I am sorry, I used the wrong term. As a discussion document it was so inadequate and contained so much information that was incorrect that it did not do us any credit and brought our energy policy no further. Frankly, I doubt if Deputy O'Malley made much input to it because it did not bear the stamp of his personality and ability. He made the mistake also of over-committing himself to atomic energy without adequate consideration and he failed to cope with energy conservation adequately. There was also the unfortunate and counter-productive encounter with the multi-national oil companies. I regard those not as a basis of serious criticism of the Minister so much as evidence that the burden was too great.
The Taoiseach was right to divide the responsibility for energy and industry and commerce.
The Minister for Industry and Commerce will now have to look after Tourism also which now comes back into the frame of that Department from which it branched out in the sixties when the Department of Transport and Power was formed. There is a certain merit in that because in a number of instances the promotional activities involved in tourism and industry and commerce tended to bring Ministers to the same place and, indeed, sometimes at the same time. Perhaps, one Minister can handle those two tasks well together. There is merit in bringing tourism back into industry and commerce.
In regard to Deputy O'Malley, I have been critical about his performance but I have been careful to say that perhaps simply the job was too extensive for any one man to do. I should like to say that nobody could doubt his ability, his courage or his integrity.
The task facing Deputy Colley in this new Department is a critical one. We are lagging far behind other countries in energy conservation. This is serious because we have obligations in this area, obligations to conserve energy, obligations to meet certain targets for the import of oil. These targets have been negotiated by the Government. We have been given leeway where other countries have to cut back. We have been given provision for increases in oil imports over the years ahead out of the static total of oil imports involved in the target of the energy-consuming nations. That negotiation was well handled and produced good results. But the fact is that a country with an economy having the capacity for expansion of ours, if it is going to expand at the rate necessary to provide anything like sufficient employment for our people, it will be necessary for us to conserve energy so that even this increased allocation will be sufficient for the needs of such a rapidly expanding economy. Moreover, if we are not seen to conserve energy and to take the kind of steps other countries are taking, we cannot be sure that the relative generosity with which we have been treated in this area will be maintained in the future.
Our failure here is something that must be tackled. It is not going to be a popular job. Energy conservation, because of its nature, is unpopular. It involves people being less warm, less mobile, less free to employ individual transport and more constrained to use public transport. We are moving into an era when the complete freedom of individuals in these areas will have to be constrained, not just here but throughout the entire industrialised world, in the interests of securing a balance between supply and demand for energy, in the interests of ensuring that the industrialised world does not remain so dependent on imports of oil as to be vulnerable to pressures, blackmail, not just from groups of countries but almost from individual countries, as we have seen in recent times.
This, then, is the difficult and unpopular task Deputy Colley will have to deal with. He will have to face up also to the issue of atomic power. Here I hope he will approach the problem with an open mind. His predecessor did not give the impression of having an open mind. When it came to the question of the public inquiry it was spoken about in terms that were dismissive. It was suggested that: well, we have to have this inquiry so that those cranks can have their say, but we all know what the answer is going to be. That certainly was not said but there was the clear implication in the approach to it. This inquiry is a serious matter. It must be, and must be seen to be, independent; and when it has carried out its task, its report must be and be seen to be impartial. When that report is received the Government must act on it and be seen to act on it impartially.
The issue in question is a highly divisive one, a dangerous one, politically dangerous, indeed potentially dangerous to the democratic system if handled wrongly. It arouses very deep concern and passion among people. I was struck very forcibly in the Cork by-elections by the number of people who raised this issue with me, and they were not all students out of a debating society in UCC or some such place—far from it. I went into major firms in the course of my duties in my campaign. I met executives of firms at their desks whose first question to me was: "Where do you stand on nuclear energy? Are you really intending to go ahead with something so potentially dangerous to this country?" As well as that I met very many young people for whom it was the major issue. That issue has to be faced. It cannot be swept under the carpet.
I reiterate—I have said this before in this House—that what happened on Three Mile Island, indeed things that have happened in France and the cracks that have emerged in their reactors, force us to reconsider our position on this. We have in Three Mile Island an example not merely of what can go wrong but of the pressures to cover up, at grave danger to tens of thousands of people, when something does go wrong. We also have an example of what a Pandora's Box has been opened up by atomic energy when we hear now that that closed-down reactor is sealed off, that nobody can go inside it for years to come, that nobody knows whether the seals can withstand the pressures during those years of waiting and, if the seals cannot withstand those pressures, then there could be a major disaster in that part of the United States. Yet nobody can do anything about it. They built that reactor without working out how they would handle a disaster if it occurred, without being sure that one could not occur, without the slightest idea of what to do when something went wrong. They have built something which is in a state of instability and there is no technology in the world that understands how to tackle it. They have to sit there, watch it and simply hope that the seals will not break. I do not think, after that experience of how far the enthusiasm of engineers can outrun their understanding of what they are doing, that one can persuade politicians to ignore the dangers involved, to set them on one side. After that example we cannot afford a coverup type of inquiry here. There has to be an open-minded inquiry. I hope that the new Minister for Energy, guided by the Taoiseach, will approach this with a genuinely open mind. It is important for our country. If I were a Fianna Fáil Government in office and concerned to be returned to power I would certainly look very carefully at this issue and be—and be seen to be—impartial in approaching it.
The new Minister also will have to handle any problems that may arise if the find of oil in the Atlantic turns out to be commercially viable, if, as current rumours have it, it turns out to be on a major scale. That, of course, would be a great bonus for this country and would bring great advantages. Nonetheless, there are problems in how that is handled, problems in decisions to be taken as to the terms eventually to be negotiated on which that oil is to be brought ashore, problems which are very delicate when a great national interest will be at stake. If the find were on a large scale there could be crucial decisions to be taken as to the rate at which we would make use of it, or the rate at which we might decide not to make use of it, as indeed Norway has prudently done. These are crucial decisions on which this Minister will have to advise the Government. I am glad that, if Deputy O'Malley is not there, someone of Deputy Colley's experience and stature will be there to handle these issues as long as he approaches them, especially the atomic energy ones, with a genuine open mind.
The Taoiseach was also right to bring communications together. It is true that this now boils down basically to transport and to general supervision of posts and telegraphs after the establishment of the boards appointed to turn these into two semi-State enterprises. I should like to take this opportunity of congratulating the two people who have been appointed to lead these two new enterprises. The preceding Government are to be congratulated on their choice of personnel. Those concerned deserve the gratitude of the country for taking on an onerous responsibility which can bring them no benefit, which can only bring them problems and which may mean their private lives being greatly interrupted by people ringing them up looking for telephones. It is a job I must say I should hesitate to take on myself from that point of view. Certainly, one would want to be very completely ex-directory if one were to be in charge of telephones here. It showed great public spirit on the part of the two people concerned to take on this job and we should welcome the fact that they have done so. We assure them of support from this side of the House, a support which will continue in Government if we take over the reins of Government next time.
The real problems for the Minister in this Department will not be in these two areas where for some time to come the work will be in getting these boards established, getting the whole process under way of turning these into State-sponsored bodies. The Government Minister concerned may not have much to do until those concerned come back to him with concrete proposals which he will have to pilot through the House. I am sure these proposals will be well prepared for him. His major problem will be transport and traffic. This is a growing problem.
This is a growing problem which we should not underestimate. Public opinion in Ireland today puts a very high priority on this question of traffic, one would almost say surprisingly high. After all, we are still only partly an urbanised country. One can drive fairly freely around much of the country as the roads are still fairly empty. Nevertheless, the problem where it exists, whether it is in a country town or one of our major cities, is on a scale which gives rise to intense frustration. It is a very difficult problem to tackle. Because our towns, more than towns in many other countries, are built on a very modest scale in regard to the road network, there are greater problems of damage done by new roads to the environment and the communities where they are built, so one should be very hesitant to build new roads and cities. This should not be the first thought. We should not let the engineers loose to do their worst in order to ease the problem of traffic for a couple of years growth when they can by so doing destroy the environment and never solve the problem. No engineering solution will solve this problem. It will alleviate it here and there at cost to the community but it cannot resolve it.
There is frustration caused to people moving about their business and a very large loss to the community through the slowing down of transport, which must be a very major burden on our economy today, a loss of time to people moving about their business and a loss of time in the transfer of goods from place to place. In this area the promotion of public transport as a priority is an esential. I wish Deputy Reynolds good luck in his task and especially on his appointment but I do not envy him in what he has to do. I hope he will approach it with a sense of proportion and that he will have regard to the importance of not destroying communities in order to build roads and that he will have the courage to make the difficult decisions that will have to be made if the necessary priority is to be given to public transport, to give it a chance to serve the community and to enable people and goods to move with the freedom they must in this country.
There has been no change of Minister in some Departments. The Department of Justice is one. There have been criticisms of the Minister for Justice. He has had to take a good deal of flack from this side of the House. It is right that he should because of the threefold increase in the scale of takings in bank robberies from mid-1977 onwards. I give him no credit for dodging this issue and for seeking in this House to present figures in a misleading way and hide the fact that the upturn to the scale of these robberies and the sudden trebling in the turnover of them more or less coincided with the Government coming into power. There is obviously no direct connection but the fact is that the problem has become worse in this period and it is necessary that it should be faced. It is no use blaming the Government because it has happened. We can blame them if they do not face the fact that it has happened, admit that it has happened and get on with dealing with it. I am not satisfied that anything like enough is being done in this area.
Arrangements must be made so that no one person being kidnapped will give access to a bank or similar institution to a gang of robbers. It should be impossible for any group of robbers to know on any one night who they have to kidnap to get inside a bank. There should be no institution of that kind with only one set of keys. There should be two or three sets of keys and the person who holds them on any one night should be decided just before they leave for home so that nobody will know who has them and so that it will not be possible, by kidnapping one woman and her children, to force the hand of a bank manager to unlock a bank and to let people away with tens or hundreds of thousands of pounds. These proportions are unfortunately necessary in this State because of the scale of violence unleashed in the last ten years, much of it still politically motivated and much of it designed to raise funds to murder people in Northern Ireland, some of it not but rather the work of criminals taking example from those who have undertaken those robberies for political motives.
Whatever the reason, it is now on a scale that is highly dangerous to our community and it must be tackled. The Minister for Justice has a job to do, which he has not yet undertaken adequately. Having said that I must also say that there is a sense of reassurance here and in Northern Ireland at the reappointment of Deputy Collins from the security point of view, even if he has not measured up to the job adequately in the view of many people. His reappointment nevertheless has given a sense of reassurance, as has the appointment of Deputy Faulkner to Defence. Whatever criticisms there have been of Deputy Faulkner in some of the jobs he has held, he is a person of dignity and reliability. He is being given an important post, one not to be underrated in a State which faces the threats we face today.
Deputy Wilson is to continue in the Department of Education. Continuity is important here. There have been too many Ministers for Education. The turnover of Ministers in this Department has been quite excessive. It is an area in which for a variety of reasons, partly the enormous number of vested interests involved and partly the structure of the Department it takes a long time for a Minister to get anything done. A lot has happened in Irish education in the last 20 years, but almost everything that has happened in that field has been initiated by a Minister other than the Minister currently in that position. The work has moved at a speed faster than the rate at which decisions can be implemented, particularly because of the consultations required with so many groups. There is therefore an advantage in keeping Deputy Wilson in that Department, but it is a muted one because his performance has been disappointing so far. I think too much was expected of him in view of his intellectual distinction and his very genuine interest in education but his slowness in action has been disturbing, even allowing for the things I have mentioned. One failure on his part I have to say I regard as very surprising, knowing him for a long time, is his insensitivity in regard to the religious minority here, which was also shown by Deputy Faulkner nine years ago when in this House it transpired he had not consulted the minority and did not seem to be aware of any churches other than the Church of Ireland and the Catholic Church.
This insensitivity has been curiously repeated by Deputy Wilson in regard to the very sensitive issue of community schools. For a year-and-a-half he refused to meet the secondary education committee of the Protestant Churches but went ahead and announced the signing of trust deeds despite stated objections of that committee whom he had refused to meet as Minister. That is intolerable.
I have no recollection of such a thing having happened in Northern Ireland. Whatever record they had in Northern Ireland in regard to discrimination, and God knows they were deplorable in areas like housing and employment and in how politics were run, the Department of Education in Northern Ireland, very consistently, showed great consideration to the minority. I know there were pressures on them in the late twenties and thirties with respect to State schools and the introduction of Bible studies and they came under pressure from Protestant groups but throughout they were always open to consultation with representatives of the religious minority and were generous in the provisions they made. There was an open door in regard to the minority for 50 years. Why should there be a closed door in Dublin to the representatives of the minority here? One can imagine the kind of impression that makes in Northern Ireland. Why do we so often, when we talk about wanting to bring the two parts of this country together, virtually spit in the faces of the people in Northern Ireland and give them totally unnecessary reasons for saying they will have nothing to do with us.
If any Member of this House were a Northern Protestant, would he be encouraged to have any involvement with a State in which he sees the representatives of the religious minority refused access to the Minister for Education and decisions being taken to go ahead and sign deeds of trust for what we call community schools, without even meeting the minority religion groups on the subject?
As regards the lack of consultation with regard to trustees, there is a particular example of how this operates, which, if you are a member of the minority community, you must find very hurtful. I understand that the Vocational Education Committee has recently, on the instructions of the Minister for Education, issued a circular saying that transport grants are to be withdrawn from members of a religious minority living within three miles of two schools—a community school and a comprehensive school. The schools in question are schools which have never been the subject of consultation with the Protestant minority, who have never been asked for their views, nor were their views taken into account. The schools have been set up and structures created, in close consultation with representatives of the majority church but none whatever with the Protestant authorities and yet, by a stroke of the pen, they are declared by our Government to be suitable for Protestants without a word of consultation with them and the Protestants are to lose their grants accordingly. If Ballymena education authority in Northern Ireland were to do that, what would we think down here about the Reverend Ian Paisley and his friends in Ballymena? What chances are we now giving him to talk about us, by behaving like that? I fault Deputy Wilson for that. I hope that, even at this late date, he will take into account any legitimate concerns and objections by the Protestant minority and that new community schools being established—there are community schools being established which are amalgams of existing schools and there is a special problem there—will be established on the basis that they are acceptable to Protestant and Catholics, so that they will be community schools where the children of the community can come together and their parents and their church leaders can be happy that they are there.
Anything less than that defames the names we have spoken in this House in the last day or two, from Irish history, who had some idea of making an Ireland in which people of all religions and traditions could live together in harmony. I hope Deputy Wilson, now reappointed, will consider this position. I repeat what I said at the time of the announcement, that if trustees are signed without consultation with the religious minority, I shall not, and neither shall my party, regard ourselves as bound by them and those who sign those deeds must face that fact. We are not going to recreate here a denominational State and if Fianna Fáil seek to recreate it, we will seek to undo it. At the same time, it is our duty to provide every aid and assistance to all sectors of the community, to all denominations who wish to maintain denominational education. The majority of our people seek and prefer denominational education; they are entitled to it and their rights should be protected also. They must have a choice of denominational education or education in genuine community schools. It is the Minister's task to do that, and I hope the Taoiseach will ensure that he does.
There is no change in the Minister for the Department of the Environment, but I trust there will be a change in housing policy. There was a time when Dublin Corporation declared a housing emergency. The problem is now having a profound effect on our society. There has been a very drastic drop in completions of local authority housing today, below the average achieved during the period of the National Coalition Government, which is profoundly disturbing. This is happening at a time when young people are finding it increasingly difficult, to the point of impossibility, to afford to buy a house and are being pushed on to the local authority housing list, thereby, in some cases, putting people living in appalling housing conditions further down the list. This is an intolerable situation. This Government must give priority to this and Deputy Barrett, the new Minister for the Environment, must address himself to this problem with more imagination and more resources than he has hitherto had.
I congratulate Deputy Woods and Deputy Maire Geoghegan-Quinn whose promotions are clearly on the basis of ability. In the case of Deputy Geoghegan-Quinn, no one watching her in the House in Opposition or in Government would describe her as a token woman in Government. She has the capacity and the bit of toughness needed in politics to do the job, and the ability. I am very glad that she is in the Cabinet and there in her own right. I hope she will carry—as she has done fairly well so far—the strain of running a home in Galway and a ministerial office here. I share her feelings about replacing Deputy Dennis Gallagher, which were obviously very genuine.
Deputy Woods's ability was recognised by the former Taoiseach with his appointment as Minister of State to the Taoiseach. I am glad that his ability has been further recognised. He has fulfilled a very important function in the last few days, in ensuring a smooth transition from one Government to another in a dignified but relaxed, way. He has a very great capacity and I am very glad he has been given this appointment. He is a man who would be genuinely concerned to do what he can with the vast problem in health and social welfare, the latter of which—if I may be forgiven for saying so—were neglected over the last two-and-a-half years.
Deputy MacSharry has also been promoted. I cannot ignore his appalling comment about bombing Northern Protestants out of Ireland. I am not aware that he has ever withdrawn this; I hope he does, though withdrawing cannot unsay it. A shadow hangs over any man who has spoken in those terms. His words cast a shadow over our whole State, and stand as a barrier to reconciliation. I must add, in fairness to him—because one should be fair and say what is good as well as what is, in this case, intolerable—that I found him, as I found the other Fianna Fáil members of the Committee of Public Accounts set up to inquire into the missing £100,000, completely impartial in carrying out a difficult and distasteful duty and in reporting objectively the diversion of these funds to the IRA. He and the other Fianna Fáil members did their duty to this House, without fear or favour. It is fair to add that comment having had to refer, regretfully, to that remark of his, not, to my knowledge, withdrawn.
Coming to the departmental aspect, it is a matter of concern expressed by others and I shall not dwell on it, that this Minister is not someone with direct experience of farming. The farming community will be very concerned that there does not appear to be anyone in Government who is a farmer. Farmers are very sensitive to this issue. There are many other sectors of the economy which are the responsibility of Ministers, where the Minister is not expected to have direct knowledge, or often does not and nobody seems to object. However, for good or ill, the farming community in Ireland do expect something rather special by way of treatment in this area. They expect to have a man who knows about farming, because it is special. It requires to be handled politically with sensitivity and special knowledge. There are many people who have a grasp of the economic issues involved in farming, even somebody with as little to do with the land as myself can at times tackle these problems, at least in speeches, and I hope I can talk about them reasonably sensibly. However, when it comes to being Minister for Agriculture there is more to it than a grasp of the great economic factors involved and farmers feel that there is more to it. It is a pity that the Fianna Fáil Party have been unable to produce somebody with practical experience of farming to do this job in a way likely to be to the satisfaction of the farming community.
I congratulate Deputy Lenihan on his return to Foreign Affairs. His last visit there was very brief; I am sorry that I was involved in terminating it. This is a very demanding post. His considerable experience should help him in it, although his disastrous handling of the fishing negotiations must raise a question mark as to whether he has the necessary toughness for the kind of negotiations involved in Foreign Affairs. He is also responsible, under the Taoiseach, for Northern Ireland affairs, for maintaining contact with the little groups in Northern Ireland and for ensuring the flow of information which would enable the Government to make the right decisions on tactics and on policy. One thing needed in undertaking that task is sincerity. No one is quicker to detect insincerity or lack of underlying concern than Northerners, either Catholic or Protestant, Nationalist or Unionist. Where we have failed most over the years is that we have not by and large conveyed to them a sense of sincerity, seriousness and concern in dealing with this problem. It will be the task of Deputy Lenihan to do that and I hope he can do it successfully for the sake of the country. No one could refrain from expressing goodwill to this genial man. In relation to his portfolio on Northern Ireland and in relation to other States much more is required than geniality and I hope that Deputy Lenihan has the necessary capabilities. This is a post where the role of the Minister's wife is important in a way in which it is not important in other Ministries. Mrs. Lenihan will be a great addition to the post as indeed Mrs. O'Kennedy was before her.
I congratulate Deputy Power on his membership of the Cabinet as Minister for Forestry and Fisheries. It has been said that he has no direct knowledge of these subjects, but we must not prejudge him or any other new member of the Government whose form we do not know. I wish the Deputy luck in his task.
I would like to add a brief word of regret about those who have left the Government. I take nothing back about what I said about Deputy O'Donoghue and the manifesto for which he bears a great responsibility. The manifesto is at the origins of Fianna Fáil's problems and of the country's problems. On this occasion Fianna Fáil's problems are the country's problems. Within his Department, Deputy O'Donoghue was an energetic and skilful administrator. The Deputy set up a monitoring system, as far as I understand it, to draw together and to try to make coherent a Government policy which is of its essence incoherent in a system in which Ministers and Departments are so individualistic in their traditions and are so unwilling to co-operate with each other in many cases. Far too much of the time of Ministers is taken up in trying to get co-operation. Deputy O'Donoghue set up a structure which will help in that task and which will facilitate Deputy O'Kennedy as Minister for Finance.
It was sad to see Deputy Gallagher going; he is a gentle man and a gentleman. We can also regret the departure of Deputy Molloy. There was widespread surprise at his departure, a surprise which is a tribute to him because it reflected a feeling that he was a Minister of capacity and he was not among those whom people thought might have been dropped because they were unable to do their jobs. There is some speculation as to why he has been dropped.
I regret the departure of Deputy Gibbons. We all know how much Deputy Gibbons put into his Department and how deep is his concern for agriculture. In view of the events of nine years ago I suppose his departure was inevitable. The Deputy is a man who commands considerable respect and perhaps more respect that he sometimes realises.
Doubts must remain as to whether this Cabinet has the necessary skills and experience and the necessary unity to tackle the problems of the country. The basis of Cabinet making in this instance has been to try to tack together two camps into what is a rather unbalanced and skewed group of 15 people. It is a rather ramshackle Cabinet despite the best efforts of the Taoiseach who was forced with many constraints. The divisions within the Cabinet are very deep and I cannot help contrasting the divisions within this unity party Government with the lack of such divisions in the National Coalition Government. The thing that struck me most forcibly about the National Coalition Government was the disparity between the reality within it and the picture outside. Constantly, while a member of the Coalition Government and since, I have met people whose mental picture of the Cabinet was of five people at one end of the table and ten at the other end, constantly battling with each other in trying to get a balance between their interests. That was totally removed from the way it worked, in which party divisions never entered in on any of the issues that came up. One cannot help being struck by how the public have preconceptions that one cannot get rid of. In contrast, whatever defects the Coalition Cabinet had there certainly was no question of disunity within it, while there is certainly no question of unity within the Government constructed here today.
This Government will have to work much harder than the last one. With all due respect to its members, one could not help noticing and it has been drawn forcibly to one's notice—the disparity between the input of work and the hours spent at their desks on the job by the members of the last Government and the second last Government. I know how much work we had to do and I know that part of the explanation for our defeat lay in our over-concentration on our jobs in Government, in our growing detachment from our constituents, our party and public opinion. We worked very hard. Somehow the lesson learned by the Government who have just got out of office seems to have been. "If you want to stay in Government, don't stay at your desk". The results have been pretty disastrous for the country. The problems we now face are due primarily to the establishing effects of the manifesto and its implementation on our economy, but are due increasingly to external forces beyond our control. They are due also to the fact that too many Ministers spent too little time at their desks, with honourable exceptions. The demands of constituencies, the photographs in the press opening this, that and the other, sometimes for the second and third time and, indeed, several people turning up to open the same thing, that kind of antic is responsible for part of our problems today.
I know that Deputy Haughey is a hard working man. Some of us have felt and said that he has put a disproportionate amount of work into his public relations and not enough into his Department in recent times, but over the history of his period in Government he has a record of a capacity for hard work. I hope that Deputy Haughey will expect that his Government will work hard at their jobs. I know that the Taoiseach will also expect them to look after their constituencies and he will hardly discourage them from being photographed opening things, but he will also expect more out of them at their desks; I hope for the country's sake that he does.
The problems that the Taoiseach and the Government face are enormous. I should say that there are no great problems, that everything is reasonably all right and that if they fail to handle the very simple problems ahead of them, they must be very stupid. That would be a good political line, but it would not carry much conviction. We all know the problems we face. Some of them derive from the down turn in our economy due in large measure to the last Government's policies for which the Taoiseach has to bear a full share of responsibility. The record is there. Growth has been greatly reduced. I know there are question marks over the growth rates for this year. Perhaps they may be a bit better than the Central Bank or the ESRI have said, but it will certainly be far lower than it was last year. Some at least of that is the result of not being free to boost the economy when it needed a boost, because the Government boosted it when they came in and did not when it was going along very nicely at almost 6 per cent per annum.
The problem of inflation was made worse by this Government because they failed to hold back the money we knew would be needed in the second half of 1978 and early 1979 to be used to hold down the cost of living to single figures, to ensure that wage rounds would work out in single figures and that inflation would be held down. We knew that was necessary. Our assessment as we left Government was that inflation would fall to 7 or 8 per cent by May 1978. It turned out to be lower, partly because of certain measures introduced by the Government because the removal of rates and road tax had a marginal but perceptible effect on the cost of living. It worked out a little better than we expected but, subject to that, our calculations of how the rate of inflation would fall were correct.
We also knew that from mid-1978 onwards the favourable factors leading to that would be reversed. We needed to hold back money to be able not to impose taxes and, if necessary, to increase subsidies so as to knock two or three points off the cost of living, to hold it down to 7 to 8 per cent, because it would be rising into double figures otherwise, so that we could create the conditions in which a wage round could be negotiated which would be not more than 9 per cent in wage rates and which would then have held down inflation. That was our strategy. It was obviously the right strategy.
Our budget before the election was based on that strategy without regard to electoral popularity. Our card was trumped by the Fianna Fáil Government and they are now reaping the consequences. The consequences are there in our external payments. Where are the results of the Buy Irish campaign when we have the biggest import boom ever, when our economy is being supressed partly by the enormous flood of imports, not just for investment purposes but much of it for consumption purposes? Our external deficit is £650 million, and some think it might be even higher and as a result, even with Government borrowing of £500 million this year, there will be a 40 per cent cut in our external reserves. It is a very sobering thought that if the Government had not borrowed £500 million abroad this year our reserves would have been down from £1,250 million by four-fifths to £250 million. That is a very risky situation. To have encouraged that consumption boom by the policies in the manifesto was to court disaster not just for the country but also for Fianna Fáil. It is one thing to dig Fianna Fáil's grave but I wish they had not dug the country's grave at the same time.
As well as all that, there is the high level of borrowing with Government finances going astray. These are all problems the new Taoiseach will face and to which he contributed when he went along with the manifesto. I know he tried by his hitherto customary tactic of remaining silent to dissociate himself from it but he cannot do so. There is such a thing as collective Government responsibility. He cannot simply say it was not his manifesto. He may seek to imply it by a nod or a wink, but he cannot say it because it would not be true. It is his manifesto as much as that as the other 14 members.
Unfortunately we are at a stage in the economic cycle of this country which has been greatly aggravated by these policies and we are at a moment in time when the world situation is becoming much more difficult. The latest assessment of economic growth for the OECD countries is barely over 1 per cent. The assessment is that oil prices have gone up by 40 per cent and are now running, including the very large minority of oil purchased on the spot market in Rotterdam, at double the level for last December. The danger of a world recession is greater than before. The solution found last time—the recycling of petro-dollars through an enormous increase in imports by massive development programmes in Arab countries which helped to stabilise them politically—is no longer open. The capacity of the world banking system to achieve this recycling is very limited. They do not have the capital base and are over-extended and there is now a greater danger of world recession.
We could face these difficulties if the country were in the shape in which we left it. Deputy Lynch, as Taoiseach, was good enough to say on 18 December 1977 in this House that it was a foundation on which they could build—but it was a foundation which they undermined. It is much more difficult to face it now from the stance our economy is now in. There must be doubts about whether this team, not that much changed, can undo the mess created by almost the same team over two and a half years. No doubt the Taoiseach will throw himself into this problem energetically. Much is expected of him in the area of economic policy. It is sad to say that little is expected from him in the sphere of social policy, especially after the last two-and-a-half years.
For the sake of the country, we hope the Government can get us out of our difficulties, so many of them of our own creation, but difficulties that will be greatly aggravated by external events. I hope they can do it, but it is not easy to be optimistic when we see the team we are presented with: a lot of old faces which have not such a good record and some new faces about whom we may have hopes but in whom we cannot have an enormous amount of confidence. For the country's sake, let us hope they do their best.