ready to concede is somewhere between £200 million and £250 million. As a consequence, money urgently needed from current consumption to pay for job creation to meet the social cost of those who are unemployed is just not available any longer.

Our country needs a transport policy. This we manifestly do not have. Does anybody know what the future of CIE is to be? Do we have any policy on road haulage? Do we have any policy on investment in roads? Witness the Dublin and Cork transportation problems which alone every day cost the country millions of pounds in scarce economic resources and loss of industrial output. As a consequence, employment content in industry is directly affected by increased costs and low productivity.

To cap it all we need political leadership. This we do not have. Political leadership here is equated with beating Fine Gael to the top of the polls. We have a public relations Taoiseach. We have a Taoiseach who believes that whatever people want, irrespective of the consequences of their expectations, people should be given and, of course, he should be seen to be the sole contributor. Political popularity before policy is the only policy this country has at present.

There are now 200,000 persons registered as unemployed on this island, 90,000 in Northern Ireland and 111,000 in the Republic. Reliable commentators not usually given to exaggeration, such as Donal Nevin, say that the true figure for the Republic is probably 140,000 and I agree with that estimate when taking into account school leavers of this year who have not registered but are seeking employment. I meet them every day. Of course, their former advocates, like Brother Vivian Cassells, are strangely silent but when we were in office many a statement was made by the said gentleman. This is the highest number of unemployed persons registered in the history of Ireland as a whole. It is an enormous waste of human resources and a serious loss of industrial production. There is grave hardship imposed on families which can hardly be measured. It is an indictment of our economic and social systems. There is a responsibility on all politicians to awaken public opinion to this fundamental issue.

One of the major issues facing our community at present is the extent to which those of us in employment are prepared to put our hands in our pockets to pay for the maintenance of those who are unemployed and to pay for job creation costs. There is no doubt that within our community there is an enormous prejudice against people who are unemployed. There is a great mythology which classifies many of those who are unemployed as persons who are perpetually on "nixers" or who are simply too lazy to work. Perhaps the only way to cure some people of this dangerous mythology is that they themselves should be declared redundant and have to sign on in an employment exchange every week and have to register in Manpower, pretend they are going to work while chasing vacancies or have to hang around their homes and streets in despair living on less than half their normal earnings. I make this point because living standards in Ireland for those at work have improved very substantially in the past decade. For example, the number of private cars per 1,000 population has increased from 132 in 1970 to 203 by 1979. One has only to visit a lounge bar any evening of the week to see evident prosperity, high living standards and an apparently unending capacity for consumption. Despite the fact that there is a real and dramatic improvement in living standards we still have about 140,000 people in the Republic who are seeking work and are on the live register.

The problem is that higher living standards inevitably fuel higher expectations and any politician who suggests that living standards should remain on a plateau or pause for two or three years to enable the unemployed, the deprived and the elderly to catch up, or at least to maintain their living standards with other sections of the community, is likely to get a sharp reaction from his constituents. However, the point must be made strongly because there is no point in being in public life if one does not state the hard options and unpalatable truths, irrespective of electoral consequences. I ask again — and I was very unpopular with some of my trade union colleagues when I asked this question before — how many of the tens of thousands who marched outside Dáil Éireann and throughout the country demanding income tax relief are prepared to march for the unemployed?

The national understanding contains a commitment on jobs for 1980 and 1981. It is not unfair to suggest that now in the middle of November the 1980 commitment is somewhat irrelevant. For example, moneys which should have been released to local authorities in mid-year are only now filtering through at an exceptionally slow pace with the odd few hundred thousand pounds being given out to local authorities to meet outstanding contractual commitments. In County Dublin there are 350 approved housing loan applicants, many of whom have been waiting for the past six months and are being crucified on bridging loans. Quite a number of builders are awaiting payment also, but to date the £4 million which is urgently needed by Dublin County Council has not been paid by the Department of the Environment.

It is in this context that one must view the commitment on jobs contained in the national understanding. There is a commitment that in 1981 there will be 15,000 net new jobs, that is, an increase of 15,000 in the total number at work in the economy. Needless to remark, our employment statistics are not produced very rapidly and it will be well into 1981 before we have an indication of whether this target is likely to be met. However, we know the cost of job creation. Recent indications from the IDA would suggest that in 1981 the cost of creating a new job will be about £10,000, taking into account inflation, imported inflation, energy cost increases and the impact of the national understanding on construction costs. This means that the cost of 15,000 net additional jobs will be in the region of £150 million. The principal point in relation to this requirement is that it is all too apparent now that the real hard political nerve does not exist in the Cabinet to divert current consumption and scarce national resources into the area of job creation. This political will has been eroded.

We will probably have a by-election in North Tipperary in the early spring. Our colleague, the esteemed Minister, may be the cause of this by-election and we wish him well. However, we do not wish to see a situation where Nenagh is to get a new airport and Roscrea is, if possible, to get a new harbour, while Thurles is promised a new helicopter pad.

Mr. O'Kennedy

I thought for a moment that the Deputy was showing some familiarity with the ground. Obviously that is not the case.

Mr. B. Desmond

I am prepared for anything in terms of promises from this Government. The Taoiseach will probably go down to Holycross Abbey and announce the lot. Such is the nature of our political priorities at present. The Government should undertake for the 1981 capital programme and the budget an exceptional, stringent view of the criteria for productive capital investment and all resources should be channelled directly into the job creation programme. This might mean that further demands from the public sector for more and yet more pay increases in addition to the national understanding, demands from the farming community in north Tipperary for more and more relief against falling farm incomes and demands for 1,001 different projects, valuable projects which are relatively low in employment content, will have to be deferred while we try to get the tens of thousands out of work into productive employment. These demands may have to be deferred in the national interest. I throw out these questions. There is little point in having a fat wad of tax free allowance certificates in one's pocket if in the other pocket one has a redundancy notice and a P60 which shows no income. The choice facing our community is as stark as that. I fully appreciate that what I am saying will probably not be too popular with very many persons who are in employment in either the public or private sector. However, the harsh reality in Irish society, as indeed throughout western Europe, is that those who have jobs by and large do not care unduly about those who are out of work even if they are their very own next door neighbours. It is the job of politicians to make sure that that appreciation and political education is brought about in our community so that there is true reality and true economic appreciation and lack of social prejudice brought about in our community.

My comment on the Government's budget strategy for 1981 is that all resources must be concentrated on two fronts, productive job creation and our social services so that there will be no cutback whatsoever in these. There will be an enormous temptation to cut back on areas such as allocations for the health boards. While I believe that that sector could be far more efficient I am strongly of the view that it should be possible to obtain sufficient resources at national level for productive capital investment without diluting or cutting back our social services as might well be advocated by some right wing commentators in their analysis of the present situation.

I wish to refer to the question of inflation and employment generally. It has been clearly established that our rate of inflation has a decisive impact on employment. It has been suggested in a number of quarters, and notably in the recent speeches of the Taoiseach and the Minister, that the rate of inflation is on a downward curve. I do not share that view. I will suggest a number of reasons for the rate of inflation and the money income increases. We have a situation where within and without the current national understanding money increases continue to be sought and conceded without restraint. While I am pleased to note that the teachers trade unions will probably accept their revised pay offer I would point out that the net cost to the Exchequer is £48 million. Good luck to the teachers. Congratulations to the teachers. The immediate current cost for 1980 will come to that. Where this money will be found to meet this award only God and the Taoiseach know. The Minister should be thanking his lucky stars that he may be in Brussels by that time. We now have a further situation where the Garda Síochána are demanding an increase of about £50 a week, arising in particular from the settlement for psychiatric nurses, prison officers and teachers.

Mr. O'Kennedy

I would not like to tell the Deputy what the immediate cost of that will be.

Mr. B. Desmond

I would not like to hazard a guess. This pay claim is, of course, additional to previous settlements of pay relativities in recent years and also to the national understanding. Where the money will come from again lies with the Taoiseach. It is difficult to be critical of the Garda Síochána but one would say that there is clear evidence available that since the Taoiseach took office every other public sector pay claim has been conceded. We therefore have the most ironic situation where we have a national understanding but no incomes policy. In relation to the new salary scale settlement for teachers, as there are some 37,000 teachers in the country who will get this increase, the reaction and the number of relativity claims from the other sectors of the public service is going to be quite enormous. The implications of the non-existence of an incomes policy despite the existence of a national understanding are very grave indeed. The current national understanding and its application to the public service pay level in a full year will cost the Exchequer £247 million. Again, I would not like to hazard a guess as to where that money is going to come from. But there is no doubt that it does have an inflationary impact and an impact ultimately on employment.

The second reason I do not have much optimism about our inflationary prospects is that as yet the August, September and October reports of the National Prices Commission have not been published by the Government. They were buried because of the Donegal by-election. Where are they? Why have they been delayed? I can appreciate that the October report might still be under consideration by the National Prices Commission but there seems little excuse for the non-publication of the August and September reports. These reports will presumably contain some further sanctions for further price increases. This will inevitably have some impact on the inflationary situation.

A third and critically important influence on our rate of inflation will be the level of electricity price increases in the next 12 months. I understand that when the ESB made their last application to the National Prices Commission it was on the basis of oil costing the board £104 per ton. I understand that last week the board was paying £140 per ton of oil on the general market because the spot market is gone. We know that the installations in the Middle East will be at least 18 months out of action due to the damage there. In these circumstances I would predict that in the not too distant future ESB bills for industry and consumers will probably rise by another 15 per cent. Therefore, these three factors I have mentioned, the profligate policies of the Government in terms of cash handouts, the money income increases from resources which are not available over and above and under the national understanding and the energy cost increases which are reasonably projected, will have a major impact on employment. On top of all that we crucify ourselves with the prospect of industrial disputes having an effect on employment.

Throughout this speech I have called for political leadership. If this should become evident we are also entitled to call on other sections of the community to exercise leadership. This includes the trade unions. In particular we need the support of one group of workers by every other group of fellow workers in society. This means that when and if strikes become necessary — and I admit that it may be necessary to serve strike notice in any industry but I recall many times when James Larkin Junior said the best strike notice was the one that is never served except in the gravest of circumstances — then industrial action is directed against the employer. All too frequently such strikes are attempted to be won on the backs of fellow workers and on the backs of their families. This kind of industrial blackmail is not trade unionism.

Strike notices should be served only after the fullest consideration for the rights of others in the community, after the greatest possible efforts to resolve the issues and then only after full democratic process within a trade union and after recourse to all other actions or avenues to resolve the dispute. Otherwise we shall descend into a dog-eat-dog society provoking a repressive anti-trade union and anti-democratic response in the nation's laws. Needless to remark such industrial disputes have a disastrous impact on existing employment and scare away the prospect of new industrial investment.

A very clear responsibility devolves on every trade union official, on every shop steward and every trade union member to ensure that the least possible damage is done to their own employment, to outside industry and to the national image when such disputes inevitably occur. I am sick and tired of seeing disputes occur because personnel management is a last item on the agenda of board meetings. Companies rarely take decisive remedial action at industrial management level until they are suddenly confronted with a critical industrial relations situation and very often it may then be far too late. Therefore the blame does not rest exclusively on one side. I want to make that quite clear. However as a trade unionist I felt I should direct my remarks on the trade union side and, therefore, every trade union official, shop steward, every trade union member should ensure that the least possible damage is done to their employment, to outside industry and to our national image when such disputes occur.

I want now to refer to the State-sponsored sector because I believe this to be very critical and the employment situation in this sector has begun to deteriorate. A number of bodies have already laid off workers or suspended recruitment. An extremely critical situation has developed in some of these bodies, such as NET. In the lifetime of this Dáil I have been a member of the Joint Committee of the Houses of the Oireachtas on State-Sponsored Bodies. In this capacity I have been afforded a first-hand opportunity of being appraised of the situation. I should like to bring some facts to the attention of the House because it appears to me that every member of the Cabinet, with the possible exception of the Minister for Industry, Commerce and Tourism, Deputy O'Malley, seems to be brushing this grave problem under the Cabinet carpet.

CIE, in its last annual report for 1979, lost £70 million. Presumably they will lose at least as much again in the year 1980. The Cabinet have absolutely no transport policy, and are giving no guidelines to the Board of CIE. The board in turn are unable to convince themselves and their trade union employees of the existence of a national transport policy. Everybody in that area has finished up with their collective heads in the sands of bankruptcy refusing to take drastic operational and policy decisions which might give us a reasonable effective transport system. The Government, with fundamental political responsibility in this area, apart from the Minister, Deputy Reynolds, trying to start a bus now and again, have done nothing at all.

NET lost £12 million in 1979 and another £30 million in 1980. Even if the board get the £80 million for which they are now asking the Minister for Finance, even if the Minister gave it to them in the morning, NET will lose another £30 in 1981. The situation is as bad as that and is a public scandal.

Mr. O'Kennedy

As the Deputy knows, we inherited that problem.

Mr. B. Desmond

They have also had three-and-a-half years in which to do something about it. That Marino Point project constitutes a public scandal and has major implications for the Public Capital Programme for the next few years. It would require extraordinarily decisive action on the part of the Government and the new managing director of NET — whom I wish well — if alone the 1,500 jobs in Arklow and Marino Point are to be saved.

The sugar company faces a deficit this year which must be of the order of £10 million. Aer Lingus face a deficit of £10 million projected to March 1981. One can add to these losses in the State-sponsored sector the B & I where it is reported there will be a loss of well over £3 million for the year 1980. Of course the Irish Continental Line lost heavily this year as well. There are other State-sponsored bodies. I shall not go into the realms of RTE, currently under investigation by the Joint Committee on State-Sponsored Bodies, because it would be improper so to do.

Those are just some of the very substantial losses in the State-sponsored sector. Indeed that was not the whole picture. In 1978 the borrowing indebtedness of the State-sponsored sector was approximately £1 billion. On 21 October last the Minister for Finance informed me that that had increased by no less than 70 per cent to £1.7 billion. Therefore in effect the State-sponsored sector, in order to keep afloat, has been indulging in massive borrowing. The £1.7 billion to which I referred does not include direct indebtedness to the State.

It all boils down to what one should do about that critical situation. It has been suggested that the Government should borrow further abroad but obviously that is not on. It has been suggested that there should be more direct Exchequer subvention to these bodies. That means more taxation. It has been suggested that there should be full economic pricing of their products and services. This should be possible but, time and again, the Cabinet have failed to face up to the challenge of full economic pricing of many of the price applications of these bodies themselves. I would exempt some bodies, like CIE, which obviously must have a subsidy. The consequence has been that the cash flows of these bodies have deteriorated to an alarming extent. The only rational solution is full economic pricing in many areas so as to avoid further major deficits. Of course that requires political courage. It may require further taxation but certainly it will mean that there will be a fuelling of inflation to quite a degree in the process

I shall refer to two or three other aspects. There is the question of agriculture. One might ask: where will the money come from to meet the IFA demands? Where will the money come from if rates on land are to be reduced by 50 per cent, with an Exchequer cost of £20 million? Where will the money come from in the event of the suspension of the £10 million animal disease levy until farm incomes improve? Where will the money come from if the Government decide to increase substantially the subsidy on lime and fertilisers? Where will the money come from if the £7 million resource tax is abolished? I appreciate that farm incomes have declined. But the hard option facing the Government is that whereas some farmers still have their land, still have an income, though reduced, there are tens of thousands who have no income, no jobs, with little prospect of getting any unless we allocate the money now being demanded to be put into the agricultural sector into job creation in the industrial sector, including the agricultural employment sector. That is the choice facing the Government. In some ways it is salutary for the farming sector because by and large they did not pay any taxation throughout the 1970s.

I believe that if unemployment is to be reduced there must be a rapid expansion of industrial infrastructural investment. If that new industrial investment is to achieve its full potential, the money must be produced out of the Public Capital Programme of 1981 and 1980, geared to that area, and the bureaucracy which prevents those industrial infrastructural services of new telexes, new telephones, new roads, and so on must be pushed aside. In the files of Dublin County Council there are over 100 industrialists looking for sites in South County Dublin. They cannot get them. They want to increase employment. We gave them sites in the Sandyford Industrial Estate. There are now 40 of them there employing 700 people. We could multiply that by three had we the political will and the Public Capital Programme opportunities of so doing. Indeed the list of existing and prospective employers willing to move into new areas and expand their factories is available to the Minister tomorrow morning. The capital allocation of moneys must be done on a very rigid and strict basis. The buying of electoral support for marginal airports or marginal harbours is a totally cynical response to the real demands of the situation.

Throughout my remarks I have advocated restraint, moderation and the direction in which public finances should go. The question is: how do we achieve that restraint? I do not think we will do so unless we receive some reasonably good example from the Government. We will not achieve it if the vast majority of industrial workers are convinced that the taxation system is unfair, is seen to be unfair. Indeed it will not be achieved so long as employees have no real say in their enterprises, when the only time they see a balance sheet is when it is handed to them by a receiver with a redundancy notice as they walk out the door. We cannot have haphazard industrial relations policies in this country if we are to succeed in the 1980s. Income restraint can be achieved only when every section of society bears its cost of economic recovery proportionately to its ability to pay. That may mean issues of capital taxation, income taxation, direct and indirect taxation. It may mean the total abolition of tax avoidance and evasion, which persist in our society, to carry the ccost of that exercise.

I believe that the present Cabinet are devoid of political will in that area. The Cabinet are maimed by the cult of the personality which leads it, by an extravagant situation where the Taoiseach went to Donegal like Adam or Eve, naked and unashamed to woo the electorate. The campaign was prurient and the Irish people deserve better because, if I may finish with a quotation by Professor Lee in a Thomas Davis lecture, he said that the damage which industrial disputes cause is probably much less than that which is due to the continuing mediocrity of the many economic decision makers whether in the public or private sector — and I would say to Professor Lee — the political sector also because in effect that is the import of our motion. We are moving it in the hope that public opinion will be stirred in the direction of seeking action by the Government in this area before it is too late.

Minister for Finance (Mr. O'Kennedy)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute:

"approves the Government's policies to sustain employment in the face of the present serious international economic situation".

When I first addressed myself to the Labour Party motion I thought that it ignored — and still does — certain realities, but before commenting on that motion and on the realities it ignores I should acknowledge that Deputy Desmond's contribution for the most part, apart from some of his comments on the by-election in which for some strange reason he himself took no part, was significant for two reasons. Whereas Opposition Deputies tend to seek more and more money to solve problems that are all too easy to identify — we even had a little of that in the previous debate where Deputy Fitzpatrick was suggesting that we should again subsidise interest rates —Deputy Desmond, it should be said in fairness, took the other view, a generally responsible view although perhaps an unpopular view and acknowledged that it was a question of discipline, restraint and obligation to each other. He deserves recognition for taking that general view. But having acknowledged that, it does seem at the same time out of tune with the terms of the motion to which the Deputy also appends his name. The impression one gets from the motion is that the unemployment situation here is solely attributable to failure of Government policy and is "a massive indictment"— to quote —"of the Government's employment strategy". Of course that is not the reality.

The reality is something that we should all face, that our problem is not confined to Ireland. This is true to such an extent that the President of the European Council has written to his colleagues saying that unemployment within the Community must be the major item for discussion at the European Council meeting in a week's time. I shall return to that later. It is important that we should recognise that fact and not try to convey impressions of others that the problems existing here are attributable only to failures in this State.

Despite these problems I should like to reiterate that the Government's commitment to the attainment of full employment remains firm and constant. It is evident that the setback in the course of the last two years, particularly the latest rise in oil prices, has certainly seriously affected our capacity to achieve that goal within the time scale and phasing we had envisaged. I say deliberately that the commitment nonetheless remains for a number of reasons, many of which Deputy Desmond has underlined. In a sense it would be a soft option to drop the commitment because it would mean in a way that there are no disciplines required of the rest of us to ensure that that objective is achieved. I am very much in sympathy with many of the points made by Deputy Desmond in that context. I wish I had more time to deal with some of them. He recognises that some commentators in regard to income tax found that no matter how generous the concessions made last year — at the taxpayer's expense let it be said — they were not generous enough. Some would suggest that I somehow cheated people by not going further back at the cost of about another £50 million. I prefer Deputy Desmond's realistic and honest approach to the notion that somehow you could pull another £50 million out of the bag in addition to the £250 million already conceded. For that at least he deserves appreciation.

The employment we have in mind is viable and productive employment which is worthwhile, which satisfies the holder and the community's aspirations on living standards. If you have non-productive employment merely for the sake of having people engaged in some activity that will keep their hands active and their minds a little less lazy, that is not fulfilling dignity of work that I think the House and the people would require of the Government. Obviously what we must aim for is a programme and an infrastructure in our priorities that will not only generate jobs at the time of these activities but which will generate the basis and foundation for continued development of employment in the future. That is particularly important for us with our growing population which is of very considerable significance when one considers this question here in Ireland.

It is important to recognise that we are aware that we are the essential open economy. Of all the European economies ours is the one that is most affected. We must recognise this reality also by external development. About 55 per cent of our output is sold abroad and obviously a much higher proportion of any addition to output must be exported if it is to be sold at all. We cannot rely, as we might have done in the thirties or forties, on our own consumers to generate demand for the employment that must be created or maintained for our growing labour market. More jobs require more output, which in turn must be based on more exports. This is the logic of the situation. For that reason the setback to employment hopes this year must be seen against the background of the present international recession — not just so that the Government can take consolation in that but so that everybody involved will recognise realities and not enter into doom or gloom where it is unwarranted.

This recession, apart from the direct impact it has on us in view of our openness and in view of the increase in oil prices also caused competition in our home and foreign markets to intensify, as producers strove internationally to maintain output in the face of falling demands. Growth in the OECD area generally this year will be very much less than anticipated. It has decelerated progressively over the last two years. That is the international environment in which we must maintain the employment programmes which this motion suggested are beset by Government failure only. The most recent forecast suggests that the GNP of OECD countries will rise this year by not much more than 1 per cent and the growth in the EEC will be of the same order. This is of vital importance to us because the growth of world trade, which is now expected to be only 2½ per cent this year, will compare with 6½ per cent in 1979. There is a stark reality which we might as well face. We cannot say it is not due to all these outside influences. This motion suggests that it is entirely due to Government mishandling.

Our performance and the progress that we have made contrast — and I am putting this very briefly but, nonetheless, it must be stated as another reality — with the situation which existed when the Opposition had Government responsibility.

Mr. Mitchell

It was never as low as it is now.

Mr. O'Kennedy

I shall tell the Deputy exactly what the situation was when the Coalition were in Government. The unemployment situation in Ireland then was over twice the average of the European Economic Community. Now, it is not even one and a half times the average of the European Economic Community. That is a fact which can be checked anywhere. The second fact is that when the Coalition were in Government Ireland had by far the highest unemployment rate of the European Economic Community. Now Ireland does not have the highest rate in the Community.

Mr. Lipper

This is the highest rate we ever had in Ireland, which is the important thing.

Mr. O'Kennedy

What the Deputy wants to say is that this is not happening all around the world.

An Leas Cheann Comhairle

Sorry, Deputies, the Minister should not be interrupted.

Mr. Lipper

Let us have facts, not distortions.

Mr. O'Kennedy

I did not interrupt.

An Leas-Cheann Comhairle

If the Deputy has anything to offer he will be called later. Deputy Desmond was not interrupted once and I shall not allow interruptions.

Mr. Lipper

Deputy Desmond did not give distortions. He gave facts and truth.

Mr. O'Kennedy

I just stated the facts. Deputy Lipper can contribute later. The record is there and I shall give precise figures. The unemployment rate in the European Community this year is forecast to rise to 6 per cent, by comparison with that period when it was just over 2½ per cent. It has been climbing very steadily, to the extent that the impact here would have been all the greater were it not for the actions taken by the Government to offset the very dramatic and damaging impact of these events throughout the whole Community. I do not think that even these quoted figures capture the severity of the deterioration and the rapidity with which that deterioration occurred. The latest published statistics show that in the 12 months to September last the rate of increase in unemployment in virtually all developing economies has been staggering. In the United States, for instance, the rate of increase was over 30 per cent, in the United Kingdom 37½ per cent and in Denmark more than 21 per cent. The figures also show that developments in Belgium have been such that the unemployment rate there has been-pushed to the highest level of the European Economic Community now and indications are that it will be the highest next year.

It would have been nothing short of miraculous if we had escaped all these trends. I am not saying that we achieved that miracle. To be able to contain the rising unemployment better than other countries with stronger economies than ours in itself has been a very significant achievement when it is considered that it was achieved particularly in the face of an actual fall in demand in our main external market, which is a very important factor here, and a serious deterioration in our competitive position.

It is important that the position in that main external market, the United Kingdom, be noted. First of all, apart from the unemployment situation in the UK, the policies being pursued there, however appropriate they may be for the UK — and I do not want to be taken as commenting on these at this time— obviously are having an impact on the export outlet which we still seek in that market. It is still our main external outlet, representing over 45 per cent of our total exports. One would be foolish to ignore the impact which the restrictive policy there is having on our employment activities and, particularly, on our export drive. For instance, no other European Economic Community state faces all these factors together — the openness of our economy, the main outlet and the policies being pursued there and our dependency on imported energy. No other developed European Community country which I know of faces all of these difficulties to the same extent. For that reason, we have seen a significant deterioration in our employment situation, which is obviously a serious issue and a problem which the Government are not only tackling, but determined to tackle even more effectively.

There is the other important factor, which Deputy Desmond touched on. We have here a labour force growth which is by far the highest of the European Community and will have it in the future. Apart from population trends, the Central Statistics Office recently released an estimate of 20,000 as the net inflow of people into Ireland in the year to April last. This reflects the relative deterioration in labour market conditions in the United Kingdom, from whence most of that inflow comes. If one adds that figure to the growth in our labour force, which is twice the rate for the rest of Europe—our population growth, incidentally, is seven times the rate of the rest of Europe — one can see all these factors coming together which indicate that undoubtedly the kind of discipline which Deputy Desmond is talking about from the whole Community will be required to ensure that the priorities which the Government will apply will benefit those who may now be unemployed and, in particular, provide opportunities for the young people coming on the labour market.

I have spoken a little about the European dimension and it is important that I should specifically say what the Government are doing on that. At the meeting yesterday of the Finance Ministers, I raised this matter as being the major problem facing the Community. I called on my colleagues to recognise it as such and said that we must not pursue policies independently which can damage the socio-economic fabric in our interdependent economies. I was both surprised and pleased that, for the first time in the Council of Ministers of the European Community, I got almost an unanimous response from my colleagues that this should be the major item on the agenda for the next European Council. Some of my colleagues, notably the French and the German, spoke strongly of that need and recognised that Governments cannot pursue policies which would, in a sense, maintain that the monetary disciplines are the only criteria. The human problem of unemployment, one of the Prime Ministers said, can create a breakdown in public order. We are, at European level, making our partners aware of how vitally important this is. This is a very considerable achievement on our part and the Vice-President of the Commission has indicated that the Commission will present the position to the European Council and, in turn, that the Finance Council should then be called upon by the European Council to co-ordinate their policies and formulate them in a way which will tackle this problem.

I turn now to what we are doing at home in this whole area. Again, I wish to place on record, because it is important, the emphasis in the Government's planning and strategy to deal with the employment situation. Our Public Capital Programme this year represented, in terms of the area for infrastructural development in particular, increases of the order of between 25 and 30 per cent on the allocations over last year. That was a major and deliberate addition on the part of the Government when drawing up estimates for this year over and above the norm of about 5 to 6 per cent we applied on the current side.

I should like to illustrate this by reference to one or two of the major agencies. I am anxious to let the House know how we have concentrated on the capital programme and, in particular, the employment agencies in that programme. The IDA capital programme in 1977 — the last year the Opposition had Government responsibility — represented £59 million or 8.9 per cent of the Public Capital Programme. This year the IDA capital programme represents £157 million or 12.5 per cent of the Public Capital Programme. That is just one example of the definition of priorities the Government are pursuing to ensure the maintenance of the employment drive in our economic programme. The same is true of SFADCo and all the other agencies who will be allocated some 30 per cent more this year than last year. In addition, the Industrial Credit Company will have a 30 per cent increase over last year. It is of vital importance to recognise that in absolute terms the 1980 figure for combined expenditure of the agencies I have referred to will be £278 million. That figure includes £6.7 million announced in the package in the national understanding as a further commitment to maintaining the employment drive. That package, at a cost of £100 million, directs itself to (a) the infrastructural base, (b) the employment agencies and to the training agency which is of vital importance particularly with a view to training our young population for the employment opportunities that exist.

At the outset of his contribution Deputy Desmond read a dull and gloomy litany of the things we do not have. If faults are due to all the things that we do not have, then all of the partners I have referred to must be in a more serious situation from lack of policies than we are. It is appropriate that I should not repeat the actions we have taken but I should like to mention the developments which give us room for manoeuvre since I introduced my budget earlier this year. The October trade figures, published today, show that the import excess is continuing to decrease over the trends for last year and each month this year. I do not wish to make too much of a virtue of that. I am aware that that is attributable to a number of factors. But, as I mentioned in my budget statement, that gives the Government, in view of the fact that the payments deficit now looks as if it will turn out at something of the order of £600 million compared with £730 million in 1979, leeway in terms of the adjustment of our policies on the public expenditure side. I should like to assure Deputy Desmond that in our examination at this stage of our public expenditure we are adhering to the priorities in the Public Capital Programme. We are curbing to a considerable extent the growth of the current budget. Deputies come here looking for more and more, asking the Government to subsidise more and more, like Deputy Fitzpatrick a short time ago in relation to the building societies, as if the Government could find the money anywhere, but they should realise that that is all current budget money. I can assure those who are seriously interested that we will not respond to those requests to add to the current budget but we will respond to the obvious need and demand to maintain activity on the capital programme.

It is important that I should state that irrespective of the actions the Government may take through public expenditure there are other realities that have to be faced. In a recent speech I referred to productivity. Productivity is not confined to working twice as hard at the bench or attending everyday at the bench instead of being absent one day out of five although those are major elements. Productivity also is very much involved in what Deputy Desmond referred to, industrial peace, better industrial relations. If there is a breakdown in one plant, that affects another plant and productivity suffers, our exports suffer and when they suffer our job opportunities suffer. There is a crying need for improvement in that area. Our level of productivity up to 1977 was only about half of that of our partners in Europe, the countries we are exporting to. Therefore, we must attend at work, work at work and stay at work. That is a message that those who have any doubts should take to heart when talking in terms of employment. It is all based on employment. If we do not do those things those who look to us for employment will find that they have been deprived of their right by those who have the opportunity and do not take it.

I should like to refer to public sector pay. It is vitally important that we recognise that if we have a national understanding which, as I stated, was bought at an expensive price, the only way we can make that effective in our national interest, particularly in terms of employment, is to get industrial peace and productivity. There is also another factor in that it should mark the end of the claims that one can expect to face over the next 12 months. Unfortunately, there are indications — it may be that it is time all Members stood together on this — that various special interest groups are queuing up with claims. In one instance an award was made last year and we are aware that those involved are queuing up for a further award because of the consequences of an award made since then. It is time we all recognised that while we may have special groups in society the consequences of special awards can sometimes have a very general effect. One of the effects is that if people do not show restraint and responsibility those who are not yet at work, our young people, will be the ones who will pay the price for maintaining the relativities, even when people got what they asked for as late as last year. That is of vital importance and it is a principle which must be recognised. The Government and I are very seriously concerned about it at this point.

I want to turn to the plan which Deputy Desmond seems to think is absent. Let me remind him of the problems we had. We did not even have a proper census. Some years ago £1 million was saved by not having a census taken. That was the most expensive £1 million this country ever saved. It is not just a question of counting heads. We had to wait for some time until we got the whole basis that is necessary to prepare a plan for socioeconomic development. I want to assure Deputy Desmond and the House that we have an investment plan for the economy for 1981 ready to be published within a matter of months as part of the continuing plan for the next few years.

We differ from our colleagues on the other side of the House. When they were in Government they told us that, when things were tough, there was no point in planning. We take the other view. We have a very deliberate investment plan which will demonstrate the priorities I have indicated. The Government can plan and can allocate responsibility but, in the final analysis, the real test is the manner in which the public react. The manner in which this House will react will also be the test.

If one thing only emerges from this debate I hope it will be that, from now on, when Deputies ask for more and more money day after day for current services, they will ask themselves are they really interested in the employment of our people? The Government are, and we are determined to maintain our advance towards full employment.

Mr. Mitchell

Before I make the remarks I have prepared I should like to deal with some of the things the Minister said. I do not altogether disagree with many of the things he said. The question of employment and unemployment is so important and such a central economic challenge, that it is above party politics. It is a national issue and a national challenge. Nobody does any service to the country by trading in human misery in trying to make it a party political issue. It is not our intention to do so.

The Minister and Deputy Desmond spoke about the need for restraint and discipline. The Minister also referred to the frequent requests for more money from all and sundry for all sorts of different projects. Great expectations were raised by the famous or infamous or notorious manifesto of 1977. That is the source of much of the evil today. That is why there are so many demands for extra money for everything. During that election campaign the Fianna Fáil Party told the people there was plenty of money for everything. During the lifetime of all of us in this House today employment will be the central economic challenge facing us. No other issue on the economic front parallels the challenge of job creation. It is an exciting challenge which can be met, given the right and persistent and consistent policies pursued by successive Governments.

The Minister said the national understanding was bought at an expensive price. What he did not say was that the Donegal by-election was bought at an expensive price. He will not say that the next by-election, whether it is in north Tipperary or anywhere else, will be bought at an expensive price, and that the next general election will be bought at an expensive price. The price to be paid is not to be counted in millions of pounds but thousands upon thousands of jobs lost. If our unemployment figures are higher today than ever before, this is the payment for political promises. Those promises are not being paid for in cash but in lost jobs.

The Minister referred to the need for discipline. I remember the former Taoiseach, Deputy Lynch, saying on our entry into the EMS that we would need rigid economic discipline, that we would have to settle for the German level of pay increases if we were to survive within the EMS. The figure he mentioned was 5 per cent. Within weeks the European election and the local elections were impending and he proposed an increase of 12 per cent which eventually became 15 per cent. What sort of discipline is that? What sort of example is that from the Government to the people from whom they are asking discipline? Here the Minister is at it again. The people will show discipline when they are given an example of discipline from this House, which they have not been given for the past three-and-a-half years.

Unemployment is higher today than it has even been before at this time of the year. Never since the foundation of the State has the number of registered unemployed been higher at this time of the year than it is now. Unfortunately, the figure is almost certain to go over 130,000 in January 1981. That is a gloomy picture, but it is not the whole picture because it does not include the under-18s, those on short time and those over 65 years of age whom it used to include.

Does that mean we must face the future gloomily with no prospects of full employment? I submit it does not. I believe fervently that this exciting challenge of job creation can be met fully. It is within our capacity as a nation to meet this challenge and overcome it. It is an exciting fact that we have the youngest population in Europe. The Minister said our population is increasing at seven times the rate at which it is increasing in Europe. That means that in ten, 15 or 20 years' time the numbers available for work will be multiplied by that figure.

That gives us an idea of how important it is to see the task of job creation as the central economic challenge facing us for the next generation at least. Nothing should be allowed to inhibit the encouragement of economic growth. Although the Minister and Deputy Desmond did not come up with any proposals they referred to the need for good industrial relations. The Minister invited all sides of the House to join with the Government in trying to solve this problem of unemployment.

Mr. O'Kennedy

The Minister for Labour will be speaking on industrial relations and it is more appropriate to his brief.

Mr. Mitchell

Fine Gael have, over the past two years, invited the Government to join all those responsible for industrial relations. Our present industrial strife is avoidable; given the right infrastructure, the legal framework and the machinery we can have industrial peace. Unless we get industrial peace we will not have the optimum atmosphere for job creation. We have published our proposals and invite the Minister for Finance, the Minister for Labour and the Government to join with us in sponsoring the necessary reforms to bring about lasting industrial peace.

Apart from that, we must look not only at our regime of incentives to job creation but at our regime of disincentives. The Minister spoke at length of the percentage of GNP now being spent on job creation and doubtless the Minister's figures are correct. Yet, we have growing unemployment. Why? We are spending more and more on job creation but we are losing jobs faster than we are creating them due to disincentives. The IDA and SFADCo are going a good job in attracting industries but they would do better if we had industrial peace. I hope they can increase the number of job approvals in the next years. There are incentives, but we also have massive disincentives. We tax employment for instance. Every employer has to pay £13 per week in social insurance contributions for every employee. Social insurance is necessary and it is the practice throughout the EEC and most advanced western counties to raise it in this way. Some other countries have a higher employer's contribution. Because this is appropriate in other countries does not necessarily mean that it is appropriate here. Because of our unique population structure it is not appropriate to tax employment in this manner and this system will have to be looked at with a view to eliminating or curtailing it. This system is contradictory to the work of the IDA and SFADCo and to the employment incentive scheme introduced by the Coalition Government which is the most productive job creation scheme ever conceived by an Irish Government. To do this will cost money, but it is not beyond the bounds of creative thinking to find alternative sources of revenue which will not inhibit employment, that will not cost money. I would be foolish if I were to tell the Minister of State how to do so, so I will let him think if out for himself. To continue taxing employment is inappropriate in our present circumstances and in the circumstances that will prevail for the next 25 years.

In relation to the recent national understanding, my party greeted it with reservations. We have more serious reservations about it now, hardly a month since it was agreed. That agreement is spurious in parts and shows how unfortunate it is that national understandings are politicised. The national understanding says that from the end of 1979 to the end of 1980 31,000 new jobs will be created. That figure was produced by the Government and accepted by the partners in the last six weeks. At the same time it says job losses in the same period will be 24,000. Therefore the net jobs increase will be 7,000. Unemployment should be down by 7,000 according to the national understanding, but the figure at 31 October 1980 for registered unemployed is 110,921 and for the corresponding month last year it was 82,892. That is an increase of 28,000 although the national understanding says that there will be a decrease of 7,000. That means that the Government's estimates are out by 35,000. That cannot have been a mistake, just a month or two ago when the Government misled the trade unions, the employers and the country. It means that the grounds for the national understanding are null and void.

Incidentally, the national understanding also said that an education White Paper would be produced on 14 November. That has passed and there is no White Paper. The Government have reneged on two major commitments of the national understanding. Their jobs estimate is out by 35,000.

Debate adjourned.