This is one of a number of measures introduced by the Government to deal with an economic situation the development of which in its present form is at least partly attributable to past Government policies. Other measures taken included price control and credit control. These different measures all have one thing in common: they have all been undertaken too late.
The right time for the extension of price control legislation was in 1963 when the turnover tax was introduced, or by early 1964 when the first round took place following price increases, not all of which were justified. Yet measures to deal with prices were postponed for 18 months or two years, until in fact a state had been reached where it was possible to say that all possible causes of price increases were, for the moment, in abeyance. Wages have been stable in industry for some time past and productivity is still rising. Therefore, it was not appropriate or, indeed, very honest to wait until this moment to introduce such a measure.
The second point I should like to make is in regard to credit control. The obvious time for credit control was during 1964 when the banking system was allowing credit at a rate and in a manner that could not be justified. This action was postponed until this year. At the time of the general election the idea of Fine Gael in this respect was pooh-poohed by the Taoiseach and by the Minister for Finance in terms which could be described only as irresponsible. They imputed to Fine Gael ideas of grabbing hold of people's deposits. We have this action now being taken against leap-frogging in the Civil Service. The right time to do that was in the years 1960 and 1961 or thereabouts when in fact this process started. It started in the spring of 1960 and became quite marked in 1961. To wait until now when the process has gone on for five years shows that the Government were not alive to their responsibilities. It is another matter referred to in Fine Gael's policy statement.
Fine Gael also called for price modification but this was also waved aside at the time. Yet within six months the Government adopted this part of Fine Gael's policy also. In addition, Fine Gael drew attention to the need for a monetary policy which is precisely what was lacking in the past year and the lack of which has allowed our economy to get out of gear. Quite clearly it was a temporary problem which could have been solved. Finally, Fine Gael called for an incomes policy. Practical proposals were made in the Fine Gael policy statement in that respect and I take it the Government have now arrived at the stage when they are prepared to adopt that part of Fine Gael policy also.
One must certainly agree that the measure now proposed, if overdue, is something that needs to be done. It is a problem that has needed looking at. The Government's record in regard to wages and salaries has been particularly bad. In a period in which we have had economic progress, the Government have claimed credit for this progress but their record in this field has not been by any standard a satisfactory one and has led to a growing lack of confidence in the Government's competence in this field. The see-saw exercise carried out by the Taoiseach and other Government spokesmen during the past five years is impossible to justify economically, if it can be explained politically.
We had the Taoiseach's denunciation of the seventh round in 1960, a round moderate in character—seven to eight per cent—appropriate in time, necessary and desirable economically and socially and against which I do not recall any serious economic judgment having been made to the effect that it was excessive or occurring at the wrong time. It was denounced in March, 1960, by the Taoiseach in the Dáil. There was then a pause during which the Government had nothing to say until the electricians' strike in the summer of 1961. There was then repeated Government intervention, for which the present Minister for Finance was responsible, and this led to a jacking up of the offers made by the ESB to the electricians until the final amount offered and accepted involved a 17 per cent increase in salaries and a 12 per cent increase in general wages. This was responsible for raising the level of the eighth round from the eight per cent which it had looked like up till then, ending up in the 12 per cent with which we are now all familiar in the context of the ninth round. Responsibility for raising the ante in that way rests with the Government.
This electricians settlement led immediately afterwards — it can be documented — to wage settlements of above 12 per cent — working out at 22/6d per week for an adult male— and the whole level of wage increases was thus affected in that way, So, having denounced a moderate and timely increase for the seventh round the Government pushed up the whole level of wage increases to the inflationary level at which they have since stood.
The next move was the closing of the gap policy in early 1963. The need for this arose because fluctuations in the economy led to a slowing down in the rate of output per worker, and a gap emerged between the growth of output per worker and industrial earnings. The Government sought to close this gap. Indeed, this document here is entitled Closing the Gap. Nine months later, the Government announced that the gap was closed and that the next round could take place. One can argue about the appropriateness of that. It has been suggested that there was a political reason for it. If there was, the timing of the round was nevertheless reasonably sound economically, coming at the beginning of a period of rapid economic growth, although a postponement of some months might have been better.
But the Government stated that the gap was closed. The gap shown in this document and in this graph was, according to my calculations, 9½ per cent. That is, whereas in the years 1958-61 the productivity output per worker and earnings were reasonably in harmony with each other, moving at almost the identical same rate, in 1962, a gap emerged between them of about 9½ per cent. In the following year, productivity and earnings continued to rise, but at the end of that year, the gap was 10 per cent—½ point larger than a year earlier. To suggest that the gap was closed was, therefore, dishonest.
I think one can make a case that there was no hope of closing the gap at that stage and that some wage round was desirable, was going to come and was inevitable, and the timing of it may not have been far wrong—but the suggestion that the gap had been closed and that the Government had completed the job they had set out to achieve, was completely unfounded.
Then we had the Taoiseach's intervention in the ninth round itself which was too late. I am open to correction on this because there is confusion as to precisely what happened, but I think he suggested that eight per cent was an appropriate figure at a time when ten per cent had already been offered. His intervention in any event came so late as to be quite ineffective.
Since then, we have had the expansion of this leap-frogging in the public service salaries. It started in 1960, and became more acute since. The Government stood by without taking action. In reply to a Dáil question earlier this year the Government explained this whole process away and said that the increases being given to the civil servants were simply to enable them to catch up with outside employment. Now, they are telling a different and a truer story—that these increases were part of a leap-frogging process, and not simply a matter of civil servants catching up with outside employment but with other groups in the public service—State bodies and semi-State companies, whose salaries were already ahead of those of manual workers in industry.
The result has been that there is in fact no confidence in this aspect of the Government's policy among manufacturers and workers and even people who, at least until recently, had confidence in the Government's general economic policy have not felt that the Government's handling of these matters has been satisfactory.
Having said that, the fact is that the Government, better late than never, have decided to try to tackle this problem. The Government's proposal is designed to meet a real problem. In this country, unlike some other countries, clerical workers in the public service, the State bodies and some of the larger private companies are highly organised in trade unions, most of them being affiliated to the Irish Congress of Trade Unions. They are organised in this way to a degree which is far greater than in the United Kingdom.
Furthermore, in this country, to a far greater extent than in the United Kingdom, the leadership in the movement of salaries is taken by the Government and State bodies. The initiative generally comes from the State bodies but the skill and speed with which public servants and those in the service of local authorities join in the leap-frogging exercise keeps them well up to par. In the United Kingdom, the leadership in the salaries groups is not in the public sector but in the private sector. The combination, in Ireland, of a highly organised group in the public service and this practice of leadership in salary movements within the public sector, has been such that clerical salaries in this country have risen faster and in general to a much higher level than in the United Kingdom—in contrast to the position of the manual workers whose wage levels are generally lower than those obtaining in Britain and for semi-skilled and female workers the levels are very much lower.
Let me give the House some examples. At the moment, the typical earnings of a clerical officer in the entry grade in the State bodies is about £1,175 per annum at maximum level. Anybody fortunate enough to be privileged to enter one of those bodies, so long as he does not assault his boss, will automatically rise to this salary. The equivalent in the United Kingdom, as will be seen from a study of the analysis of clerical salaries published every three years and a copy of which is available in Trinity College—and, one would hope also—while doubting —in the Department of Finance—the equivalent figure in Britain is around £900 to £950. I would not want to specify a figure too precisely because there are higher London rates than elsewhere in Britain and there has been a certain movement in salaries recently but I think we can say the figure is around £900 to £950. There are institutions such as the Coal Board, Air Companies, and so on—the same kind of bodies as we have in this country.
There is here an extraordinary anomaly that clerical workers' salaries rise automatically to a level of the order of 20 to 30 per cent higher than similar salary levels in the United Kingdom, whereas the wages of manual workers in this country are from 40 to 45 per cent lower in some cases in similar occupations in this country than in Britain, particularly as regards women workers.
Not only are clerical salaries at a higher level but they have risen faster. The increase between March, 1960, and March, 1965, a period of five years, in industrial earnings in this country has been 43 per cent, from an average of £7 7/- a week to £10 8/11d. The figures themselves are not significant: they are an average for all workers in this country, juveniles and women included, and the figures would be higher for adult males. The increase in the maximum salary for entry to clerical grades in State bodies and the Civil Service has been over 50 per cent and the maximum for the clerical officers had risen by 57 per cent from £712 to £1,117 since 1960. We have, therefore, a situation in which these salaries have risen faster than manual workers' wages to a level higher than elsewhere. This has been primarily because of this leap-frogging exercise which the Government have watched but have done nothing about during the five years since it started in the spring of 1960.
There is a fundamental problem here, in fact, which has to be faced and will not be dealt with by this tribunal. It will require a broader prosion. It is a problem of social philosophy, of agreement on just what kind of society and what kind of structure of society, in regard to remuneration for work, we are moving towards. Up to 1960 it was the tendency in this country as in other countries for differentials between different levels of pay to be narrowed. This was achieved through flat rate increases rather than percentage increases. This led to a certain levelling up in society. Nobody's standards were lowered during the 1950s but the lowest paid had their standards increased more rapidly than better off people. This seemed to agree with the general philosophy most civilised countries have nowadays.
Since 1960, however, this process has been reversed in this country but not because the people of Ireland have decided on a new social philosophy or, have decided to raise to new levels the remuneration for clerical work and to keep manual workers further behind. This has happened because of the failure of the Government to manage the affairs of the public sector. This development seems to me to run contrary to the social philosophy which people in this country would broadly accept. One might have thought we had reached the stage here where we would be moving in the general direction of some measure of parity of status and remuneration between different types of workers with similar skills or qualifications. We have very skilled workers in the country now. The standard of mathematics required by them is now substantially higher than that for entry into any of the State bodies in his country. While this narrowing of the gap between educational standards has occurred—this catching-up process regarding the standards of manual workers—the pay gap has widened and there has been no sign that any of the privileges of clerical employees, incremental scales, pensions or month's notice have been generally extended from the clerical workers to the manual workers. This gives rise to the question as to what is our concept of social justice—more for those who have, and grind the face of the poor? Is it to maintain and widen social distinctions? I think that the Government and the trade unions must think on this again. It must be said that this process has been brought about by the efforts of the trade unions on behalf of the organised clerical workers which has been much more successful than on behalf of the manual workers.
We must consider, if we are moving towards an incomes policy, whether it does not involve some idea of narrowing the differentials and relating of remuneration ultimately not to social status, but to ability and educational qualifications earned in conditions of equality of opportunity which we are so far away from at the moment. This is a matter on which we on these benches must speak out. The Government have not faced up to this question. The Labour Party and the trade unions have not faced up to this question. Somebody must say something on the issue of what has been happening here over the past five years. If something is not done about this the legitimate dissatisfaction of the manual workers could prove a destructive force and it would be difficult to reject the arguments they would put forward against the widening of the gap that has occurred. The attitude of the trade unions with regard to the points I have been making has been somewhat perfunctory. They realise this measure is one designed to prevent the development of social injustice operating to the detriment of the bulk of their members but they are inhibited from saying so. Their reactions to this policy to some extent reflect this fact.
The need to deal with this situation is all the more serious because of the fact that we are not simply dealing with clerical grades, who are not highly paid people, but we are dealing with a system under which any new increase becomes generalised upwards and upwards to the very top in the public service and, so far as one is aware, in State bodies also. The recent status increases started at the bottom of the local authority service where the clerical entry maximum salary had fallen far behind the equivalent salary in the State bodies who had been leap-frogging each other with great success. They got an increase to bring them into line with State bodies. This was finalised upwards through the local authority services to about county accountant level and, I think, further at a later stage, and then moved across to the clerical officers in the Civil Service and thence to the top rank in the Civil Service. We are talking about the whole body of people engaged in administrative work in the whole public sector and the relationship between them and manual and skilled workers.
This measure is justified as this stage and it is largely for the reasons I have stated. I note the Minister in his speech made reference to moving towards a uniform arbitration system. This would be justified at this stage. I do not understand the Minister's attitude with regard to any form of compulsory arbitration. I cannot see that an arbitration tribunal dealing with a number of grades should interfere, to any great extent, with collective bargaining. Some proposals may be accepted and others rejected. It is quite true that for some of the workers involved the results may be less satisfactory in outside bodies. The purpose is to prevent leap-frogging but I do not think it involves any interference with collective bargaining. I would like an assurance on this.
I would also like an assurance from the Minister on a point in his speech. He said:
The Government have, therefore, decided to defer and to request other employers in the public sector to defer, until the tribunal's report is available, the granting of any pay increases to groups whose rates are to be the subject of investigation by the tribunal or to directly related groups.
He also says further down:
The claims still to be heard by the board concerns small numbers in Departmental grades and are based largely on internal relativities with grades which have already had revisions.
I cannot see the distinction between these two categories of directly related groups. There may be a distinction with regard to the groups who have had revisions but it is not clear to me. I would like to be clear whose claims are being affected and whose are not. There are, in fact, a number of consequential claims based on status, claims of people who have fallen out of line because of the general upward movement. I should like to know whether in fact they are not affected as is indicated. As far as I can see from the last thing the Minister said they are still open for negotiation. This affects the police, whose claim some years ago brought them to a point which is still behind the status increases which have now been given. It also affects the universities which have always had salaries in line with the Civil Service salaries but which have not obtained status increases. The Minister should make it clear whether these groups are affected. Do they come within the category to which he referred later?
I should like to support this motion while claiming that it is much too late. I would also like to suggest, in the light of what has been happening in the past couple of months, that the Government ought to have another look at the Fine Gael policy—I read it again myself yesterday—because there are still many good things in it which could be used.
