The war in Iraq is obviously damaging the international business climate. Oil prices are rising, markets are in turmoil and this will impact on the Irish business sector. This is happening at a time when Irish business is suffering from the highest inflation rate in Europe. Is the Taoiseach happy to see inflation increase by 1% in February? This is the highest monthly increase in five years. Is he happy with the annual rate of inflation of 5%, two and a half times the European average? VAT has been increased in two consecutive years and there has been increases in ESB charges, telephone bills and VHI contributions. Will the Taoiseach explain the actions the Government will take to reduce this inflationary trend so that the word does not get out that Ireland is a high-inflationary area? It is difficult to persuade companies to invest in a high-inflationary area. This is all before the impact the Iraqi war will have.
Leaders' Questions.
The war in Iraq is a tragedy. In his question, the Deputy correctly said this will have an impact on business and lead to a slowdown in the world economy. We are still projecting GNP growth of 2.25% this year. Inflation is still too high. We have had several meetings between Departments, agencies and bodies that can help us to drive down prices. Competition is obviously a factor in this. While there are some direct tax charges, our business, employment and direct taxes are lower than in most countries. Our overall tax burden is certainly not in the upper reaches among OECD countries, never mind EU states. We accept that it will be a challenge to drive down inflation. Price stability remains a key part of our fiscal policy and this will only come about through more competition in the market, trying to get better price controls and our fiscal policies. We will continue to operate all those.
Today is a crucial day for the partnership agreement. If it is agreed, we will work with the trade unions and employers across a range of issues and take a range of measures to try to improve on this. The issues we will be engaged in range from housing to salaries. Our overall policy attempts to sustain progress in a difficult international climate and hold employment and taxation at current levels. We will try to be ready to take up growth again and be in an competitive position when the international climate improves. While we are not in a great position, our position is not bad – it is certainly better than most countries.
Is it not a fact that 2% of overall inflation is directly attributable to the Government's actions and reflects its inability to control price increases? The Taoiseach referred to the partnership agreement, which is based on open and honest engagement with all the social partners. The letter of determination of health expenditure for 2003 refers to a non-pay inflation factor of 2.8% while health inflation was running at 8.8%. Is that honest and open in respect of both sides? Will that gap be filled by empty wards, surgery cancellations and empty beds?
The partnership agreement also refers to the fiscal policy that contributes to non-inflationary growth. However, local authority funding has decreased by 2% this year. That means that every local authority will have to charge increased commercial rates and service, water and refuse charges, while local authority rents are increasing at an enormous rate. The Taoiseach has not answered the question. The Government is directly responsible for 2% of inflation and he has failed to control prices in his own area. The stealth taxes that are creeping in throughout the country are causing grave concern and a great deal of frustration for the electorate. This is before the impact of the Iraqi catastrophe ever hits our shores. The Taoiseach might explain what measures the Government will take to reduce inflation in the coming months.
We will continue both in Government Departments and agencies to follow the policy of price stability and we will try to get inflation as low as we can, although I recall when I was Minister for Finance, there was no inflation and I was called on to stimulate the economy and generate more activity in it so that there would be inflation. We do not want inflation at the level it is today. We want to control it and drive it down as best we can. There are no orders in place to control prices but if we can generate more activity and competition in the economy, that will be of assistance.
I want to correct the Deputy on the health inflation figures. He outlined an overall figure but, even if he was correct, there was a 12% increase in the revised volume of the health Estimate.
These are CSO figures.
The Estimate has increased by €902 million to €9,200 million, an increase of 12% on the outturn.
Why is one in five beds being closed in the Mater Hospital?
This is Leaders' Questions. The Deputy is not the leader of his party.
Hopefully, the social partnership agreement will be ratified later and I hope we will be able to work with the social partners and our agencies to achieve price stability as best we can.
The Taoiseach is not helping the situation.
Does the Taoiseach agree a majority of Irish people believe that the war in Iraq is an illegitimate war that might have been avoided, the case has not been proven and they cannot see what the connection is between the al-Qaeda network and the terrible atrocity of 11 September and Iraq? Does he accept the people are concerned about the ordinary people of Iraq; the duration of the war; the future of frightened children; the implications for the region and the manner in which the conflict is likely to inflame the Arab world; the implications of this stoking of enmity between the West and the Islamic world; and, above all, the emergence of a new doctrine of pre-emptive war under the present leadership of the United States?
The Taoiseach will accept a majority of the people understand the Government had a difficult decision to make and the United Kingdom and the US are good friends of the country. However, they are distressed by the manner of the handling of the crisis by the Government and, above all, by the doctrine, articulated by the Tánaiste, of the present leadership of the US. She says it is America, right or wrong. What position will the Government take on the new doctrine of pre-emptive war? When given the opportunity at the United Nations, where will the Government stand?
Our thoughts and concerns are with the Iraqi civilian population who bear no fault in any of this, including, as Deputy Rabbitte said, the children, women, the elderly and displaced persons caught up in the conflict, particularly in the unfolding battle at Basra. Considerable uncertainty remains concerning the direction and duration of the war and the precise needs of those directly affected. We will continue to do all we can on the humanitarian side. Yesterday I outlined our contacts with GOAL and the UN. Thankfully, the UN took many preparatory steps to avoid difficulties in the event of war and, at the same time, it worked hard to avoid war.
As Deputy Rabbitte stated, we have tried for many months, particularly since last September, to work with the UN to see if a peaceful resolution could be achieved. Last Monday week, unfortunately, those efforts failed and it was only then that we had to consider what position we would take. We decided not to be involved or to participate in any way in this conflict because we could not do so without a UN resolution. Our position is now to work as best we can and to the fullest extent with the UN on the humanitarian aid issue. We can do many things in this regard, which have been outlined.
On the other hand, there will be a role for the UN. That has been agreed by practically everybody and we will be able to play a role in that. Hopefully, the war will be short but nobody knows. The policy of this country since 1955 has been to play our international role in foreign policy under the collective security of the UN. That remains the position. There is no doubt this has not been a great conflict for the UN but it has had major successes and is playing a key role in many other parts of the world. Nobody should forget that. Unfortunately, this has been a bad experience but we must build on that, see where the difficulties and fault lines were and continue to work collectively, with the Security Council at the centre, to promote peace, justice and security in the world as best we can.
I asked the Taoiseach only a single question and he did not answer it.
The Deputy asked seven questions.
Deputy Rabbitte, without interruption, please.
It is encouraging that the Minister for Health and Children can count. It is a pity he will not count the number of patients in queues and deal with the hospitals.
The queues are getting longer.
I asked the Taoiseach one question. He was in the House yesterday when I traced the origins of the doctrine of pre-emptive war from 1992 through to 1997 when half a dozen people who are now in President Bush's Cabinet authored the document, Project for the New American Century, to the letter they wrote to Bill Clinton in 1998 demanding that he should invade Iraq and discount the UN. I spelt that out in considerable detail yesterday. What is the position of the Government on the new international doctrine of pre-emptive war sponsored by the people surrounding President Bush? Will the Taoiseach assure the House that the humanitarian programme is within the charge of the United Nations? Is the €5 million, which the Government has come up with, in excess of the €23 million global budget, because the statement from the Department of Foreign Affairs seems to imply that it is not?
I answered Deputy Rabbitte's question—
Deputies
The Taoiseach did not.
—but I will repeat my answer. The Government supports a system of collective international security, with the UN Security Council at the centre exercising primary responsibility for the maintenance of international peace and security. I am not answerable for pre-emptive strikes by anybody. I stand for and believe in the United Nations and I want to see it fully complied with.
The Government is assisting pre-emptive strikes.
It is supporting them.
I heard what Deputy Rabbitte said yesterday, but I must remind him that the the Clinton Administration – which was a good friend to Ireland – was in place for a large number of UNSC resolutions directed against Saddam Hussein.
It did not invade Iraq.
The Deputy declined to recognise that fact. Saddam Hussein declined to listen to what the organised world was saying. We would not be faced with the Bush Administration having to deal with this issue if Saddam Hussein – a dictator who has killed one million people – had fulfilled his obligations during the term of the Clinton Administration.
Allow the Taoiseach to conclude without interruption.
We will continue to put as many resources as possible into the humanitarian effort. We committed resources yesterday and we have already provided resources to the general fund. We will use as much as possible to help genuine Iraqi people.
Who is running it?
Does the Taoiseach agree with pre-emptive war?
He does.
Despite the enormity of what is happening in the Gulf region, there are issues at home which need to be addressed. Is the Taoiseach aware that, despite the economic slowdown, there has been no relief in the housing market and that property developers continue to fleece prospective house owners and young couples in particular? Is he aware that last week a property developer gazumped house prices from €198,000 to €214,000 over a three day period? How does the Taoiseach suggest young prospective house owners can ever hope to achieve the goal of home ownership? What steps do he and his Government propose to take to address this scandal, which has been continually highlighted and condemned? No serious action has been taken to put an end to gazumping?
Is the Taoiseach aware of Threshold's assertion that, even if current housing output targets are achieved by local authorities in the current year, they will still only just reach a level to reduce overall lists by some 1,400 per annum because of the increasing number of people coming onto the list out of necessity? This means that it will take some 30 years before those currently on lists will be addressed. This condemns many tens of thousands of men, women and children to unsuitable and unsatisfactory living conditions and, in the most severe cases, to living on our streets. Given these facts, what does the Taoiseach say to the countless number of people living in terrible living conditions, those who have to contend with outrageous rent demands and those facing massive mortgage demands which, even with double incomes, they cannot meet? This is all a result of the Government's failed policies on housing since 1997.
Housing supply is the key to holding prices down and helping people to become home-owners, which is the Government's stated policy. A record level of housing was delivered by the previous Government and, hopefully, this year some 55,000 houses will be provided, 12,000 of which are social and affordable housing. I know the Deputy agrees and that he merely forgot to say that was a record in the history of the State, but I am sure he will say so in his reply.
If we continue to maintain the level of housing supply, including affordable housing, from the changes that have been made in Part V of the Housing Development Bill and if we continue to develop the successful voluntary housing sector, it will be a great help. The voluntary housing agencies started small but a number of them are now providing quality housing to the less well-off and marginalised people, which has been a help. I agree with the further development of the voluntary housing sector to which the Deputy referred.
We should continue to increase supply. Land is another major issue because it is it rather than house prices which are causing costs to escalate due to the enormous speculation in the area. This is being looked at by the constitutional committee and we are also examining the Kenny report to address aspects of the situation.
The Government will introduce a private residential tenancy board, which is already working on an interim basis, for the private rented sector. The Private Rented Sector Tenancy Bill will be before the House in this session which will be important for controlling rent and improving and maintaining standards and facilities for people in rented accommodation.
Record numbers of houses are being built in the private sector, including affordable housing. Local authority lists have been maintained at a good level and there are record numbers of units in the voluntary housing sector. If we can continue to maintain that situation over a number of years, we will make a major impact on housing lists.
I am afraid it is not I who forgot, but rather the Taoiseach who has forgotten his Cabinet's facilitation of property developers by reneging on its responsibility to provide a percentage of affordable housing in developments. The Government facilitated this in legislation, passed since the resumption of this year's work in the House. He has also forgotten to respond to my question on gazumping and the disgraceful situation in Tallaght last week, where house prices rose by €15,000 or €16,000 over a three day period, placing beyond reach homes for which many young people, who are now left sitting high and dry, had organised finance.
The Taoiseach has also forgotten figures, released by his own Department, which show a 23.5% increase in the number of families on the housing waiting lists between 1999 and 2002, yet disgracefully, there has been a drop of €57 million in the allocation to the Department of the Environment and Local Government for the provision of social housing. How does the Taoiseach square all of that with the nonsense with which he responded to my question? He has answered neither my question nor the needs of the people who demand this Government takes action.
Hear, hear.
We have taken action.
The Deputy obviously does not want to hear that 55,000 houses have been built or that the figure is a record. He does not want to hear that in the voluntary housing sector—
The Taoiseach's own Department—
The Taoiseach, without interruption.
Let the Taoiseach speak.
The Deputy can listen now since he has wasted his minute. The voluntary housing sector is providing thousands more units than before. We have comprehensive strategies to deal with the homeless. Local authority figures, even where they are not records, are living up to high standards. We are to introduce a private rented sector Bill, which has never been done before—
What is the Taoiseach going to do about it?
People have paid lip-service to such a Bill for years, but the Government is implementing it. The 20% provision under Part V has not changed. The Deputy should have read the Act. It still applies. We made the Act workable so houses can be built. We could talk about what should be done and do nothing. We are now providing good quality housing speedily and at record levels—
Where are they?
—and if we can increase supply, prices will ultimately come back under control.
In your own mind.
That is what the Government is doing. It is providing good serviced land initiatives, has amended the planning law, put extra resources into the planning system and given high resources to the local authority system. All that is working.