Vol. 258 No. 1
I move:
That Dáil Éireann approves the Government's handling of the economic situation.
I understand there has been agreement between the Whips that speeches be limited to three-quarters of an hour. I mention that in case some Deputies are not aware of it.
May I say that there is no firm proposal before the House. However, it is the understanding among Labour Party Deputies that speeches would be limited to three-quarters of an hour.
Although there is no proposal before the House, there is agreement between the Whips and I hope it will be observed. I hope to start by giving a reasonably good example. There has been much comment in recent weeks on the economic situation, particularly on the level of unemployment. Much of this comment has been inaccurate, exaggerated and unnecessarily alarmist. However, I welcome the opportunity, particularly for that reason, to state the facts clearly and to place the present situation in its proper perspective. To do this it is necessary both to appreciate the events which led up to the present situation and to take account of other important elements in addition to unemployment which must influence any action at the present time.
Following the period of substantial growth in 1967 and 1968, severe problems developed in the economy in 1969. The round of large pay rises which got under way in that year triggered off a wave of steep price rises and led to unsettled industrial relations in several industries. The bitter fruits of this inflationary wage price movement were seen in 1970. Growth was brought to a virtual halt, prices rose at an unacceptably rapid pace, major stoppages of work took place and the large balance of payments deficit which emerged in 1969 persisted.
In such a climate it was scarcely surprising that there should also be a major slow-down in the growth of employment in industry and in services. It becomes imperative at first to bring to a halt and then to reverse such dangerous economic trends and the major requirement for success in this direction was to reduce the size of further pay and income increases. The National Wage Agreement of December, 1970, was the first important step towards achieving these results. However, it is important to recall that while this agreement held out the prospect of arresting the rate of increase in prices and pay levels. it did not promise to bring about any substantial or immediate pause in the rate of inflation.
All parties—trade unions, employers and the Government—were aware of this and recognised that they were taking a calculated risk in committing themselves to continued inflation. It was only possible to do this because by late 1970 it was clear that other countries too were experiencing severe inflation. Those are the countries with which we normally trade and from which we expect competition in industry and so on. Therefore, there were prospects that our ability to trade competitively with them would not be further undermined in 1971.
Against such a background it was obvious, and accepted by all parties, that 1971 could not be a year of rapid economic growth nor of increasing employment. The aim was to seek some recovery in output to contain the balance of payments deficit, to bring about some slowing down in the level of price increases and to preserve employment at its 1970 level. These aims were, I suggest, achieved. Output grew by 3 per cent in 1971 compared with 1½ per cent in 1970. The balance of payments deficit was held at a comparable level to that of the previous year. The rate of increase in consumer prices, which reached a peak of 10 per cent in 1970 and early 1971 had fallen to approximately 8½ per cent in the later months of last year. The level of employment, which is the aspect of immediate interest, appears to have shown little change compared with 1970.
The last statement may appear to conflict with the fact that unemployment figures are greater now than they were a year ago and also with the publicity given to increased redundancy figures. It is important therefore to clarify the situation. In doing so I do not wish in any way to minimise the human misery which unemployment nearly always means, nor do I fail to understand the strong feelings to which it gives rise. The issue is of crucial concern both to the individual who is employed and to society as a whole, but neither the interests of the individual nor of society will be served if emotion clouds reason in discussion of the problem. If we are to solve it we must look at it realistically, establish its extent and the reasons for it and then set about finding ways of remedying it.
First of all, we must set out the facts of the present level and recent trends in unemployment and redundancy. At the beginning of 1972 there were, in round figures, 77,800 people on the live register at local employment offices. This is not to say that there was an equivalent number of people who were genuinely available for and seeking employment on a full-time, unrestricted basis. The distinction is important because it helps to determine the extent of our unemployment problem. In the number of 77,800 people which I have mentioned there are over 5,000 persons aged over 65 years. It is highly unlikely that all of these are genuinely unemployed. The same can be said about the majority of the 11,000 farmers, and farmers' relatives assisting them, who are included in these figures. There is an unknown number of married women who continue to sign on for credits despite the fact that they are engaged wholetime on domestic and household duties. In addition, account must be taken of the chronically unemployed, those who through physical or other deficiencies are unable to hold down full-time jobs. We have no estimate of the numbers of such people in Ireland but an indication of the possible magnitude of this may be gained from a study made in Britain in 1966, when it was established that nearly 40 per cent of the registered unemployed in that country would have found difficulty in getting work on personal grounds, excluding age. I am not producing these figures to imply that we do not have an unemployment problem. On the contrary I fully recognise that we have such difficulties. These facts imply that the magnitude of the problem is not as great as the unemployment figure of 77,800 persons would appear to suggest.
The position in respect of redundancy is another issue where the facts should be seen in perspective. There was a sharp rise in redundancies during 1971. These redundancies naturally gave rise to public comment and concern. They also tended to create the impression that the overall level of employment was falling. May I stress that, apart from agriculture where there is a long-term decline in employment, and this applies to all progressive countries in the world— the number of new jobs created in 1971 is estimated to have exceeded the number of jobs lost through redundancies. While this performance may not have been sufficient to lower the overall level of unemployment it must be regarded as a satisfactory achievement in difficult circumstances. This is not to say that we can be complacent in any way about the current level of redundancies. While we must recognise that redundancies will continue to occur as part of the inevitable change in any society, our task is to ensure that such loss of employment is kept to a minimum, particularly when the special difficulties of the retraining of, and finding alternative employment for, people who have reached or have passed the middle age bracket are taken into account. While the Government can and do help to ensure the minimum loss of employment by providing financial and other aid in problem cases, success in this area ultimately depends on the action taken by both management and workers. For example, in some instances redundancies appear to have occurred because managements were unable or unwilling to adapt to changing circumstances. In other instances, inflationary wage rises or other labour cost factors have assisted the incidence of redundancy.
I mention these factors not because I wish to engage in any process of allocating blame, but in order to emphasise the point that success in minimising redundancies requires constructive action from all the interested parties. Before leaving this topic I wish to point out that increased redundancies are not due to the EEC nor are they to be blamed on the Anglo-Irish Free Trade Area Agreement. Those who try to convince workers that this is so are doing these workers a grave disservice. Our problems will not be solved by trying to blame outside bogeymen. Even if we were to remain outside the EEC the coming years would still bring the prospect of increased redundancies. It is the firm view of the Government that outside the EEC there would be both increased redundancies and a fall in new jobs.
A further factor which confuses examination of our unemployment position is the influence on the statistics of seasonal factors. In the week before Christmas the number on the live register was 71,400 persons. In the week after Christmas the figure had risen to 76,500 persons, an increase of 5,100 persons. Viewed in isolation this seems to be a big increase, but it is similar to that which occurs between these two weeks of every year because of the pattern of employment at Christmas. If we compare the differences in the employment levels in the pre-Christmas weeks of 1970 and 1971 and the post-Christmas weeks of those years we will see that there has been little change in these two periods. This influence of seasonal factors on unemployment needs to be stressed because to be unaware of it would be misleading and could lead to action on the economic front which would endanger the smooth growth of the economy.
The general increase in unemployment in the immediate post-Christmas period normally continues until midspring. This pattern is being repeated this year, as the figures for the first week in January indicate. By midspring a declining trend sets in, with the low point in unemployment being reached in or about June. It would be wrong, therefore, to be pushed into precipitate action to remedy with longlasting measures a problem that is essentially short-lived. Taken in isolation the rise in the number of persons on the live register after Christmas last may look substantial, but viewed in the context of the seasonal pattern there is nothing to suggest any alarming tendencies this year. Of more concern is the trend in unemployment from year to year.
Making due allowance for all the influences to which the live register statistics are subject, it is estimated that unemployment in mid-1971 was about 6,000 higher than in mid-1970 and that this increase had risen to about 9,000 by the end of 1971. I have already stated what the reasons for this are. I do not propose to reiterate them in any detail here. I must emphasise, however, that Ireland's experience in this regard in 1971 was not unique. Many other countries, particularly the UK, with which we have such close economic ties, suffered from rising unemployment in 1971, and Ireland, being an open economy, could not insulate itself from this adverse development.
Many of the redundancies which occurred in 1971 have been in traditional industries which are undergoing, on a worldwide scale, a general decline in demand. Not a few of the others have been in industries geared to markets in the UK and the US in which there has been a temporary falling off in demand. In addition, the poor employment situation in Britain has deterred potential emigrants from going there and has deflected them instead on to our labour market, which has been unable to absorb them all. This conclusion is supported by the most recent statistics for net passenger movement. For the 12 months ended November, 1971, these show a net inward movement of almost 1,000. This represents a very sharp contrast with earlier years. In the 12 months ended November, 1970, there was a net outflow of almost 8,000. For the same period in 1969 the outflow was 13,000, and in 1968 it was 24,000 approximately.
These figures would suggest that emigration has dropped sharply over the past two years and has now come to a halt. I am not suggesting that this is a permanent halt. I have said that lack of job opportunities in England have deterred many potential emigrants, but that fact has considerably swelled our unemployed register. When this trend of falling emigration and increased numbers of unemployed became apparent in the autumn, the Government took action aimed at boosting the level of employment and output. An extra £20 million was allocated for capital spending in the present financial year. Hire purchase and other restrictions on credit sales were removed and a reduction in the level of company taxation was announced, this latter to facilitate greater investment in industry. Since then, further public investment totalling about £6 million in agricultural grant schemes and credit has been approved.
Although the full economic benefits of these recent increases are not yet apparent, it is clear that in a number of instances they have resulted in an increase in activity. For example, the £1 million which was then made available for housing has enabled 800 extra local authority houses to be commenced in schemes which have been dispersed throughout the country.
To maintain the atmosphere of confidence which these measures represent, the Government have reviewed their investment plans for the period ahead and have now fixed the 1972-73 public capital programme at a level which is substantally higher than the revised level of the 1971-72 programme. The result of this is that something in the order of £240 million will be spent in 1972-73. This is about £50 million more than the initial figure announced for 1971-72 and represents a further increase of over £20 million on the higher revised figures for that year. Most of the extra spending relates to activities in which the employment content is relatively high and the time lag in providing additional employment is relatively short, so that this will make the maximum possible contribution towards reducing unemployment and redundancy.
The decision to increase the 1972-73 programme will take effect immediately. Departments and other public bodies may draw immediately on their 1972-73 allocations in order to get works going and stimulate activity in the economy right away. Full details of the 1972-73 programme will be made known when the 1972 Capital Budget is published. In the meantime, I can say that the expanded programme will give an added impetus to activity in the sphere of investment. Housing projects whose progress has been impeded by lack of funds will be stimulated. Improvements in the sanitary services which have been held up for the same reason will be put in train. The building programme for schools, factories, farm buildings and hospitals will be accelerated. All these measures will have a direct and immediate impact on unemployment, particularly in the building sector. Equally important, their effect will not be confined to particular areas but will be spread over the whole country, and their secondary effect will be to stimulate demand in activities other than those immediately affected by the Public Capital Programme.
On top of these allocations, which are designed to act swiftly to generate economic activity, the Government are making more credit available through the Agricultural Credit Corporation Limited. This will enable the agricultural community to capitalise on the opportunities now offered by EEC membership and will also have a beneficial effect in the short term.
There are other ways in which the Government have acted to combat unemployment. An example was the recent imposition of higher rates of customs duties on certain textile goods. This was done in order to protect employment in the industries concerned, which were being particularly hard hit by the worldwide recession in textiles. Such measures cannot, however, be used on any extensive scale if only for the selfish reason that they invite retaliatory action which could jeopardise the viability of the economy. In any event such remedies are only transitory in their ameliorative effect and for the period of their existence they deprive the economy of the undoubted benefits which follow from greater freedom in international trade.
Government action has also been taken into account in recent months to safeguard employment in a number of State-sponsored companies. The most recent example was in the case of Erin Foods. Deputies will have heard a statement issued today by the company which makes clear that no redundancies will take place as a result of rationalisation measures. The effect of this form of action has been to safeguard the employment of several thousand workers in these organisations and it thus represents a positive and substantial contribution by the Government.
There are other measures which, though not undertaken because of employment considerations, will nevertheless have a beneficial impact on the situation. Because of the continuing need to ensure that the nation's security is adequately safeguarded, the Government are further increasing the strength of the Army and Garda forces. Recruitment, which will be stepped up immediately, will open up further attractive opportunities for the right men. These increases are additional to those announced some months ago. Deputies will remember that the rate of new recruitment to the Army was running at about 100 a month, and 400 new places over and above normal recruitment were provided in the Garda Síochána last year and this year. These new increases, as I said, are additional to those, so that the combined increase in Army and Garda numbers would approach 3,000 as a result. This expansion will, of course, bring more employment to those industries supplying clothing and equipment as well as to the building and furnishing industries.
All the measures I have outlined will produce an immediate impact on employment in the areas which will benefit from this spending but their longer-term effects will be greater because most of this extra money will be spent on goods and services produced within the country, thereby increasing employment in other sectors as well.
The Government, however, are not content to stop there. Structural measures to deal with unemployment are also called for. First among these is one which is designed to ensure that redundancies do not take place unless and until they are absolutely unavoidable. To this end, Fóir Teoranta, which will be established shortly, will play an active role in regard to imminent major closures or major redundancies. Their role will be selective and confined to cases where there are reasonable long-term prospects of viability. In addition, other possible ways of taking action on structural problems are being explored and wherever real possibilities are offered Government initiative will not be lacking.
Let me now repeat a very important observation that I made earlier, namely, that Government action on its own will not solve our basic unemployment problem. Other sections of the community must also make their contribution. In the situation immediately confronting us this requires that employers and workers keep the redundancy position under constant review with the object of minimising or avoiding redundancies in specific cases. Their co-operation and agreement to a renewal of the national pay agreement on a realistic basis is also essential.
Let me say, in this connection, since external trade plays such a vital part in our economic wellbeing, we cannot afford to experience inflation at a higher or more severe rate than is being experienced by our trading partners and especially by our major competitors. The rate of price increases in the most important two of these partners and competitors, the United Kingdom and the United States, is expected to taper off to about 5 per cent in the current year. Therefore, unless we can match that tapering off in price increases then we will be faced with renewed difficulties in the year ahead.
It may be a truism but it none the less bears repeating that, in the ultimate, Government action can only create the environment favourable to the solution of our economic problems. It will be clear both from the facts of the situation and from the action which the Government have taken and are now taking that there is no basis for the many exaggerated statements and scare stories which have circulated in recent weeks. I want to say that I particularly deplore this kind of behaviour where unemployment is concerned. Playing up real or, for that matter, imaginary difficulties is one of the ways in which Opposition parties seek to embarrass the Government. Fair enough, this is behaviour which politicians are accustomed to but there are or should be limits to this playing of party politics.
Give us an example.
Yes, the 1,000 jobs being lost in the Sugar Company which the Labour Party plastered all over the papers and which is completely untrue, unsustainable and unjustified.
Who in the Labour Party?
That is one example.
Which Labour Party?
We succeeded in scaring the daylights out of your party anyway.
Let me say to the Labour Party that misleading and inflated statements about employment create needless concern and worry for the workers, create fears and feelings of insecurity among many workers.
What of the extra 10,000 unemployed?
I would hope that Deputy O'Donovan and his Opposition colleagues will in the future have more concern for the workers than for scoring political points.
Is the Taoiseach accusing the Irish Transport and General Workers Union of inventing scare stories?
Deputies opposite try to create alarm rather than try to protect the interests of the people about whom they purport to be concerned.
The Taoiseach should go back to Cork.
I am delighted to go back every time I can. Unfortunately there exists an unemployment situation in Cork because of the textile problems to which I referred earlier and we have taken action to try to overcome these problems.
Because we scared the living daylights out of you.
If that is the Deputy's story let him stick to it.
There was no crisis.
If the Deputy would keep his mouth shut and not scare me further I would like to finish. I have only a few minutes to go and I do not want to quake in my shoes opposite him. I want to say that the action which the Government have taken in our opinion provides a sound basis for a rapid improvement in the economic situation and for increasing employment. If the actions of the Government are matched by a mature response from all sections of the community, employers, unions, farmers, as I feel confident they will be, then 1972 could be a year of substantial improvement and advance. The opportunities to bring about this result exist. It is in the interests of all sections of the community that these opportunities are grasped and realised. Having overcome the worst of the difficulties which have affected the economy in the past two years the aim must now be to resume the rapid rate of progress necessary for the attainment of full employment and the attainment of other desirable social objectives.
I must confess that listening to the Taoiseach's speech I could not help thinking that he was rather like a schoolboy who had just received a very bad school report, was trying to explain it away and was promising to do better in the term just about to begin. He has spent some time in dealing with the problem, which prompted the Fine Gael motion, by trying to explain away the unemployment figures.
There are now some 78,000 people unemployed, that is 10 per cent of the employment force. It is the highest percentage in Europe. I would imagine that the leader of any Government under whose policy that situation had come about would have been obviously concerned with the result, but no. From the Taoiseach today we had an extraordinary exercise in producing one bad excuse after another. Apparently we are to believe that quite suddenly 5,000 people over the age of 65 signed on the register. Apparently we are to believe that quite suddenly married women, wholetime engaged at home, have signed on the register. Apparently we are to believe that 11,000 part-time farmers have quite suddenly appeared on the unemployment register. I am sure they are part of the total of 78,000, but they were also part of the figure last month and the month before, last year and the year before, and they have nothing whatever to do with the fact that over the last year and a half the unemployment figure has been climbing week by week and month by month. Let us, therefore, put aside the excuses and try to have some regard for this very serious problem. Unemployment is a great evil in any economy, but it is particularly evil in a small economy such as ours. It is particularly disturbing at a time like this when the prospect of Europe lies ahead.
The Taoiseach made some remarks about playing politics. If the purpose of political action, or political play, is to achieve a reduction in unemployment, then I make no apology for it.
Hear, hear.
I assert that the purpose of this motion put forward in my name and in the name of my colleague on behalf of the Fine Gael Party was to alert the Dáil, the Government and the nation to the size of our unemployment problem. It was to do that first. Secondly, it was to suggest positive steps which could be taken to curb the trend or at least alleviate the problem. I have said that at 78,000 unemployed we have, comparatively speaking, the highest percentage unemployment figure in Europe. The disturbing thing about our present situation is that that high percentage would, I suggest, have evoked no concern on the part of this Government had this motion not been tabled. It is appalling to think that a problem of that dimension should not have evoked much earlier attention and much more constant concern from the Government.
We used to be told by a Leader of the Fianna Fáil Party that the acid test of the success of a Government's policy was the number of people put to work. It is somewhat extraordinary that that view should not have retained some importance in the Fianna Fáil Party. After all, what are Fianna Fáil? They are the party who produced on 12th October, 1955, the following: "Fianna Fáil's aim is full employment. The Fianna Fáil Party are committed to providing 100,000 new jobs in the five years immediately ahead." Full employment, ending emigration and all the other very attractive aims were put forward on behalf of the present Government party. Now, years later, we have a shy, apologetic Fianna Fáil Leader coming into this House and saying it is wrong to create alarm about unemployment; it is wrong to be too hard on the Government and do not play politics with a matter of this kind. After all, it is really the fault of the British; their economy has gone down and potential emigrants, so the Taoiseach says, are being diverted into our labour market.
Imagine the leader of an Irish Government complaining and explaining that some other country's condition is responsible for the fact that he cannot provide employment at home for people who, if things were going well in another economy, would be emigrating. That would seem to me to be a complete confession of failure. It indicates the utter bankruptcy of this Government in relation to any positive thinking.
Full employment is a dead duck now so far as Fianna Fáil are concerned. Apparently we can look forward under the present Fianna Fáil Government only to a restoration of our right to emigrate our people so that the unemployment figures may be reduced. I do not want to quote unduly other people's views. For some years back the present Administration's conduct of this country's affairs has been marked by a singular lack of policy. Problems have been dealt with only when the Government were forced to deal with them. Difficulties were not foreseen. There was very little fore-planning. It appears to me that much that was done over recent years was done because political necessity required it or because political expediency demanded it.
Hear, hear.
The Taoiseach, in his efforts to show that this present situation was not his fault or the fault of the Government, had the temerity to refer to 1969. He was right in doing so for it was in 1969 that the Government were plainly and squarely and objectively warned that a dangerous situation was arising. Does the Taoiseach ask us to forget that dramatic fireside chat from the then Minister for Finance who cried "Crisis" and said that the country was heading straight for bankruptcy? That was back in March of 1969. The Taoiseach was right in recalling that. But would he explain now to the 80,000 unemployed, to the people who cannot get work in Ireland, what prompted him and his Ministers to retreat from that situation in March of 1969, to bring in a phoney budget and dissolve Dáil Éireann in order to win the last general election? That is where political dishonesty was in control. That is where politics were played to the disadvantage of the nation. That is why today this country is face to face with an economic crisis and that is why it is the responsibility of every member of the Fianna Fáil Government who chose his own political safety instead of acting in the interests of the country.
In today's Irish Independent there is a comment from Mr. Don Carroll, the former governor of the Bank of Ireland. He says:
Too little economics and too much politics.
In describing the management of the affairs of this country by the Government he says:
For years past there appeared to have been little in the way of a strategic plan for the economy. All the evidence suggested that political considerations were foremost and that the time scale of thought in Government circles related to the old adage: a month is a lifetime in politics.
So very apt and true. This Government drifts along from week to week and month to month having no programme and no policy.
For the last five or six years, and certainly since the Anglo-Irish Free Trade Area Agreement, the problem of adjustment of possible redundancies and the need for assessing job opportunities in our economy have been clear: it was pointed out time and again. People have stressed the need for an overall examination of our potential, our future and so on. What have the Government done? Absolutely nothing. I suggest. There has been talk about adaptation. There has been clear knowledge by everybody that, even apart from free trade, technical change in industry would create redundancy but the Government allowed many companies to paddle along doing nothing, taking no action until quite suddenly action was forced on them.
No doubt the Taoiseach will point to speeches made here, there and elsewhere. That is no good. The last five or six years was a time for action and action was lacking because so many Government Ministers were too lazy or too incompetent to discharge their duties. The Taoiseach is perfectly right in saying that the present unemployment figures have nothing to do with the European situation because they are the direct result of Government inaction in the last five or six years.
Is it not a very very strange approach to a most significant issue for the people in the next couple of months, an issue which may decide our future, that on the eve of Europe, with free trade just beginning, we have not been able to employ our own people? Let us be clear about this: it has nothing to do with whether we go into Europe or not. We must now face the fact that inside or outside Europe we must exist from now on in a free trade world where there can be no question of being able to protect industry behind a tariff barrier. That has gone. The real trouble is that this is happening suddenly and it is like somebody waking up out of a deep dream to find industry in a shambles and jobs lost all over the place because in the years of preparation there was nobody to see that the preparatory work was done. I charge the Government with failing to do their duty in this important field in the last five or six years.
What is to be done now? Forced into action by the tabling of this motion and forced to pay some attention to this serious problem the Taoiseach has alternated between saying that the problem is not a problem and even if it is, it is not his fault. Now he says he will do wonderful things immediately. He talks about expanding the capital programme by £20 million. That is 9½ per cent. Who does he think he is fooling? That will not even meet the increase in prices. That is a proposal that has no meaning except to tell the unfortunate unemployed man to live in hope and he may get pie in the sky. This £20 million fund can be drawn on in two years which will have the effect of reducing the effect of this expenditure.
We tabled this motion to alert the Dáil, the Government and the nation. This is a serious situation which I believe may grow steadily worse unless positive action is now taken. We suggest in the motion the steps that appear to us to be urgent. We suggest the initiation of discussions between the organisations jointly concerned, the employer and trade union organisations, to secure a postponement of any further contemplated redundancies and we then suggest the Government should come in and in an emergency situation help to finance a caretaking operation. We also suggest—this is a matter of common justice—that legislation should be introduced at once to provide for at least one month's notice before redundancy or dismissal.
We suggest in relation to the meat trade that the present meat subsidy arrangement should be reviewed. It is a most extraordinary situation that men are being laid off in that industry because cattle cannot be secured for slaughtering. This is the one industry in which nobody could doubt there would be a vast expansion upon our entry into Europe and at this moment there is redundancy and unemployment in that industry which has all the hallmarks of a sound Irish industry, because cattle on the hoof are leaving the country.
Surely a Government with any idea about foresight would realise that this is an area in which action should be taken to preserve a situation until a future position in the European markets is available.
We also suggest in relation to those industries where, for some of the reasons I have mentioned, the devastating result of competition is now arising under the free trade agreement with Britain, there should be a review and an exercise of the powers under Article 19 of that Treaty to preserve the situation because of the large unemployment involved. We suggest also a reduction in bank interest rates pro rata with the reduction in the Central Bank discount rate and the interest rates in Britain. Why is this not done? This little measure of reflation is what our economy urgently needs at the moment.
The Taoiseach referred to the provision of more credit for farmers. I welcome this measure but I would remind him that I advocated this on behalf of my party some six or eight months ago. Had that action been taken then, I think it could have had some effect in preventing such an increase in the unemployment figures. Nevertheless, I am glad that it is being done now. Our party also advocated the launching of a major recruitment drive for the Army and the Garda and I am glad it is being done now. It will help and, at this time, it is not out of place.
We have also advocated the immediate reduction of taxation on company profits from 58 per cent to 50 per cent. I will not say anything too hard about that. All of us know that the increase in corporation profits tax in the autumn of 1970 was the most stupid action any Government have ever taken. It was done in the teeth of warnings as to its effect and I am certain it was done contrary to any sound advice. The immediate effect in liquidation and unemployment was foretold and, very grudgingly, an ashamed Minister tried to deal with the situation. Unfortunately, the reduction is not having an immediate effect and I suggest that in this situation that reduction should operate now. It would be a small way of helping through Government financing companies that are now in difficulties.
Our party advocate a proper public works programme related to the problem of unemployment. The Taoiseach has said, in effect, that he is doing this but I assert he is not. I believe that his proposals in that respect will not have the slightest effect. There should be a full assessment and there should be proper short-term planning with regard to public works in order to deal with this situation.
I put down a motion on behalf of my party. I did so because I am concerned that there should be a public appreciation of the potentially dangerous economic position at the moment. I am concerned that from now on people no longer will regard unemployment as something inevitable. Much has been lost because of lack of action in the past. In the immediate future we cannot afford to let things drift. It has been this negative attitude to the inherent dangers in our economy that has brought about the present situation. So far as we are concerned, we will listen to no more excuses. We will demand action from this time on.
I do not know if members of the Fianna Fáil Party regarded this debate as being so serious that they did not engage in their usual act of applauding the Taoiseach after what should have been an extremely important speech, what should have been a keynote speech so far as the economy is concerned. Even if I were a member of Fianna Fáil I should not have joined my hands together in applause because I did not recognise in that speech the sense of urgency that is needed in the circumstances from the leader of the Government.
I do not think it would be unfair— I say this without any disrespect—to comment on the short motion which has been tabled by the Taoiseach. This motion states: "That Dáil Éireann approves the Government's handling of the economic situation." I do not think it is unfair to describe it as a cynical and smug claim.
I regard this as a very serious debate, as serious as debates that have taken place here on matters relating to the North. I do not think there is any point in Fianna Fáil members shouting across the House to me or to any other Member: "You had 95,000 unemployed in February or March of 1957." Neither do I think it is the kind of debate where I should retort and say: "You have the all-time record of 133,000 unemployed in 1933." It does not give me any pleasure to suggest that if certain action is not taken the unemployment figures will reach an all-time record for the past 20 years before the spring is over.
I do not want to pursue that kind of debate in the situation in which we find ourselves and I shall not mention those figures or make such comparisons in the course of my speech. That kind of debate will not do the country any good; it would merely demonstrate to the country another degree of deterioration in the institution we called Dáil Éireann. That kind of debate would not be any consolation to the 77,801 who registered as unemployed on the 7th January, 1972. When we speak about unemployment we must consider another portion of the country—even though we may not be able to do anything positive about it—the six north-eastern counties. If we take the unemployment figure for that area with the figure of unemployed in this part of the country, in this small island the unemployment figure is in excess of 120,000.
In considering unemployment, we cannot ignore completely the effects on our economy of the happenings in the six north-eastern counties. We cannot ignore the effects in the last two or three years on our tourist industry or the trade between the two parts of the country. I do not think that the people of the country expect me to score points off the Government; they want me to criticise them but I do not think they want this to be a debate in which we score political points or where the motion is passed because the Fianna Fáil Party with some Independents and some Independent Fianna Fáil people vote for it. The people of the country want the Government and the Dáil to do something about the situation, where there are 77,801 unemployed. As I interpret it, it is the view of the Taoiseach and the Minister for Labour that this figure assuredly will increase during the spring.
Suffice it to say that out of every 100 people in the country who are available and are willing to work there are nine people who cannot get work. This is an alarming figure and it is a situation in which we cannot afford to play politics. Of course, if the method of counting the unemployed was the same as was used in the 1950s the figure would be much more. I do not want to make a great point of that. I merely want to mention the figure given to us every week. The Taoiseach made some qualifications. He said the figure might be reduced if it were compared with the figure for years when farmers were on the unemployment register and when people who are now in receipt of retirement benefits were registered as unemployed.
I think I remember reading that the Taoiseach said to the National Executive of the Fianna Fáil Party that there was no crisis. It is difficult to know what the Taoiseach believes now about whether there is or is not a crisis. In that speech, and I think in another place, he said this was a seasonal increase. I know that there has always been an increase in the number of unemployed in January, February and March and an improvement in the spring, but I think the figure this year can be considered to be abnormal.
I do not accept at all the Taoiseach's allegation to the effect that Members of this House, and I think he said particularly Members of this party, were engaged in spreading scare stories. Somebody mentioned the sugar quota negotiated with the EEC over the past few weeks. We in the Labour Party can claim credit for making the workers and the people aware of the situation that will arise unless the farmers and the workers are allowed to produce their full potential. That is why I, representing this party, drew the attention of the public to that situation.
It must be remembered that up to the time I mentioned it—and I do not boast about this—people were not aware that the sugar quota was to be reduced to 135,000 tons per year for a period of two years, and that our potential was in the region of 250,000 tons. Perhaps by these public pronouncements we did exert some pressure on the Minister for Foreign Affairs to such an extent that he negotiated an extra 15,000 tons as being our quota. It is not sufficient. In any case I do not think we, as public representatives, should be abused for bringing to the notice of the public something that vitally affects the farmers and workers. I, for one, am glad that the Taoiseach has given us an assurance today that, as a result of the quota negotiated, there will be no lay-offs in any of the four factories. I will remember that that was said on 19th January, 1972. Again as far as the sugar quota is concerned, maybe the workers will not be laid off in the immediate future but a loss to Irish farmers is involved.
The Taoiseach said there was no crisis. He can describe it in whatever way he likes but, within his mind and within his heart, he must regard it as a crisis. On other occasions we have asked for debates on various topics which we considered to be of urgent public importance and we were denied them. With the greatest facility the Taoiseach arranged, through the Whips of course, for this debate to take place. Therefore, no matter what he said in his speech, he must in his heart recognise that there is a crisis to which he must face up, and to which this House must face up as well. I believe the Taoiseach has changed his mind.
I meet my constituents and I suppose I am not unusual in that. I am a little more unusual than other Members of the House in that with my colleagues I am a member of a trade union. I have not spread scare stories and I do not believe that any of my colleagues have spread any scare stories. There is not so much of an uproar in the country as a sense of fear in the minds of many workers. I am not saying it is in the minds of all workers, but many of the workers. We did not spread these stories. The trade union movement have been expressing their concern for quite a long time. They asked to be received in deputations by various Ministers and on occasions they were refused. The trade unions expressed their concern at the Irish Congress of Trade Unions conference held in Limerick. They expressed their concern about the prospects for employment at their annual conferences held over the years.
As I discovered in my own home town, the fear of the worker is: "Who will be next to go? What factory will be next to close?" I do not go around my constituency saying: "That factory or this factory may close if you keep Fianna Fáil in office. Half the workers in that factory may be laid off." They believe this themselves. I can speak for my own home town and I am sure the Taoiseach knows his own city of which he is so fond, and fair play to him as a Cork man would say. I know that Springs Limited, Wexford, are in difficulty. I know there are many other factories in Ireland in the same difficulty. I know that the workers in Fine Wool Fabrics in Wexford, with the most up-to-date machinery in Europe, are working only 75 per cent of the working week.
I know that tomorrow night in Wexford town the workers in Clover Meats, a reputable concern and regarded as a safe concern, are meeting —and I did not prompt them—to consider their future because they know that factories in Waterford or some other place are either closing down or about to lay off workers. I know that a furniture factory in my home town closed down. This did not happen because it was inefficient or because the manager, who is an excellent man, was not on his toes, but because of the direction in which Government policy has gone over the past seven or eight years. Somebody interjected to say— and may I repeat it?—that there were 3,628 people registered as unemployed in the Taoiseach's home city on 7th January of this year. I will not say that should cause panic in the streets but it should be a cause of concern to the Taoiseach.
One of the purposes of this debate is to show that the problem exists. If we do not recognise that the problem exists, or if we do not accept that there is a problem, there is no use in devoting two days of the time of the Dáil to a debate on unemployment. We cannot solve it if we do not accept that there is a crisis. The Minister for Labour in a bland fashion—and I am not entirely unsympathetic towards him because, with all due respects to RTE, I do not like being interviewed on the telephone; however that is not their fault—talked about external factors causing the situation. I have heard that many times in Dáil Éireann in my 26 years from Ministers from the two sides of the House and, perhaps, from our side of the House as well, but I am concerned about 1972. I am concerned about the people and their jobs in 1972 and for many decades to come. That is what we are here to talk about today.
The Minister for Labour talked about seasonal increases in unemployment. I think he said there was little or nothing that could be done. The Taoiseach said something to the effect of: "OK. It will get worse up to the spring." People have to live in January, February and March as well as during the other months of the year. These three months in particular are the toughest of all so there is no point in saying that the situation will be better in the spring.
We hear of worldwide inflation and recession and we hear, too, of a decrease in emigration. Another speaker here today suggested that if there was more emigration our problems would be fewer. This is a shocking reflection on the Governments of the past 50 years. Is the solution to be found in exporting our people? Will this be the outcome of full membership of the EEC? If our people cannot obtain employment at home—and I do not believe they will—are they to be expected to emigrate? I know they will be able to go to such countries as Germany, France, Luxembourg or Italy, but each of us must be concerned with ensuring that this nation lives, that it will not be a nation of one million people dependent on the tourist industry but a nation of some millions of people employed gainfully either in industry or in agriculture.
Let no one think that the type of speech I am making here today will be the means of gaining extra votes for me at election time. While the people condemn the Government, they blame the inactivity of Dáil Éireann as a whole for the situation. Therefore anybody who might be under the impression that a debate of this kind would win extra votes for any individual Member would be mistaken very much. During the past three years the mood of the people has changed to such an extent that public representatives are at a discount.
We must consider the present situation, because if we do not recognise what is the crisis there is no point in talking about a solution. Unemployment increased by almost 9,000 between January, 1971, and December, 1971, and, compared with this time last year, is still increasing. The Taoiseach has said that for certain reasons this figure may be inflated: that there were a certain number of married women who, although registered as being unemployed, are not available for employment. I can assure the Taoiseach, as one who attends at the appeals officers' courts, that the sort of claims to which he refers are demolished very quickly by many of the appeals officers. Therefore, let us not believe for a moment that the figures are inflated. Any trade union official or any member of Fine Gael or Fianna Fáil who attends at any of these hearings knows well that applications for unemployment benefit and unemployment assistance are scrutinised very well. I admit that there are many appeals officers who are sympathetic to those people who need unemployment benefit or unemployment assistance urgently. Neither is there any use in saying that the figures are inflated by reason of the fact that certain farmers can be registered as unemployed, because that situation has obtained during the past five or six years. Compared to this time last year, when farmers were allowed register, there is an increase in unemployment of almost 9,000.
This situation did not manifest itself overnight. I shall not dwell on the three Programmes for Economic Expansion except to say that instead of improving the situation they resulted in a net loss of 2,000 jobs. Of course, that did not happen by design, but there is not much consolation in anybody saying that so many new jobs in industry were created each year. We cannot differentiate between the industrial and the rural worker. All our workers are Irish people. It is a hollow boast to say that we have increased industrial employment by so many thousand: we must have regard for the entire population. If the purpose of the three Programmes was to create more jobs, as I am sure it was, they have failed miserably.
There is a progressive decrease again in the annual average percentage growth despite the plans of the Government for economic expansion. The First Programme for Economic Expansion was in operation between 1959 and 1963 and the average growth then was 4 per cent. The figure decreased to 3.3 per cent during the term of the Second Programme, which began in 1964, and there was a decrease to 2.8 per cent during the term of the Third Programme which, I think, was abandoned. Last year the figure for redundancies was 9,000. The Taoiseach tells us now that there are plans for ensuring that there will not be an increase in the number of redundancies during 1972. I do not know whether this gallop in redundancies can be slowed down, but in the last quarter of 1971 redundancies were increasing at the rate of 1,000 per week and, so far as my information is concerned, that increase is still continuing.
When we are considering the whole problem of employment and unemployment, we must have regard to prices. During the Adjournment Debate in December last I said that prices increased during the year by 9 per cent. One must talk too about the disparity in prices throughout the country. Any Deputy's wife will know very well that there is a big disparity in prices in the various shops.
It appears that the Department of Industry and Commerce are not utilising the powers they have in this respect to any effect whatsoever. In so far as prices are concerned, individual items that are absolutely essential have increased even more than previously. Food increased by 10 per cent, fuel and light by 12 per cent, the cost of housebuilding by 15 per cent and transport by 14 per cent. The prices of all these commodities have increased by more than the average increase for the year 1971. In his Budget speech the Minister for Finance stated that one of his objectives was to keep down prices. He had a real opportunity of doing that during 1971.
At this point one must pay tribute to the trade unions of this country who negotiated a satisfactory wage agreement with the employers without Government interference and, despite all the criticism that has been levelled against them during the past three to five years, we can look back on 1971 as a year when there was stability in industrial relations. In those circumstances the Minister for Finance and his colleague, the Minister for Industry and Commerce, could have done much more to keep down prices.
Today the Taoiseach said he did not see a report in one of the papers to the effect that civil servants would be telling the people about the EEC but he admitted that civil servants would be available for this purpose. I have no doubt that many pro-marketeers will ensure that the services of those civil servants will be availed of. They will be engaged in making propaganda for those who believe in our going into Europe as a full member. I would suggest that if there are many such civil servants available it would be far better if they were engaged in checking on prices and price disparity within the country. I would deplore any effort by any Government or by any Minister to utilise civil servants to engage in discussion and to attempt to influence people on a matter that is a purely political decision.
1971 was a very bad year and there is no sign of recovery. I am talking about the calendar year 1971 but even as far as the financial year is concerned there is no sign of recovery. I think it was Deputy O'Higgins who directed the House's attention to a comment by the Director of the Economic and Social Research Institute when he spoke yesterday to the Federation of Irish Industries and said that with present policies—he was not talking about the policy of the Labour Party, the policy of the Fine Gael Party or that of the trade union movement, he was talking about the policies of the Government—there would be no increase in employment. If the Taoiseach does not care to listen to or believe what members of the Labour Party say I am sure he will listen to the Director of the Economic and Social Research Institute. I am sure he is a man of importance.
Some of the causes for the situation in which we find ourselves have been dismissed and some of them have been mentioned. The Anglo-Irish Free Trade Area Agreement, in my view, has been responsible to a very large extent for the situation as far as unemployment is concerned.
Hear, hear.
Secondly, I would list the failure of management to modernise Government industry for the last decade. I concede that in the sort of system in which we operate world competition certainly has an effect in respect of most of our industries but I would say also that the Budget proudly presented by the Minister for Finance in April of last year was the main cause of this year's crisis. People dismiss the Anglo-Irish Free Trade Agreement as being a contributory factor to our difficulties. It is interesting to hear the qualifications now of the Fine Gael Party in that respect because they were very fulsome about it when we debated it here on the 4th, 5th, 6th and 7th January, 1966. The Taoiseach, I am sure, would be the first to say we are not always right but we were right on that particular occasion. Tariffs have been reduced since then and the industries that suffered in particular were textiles, clothing, footwear and light engineering. There were others as well. We said at that time that the lowering of the tariffs by 10 per cent for the first year would not make much difference, or for the next year, or the next year, but we forecast that in the middle of the period of the Anglo-Irish Free Trade Area Agreement the crunch would come and now the crunch has come. We opposed it and I think we were justified in opposing the terms that were negotiated by the Fianna Fáil Government with the British Government.
I asked the Taoiseach a question today. It was answered by his Parliamentary Secretary. I am sure it will be brought to his notice. I asked the Taoiseach if he would state the value of the imports of knitwear, footwear, leather goods and hosiery for each of the past six years. The reply makes interesting reading but it is sad reading for workers engaged in these industries. In footwear in 1966 the imports were worth £538,000, in 1967, £633,000, in 1968, £807,000, in 1969, £1,451,000, in 1970, £2,354,000. In 1966 we imported £77,000 worth of leather accessories. In 1970 that figure had gone up to £274,000. Imports of other leather and leather manufactures amounted to £1,834,000 in 1966 and had risen to £3,599,000 in 1970. In regard to clothing and accessories of textile fabrics, knitted or crocheted, in 1966 we imported £140,000 worth. In 1970 we imported £1,135,000 worth. Would somebody tell me from what country these came? I suppose I should have asked that question. I would suggest that the bulk of these came from Britain and because they were allowed in under the Anglo-Irish Free Trade Area Agreement that was negotiated by a Fianna Fáil Government workers in my town are on short time and factories all over the country have closed down. May I repeat: textile factories have closed down due to the policy pursued by this Government over the last ten years, particularly the type of treaty they brought back from London in 1966.
Deputy O'Higgins talked about the failure of management to modernise industry in the last decade, their failure to improve in production, in marketing and in research. It is difficult to make an assessment of the attitude of industry, apart from the profit motive which they have, but again the Government must take a big share of blame in all this. It seems their idea now of modernisation and rationalisation is to lay off workers because it is only now they are feeling the effects of competition as a result of the Anglo-Irish Free Trade Area Agreement and as a result of what appears to be impending free trade vis-à-vis full membership of the EEC. The effects of free trade, not only with Britain but with any other country in the world, should have been foreseen and they should have planned for increased and more efficient production over the period they had in which to prepare. I know that various Ministers for Industry and Commerce, including the Taoiseach himself, exhorted them to rationalise, to re-adapt and modernise and offered them financial incentives but they did not do it.
The responsibility was on the various Ministers for Industry and Commerce and in the last two or three years on the present Minister for Industry and Commerce, Deputy Lalor. Exhortations were not enough to Irish industry; they did not rationalise, they did not readapt and many of them did not make any effort to modernise. The financial incentives that were offered by the Government, on the admission of Ministers over the last ten years, did not induce them to prepare themselves for the sort of situation we have in 1972 and that we will face for very many years to come. Production targets for individual industries were never set, and even if these targets had been aimed at and achieved, there was no reward. I believe efforts in this respect should have been rewarded more because failure of an industry not only affects the people who own or manage the industry but it affects the lives of the people who work in them. This should have been taken into account by the Government but the Government did not seriously tackle the problem of industrial rationalisation and modernisation. As a result many thousands of workers are suffering today.
Because of the failure of the Government in the Anglo-Irish Free Trade Area Agreement to ensure and to insist that Irish industry would gear itself, we cannot support a motion saying that we approve of the Government's handling of the economic situation. We do not approve of it in respect of this year, we did not approve of it during the last ten years and we certainly have not approved of it in the last two or three years. The Taoiseach was a former Minister for Industry and Commerce, and all these factors were known to him and to the Minister for Finance on 28th April last year when the Minister presented his Budget. In his Budget Statement the Minister said there were two objectives: one was a limitation of prices and the second the trend of the balance of payments. He took these two things into account for the financial year as top priorities but in doing so he acted at the expense of industrial growth which would have meant increased employment. In his speech, reported at column 690. Volume 253, of the Official Report, the Minister said:
There is clearly no point in aiming at maximum growth in the immediate future if this would push both the external deficit and prices to dangerously high levels.
He clearly sacrificed growth in favour of the two objectives I mentioned. He was tackling the wrong problems and what he introduced only worsened the situation. The Minister for Finance said that increased Government expenditure while increasing employment would lead to increased consumer imports and so worsen the balance of payments deficit. Therefore, he opted to cut Government expenditure but he did not control prices and it does not appear as if he will succeed in improving the balance of payments deficit. Therefore, the only effect of the Budget introduced on 28th April last was to worsen the unemployment situation. The mistake the Minister made was to think that eventually the trend in national production would be towards improvement and that employment would not be affected. The funny thing about that speech, as about speeches of various Fianna Fáil Ministers for Finance, is that there was no mention at all in it of employment or unemployment. They were mentioned in the index to the speech but there was no definite mention of a danger of an increase in unemployment.
In that Budget the Minister and the Government cut back capital and current expenditure from the Estimates the Minister had received from the various Departments, Estimates which were required to be voted to provide sufficient money for capital works and current expenditure. He said, as reported at column 697 of the same volume in relation to the cutback in capital and current expenditure:
This very substantial reduction, which was not achieved without difficulty, represents the main effort of my budgetary policy for 1971-72...
In relation to stagnation he said that the programme proposed should ensure steady economic and social advances. It has not done that and therefore the Minister and the Government in their Budget proposals sacrificed jobs because the analysis of the Minister for Finance of our economic problems was wrong.
Because of that we cannot give any comfort or solace to the Taoiseach, certainly not by way of voting confidence in the way the Taoiseach and his colleagues handled our economic affairs in the past year. The real problem then, as we pointed out, was growing unemployment and redundancies. They were what the Minister for Finance ignored. If he had wanted to tackle the prices problem, for example, he should have concentrated his efforts on the provision of jobs rather than do nothing or to cut back on jobs as he did when he cut back on capital expenditure. Now we have an admission by the Taoiseach of the failure of that Budget and there has also been a tacit admission by the Minister for Finance by his action in injecting an extra £20 million into the economy. This was done belatedly and, of course, the problem is still growing.
Some remedies have been suggested for the immediate situation. However, we must appreciate that we have had the same problem once every few years. People have been thrown out of work time and again during the past 50 years when long term solutions should have been sought. The whole purpose of the debate is to alleviate the present situation, but there should be programmes for growth because programmes for economic expansion have failed; there being too much dependence on private enterprise. Private enterprise here and in other countries has not been enterprising enough for many years past.
The Taoiseach mentioned that capital expenditure would be increased by £50 million in the next financial year. This was suggested by our colleagues in the trade union movement before Christmas but what will happen to those workers who are now out of jobs, between now and 31st March next, or whenever the £50 million extra will be provided for the building of houses, hospitals, schools, for drainage and afforestation? This money will not be a hand-out or a dole for workers. These schemes are socially and financially necessary and the sooner the Taoiseach devotes the extra £50 million to projects like that the better for all concerned. Such employment is suitable only for certain categories. Industrial employment has to be tackled as well. We appreciate there cannot be new industries overnight.
The Government can be accused of lack of interest in many long-established Irish firms some of whom have been struggling to survive for a long time. I suggest there should be a special section to deal with this in the Department of the Taoiseach because he is the man mainly responsible because he is the man who congratulated himself today on the manner in which the economy was being handled. This new section within his Department should be there to deal with those firms which are now deemed to be vulnerable. If such a situation existed long ago we would not have closures and redundancies now. The section, I suggest, would have immediate ability to help such firms whether in marketing or in production. The Government should also take power to take over industries rather than let them die for want of financial injections. I advocated in this House previously that where industries did not live up to their responsibility it was the bounden duty of the Government to take them over and to run them for the benefit of the workers and for the country. Industries should be obliged to notify impending redundancies or closures as quickly as possible to the section which I propose should be set up.
It was pathetic to listen to the Minister for Industry and Commerce telling us on various occasions in this House that he had just learned that day that a factory was about to be closed down or had been closed down. A Minister for Industry and Commerce has a function to provide for industry and to make sure that it progresses. He has responsibility to ensure that the workers employed are protected and have some security. Under present circumstances in respect of most industries it appears that the Minister for Industry and Commerce does not know what is going on until it is brought to his attention that a factory is about to close down or has closed down.
The Anglo-Irish Free Trade Area Agreement should be suspended. It has been the cause of redundancies. We seem to be like Simon Pure in so far as international treaties are concerned. The British broke the Anglo-Irish Free Trade Area Agreement without notification to us. They took action some years ago by the imposition of a 10 per cent import levy. Our Government can say that they took action in respect of the clothing industry a few months ago when they increased protection by 50 per cent. That was too late in respect of many industries which have closed down over the last 12 months. Why can something not be done in respect of other industries affected by the Anglo-Irish Free Trade Area Agreement?
I had wanted to talk about the long-term remedies. I do not know whether I should leave this to one of my colleagues. Suffice it to say that there must be a long-term remedy. What we are doing now is a fire brigade action. If this situation is not to recur in two or three years time we must plan our economy; otherwise the same situation will arise again. A plan for economic recovery should be put forward without delay in consultation with the trade union movement, the farmers and industry. There should be concentration on the development of native industry as a first priority in the recognition that dependence on private enterprise has failed as has our dependence on foreign industry.
I am astounded to note that the National Industrial and Economic Council, which in my view did a tremendous amount of good work, have not met for the last 18 months. They had many good discussions and compiled many reports. The Government promised a National Economic Council with the farmers taking part. We are entitled to know what has happened to it.
There cannot be any progress without planning. The Taoiseach may be scornful about socialist policies and regard them as outdated. If he has time, perhaps he would read the proposals of the Labour Party in so far as planning is concerned, not alone in respect of industries but also in respect of agriculture. They are not outdated. If the Taoiseach read them he might be convinced, as he is a grassroots man, that they should be given a trial. They have been tried successfully in other countries. We should not be afraid of planning or of consulting people and involving them. The Taoiseach can put whatever name he likes on the proposals but they have been successful in many other countries, particularly in Sweden.
Talk about planning will give the Tánaiste a nervous breakdown.
I am sorry that I have not time to say more about long-term remedies but my colleagues will take up the matter. We should not vote confidence in this Government on this or on any other matter. The £50 million which it is proposed to inject into the economy so that local authorities and Government Departments can engage in activities for giving employment is not sufficient. We have to ensure that there will be a recovery in industry, not alone for those who are out of work now but also for those who are threatened with unemployment. I am sure that the Tánaiste has found the threat of unemployment in his own constituency. Let us forget the scare stories. The Taoiseach is an expert on scare stories; he has told them to the nuns in the convents and to the priests. If the Taoiseach is as casual as he appears—maybe it is his physical approach—from the way in which he delivered his speech today in his approach to the crisis in the country today, I humbly suggest he should resign.
A Member of the Labour Party said that if he mentioned the word "planning" I would faint. I have always believed in a degree of planning. I have believed in planning the future economy of the country. I have always recognised that external conditions can deeply affect plans made and that whatever plans are made they depend on——
In a debate of this nature when the Tánaiste is speaking surely we should have a House? There are only two Deputies on the Fianna Fáil benches.
Notice taken that 20 Members were not present; House counted and 20 Members being present,
Labour Party Deputies suggested that I did not believe in planning. Of course I believe in a degree of planning and making estimates in advance of what capital will be required in the public and private sectors for industrial, agricultural and social development. I believe in planning as far forward as possible the growth of production and exports and in making all calculations that may be useful in regard to the development of the national economy. I also recognise that planning can be very much affected by external conditions over which we have no control. We can be very much affected by economic developments in countries with whom we have extensive trade.
There is also the fact that in a free labour market, where industrial relations are free and democratically preserved, the decisions of employers and trade unionists in regard to rates of wages and in regard to prices can also have final effects on the determination of production, the determination of exports, and can equally put a great many plans out of joint. However, I certainly think it is an excellent thing to plan in advance in order to see just how the rescources of the country can be utilised to the best possible effect.
First of all, I want to avoid covering the ground that my colleagues will cover in the course of this debate and to deal with the question of free trade. It has been alleged that a very considerable number of persons are now unemployed or redundant as a result of the Anglo-Irish Free Trade Area Agreement. While I do not always necessarily believe everything that is written by Deputy Dr. FitzGerald in his economic analyses in The Irish Times, I nevertheless have noticed in times past a very considerable degree of objectivity in his observations. Some of his economic summations are of extreme interest, and I quote from his article published in The Irish Times of 14th January, 1972, in which, after a long and detailed analysis that I do not presume to repeat because I think it would be unnecessary, he says finally:
All in all, it seems unlikely that the net adverse effect on employment of free trade up to this time could have been more than 1,000 to 1,500 or that actual redundancies due to free trade could have even reached 1,000. Clearly therefore present unemployment is not due primarily to free trade, although in the next three years the Free Trade Area Agreement could yet have a significant effect on redundancies.
That is his statement and it has been matched by other economists who have made the same kind of prediction without the detailed examination of Deputy FitzGerald. Having said that, I suppose we really have to face realities in this House. I do not know of any area in the world where we can export goods that can be sold in that particular area with reasonable ease and using the possible marketing methods available to us where it is not essential to sign some kind of free trade area agreement.
The whole of Europe is becoming a free trade area. You have EFTA. You have the European Economic Community. You now have the European Free Trade Association entering into negotiations with the European Economic Community with a view to reaching some kind of agreement in which there will be reductions of the common tariffs of the EEC. You had already a mutual agreement, akin to free trade, between the nations of Scandinavia. You had previously the Benelux Agreement between the Netherlands, Belgium and Luxembourg. You have countries from outside the European Economic Community applying for reciprocal trade relations. Above all, you have the spectacle of the country which is supposed to have half of the total wealth of the world, the United States, being compelled by the European Economic Community financiers, the ministers for finance and the bankers, to cut out the import charge of 10 per cent on a variety of goods that were being imported into the United States, which we can reekon to be the greatest single but short lived reversal of the free trade trend in the world— and indeed it was very short lived. Although there were adjustments in the value of currencies some of which would have the effect of some tariff protection, nevertheless those who were in charge of world currencies insisted that the most powerful nation in the world should reduce the first big and single increase in tariffs that had been imposed since World War II. There is a constant trend towards free trade.
Therefore it is no good pretending that we can live in a world where somehow we can escape the implications. If we want to export more goods—and we are a country that relies utterly on exports for increases in production and employment of any magnitude—we then have to accept some exchange relationship with other countries. However, I was interested to read Deputy FitzGerald's analysis, and I doubt that any member of the Labour Party would be able to contradict him in large measure.
Deputy FitzGerald gave a warning that there might be some additional redundancy and then made a very interesting analysis in regard to modernisation of industries. Deputy Corish has asked for more and more modernisation of industry, and that, indeed, is desirable. We have paid out millions of pounds on grants for the modernisation and re-equipment of industry, but modernisation of industry frequently results in short-term unemployment because of the technological changes that are inevitable. If Deputy Corish would study the economic situation and read the history of the economic changes that have taken place in the last 12 months in the United States, he would find that there has been a very considerable increase in unemployment and an absolutely gigantic technological shake-out in that country which, for the time being, has resulted in a degree of unemployment in the various sectors of industry. Some of the giant corporations in the United States, following on these technological changes, closed whole plants employing tens of thousands of workers. Now we hope, because we depend on American trade as well as everybody else, that, as a result of the settlement of the exchange difficulties and as a result of the predictions that are made in the United States that the United States economy will be on the up turn in spite of these technological changes that resulted in short-term unemployment, that the American GNP will continue to grow in the way that is predicted by the economists there during the current year. This should beneficially affect our unemployment position, particularly since a number of our industries would be very badly affected by any long-term surcharge of 10 per cent on the existing tariff structure in the United States, even though our wage levels are very much lower, in common with those in other European countries, than the wage levels in the United States, which, of course, makes it somewhat easier to compete in the United States market.
It is perfectly evident that we have to face the realities of free trade. We must have, as Deputy Corish says, more modernisation. May I comment on the fact that the Minister for Industry and Commerce has had each industry examined, has invited the managers of all the industries and the trade unions to participate in an examination of each separate industry as to how it would be affected by free trade. Reports have been published on what needs to be done by every industry, and the industries are in touch with the Industrial Development Authority and with the Industrial Credit Corporation. The best of them are proceeding with modernisation, and we can only encourage the others to develop this trend of modernisation in order that we can face free trade and in order that our exports can be more competitive.
Therefore, we have to engage in greater modernisation of industry, in a still greater effort in marketing, making use of Córas Tráchtála, but above all we must examine the wage costs and prices in our country in order to maintain competitiveness and favourable conditions for expansion. Let us be clear on this also: it is simply no good our talking as though we alone in this country had inflation. One of the reasons we have been able to survive one of the worst periods of inflation in which, unfortunately, we paralleled that of Great Britain, has been that there has been inflation all over Europe and all over the world. Inflation has been greater in some countries than in others. It has been less in some countries either because the industries were more labour intensive, were more capital intensive or else because the employers and the trade unions followed the rule of productivity with greater care and as a result the inflationary process was restrained.
May I point out that as we trade to a 70 per cent degree with Great Britain if Great Britain finally suffers an economic recession of some magnitude with a million persons unemployed we are bound to suffer, we are bound to face at least short-term difficulties in exporting our goods to Great Britain. The expansion will not continue at the rate it could have if Britain had been a country showing a great expansion of production and a great expansion of economic effort. When we join the EEC and when our trade diversifies we will then at least be able to trade with countries whose economic position varies. If one of the ten countries shows a degree of very high inflation and depression there may be other countries, who have conserved their resources, with whom we will not face the same difficulties in maintaining our export trade.
This is a fact. If you look at the inflationary position in Europe and the export trends of the various countries you will see that some of them succeeded better than others because, for example, they were not too grossly dependent on one particular form of export, or they succeeded better than others because they had diversified their trade so that their exports were directed to a number of alternative countries. The result that follows from that is that the pattern of inflation and the pattern of any depression within a particular free trade area does not impinge so directly and immediately on a country which can trade on an equal basis with nine or ten others as it does with a country which is grossly dependent for its exports on one single country.
Anyone studying the economics of the European Economic Community will see at least that very great advantage in the diversification of trade. Let us look at these countries which have faced inflation and whose Ministers and whose Governments have been unable in large measure to prevent some degree of stop-go. Stop-go has become common in all countries in Europe, less in some than in others, but there has hardly been a country in Europe, not even the magnificently managed countries of the West German Federal Republic and Switzerland where there has not been some degree of stop-go. No one is perfect in this. If we have not been successful in preventing completely the stop-go element all I can say is we have been in excellent company with other countries with intelligent Governments, with economic research institutes and with all the economic advice available to them from all quarters.
That is a point which must be borne in mind. Most of these countries have found that efforts for compulsory wage freezing have not been successful, that in the long run they must rely on voluntary negotiations between employers and trade unions. This is difficult to prove, perhaps, in practice, but I suppose it is true to say that when Mrs. Barbara Castle imposed the wage freeze of 3 per cent for a year and the outturn was 6½ per cent no one could say that operation was successful because there was a bound in wages in the subsequent year which seemed to nullify completely the effect of the wage freeze in the year it was in force. If you look at efforts in other countries, wage freezes and price freezes may have had a certain effect for a period but on analysis it is true to say that in the long run an intelligent attitude to inflation by the private interests concerned, by the State enterprises concerned, is really the clue to preventing inflation.
Inflation in this country has obviously had its effects on employment and its effects are multifarious. It can affect industries with a very high wage content more seriously. It will affect industries that have extensive capital intensity less seriously. It may prevent from expanding some industries which otherwise would have expanded. It may have the actual effect of closing certain industries, either because the costs of the industry have gone beyond the competitive level or because along with inflation there has been a downturn in that industry. Of course, one of the best examples of these is the textile industry which has faced quite a severe recession in a great number of European countries, particularly in Great Britain where whole units of the cotton industry, for example, have been closing down in the last six months. It is difficult to know how any Government, no matter what inducements are given, and no matter what help can and will be given, can prevent some measure of unemployment from occurring in an industry in which a great recession can be seen in an adjacent country to which most of our trade flows.
This is a fact and it can be seen in various countries in Europe that cyclic depressions occur as a result of a drop in demand. One matter which we will have to face in the next three or four months is the British Government's reflation of their economy. It can be argued whether or not they reflated it enough. All the indications are that the British public chose to begin their increased purchases by purchasing what are called consumer durable goods, motor cars and such like, and that the consumption of convenience foods and ordinary consumer goods tend to lag behind. We can only hope that the economists in Great Britain are right when they say that in the latter part of this year the rest of the English economy will reflate and that the English public will start to consume more goods of the kind we can sell them and that they will not restrict themselves to a growth of purchases of consumer durables. That should help us overcome some of our industrial difficulties. Nevertheless, let us say that until our trade is diversified we are dependent to some extent on reflation in Great Britain and this is not our fault.
Let us take another country which is close to Great Britain, Denmark. Denmark depends to an enormous extent on British trade and can be equally affected by a British recession. Mercifully for herself, Denmark has been traditionally a neighbour of Germany and over the years has been able to build up a trade with Germany which cushions the effect of a depression in Great Britain and its consequent effect on Danish trade. Denmark, of course, is looking for admission to the European Economic Community both for agricultural reasons and also because she will be able to diversify her trade more by this means.
Inflation, as I have said, has a varying effect on industries and inflation can deter some industries from starting if they see the wage cost per unit of output mounting excessively. Nobody can contradict me when I say that there has been a degree of inflation all over Europe.
Next, I want to deal with the observations that are constantly made, particularly by members of the Labour Party, about the Government's inability to control increases in prices. I do not know what kind of admiration the Labour Party had for Mr. Wilson during his term of Government. He was in office from 1964 to 1970. I suppose it is fair to compare the comparative inflation in England with the comparative inflation here, and to see whether there is any proof that either profits or prices increased excessively here compared with Britain or with any particular rise in the earnings of workers. It does not matter what year one takes for the purpose of illustration. I mention that because one does not want to introduce statistical measurements which are deliberately conceived in order to get a good result. If one takes the increases in industrial earnings from 1964 to 1970 the increase here was 73 per cent. In the same period there was an increase in consumer prices of 35.9 per cent. In the United Kingdom the increase in industrial earnings was 62.3 per cent and the increase in consumer prices was 31 per cent. I would like any member of the Labour Party to get up and say that the Labour government in Britain was completely inactive and utterly negligent in its price control mechanism and these comparisons are, therefore, wrong. I would like any member of the Labour Party to examine the corresponding increases in earnings and in consumer prices in Europe and look at the rate of growth of productivity and then make the case that prices and profits, or either of them, increased excessively and not according to the public weal and not in a way which was right from the point of view of the general economy here as compared with other countries. No evidence at all can be found for this.
If one takes wage costs per unit of output from 1964 to 1970 the increases are as follows: here, 34.7 per cent; in the United Kingdom, 31.2 per cent; in Germany, 17.2 per cent; in France and Italy, 11 per cent and, in the Netherlands, 8.7 per cent. Both we and the British have uneasily survived this situation with a very considerable growth in unemployment. We have this appalling record of having had the two highest increases in wage costs per unit of output compared with most European countries with which we traded in the period from 1964 to 1970. We cannot, of course, go on in this fashion. It is not to the advantage of workers because fewer numbers of their families will be employed. It is not to the advantage of workers because inevitably they lose most of what they gain in wages in increased prices. If we are going to put ourselves into the modern world we must have all the right conditions here. We have no long industrial tradition. We have not got a gigantic pool of traditionally skilled labour. We are a new industrial nation and we are in a dangerous position, but we can at least make a reasonable compromise. Even if, at certain times, it is necessary that wages and salaries should go up there can be compromise as to what is reasonable by comparison with what put us virtually at the top of the European League from the point of view of increases in wage costs per unit of output. If that policy is adopted, over a period of ten years the workers' real standard of living, taking the family as the basis, will grow just as fast, or even faster, because there will be more opportunities for employment, steady employment, increased opportunities for different kinds of employment and more opportunities for skilled employment as compared with unskilled employment. That is the message we have been preaching constantly. When Deputy Corish referred to the non-initiation of the new and reorganised National Industrial and Economic Council, might I point out that the National Industrial and Economic Council published reports steadily for years and years and publicly advocated, with the consent of nine representatives of the trade unions, a particular figure for increases in remuneration and not once during the period of its life was there the faintest effort on the part of anybody to follow that particular guideline laid down by the National Industrial and Economic Council. Industries and trade unions may have followed other recommendations. The major report of the NIEC every year warned the country against the dangers of inflation. Not the slightest attention was paid to these admirable reports. When the reorganised National Economic Council, with agricultural representatives, is formed and issues its reports, perhaps on a more elaborate scale, I hope the public in general—consumers, workers and employers—will take the advice given in these reports.
The future of incomes depends on a number of matters of very great importance. We must advert to the capacity of industry to face free trade and cyclic changes in demand. It does not matter what the Labour Party say about free trade, free trade is absolutely inevitable and no country in Europe can continue to trade, to establish and maintain export markets, without accepting the free trade concept. The capacity of industry to face free trade and cyclic changes in demand relates equally to the decisions made by employers for modernisation and for establishing the best possible industrial relations and by the workers accepting the crude realities of the situation facing every single industry. Then when demands for increases in wages and salaries are made I hope those concerned with the negotiations will have regard to the ancillary effects of an excessive growth of incomes with its consequent excessive growth in prices. One result of this is that more money has to be taxed to increase social welfare benefits. These have to be increased to provide a real increase in pursuance of Government policy and also to compensate for increases in the cost of living. Again more transfer payments have to be made in respect of agricultural subsidies until such time as we join the European Economic Community to compensate the farmers to some degree for the growth of incomes in the non-agricultural sector as compared with their incomes. Taxation has to be increased to pay for all these things.
In this context I would particularly draw the attention of the House to the fact that the health bill has now grown so enormous, over £70 million, that people when they ask for increases in income should take a look over their shoulders at what they will have to pay for health and hospital services. Whether they pay by way of rates or taxes they will have to pay. The health service has a 70 per cent remuneration content and it is, therefore, doubly affected by inflationary conditions. The public go on demanding better health services. They deserve better health services. Every year 2½ per cent more go to hospital. If there is an excessive increase in incomes there will be a corresponding inflation in prices and inevitably either taxes or rates, or both, whichever method is used to meet the cost of health services, will increase far more than they will in any other service or industry. The only comparable service is the Post Office which has over 70 per cent of a remuneration content and CIE which has a 61 to 63 per cent remuneration content. They are all affected by these inflationary changes.
To give an illustration of what has been happening here and in our neighbouring island, industrial earnings increased from 1967 to 1970 by 38 per cent and real earnings by only 13.7 per cent because of the effects of inflation. No matter where you look in Europe where there is a modern economy, if you take the average wage content in industries into account and if you consider the increase in prices and the increase in earnings you find that most countries are compelled by the same inexorable discipline as ourselves and that in the end nobody gets much more of the increase in real earnings than they would have been really entitled to judged by the actual growth of productivity in the country in that year. In other words, it is impossible to beat the productivity rule. There may be marginal changes but if gross national product in real terms, the real growth in production per person, was up by 5 per cent, then real wages may go up by 6 or 6½ per cent but they rarely exceed by any great degree the actual net growth of production.
It seems to be senseless to continue pursuing the mirage that by asking for enormous increases in remuneration there will somehow be an escape from the inexorable increase in prices that takes place not only in this but in other countries with a long tradition of what are called left-of-centre Labour Governments such as in Sweden or in Britain under the Labour Government. It does not matter what kind of administration there is or whether there is a slightly greater measure of State intervention along with private enterprise in that country than there is here or whether there is less, the discipline is inexorable and these changes always take place.
This problem of inflation is a world problem. Some countries have diversified markets and are better able to counter the effects of depression in an adjacent country. The purchasing power of the nine nations with which we shall trade will vary according to the demand for their industrial products, in relation to their economic policy and in relation to the intelligence of their Governments. If we can diversify our trade, at least when there is either a cyclic depression in an industry in Britain or a measure of inflation there or in some other countries, we shall be able to look to others where there is some hope that there will not be some change of trade due to the fact that the country to which we export reduces its demand for economic reasons over which we have absolutely no control.
I suppose it is true that when we join EEC we shall join a community where there is a closer observance of the mutual economic position of the countries. If you study EEC reports you find there are many economic committees whose reports rarely appear in our newspapers, and in which the countries come together and discuss their problems of balance of payments deficits, capital investment and mutual economic needs. When we join EEC it will have a certain disciplinary effect in that we shall be closely associated with countries facing similar problems. It will also encourage us and enable us to deal with crises when they arise. At the moment we perforce follow the United Kingdom trend far too closely.
Let me mention some of the countries in Europe and show how they are affected in 1971 and 1972 to illustrate that, whether in EEC or EFTA, no country can absolutely control its own economic affairs and that practically every country at one time or another must face the same kind of difficulties we are facing today and that none of them seems to be able to exercise the perfect control demanded by the theorists in regard to economic affairs. I do not say we cannot do better: all Governments can always do better. All Governments occasionally make the wrong kind of predictions and have to correct them. All countries at one time or another take reflationary actions perhaps one or two months too late or too early—rarely too early—but when you compare the position between ourselves and Europe we can see that this is a very difficult job because there are many and complex factors relating to the economy of one country and there is no such thing in the world any longer as complete economic independence if ever there was.
We are now becoming grossly dependent on decisions of other countries. The US decision to impose a 10 per cent import charge could have had eventually disastrous effects on our trade and that of a great part of the world. I read some reports in The Economist and I saw that in 1972 Germany, one of the miracle countries of Europe, expects to have an increase in real terms of 1 per cent in gross national product but anticipates more if inflationary measures are taken, and that Germany, one of the countries with a great record for containing inflation and which for some periods could show the lowest increase for the cost of living of any country in Europe, had a 6 per cent increase in prices in a recent 12 months period. Also, in Germany, which employs a very large number of foreign workers, at this moment some 100,000 new workers are on short time. I also see in The Economist that the Germans are likely to accept the economic guidelines that will probably be proposed to them by the employers and workers for this year's growth of incomes and, perhaps, as a result a more favourable out-turn will emerge than the 1972 preliminary prediction of a 1 per cent increase in GNP.
In France in 1971, I see that prices rose by 6 per cent and gross national product by 5.9 per cent, a very respectable increase by general European standards, and that wages rose by 10 per cent and that they were reduced by price increases to a net increase of 4 per cent. Again, there is an observation in The Economist that they hope to follow the guidelines and that if so economic progress can be made.
I am not sure whether this was 1971 or 1972, but in Italy in one of those two years the GNP is reckoned to have increased by only ½ per cent. Italy has been facing problems peculiar to herself and reflation is needed. It is possible that there will be an increase in GNP in Italy of 2 per cent. In Belgium there was a respectable GNP increase and there is not much comment on what needs to be done there but in the Netherlands there has been gross inflation, very great difficulties and the competitive position is regarded as difficult. They had an increase of 5 per cent in 1971. They anticipate an increase of only 3 per cent in 1972 unless they take remedial measures.
I could go on through the countries of Europe. They show a varied pattern which relates reasonably to the position we faced in the last three years and in which we can say we have had certain economic difficulties which I believe we will solve. But every country has faced this sort of inflationary crisis in one way or another. The year 1971 was a year of depression in some countries; it was a year of virtual stagnation in some countries, of modest growth in other countries and of satisfactory growth in other countries. There were increases in unemployment in some States and it was a year of turbulence in the exchange markets. I am not an expert on exchange markets but, according to the more recent reports, although there has been a settlement with the United States, further steps will have to be taken to strengthen monetary conditions throughout the world if we are to have the most favourable monetary and exchange conditions, which affect us as they affect other countries, and which will result in an increase in our export trade.
All of these countries have planning departments and economic institutes. They have government forecasters; they all make the best effort they can to predict the out-turn of the economy; they make the best effort possible to apply fiscal remedies, tax remedies and incentive remedies to keep the economy expanding. However, all of them depend on intelligent decisions made outside the government level regarding the growth of productivity, private investment, wage and salary negotiations and the level of prices and profits maintained by the employers. There is not a single country in Europe where the government alone can organise the economy. No matter how much intervention of the socialist kind, no matter how much socialist enterprise there is in these countries, the government can only have a partial effect in stimulating the economy. The rest must relate to decisions made by private individuals, influenced by government agencies, influenced by experts, but the decisions are made by private individuals.
In the course of his analysis of the pattern of employment growth, Deputy FitzGerald showed how it varied from year to year. He demonstrated how one could have in a particular year a considerable growth in output and a comparatively small growth in employment and in an ensuing year one could have a lesser growth in output and an increased growth in employment.
He illustrated these facts for the years 1961 to 1971 and his conclusion —which he is entitled to have—is that this was due at least in part to stop-go policies. He was quite right to challenge the Government to occupy themselves with, perhaps, better fiscal policies but in anything he said that suggested that we could control the rate of inflation except by appeals to the employers and workers I could not agree. The Deputy did not actually suggest this; rather he issued a challenge to the Government that our performance was not adequate during that period with regard to economic planning. In looking at our economic growth since 1957, in comparison with many countries in Europe we made a fairly good job of it in terms of increased employment, an increased number of industries and a truly tremendous increase in exports. This was partly due to private enterprise but it was also due to Government reflation, to Government planning and Government action in relation to grants for industries, tax incentives and other measures.
According to Deputy FitzGerald, in 1971 employers decided that so great was the rate of inflation they would cut down the work force to the maximum and that could account for some increase in unemployment; that apart from actual redundancies for the causes I have stated already, there could be some cut in employment that might otherwise have existed if there was not a decision by industries to trim their work force because they felt a sense of uncertainty having regard to the inflationary spiral.
It is not a pleasant thing to be forced to cut the work force. I hope that with the two measures of reflation that have been published by the Government, with the evidence of some improvement in the European economy and with the hope of some improvement in the British economy, employers, with the help of capital cost allowance they have had, with the reduction in corporation profits tax and with the other incentives they have been offered, will take a more hopeful view of industrial production and investment in the current year. In turn, this depends on the action taken by the employers and workers when the employer/worker agreement comes up for renewal. It depends on how far the position is examined in detail in order to ensure that the right decision is made——
Might I remind the Minister that the House agreed that each speaker would finish after 45 minutes.
How much time have I left?
The Minister has exceeded the time allowed by seven minutes.
I am sorry. I did not realise that. I have been dealing mainly with the problem of inflation. It is not the only cause of unemployment or redundancy, although it is a contributory cause. I have no doubt that in the coming year a great effort will be made to contain it or to reduce it so that we can have greater hope for an expansion of industrial output. This relates to the intelligence of the employers in presenting information of an adequate kind to the trade unions and, equally, it depends on the intelligent acumen of the trade unions.
Our future depends, first, on world trade; secondly, on our entry into the EEC; thirdly, on Government stimulation and Government action; fourthly, on intelligent decisions by employers, trade unions and everyone concerned in the private sector. We need to have favourable conditions for all those elements which affect our economy. An honest effort by all of us to increase productivity in the coming year, perhaps, would have the best effect.
The characteristic feature of an obituary notice is that it refers to the achievements of the dead person without saying anything about his possible future activities. As I listened to the Tánaiste, I felt I was listening to an obituary of Fianna Fáil, with the customary encomium in that little that was bad was said about the dead, but when it came to the question of dealing with the problem of doing anything about the future the Tánaiste was even more silent than the Taoiseach. The Taoiseach spent a few minutes mentioning one or two relatively minor and unspecific things the Government were thinking of doing in the future but the Tánaiste confined his remarks entirely to the past——
There will be other Government speakers.
Is it possible that some Government speaker may concern himself with the fate of the unemployed and what is to be done about the problem? I suppose we can hope for that at some stage but we have not heard anything about it so far. The Government speakers so far have adopted a defensive approach but this will not cheer the hearts of people who are redundant or are likely to become redundant. It will not cheer those who are unemployed. Judging by what has been said so far, one would not think that there was a problem of unemployment or that there was a serious economic situation. There was nothing in the speech of the Taoiseach or the Tánaiste to suggest that there is a serious economic situation.
The Tánaiste quoted some of my statements with a view to refuting some points made by the Labour Party. He was good enough to pay tribute to my objectivity in economic matters——
I said in the Irish Times.
I appreciate that. When I have completed my speech, I hope the Tánaiste will consider I have not been unobjective in my presentation or even unduly selective, which I think a politician is entitled to be. First, let us review the situation and, having reviewed the position we are in, let us consider why we are in this position, who is to blame, what can be done about it and whether the Government's proposals bear any relationship to the needs of the situation. It is in that form I propose to construct my remarks.
The situation is one of a fairly prolonged period of stagnation. In 1970 national output rose by 1½ per cent and last year by 2½ per cent. In passing, it is worth noting that in each of these cases the forecasts of the Government and, indeed, of other economic commentators have had to be pared down.
As I recall it, in 1970 the original hopes were for at or above 2 per cent. It turned out to be a growth rate of 1½ per cent. Until quite recently and, indeed, until yesterday in figures given by the Director of the Economic and Social Research Institute addressing the CII Conference, the figure for 1971 had been spoken of as a 3 per cent growth. Earlier it was hoped that it would be more than that. He has now said that it will be only 2½ per cent.
Talking of this constant process of revising performance downwards I notice also that in the table Dr. Kennedy produced for next year, he shows a lower growth rate than that which had hitherto been forecast: 3½ per cent as against the slightly higher figure hitherto mentioned. We can see here a constant process of things never turning out to be as good as they were expected to be, or even as they were thought to be in the immediate aftermath of the period in question.
It is worth mentioning here, and this is a point to which not enough attention has been drawn, that one of the reasons for slow growth—and it is, in fact, only part of the reason; I think it accounts for roughly one-quarter to one-fifth of the total disparity between the growth we have had in these years and normal growth rate in this country over the past decade—is the impact of events in Northern Ireland and also of inflation at home upon our tourist industry.
It has been stated recently by an economic observer—and my own calculations based on the GNP figures confirmed this—that the growth of national output in recent years has been at about ½ per cent less than the figures would have been at had we secured the normal growth in tourist activities. Over the four years, 1969 to 1972, this means that by the end of the year the living standards of people in this part of Ireland will be 2 per cent lower. The average worker with his, say, £35 a week will find himself with 10s less purchasing power than he would have had, had it not been for the developments in Northern Ireland and the inflationary pressures on the tourist industry. That accounts for only between one-quarter or one-fifth of the slowing down of growth. The bulk of it is accounted for by the Government's stop-go policies.
Let us consider the impact on industry. In the industrial sector we had a growth of about 3 per cent in 1970. We have no firm figure for 1971. I thought that the figure might be over 6 per cent but I notice that Dr. Kennedy has again discouraged us a bit here by referring to evidence suggesting a further slowing-down of industrial growth in the second half of 1971 in which case my picture of a 6 to 6½ per cent growth in industry is probably on the high side. That means that over two years industries' growth will be no more than 4 per cent as compared with 10 per cent in the two previous years—a dramatic deceleration in the performance of this vital sector.
Wherever we look we find this evidence of a slowing-down which has been a very important factor—I will suggest later perhaps the primary factor—in the growth of redundancy in Irish industry. This has been accompanied by and, indeed, caused to a large degree by the inflation which Government policies have released and aggravated. In this connection I commend to the Tánaiste's attention the table in Dr. Kennedy's paper published yesterday showing a number of key growth rates, including the growth rate year by year of the Government's capital expenditure, a table which shows how extraordinarily erratic the Government's performance has been in this respect.
The Government have been jerking the economy forward far faster than it could afford to go, and pulling it back far slower than it could afford to go, and they have created a chaotic situation. In 1962 the capital programme in real terms was up by just under 9 per cent. In the next two years there was a 17 per cent growth. In the next two years it was minus two and minus 4½. Then it went up to nine, 24 and 16 and then down to 6 and down to the figure which, if it had been maintained, would be another minus for this year.
This is an extraordinary system of anti-planning. You could not even call it non-planning because they plan to spend the money. They take some decisions about it in advance and decide to spend it. This anti-planning on the Government side, with colossal oscillations in the public capital programme, is an important part of the cause of the troubles we are now facing. Like the incomes growth to which the Tánaiste referred rather exclusively, it has contributed to this inflation which for three successive years has pushed up consumer prices in a gradually increasing spiral: 7½ per cent, 8 per cent, 9 per cent.
I thought I heard the Taoiseach talking of a slowing down in the price rise last year. If I caught him aright, this will be the third time within nine months that the Taoiseach or his Ministers told us about this slowing down, in defiance of the statistics which persistently showed an acceleration. The last figures I looked at were those for the latest six month period in 1971 which showed that in six months prices had risen by 4¾ per cent at an annual rate of 9½ per cent. To me 9½ per cent is an acceleration of 9 per cent which is an acceleration of 8 per cent which is an acceleration of 7½ per cent. All I can see is evidence of a continuing further spiralling of prices.
The consequence then of Government policy has been unemployment, unemployment which has a number of different causes. I accept, as the Taoiseach said, that a significant proportion of the present level of unemployment is due to the fact that people have not been emigrating. It strikes me, as it struck Deputy O'Higgins, as a rather curious approach by the Taoiseach of an Irish Government to be complaining that people would not get out fast enough and were hanging around at home cluttering up the unemployment exchanges. It does not suggest a very responsible attitude on the part of the Government. It seems to me that if employment conditions in other countries discourage people from Ireland from going there, we should welcome the opportunity that gives us to put them to work at home, and make some concrete attempts to do so, instead of complaining that they are still hanging around and encouraging them to get out as quickly as possible. The fact is that that is a substantial factor in the present high level of unemployment.
In the Taoiseach's speech on unemployment he was not concerned with the human problems. He was not concerned with alleviating them or finding solutions. He was concerned—not to explain the problem which I would accept, and which is what I am trying to do, but to explain it away. He told us about the old, the married women, and so on, who are always with us in the unemployment figures and are no more with us today than normally. Although he was trying in a half-hearted way to pretend that he was suggesting it, I do not think he was suggesting that the figures had been increased in some way by increases in these categories.
He told us about the seasonal pattern. We all know about that. What we are concerned about in unemployment is the fact that, discounting the seasonal pattern, it has been rising very sharply. Let me give the House the true position. While I was waiting to speak I spent a few minutes calculating out seasonally adjusted unemployment figures under two series to show what is the underlying trend when you remove the seasonal element which the Taoiseach is apparently not capable of doing for himself.
Let me take the figures for those on unemployment benefit, a crucial group because they are the only group with whom fair comparisons can be made backward over time because of the Government's constant fiddling with people on and off the dole. In the first quarter of last year the figure was 35,900; in the second quarter, 35,300; in the third quarter 39,900; in the fourth quarter 42,000. In nine months, unemployment seasonally adjusted, rose by 22½ per cent, an annual rate of growth of 30 per cent in unemployment with the seasonal adjustment removed.
A slightly smaller figure is indicated by the figure for the percentage of unemployed rising from 6.7 to 6.8 to 7.3 and finally in the last quarter as far as I can calculate—and I have had to put in one estimated figure and I put it in at a very cautiously low level —to 7.85. Again in nine months that is a 17½ per cent increase, a 25 per cent annual rate of increase, in the percentage figure for unemployment, the two figures being calculated on a somewhat different basis. Whether it is a 25 per cent or 30 per cent annual rate of increase in unemployment, that is what the Taoiseach should be concerning himself with instead of trying to explain it away with spurious statistics.
May I mention a fact which has not been sufficiently highlighted? In the latter months of last year, during October and November, the level of unemployment as measured by the unemployment benefit figure, the only valid comparison, was higher than at any time that I could find since the 1930s. It was higher even than in the 1956-57 period to which Fianna Fáil for so long have tended to refer in any discussion on unemployment, or emigration, or economic problems.
What about the causes of this? I mention first of all unemployment in the UK and indeed it must be said in Canada and the US, the alternative markets for our labour surplus. This is a major problem, a major cause, but it is not the only one. There is also free trade. I have to differ from the Labour Party in this respect, not because I think it is important we should not fool ourselves into thinking that the unemployment we have now and the redundancies have been caused yet by the Free Trade Area Agreement. I believe there will be significant redundancy caused by that agreement before being compensated by any of the gains which will come from EEC membership. Those have not yet come and it is foolish for us to be talking as if we have already suffered much or most of the Free Trade Area Agreement effects when we have not begun to suffer the effects.
In the article referred to by the Tánaiste, I calculated as best I could in that fairly thorough analysis—it was by no means as deep as could be done by somebody with more time and more competence—that there may well have been up to this point a diversion of business to British firms of the order of about £12 million, involving 3,000 to 3,500 jobs, but in fairness it must be said that the single significant benefit from that disastrous agreement, the removal of the synthetic fibre duty in Britain, will have given to us during the period something approaching £12 million in extra exports and something like 2,000 extra jobs. Therefore, from that point of view, the effects of the agreement to date have not been very significant. From now on the accelerated adverse effects will far outweigh the slow process by which exports containing synthetic fibres will tend to arise. From now on the net disadvantage will become extremely clearer, but I think it would be wrong to attribute too much to free trade at this point. Indeed, we should be hiding from ourselves the truth about what has yet to come under this heading and we may not therefore be seeing clearly the causes of the present situation.
I think the main cause of unemployment in Ireland at the moment, leaving aside the people not emigrating—I put the word "problem" in inverted commas, unlike the Taoiseach—is the effect of economic stagnation, this stop-go policy, this boom-slump policy of the Government which is so marked in our planning about the capital programme. This has had the effect since 1964 of creating a sense of confusion in industry, industry having to increase its output sharply in the boom periods, with a certain lag, building up to employment only to find the Government creating a slump, with too many workers having to be released, and then another boom coming along with not enough workers to do the work and industry having hastily to employ a vast number of additional workers only to find—this has gone right on since 1963—another slump and industry having once again hastily to disemploy workers.
The growth rate in employment fluctuated very widely between 1967 and 1971. It is as follows: 1 per cent, 3½ per cent, 5 per cent, 2 per cent and 1 per cent. The kind of cycle that creates excess demand for labour for a certain period and for certain skills, is inflationary, as the Tánaiste will well know. It sparks off wage demands from particular groups in short supply which then spreads to other groups in the economy thereby generating wage inflation. We get wage inflation from Government policies of booms and then we get redundancies and employment with consequent deflation. This happens when we find growth in employment in industry dropping back to a mere 1 per cent. If there is a 1 per cent growth in industry it is about a ½ per cent in services and of course it is always about minus 3 per cent in agriculture.
The net effect of that, as the Tánaiste and the Taoiseach know, is that employment in the country is declining. The Taoiseach put it very nicely today when he said there was not much change in employment last year. If there had been any change upwards he would have told us. If he says there is not much change it means it is downwards, but he did not say how much. We all know employment fell last year because of stagnation in industry.
This is the main problem, but associated with it, and this is where we come to the specific question of redundancy, has been a fair amount of redundancy of workers due to technological change and due to the impact of this coming at the end of a period of stagnation—the failure of the Government in recent years to get industry into a posture of being prepared for free trade and for technological change, which has been happening with or without free trade. That failure of the Government has built up a backlog of potential redundancy in industry never quite pushed to the point of actually occurring, and the Government's only way of dealing with this seems to be to have a prolonged period of stagnation during which this accumulation of technological redundancy is building up and is suddenly pushed on the market so that it is most difficult for the people concerned to find jobs.
This is not planning—it has nothing to do with economic planning. It is muddling along and the Tánaiste well knows it. I think that the extra factor we have to face in Ireland, as in other countries—and here the Tánaiste is right—is that this problem of technological change has been inadequately faced up to by industry and has consequently caused a problem of redundancy. This can be suppressed for a while by Government inaction, and at great human cost it gets on top because of unchallenged and untackled technological change.
This seems to me to be the explanation of our present problems. When we come to ask who is responsible, where the blame lies, let us leave at one side the blame which the Government seem to place at the foot of the British Government for daring to have unemployment to such an extent that the British economy is no longer taking our surplus workers: how dare they embarrass the Taoiseach and the Tánaiste? Let us look at the blame that rests at home. These speeches that tell us all about other countries and about their problems and how they are in difficulties too do not comfort the people who are unemployed and offer no hope that the Government know how to tackle the problem.
Where, then, does the responsibility lie? It lies, first of all, with the stop-go Government policies. I need not dwell further on them. It lies, secondly, with the failure to get industry ready in time for free trade, to get it efficient. Here it is not enough—the Tánaiste must be made to understand this—for Ministers to go around making platitudinous speeches about the need to prepare. It is not enough to send officials to meet different groups and to report back to Ministers by way of some written report. I know enough about this to be able to say how it goes. I have been at dinners of various kinds where Ministers have come along to make speeches and I have seen everybody at the back of the room counting how many clichés have yet to come and placing bets on the number of platitudes that will be uttered by the Minister before he has finished. That is the level of respect in which these Ministerial speeches are held.
How often do we hear a Ministerial speech that contains anything concrete, anything factual, anything helpful? Whether it is the civil servants who write the Ministers' speeches, the platitudes, I do not know, but it is the Ministers who utter them. As well, everybody in industry is thoroughly dissatisfied with the way the Government carry on their business, leaving all the work to the civil servants and contenting themselves with making speeches. How often have Ministers gone to meet the people in industry to discuss their problems with them and to force them to face the issues and to hammer out procedures? That is not what happens. I was through all these consultations. I was present at every consultation on the Second Programme with every industry and subsequently at the reviews for the first couple of years. There was not a sign of a Minister anywhere. It was all left to the civil servants and there was no evidence that the Minister knew what was going on or that he cared. That is the way that sector was treated and the same happened in every other sector. How often did the Minister for Education concern himself directly with the problems of his Department and how often did he leave it to the civil servants to do the work for him while he sat in his office, going out occasionally to make a dinner speech?
Finally I must come to the question of free trade and the Free Trade Area Agreement. I insist that the bulk of our problems are not yet due to it but there is one thing to be said about it. The agreement itself was a bad one from which the losses to Ireland by 1975 will exceed the gains twice over. I made that point in the Irish Times at that time and nobody ever dared to contradict any of the figures I gave.
Quite apart from that basic weakness, there is the way in which it was negotiated and the spirit in which the Government went into negotiations. There was also the timing. It was wrong. Such an agreement, planning free trade over a period up to 1975, was bound to create the main problems in the period 1971 to 1974: because of the high level of our tariffs it was at the end of the period of the free trade that the problems would arise. I do not think anybody in the Government at that time could have thought that the progress of our EEC negotiations would be such that the gains from EEC membership to be secured during the last two-thirds of the transitional period and thereafter would be accruing to this country by 1971, 1972, 1973, 1974. If anybody in the Government thought that his judgment was not only wrong but it was out of line with informed judgment in this country and elsewhere.
Therefore, in signing an agreement which committed us to the adverse effects of free trade in the years before on any reasonable assumption there would be compensating benefits from EEC membership, the Government condemned the country to very serious economic circumstances, with persistent redundancy and unemployment in the early 1970s. That problem could be dealt with. We could have, should have, but, as far as I can see, have not negotiated with the British Government in the context of EEC membership, a rephasing of the freeing of trade with Britain to line it up with the freeing of trade with the EEC. Within the EEC the transition period is so designed that the losses on the industrial side and the gains from agriculture are phased simultaneously so that the benefits come with the disadvantages, so that we can avoid being hit before we can get the advantages. That is the purpose of this arrangement. Why did the Government then not seek, as they should have sought and could, I believe, have got from the British Government, in conjunction with the discussions with other EEC members, a rephasing of the agreement so that instead of phasing out our tariffs with Britain by July, 1975, this would be done by 1977? Those extra two years could be vital and would, I think, have saved us possibly two-thirds of the adverse effects in the form of redundancy likely to hit us in the next three years. The Government as far as I know did not even attempt to do that. They never even mentioned the subject. It has never even been hinted that there was any possibility of doing this. Whether they never even thought of it or whether they did not care enough or whether they did not try hard enough I do not know because their silence on the subject is so vital.
If they did not do that they still have a card to play. They still have the power, under the terms of this agreement, when the country is faced with problems of unemployment, to take action and in the Fine Gael motion there is a section 5 which calls on the Government to invoke the provisions of Article 19 of the Anglo-Irish Free Trade Area Agreement and the wording of our motion takes exactly the words of the agreement. The Minister for Industry and Commerce has now come in. I am glad he has come in at this moment. He missed a few remarks relative to him but he will get a few yet. The wording here is exactly the wording in the agreement. We should invoke the provisions which enable us to impose temporary restrictions on imports of goods where increased imports have reduced internal demand for domestic products and have thus brought about an appreciable rise in unemployment.
While I have said that the main problems of redundancy are not the free trade area agreement, part of it is the agreement and undoubtedly especially in the clothing and footwear trades the effects have been significant by any standards. There has been a diversion to the British manufacturers of £5 million, £6 million or £7 million worth of clothing and footwear. That has definitely involved several thousand jobs and it will involve in the period immediately ahead many more thousands of jobs if the Government do not do something to remedy their failure to seek a rephasing of the tariff cuts in the context of the EEC and do not at least try to make up for that failure by implementing Article 19 and thereby imposing the necessary restriction on the freeing of trade so as to postpone this process until it can be compensated for by the favourable impact of EEC membership through the agricultural sector.
I would ask the Minister to deal with this when he is replying. I was astonished that the Taoiseach made no reference to it. The Taoiseach's silence, indeed, on virtually all the constructive proposals in our motion was very significant. I hope that neither he nor the Government are so petty as not to take the necessary action because Fine Gael suggested it. This is the kind of action that is needed at this stage and failure to take this action before, failure to negotiate an agreement likely on any reasonable assumption, to fit in well with EEC membership, failure to seek a rephasing of the tariffs and the failure up to this point, except in the case of the hosiery and knitwear industry, to use Article 19, do account for a significant fraction of the problems now being created and the unemployment now being created. They are not a major factor yet but they will be so in the months and years immediately ahead if the Government do not do something about it.
How free are we to take some action to deal with the problems now facing us? Very often a country finds itself in the position of facing serious economic difficulties but being constrained by economic forces so that it cannot take the necessary action. An Opposition can criticise but the Government cannot really take action and the Opposition's criticisms can be, perhaps, at times unfair. Is this the case now? Are we seeking from the Government a course of action which is not open to them because of economic constraint? It is fair that that question should be asked and that the Opposition should face it. Let me examine the position taking item by item what the constraints might be. The first constraint is the balance of payments. The balance of payments deficit is by traditional past standards relatively high. The jumbo jets are a once and for all transaction and are not going to affect the balance of payments in the years immediately ahead. Obviously, if we take that distorting factor out, it is a £62 million deficit estimated for this year. It may be somewhat more. I thought the December trade returns which we got this morning were extraordinarily favourable. I doubt if they were anticipated by either economists or Government and it may well be that the external deficit, adjusting for the jumbo jets, may be below £60 million, a high figure by past standards although if one allows for changes in money values not so very high.
Then let us consider that deficit in the context of the reserve situation and the capital flow situation. Our reserves are at this point enormous partly admittedly because of Government borrowing, the fact that the Government have decided it is proper to borrow and as a result the reserves have been increased. In the 12 months between November, 1970, and November, 1971, our reserves rose from £309 million to £402 million, an increase of one-third. What this reflects, an increase in reserves of this magnitude achieved during a period when there was an external deficit of a significant character, is a capital inflow of an incredible magnitude, £180 million. It is only a year or two since we talked of the £30 million or £40 million inflow with rather bated breath and wondered could it last. Then it pushed up to £60 million or £70 million and we all said it was the bank strike. Then it went up a bit higher and we said it was because the bank strike was over.
At this stage the fact is that the capital inflow last year was £180 million. As far as I can make it out, something like £40 million of that was a once and for all effect of the bank strike, deposits returning. Of the remaining £140 million, £60 million or something of that order is accounted for by Government and State bodies borrowing including the £20 million for the jumbo jets. That still leaves an autonomous private capital inflow, net, of £80 million, a very substantial figure and while it is never wise to count on the whole of this I think it is clear, and I think the Government and the Central Bank and so on must be satisfied on this, that our capital inflow position has improved greatly and that we are in a position today with reserves at a very high level, with a capital inflow which although there are abnormal features in it even when you discount them is nonetheless by any reasonable standards at a high level. We are in a position where I believe if other circumstances permit we could legitimately take action to reflate the economy even at the cost of a significant increase in the external deficit above the basic figure of around £60 million which it was at last year allowing for the jumbo jets.
Does the external situation permit it? If we were facing at this moment external difficulties, the prospect of exports being cut back, of imports rising sharply, if we were facing a deterioration in the balance of payments, quite separately from what I am talking about, then one would hesitate. I do not think we are. I think, and the Government must surely see this, that we face a very favourable situation in export markets next year. Britain still takes two-thirds of our exports and the British economy is now in a position where it can look forward to a growth in output of over 4 per cent while securing an external surplus of £1,000 million. I shall not dwell on the question of how they have got into that position after the experience of the 1960s and even the 1950s. Perhaps there is a bit of a British economic miracle. Perhaps we can learn something from it. That is the position anyway. That Britain should get to the point of being able to look a 4 per cent growth rate straight in the face while having £1,000 million about to be tucked away in the form of an external surplus is a remarkable situation but it does mean that the British economy is being reflated pretty fast. This will involve not only an increase in imports to match consumption but because of the condition of the British economy considerable restocking and, therefore, the growth in imports in the year ahead will be disproportionate to the growth in consumption. We can look forward to a year in which our exporters will face very favourable conditions in the British market.
A country which is in the position of having its reserves up by one-third, having a capital inflow of a magnitude which we never foresaw as possible but a proportion of which is sufficiently stable to permit one to count on it, whose export prospects are abnormally good, is a country which should not be facing massive unemployment and be feeling incapable of tackling it. There are no constraints at this point that should prevent this Government from tackling this problem. I do not think any economist would advise the Government at this stage that they cannot safely reflate. I know there are always risks in this. I know we face the problem of the wage round and its magnitude but I think the Government are more likely to get a more favourable reaction on this wage round from the trade unions if they act to deal with unemployment than if they do not. As I judge it if they show no signs of caring about the unemployment situation, if the Government show that they are not concerned, there will be very bloody-minded workers next June, and who could blame them? If, on the other hand, the Government take the necessary action and show that they are dealing with the problem, and go to the workers and say, either directly or indirectly, "Look what we are trying to do, help us to do it by not endangering our work of creating employment at this stage by an excessive wage round," they are likely to get co-operation.
Sometimes economic advisers to Governments fail to appreciate the psychological points. They sit in their backrooms and may well calculate that they can reflate but only if wage rounds are all right. However, one cannot adopt a wait and see attitude in these conditions because such an attitude changes conditions and changes for the worse people's psychological attitudes. There is a chance now to make a double breakthrough, a breakthrough in reflating the economy, in bringing down unemployment and creating favourable conditions for economic growth next year, while at the same time putting oneself into the position of getting across to the unions and the workers the need for the necessary measure of restraint. The opportunity is there; but if there was anybody on the opposite benches, which there is not, as usual, could he say that, having listened to the Taoiseach, he could look forward to something of that kind occurring within the next few months?
There is full evidence of the Government's attitude to the position in the Taoiseach's speech and in the speech of the Tánaiste. Having made these suggestions, but not holding out any hope that anything will be done about them, it is open to the Government to take more action. The constraints are not there now and, economically, they have freedom of action. Politically, a Government should wish to do something about unemployment, but this Government is so mesmerised by their problems and are so incapable of applying their minds to them at this stage that they prefer to drift along and not attempt to tackle the problems, regardless of the fate that will await them for having adopted that stance of inertia in the crisis.
Many of the solutions to the problems facing us are set out in the Fine Gael motion, to which Government speakers have not referred. First, there is the immediate problem of redundancy to be tackled and this can be done, as proposed by us, by ensuring that people receive at least one month's notice of redundancy. A Government capable of acting as the Minister for Education acted a couple of months ago, when he sacked a couple of teachers in his direct employment at three days notice but told the House that they received a week's notice, is not a Government who will be concerned about one month's notice of redundancy. That would be too much to hope for. Secondly, as we propose in the first part of our motion, the Government should initiate discussions immediately with employers and trade unions to secure a postponement of any further redundancies for a sufficient period to make it possible to investigate the possibilities of maintaining employment. If I understood the Taoiseach correctly, something of the kind is being done. He was so downcast in what he said and so unimpressive that I do not know how seriously I should take him. However, he did say something—and I hope that some other Minister will tell us in concrete terms what exactly is meant and what are the proposals. If the Taoiseach, as I understand from his speech, has accepted the first of the Fine Gael proposals, I am glad to hear so, but I would like to be more sure before congratulating him or any other member of the Government on so doing.
The other point that we made is a more long-term one, but since it relates to redundancy I shall deal with it now: that is, the need to look ahead so that we might foresee where redundancy is likely to occur and endeavour to get new industries into these places. I am tired of referring to this matter in the House. As the Minister's advisers know, it was put forward—and, I thought, accepted in principle—in the CIE hall in 1961 that the assessments being made of industries by the research teams would be reported confidentially to the Department and that they would identify individual firms likely to face redundancy. Most of us knew which firms these were although we were never given information on individual firms. The suggestion was that these places would be pinpointed geographically so that the IDA could encourage industries to locate in these various places. However, nothing was done in that regard, although the job would not have been a very difficult one. Somebody could have kept a map for the IDA so that they might plan industrial locations from then on but the policy of the Government, which the IDA had to follow, was: "We must not try to locate industry anywhere in particular because if that is done all the pressures from other towns would be against us; we must be neutral in this affair so that we cannot lose votes in other places." That policy still persists in the failure of the Government to deal with the Buchanan Report. Our proposal was made without much confidence because the Government have neglected to do anything about the proposal since it was first made ten years ago, although not made by us at that time. It is only right that we should put forward publicly this particular proposal.
The next problem with which I shall deal is one that arises in one particular industry at the moment, that is the problem of bridging the gap between now and EEC membership. There is nothing more stupid, tragic or absurd than the spectacle of largescale redundancies occurring in an industry which, of all industries, is the one that is certain to benefit in the immediate future from EEC membership. If there is one question that is not challenged by the anti-Common Market people—and in this respect I look vaguely at the Labour benches— it is that the beef industry must benefit from EEC membership. Some people may say it is not the right industry to benefit but everybody is aware that it will benefit. However, there are redundancies in the industry at this stage. It is in this industry that thousands of extra workers will be needed but we have redundancy because of some technical defect in the relationship between Irish and British subsidies and the failure of the Irish Government to tackle the problem. The subsidies are working now in such a way as to encourage store cattle at the expense of beef, that is, the British at the expense of the Irish economy. What did the Government do? Nothing. They would have every justification in acting and the problem is one that could be dealt with. That is why we have put it down as one of the problems to be disposed of but, like most of our other suggestions, it has met with silence from the Taoiseach.
Next, there is the problem of trying to create employment directly by Government action. Politically, this is a popular line and one that is always brought forward and I would not be satisfied to endorse it were I not happy, first, that the programme we are putting forward is a much broader and more constructive one and that, secondly, in the particular circumstances of the moment there is justification for this. I am not talking of public works for the sake of public works. What we are putting forward in item 9 of our programme is that the kind of works that have been held up and in which there has been a cutting back—for instance, schools and hospitals and the housing programme—should be stepped up. These facilities are needed both socially and economically, but in respect of them, the Government have had to impose cutbacks because of the mess they have got into. These are facilities that can be extended in terms of finance available and also in terms of the labour force available. Workers who are now redundant could be absorbed into this type of employment. It is an important part of any programme at this stage, although I would not rely on it as the sole part of a programme of reflation at this point of time.
I must comment at this stage, as Deputy O'Higgins commented, on the spurious way in which the Taoiseach tackled this matter. Mumbling along, he said that the capital programme was increased by £20 million last November and, apparently, by a further £6 million since then. But by some process of arithmetic that is lost to me, £20 million plus £6 million became £30 million so that there was a total increase of £30 million. The Taoiseach said then that the total increase for next year would be £50 million more than the original for this year. If the figure of £30 million is right there will be a £20 million bigger capital programme in 1972-73 than the actual one for 1971-72. However, what he did not tell us was that the actual programme as increased for 1971-72 would amount to £223 million and that £20 million on £223 million is only about 9 per cent and that on any reckoning of inflation, 9 per cent is about the amount of inflation. What the Taoiseach was telling the House in concrete terms, but hidden carefully in figures, was: "We do not propose to increase the capital programme next year no matter how bad the situation. We will keep it at the same level. We will give enough money to prevent it dropping but not to increase it."
If the Taoiseach was right in saying that the authority is being given to spend some of next year's money during this year and if that is done on any scale at all, the actual increase in next year's spending over this year's would be reduced correspondingly by that transfer and there would be a drop in the level of next year's programme by comparison with this year's. If even £3 or £4 million is brought back to be spent this year, and so it should be, the restriction which the Taoiseach has placed on next year's capital programme, a restriction appropriate to periods of deflation rather than reflation, there will be involved an actual drop in capital spending in real terms. That was the prospect held out to us in the guise of an increase. That particular dishonesty was unworthy of the Taoiseach.
The other things we have put down here relate to the question of interest rates. This is important. It puzzles me that we have got into the position we are in in regard to interest rates on capital. In December, 1969 the Central Bank discount rate which is the dominant interest rate in this country, was 8¼ per cent. The deposit rates were 4½ per cent and 6 per cent for under and over £25,000. The overdraft rate was 9½ per cent. During the period December, 1969, to March, 1971, which is roughly the period of the bank strike, the discount rate fell by 1 per cent from 8¼ to 7¼ per cent. The overdraft and deposit rates showed no reduction although there could have been a reduction.
Between March and November, 1971, the discount rate fell from 7¼ to 4.94 per cent, a 40 per cent drop in interest rates in eight months. What happened to the rates charged by the banks? Deposit rates have not fallen proportionately. They have fallen by 33 per cent. Over this period from December, 1969 to November, 1971 the deposit rates have not fallen as sharply although they could have done so, because the true interest rate level is governed by the discount rate. It is not clear why the deposit rate has not been reduced proportionately to the discount rates. The overdraft rates have not been reduced proportionately to the deposit rates. The overdraft rate was 9½ per cent in March. Since then it has been reduced to a range of from 7¾ to 9¼ per cent. Those who are getting money at 7¾ per cent are getting a reduction of 18 per cent in the overdraft rate. Those with 9¼ per cent are getting a reduction of 2½ per cent. Why are the banks not reducing the overdraft rates proportionately? The profit margin of the banks has been vastly increased. I do not see what this is in aid of. The interest rates charged at the moment are beyond what is necessary.
As we know from the figures we have got for the actual deposits and advances of banks, the liquidity has been sharply improved. The advance deposit ratio has gone from 68 to 65 per cent. Taking private borrowing only, the ratio has gone from 59 to 54 per cent. In the period April to November, 1971, deposits have gone up by 5½ per cent and advances down by 4 per cent. In other words, the banks are keeping their interest rates for deposits high. Lending is going down. It is no wonder that this is so because the interest rates are high.
The Deputy has now been speaking for 45 minutes.
Two previous speakers spoke for just over 50 minutes. I should like to sum up. There is a need to look at the interest rate situation. There is no point in keeping deposit rates so high and bringing in more money than can be lent. There is no point in having profits inflated while people cannot borrow money. There is no point in holding back economic growth. It is up to the Government, the Central Bank and the banks to get together and deal with this.
A final point in our policy is that the company taxation cuts should be brought forward. This is vital. Industry is starved of the resources for investment. This has been objectively shown and nobody can quarrel with it. It is vital that the resources should be available to step up investment and to increase output and employment in the years ahead. This is a very important point. I hope that the Minister for Finance will deal with this.
We had a debate introduced by a Taoiseach who exuded lack of confidence in himself, in his Government and in his plans and policies. The Tánaiste spent his time emphasising that everything was beyond our control and that every other country was in a position as bad as ours. Deputy Childers made it clear that there was no plan to deal with the situation and that he would regard any attempt at planning as unsuitable and improper. There is no overall strategy of any kind.
I have a quotation from the speech of Mr. Don Carroll. I commend his speech to everybody in the House. It contains much of importance and shows how business people see the Government. I quote:
For years past there appears to have been little in the way of a strategic plan for the economy, all the evidence suggests that political considerations were in the ascendant and that the time scale of thought in Government circles related to the old adage that a month is a lifetime in politics. So much Government action appears to have been a grudging response to events rather than a firm, clear intent to pursue a broad consistent strategy towards some defined objective.
On the next page Mr. Carroll says:
It is for the leaders of the sectors of the community and the elected representatives of the community to honestly, unequivocally and unambivalently, bring home to the community what is and what is not possible, how it can and how it can not be achieved. And quite certainly, in this country now for far too long, we have lacked that honesty and clarity of explanation. The result is disillusionment, instability and inconsistency, lack of respect for the opinions of those we should respect,——
and we should be able to respect the opinions of Ministers of the Government
——lack of understanding as to how we could contribute to the society which we would wish, in a word—a credibility gap.
A credibility gap is what this Government have created. It is not just a gap between them and the Opposition or between them and the workers, but it is a gap between them and the industrialists. I was at the CII conference yesterday and several industrialists, at least one of whom I could identify politically, spoke in caustic terms of the Government and he evoked applause.
This Government have now lost the confidence of management and that is the stage when the Government should get out.
Having listened to the Taoiseach this afternoon, one must inescapably come to the conclusion that if the Irish electorate are seeking further conclusive evidence of the now almost total incapacity of the Government to manage the economy it has been presented here today in very sharp and glaring form by the Taoiseach. There was a time when people displayed some hope that, perhaps, Deputy Colley would make a reasonably good, if unimaginative, Minister for Finance. The Minister now has the unique position in the history of Irish economic budgetary management of being the presenter of about three and a half budgets in one financial year. So far in the financial year 1971-72 we had three major budgets. I am afraid we in the Opposition are almost loath to predict what might happen between now and 31st March, 1972. Such has been the policy of inflation and deflation, of chopping and changing the capital programme, that the whole budgetary strategy—if there is anything of that nature left in the Department of Finance—reminds me of some kind of a Christmas balloon which has been blown up and knocked down by a child over the Christmas period. There is a broken down, Christmas-balloon style of Fianna Fáil management. One might classify it as being a Colley fire brigade type of management, and nothing more than that at this stage.
The Labour Party have been rightly critical of the Government over recent months. One cannot travel through any industrial enterprise in this country and talk to the management or to any trade union official of any seniority in the country without finding a blaze of criticism. There used to be cynicism but now there is open hostility towards and criticism of the Government in the terms of the management of the economy. The announcement by the Taoiseach puts us in a rather unique position in the history of the State from the point of view of the economic policies adopted by the Fianna Fáil Party. They have been of a stop-gap, ad hoc, piecemeal nature of panic, capital injection into the economy, of easing credit, then cutting back on credit, of panaceas. They show that the collective expertise of the Cabinet and their ability to project even one quarter ahead is at such a low ebb that I can do no more than reiterate the view expressed by Deputy FitzGerald that the Government should simply get out, and the sooner the better, before politics become completely discredited and before the people come to the conclusion that politicians should not be let run the country at all and particularly the country's finances. The panic action of the Minister for Industry and Commerce in regard to import duties is a further example of ad hoc administration by the Government and their tendency to react to events rather than initiate some form of economic strategy.
The major criticism to be made of the Taoiseach's statement is its vagueness. There was a £20 million capital injection in the last quarter of 1971; then a further £10 million, and now there is another £20 million, making a total of £50 million above the initial 1971-72 figure. There is very little detail from the Taoiseach as to how it is proposed to deal with this revision of the State capital programme. He mentioned sanitary services and, in passing, toyed with the question of schools and factories. He also made an oblique reference to the construction industry. There is no indication as to which Departments have been asked to bring forward their programmes now in the pipeline. We do not know what stage these programmes have reached. We do not want the same kind of situation which developed when, in his abysmal ignorance in many respects, Mr. Barber in Britain performed the same kind of trick of the loop in injecting capital into the economy and discovered six months later that what he had done was not having any effect because of the delayed reaction associated with any change in the capital programme.
Fianna Fáil became very scared in the past fortnight, indicating that unemployment might go up to 80,000 or perhaps 85,000, and said: "We have another party meeting next week. The boys will crucify us again. Neil Blaney may make some loud noises. It looks very difficult now for the referendum, so let us think up another £20 million for the capital programme." Such was the panic in the Department of Finance in the past week that they were chasing around from bank to bank asking: "If you had another £2 million what do you think we should do with it?" and asking certain trade union leaders: "Suppose there was another £2 million on the construction side, where do you think it might usefully go?" Fianna Fáil may call that running the country but I regard it as the kind of ad hoc government which deserves to be exposed and purged from Irish politics.
We in the Labour Party are not content merely to expose the mismanagement or non-management by the Fianna Fáil Party but also wish to advocate our own short-term proposals. The fact that some of these may coincide with the proposals of the Fine Gael Party illustrates that no group of politicians have a monopoly of wisdom residing solely within them. In the policy statement of the Labour Party issued on 12th January we suggested that there was a need for a massive injection of purchasing power into the economy and that a national loan should be raised. There is no reference in the Taoiseach's statement to the feasibility or desirability of raising a national loan. We also suggested that further redundancies should be prevented by using Fóir Teoranta or some similar Government agency to deal in advance with threats to firms by providing them with capital, tariff protection or other facilities required to save employment. I do not know where the Taoiseach, a man from North Monastery, Cork, which has a certain precision about it, got his vocabulary. He speaks vaguely about "active roles,""long-term viability" of companies which might get some assistance from Fóir Teoranta. All one can say is that the files must be piling up on the desk of the Minister for Finance and of the staff of Fóir Teoranta. I gather that there are a substantial number of applicants for assistance, but the kind of direction that has been given here this afternoon by the Taoiseach has not been very good.
We welcome—and this is the only positive point in the Taoiseach's statement—the decision to increase by a total of 3,000 recruitment to both the Army and the Garda. Undoubtedly this will give a certain impetus to the clothing industry, the building and equipment industries and so on.
This brings us back to the serious failure of the economy to provide employment for those who wish to remain in this country. The advocacy of full employment has been the basis, one might even say the reason for the existence, of the political labour movement in this country. It has certainly been the basis of all our political demands. The real test of economic growth is the level of employment. Growth and employment during the past two years have been abnormally low, and the number of persons in receipt of both unemployment benefit and unemployment assistance has risen quite substantially during that period. I accept the comment of the Taoiseach on the seasonal pattern of employment, that there must be a question mark about the distortions which show up in unemployment totals and so on.
I accept there have been substantial changes in the methods of compilation which are statistically reliable and which one cannot dispute. However, at 30th December, 1966, there were 61,000 people unemployed, whereas at 7th January, 1972, there were 77,800 unemployed. Perhaps a more reliable indicator is the number of persons in receipt of unemployment benefit.
The Parliamentary Secretary, in a reply to me this afternoon, indicated that in December, 1966, there were 33,000 persons in receipt of unemployment benefit, and at 31st January, 1971, there were 42,000 in receipt of unemployment benefit. Therefore, notwithstanding the very substantial structural changes in the employment pattern that have occurred, the overall unemployment position is quite serious. While I have no intention of talking the country into a crisis, which could be a dangerous thing to do, nevertheless, one can see that the position is extremely serious and the Government are not taking action. We also have been authoritatively assured by recent successive forecasts by the Economic and Social Research Institute and the Central Bank that the unemployment situation is not likely to improve very much. One can say that the IDA reflect a certain level of Government thinking, particularly that of Deputy George Colley, the Minister for Finance, who is very vicious if people tend to step out of line unduly. The IDA at the end of 1971 expected that the grant aided new industry would create 8,000 new jobs but that this would be offset substantially by as many as 4,000 jobs made redundant. The net job creation growth in this country is substantially down on recent years.
While one can accept to some degree the statement made by the Tánaiste that a Government can only create the climate, that a Government can only create infrastructure, that a Government cannot literally provide jobs as such in each area of the economy, nevertheless, I do not think one can accept their washing their hands of responsibility for influencing the level of growth in the country, which is now quite obvious from the Fianna Fáil benches. I would accept the Taoiseach's comment that part of our high unemployment total arises from the fact that there are virtually no emigration opportunities in Great Britain at present and that many Irish men and women are staying at home. I have found this to be particularly true in the constituency I represent. People who came home from Britain for Christmas have not gone back. There are now some 25,000 persons unemployed in Liverpool alone.
I would also accept the statement of the Taoiseach today that there has been a net inward movement of 1,000 persons in the year ended November, 1971, but I submit that with the level of unemployment in Great Britain now likely to increase the picture is not very encouraging for the first quarter of this year. The level of redundancies for the year 1971 will certainly be in the order of at least 9,000 which is three times the rate of 1969 and roughly three times the rate of 1970. The position is, therefore, quite serious.
One would not, perhaps, be critical of the Government if one were aware of the prospect of unemployed people receiving re-training. When one looks at the very sparse efforts being made by the Government in the new AnCO industrial training centre set up it certainly is not encouraging. There are 42,000 people in receipt of unemployment benefit so one sees the contrast when one considers that there are only 423 persons currently receiving training at the AnCO industrial training centre. This is a very small contribution towards the solution of the redundancy problem. There were only 114 resettlement allowances paid out during the past 12 months so it can be said that very little impact has been made on the unemployment situation here.
It is not good enough for the Taoiseach to come into the House and say: "Here is another £20 million. Build a few schools and factories, keep the construction industry going." There should be an immediate review in the Department of Labour of the extent to which it can alleviate the serious situation developing. This point must be made very strongly to the Government. We have at the moment an international recession in textiles and in the footwear industry together with the depressed demand in foreign markets for many of our exports. The Taoiseach does not seem to have grasped the point of the criticism of the Labour Party. He came in this afternoon and said that increased redundancies were not due to the Anglo-Irish Free Trade Area Agreement. I suggest that while one can reject the statement of the Taoiseach one must also bear in mind the proper perspective in terms of the Labour Party criticisms in regard to this agreement. I would accept the figure mentioned by Deputy FitzGerald when in The Irish Times on the 14th January last he spoke of the net adverse effect of the agreement and said that roughly 1,500 jobs were affected by this agreement. I would make the figure 1,800 but this at least is quite different from the Taoiseach saying that increased redundancy is not due to the Anglo-Irish Free Trade Area Agreement.
The Government should invoke the provisions of the Anglo-Irish Free Trade Area Agreement relating to temporary import restrictions which would protect employment. I would strongly point out that the final four of the ten annual tariff cuts which are still to come, that is, those in July 1972, 1973, 1974 and 1975 will have a major impact on Irish industry. We should demand another review of this agreement because the final two-fifths of it, which have yet to come, will have the real bite.
There has been a good deal of hysterical criticism of the Anglo-Irish Free Trade Area Agreement. I do not think it has been too bad in many ways but I certainly believe that the provisions relating to temporary import restrictions were not well devised. Many sections of the agreement should now be open to immediate review. In the light of the current unemployment situation one should not merely wash one's hands, as the Tánaiste did, when he said that we are going into Europe, that free trade is on the way and, therefore, one must accept that there will be general unemployment. The serious aspect of the final phasing of the free trade area agreement in the next two or three years deserves proper discussion and action.
I would accept the comment made by the Taoiseach that one of the causes of redundancy has been downright bad management in some firms. This is a fact of life but we have had an excessive number of closures and of pure breakdowns because a substantial number of firms which were privately owned encountered serious difficulties. Many of their managements have been quite incapable of meeting increased competition from imports in particular. Indeed, one must point out that the bad management in these firms is the responsibility of the firms, and no amount of chasing after Government Departments can relieve them of that responsibility. Unfortunately the workers in these industries are the first to suffer. The closures have been quite substantial and so have the number of workers directly affected. This must be stressed. We had a plethora of reports from the original committee on industrial reorganisation and industrial progress but whole sectors of management simply ignored the warnings and the indications given in these reports time and again from 1964 onwards. Now they cry to high heaven. Small firms simply did not take it upon themselves to adapt in order to face increasing competition. Now the chickens are coming home to roost. When we talked about the impact of free trade right from 1964 to 1970 we were laughed at by many of these industrialists as Jeremiahs preaching gloom. Now the chickens are coming home to roost.
It is no consolation to anyone in the Labour Party to point out that the critical political situation in Northern Ireland has badly affected the level of industrial development inquiries from abroad in both the North and the South. Political, sectarian strife in Northern Ireland has had a disastrous impact on employment there. There are 44,100 out of work in the North. I am always amused, ruefully amused, when Mr. John Taylor says that we have 70,000 unemployed in the Republic. He ignores the figure in Northern Ireland though it is the worst in 19 years. While we can pinpoint the cause for redundancy here it is only too true that many thousands of jobs in the North have been bombed and burned out of existence in a totally stupid fashion. This has unfortunately spilled over into the Republic and we are being affected from the point of view of the level of industrial development and investment inquiries from abroad. We should not hide this fact. It is my information that the level of foreign inquiries has fallen substantially. The people must appreciate that they are not immune, as many would think they are, from events in Northern Ireland and they might now have another look at the situation on the other side of the Border since it inevitably affects us all.
Having made these points, the only conclusion one can draw is that our Government have been the most ineffective and most incompetent Government in the history of the State from the point of view of their approach to industrial development and employment. As I said before—I say it now directly to the Minister for Industry and Commerce—if I were an employer, on a job valuation basis, I would offer two-thirds of the present Cabinet jobs at no more than £1,500 a year. Whether it is a Minister opening a petrol service station or a Minister commenting on economic problems on television, one certainly does not have any great confidence in the calibre of some of the occupants of the Government front bench. There has been an abject failure to implement proposals. One can excuse ignorance and one can sympathise with incompetence, but one cannot excuse a Government refusing to implement reports and recommendations. The report on full employment was issued in January, 1967, four years ago. It was signed by some of the best brains in the country.
Full employment in 1980.
If those policies——
As I have said already, full employment in 1980.
Deputy Desmond.
Had the proposals and policies been implemented we would now be facing a level of industrial employment——
Where is the NIEC now? It is where it deserves to be. It is dead.
Deputy Desmond.
I charge the Government with abject failure over the past five years to implement the many proposals which issued from the NIEC and the CIO. I charge the Government with very little effort at any kind of reasonable industrial policy. The Taoiseach knows that the industrial reorganisation branch of the Department of Industry and Commerce exists. It has been set up and the Government are hoping it will work out all right but I have never seen any real drive to make expertise available and no attempt at dynamism. I have seen no effort made to implement the recommendations made by the committee on industrial progress which reported on a number of vulnerable key industrial sectors. We had the snide criticism of the Taoiseach this afternoon when he, so to speak, accused the Labour Party of "doing the dirty" in respect of the Sugar Company. This is a classic example. Over the past four months I have addressed questions to the Minister for Finance. Time and again he had matters under consideration. Time and again he was not quite sure whether he would reorganise this way or that way. The indecision spilled over into every reply I got. When the Labour Party rightly pointed out that, if Government action was not taken, hundreds of jobs would be in jeopardy, the Government in the past week—let us be quite crude about it—suddenly made up their minds that they had better do something about the Sugar Company. Now, whether the decision is right or wrong, frankly it is better to have a decision and make mistakes than to have no decision at all. I welcome the Taoiseach's statement in relation to the Sugar Company and the assurances of the continuance of employment.
I worked in Carlow for a couple of months as branch secretary of a transport union and, when one talks about full-time employees and seasonal workers in the Sugar Company, a great deal can be involved in terms of giving guarantees. Those in fulltime employment have got guarantees. We do not know the level of campaign employment in Tuam or Thurles. No real indication is given beyond the total anxiety by the Government to ensure that there is not an undue political backlash. I leave it like that. The Government should be thankful to the Labour Party for having appropriately and in the national interest put the screws on them in respect of the way in which they allowed that company to slide into a slough of indecision.
The Government are also preoccupied about the national wage agreement. I should have to be a political innocent in the Labour Party if I did not accept that relative wage levels and unit labour costs have a major influence on our export competitiveness and on our employment. I should also have to be abysmally unaware of economic facts of life if I did not concede that consistent inflationary growth is essential in this vital area. The Labour Party as a responsible political party, no doubt by an overwhelming consensus within the Labour Party, concede that the planned development of incomes best occurs by means of comprehensive, phased, short-term national wage agreements. In the past ten years that has always been my approach through experience of such agreements and their benefits to the economy and low paid workers. Therefore, in the future we shall—at least I will, and I am sure the party will—fully support efforts along these lines by trade union and employer organisations in regard to national agreements.
It is only proper to point out, particularly in reply to the Minister for Health who always has a bee in his bonnet about unit labour costs—one would think he had never heard of managerial incompetence or Government policy—that the trade union and labour movement generally reacted with reasonable restraint, with great restraint in many areas despite the fact that, as the Minister for Industry and Commerce is well aware, there has been a 24 per cent or 26 per cent increase in the cost of living in the past three years. Things are bad enough at present but they would be disastrous for the economy if we had a free-for-all on the incomes front in 1972. The consequences for employment would be most unfortunate. While politicians should not talk too much about prospects in that regard I would hold strongly that in the national interest every effort should be made to ensure that a further such short-term, national agreement should be negotiated by the employer organisations and the ICTU in the months ahead.
In regard to the other proposals submitted by the Labour Party I urge the immediate publication of details of the revised State capital programme making up £240 million. In the absence of this data we cannot gauge the real impact on employment. There have been major cut-backs between February, 1970, and October, 1971. Will these cuts be restored? What will come from the Department of Education in the way of revised plans and revised projected expenditure for regional colleges? How do we stand as regards expenditure for regional hospitals and in regard to sanctioning outstanding housing programmes? There is no indication in the Taoiseach's statement.
A number of other serious situations are developing. For example, the ESB, who are a major source of employment, now have a projected deficit for 1972 of £3.5 million. The finances of RTE are not very sound. Therefore, I urge that in the allocation of the State capital programme there should be full consultation with these vulnerable State sponsored bodies. The two I have mentioned employ up to 10,000 people between them. In the context of immediate substantial reflation of the economy I also ask that the Department of Finance should consult again with the Central Bank and other financial concerns. I begin to feel that Dr. Whitaker may be more conventionally conservative than people imagine but there should be consultation in depth with the Central Bank, the commercial banks, insurance companies and building societies and they should be made aware that there is need for more capital funds to be released to the Government. If necessary, a national loan should be floated.
Another point is the need for a termination of employment Bill. It is absolutely disgraceful that thousands of workers after years of employment get only two weeks notice on a statutory redundancy form—form P.5, I think it is—of the Department of Labour. A termination of employment Bill should be introduced which would give legal entitlement to longer periods of notice based on service. There would be no dispute about it and I am sure this would prevent a flare-up of redundancies and ensure that employers would plan their level of employment several months ahead and it would be of major benefit to employees directly concerned and to the country as a whole.
Legitimate complaint has been made of the disincentive effect of the current level of taxation on company profits. If one were to have a 10 per cent reduction in company taxation, now at 58 per cent, it would stimulate investment in manufacturing industry for export purposes and would lead to industrial expansion. Although one of my trade union colleagues reacted otherwise, I was impressed by the suggestion of Mr. Carroll, chairman of Lloyds and Bolsa International Bank, in regard to tax credit and I think this idea should be considered. It is not entirely new but I think his approach is desirable. I noticed that at that conference, on an entirely different level, Martin Rafferty, general manager of the Allied Irish Investment Bank, spoke in terms of a business advisory unit to the Government, again the embryonic approach of the National Industrial Economic Council. It is disgraceful and scandalous and shows criminal political irresponsibility that the new National Economic Council have not got off the ground. Who will examine the Taoiseach's statement here this afternoon?
This debate concludes at 5 p.m. tomorrow. There is no prospect of the heads of the various national economic organisations, the employers, trade unions, State-sponsored bodies and those people in the academic life of the country carrying out an examination in depth of the Taoiseach's statement because we do not have a national economic council. It was an act of criminal irresponsibility on the part of the Government to sabotage the setting-up of the new NEC. The stupid and narrowminded insistence of Fianna Fáil that no Member of the Oireachtas might be nominated by the representative bodies has prevented the setting-up of this council. I had a vision that perhaps this National Economic Council would have the prospect of consulting with the National Economic Council in Northern Ireland, of getting together and of trying to work out how they could do something about the 125,000 workers who are out of work. Had the National Economic Council been in operation, I am convinced they could have made a decisive contribution in this regard but unfortunately Fianna Fáil have set aside the national interest in their own petty, party political interests.
Finally, I would make a simple plea but one we are inclined to forget. So caught up have we become in our own remedies and economic propositions for reform that we tend to forget those who are unemployed. The Government should have a sharp look at the level of unemployment benefit. This is a simple issue but it is of major importance to those concerned. The Taoiseach can talk in terms of handing out £20 million for those who will benefit under the capital programme but it is essential that consideration be given to the level of the benefits paid.
It is a sharp reminder to us that if you are unemployed in the North you are better off to the extent of £5 per week than the unemployed person in this part of the country. In Northern Ireland a family with two children who are in receipt of graduated benefits can be better off to the extent of £10 or £11 per week. It is a sharp reminder that the rate of children's allowances in Northern Ireland is higher than in this part of the country; the monthly rate in respect of a family of three qualified children is £4.25 in this part of the country while it is £8.23 in the North.
The level of benefits and the total incapacity of our social security system in the Republic to meet the new demands unemployment is making on the system is worthy of serious consideration by Members of this House. I am an insured worker and I should not like to be forced to live on £10.75 per week with my wife and three children. Many workers have to pay differential rent for a local authority house and feed their families on this amount. This is the reality of unemployment, it is the reality of what we are supposed to be discussing here. It is the reality of someone trying to live on that level while the Government play politics with the situation and, perhaps more disgracefully, do not know what is going on. In the circumstances we drift from one half-Budget to another.
In listening to the contributions that have been made by Opposition speakers one might be led to believe that there has developed an economic situation that is peculiar to the Republic of Ireland. There does not seem to be an awareness of the fact that throughout the world the general inflationary situation which obtains has affected economies and governments have had to take serious remedial steps to protect their economies.
Having listened to the volume of criticism that has been expressed by spokesmen for Fine Gael and Labour, it is obvious that the speakers overlooked the fact that in 1971 Ireland was one of the few countries—in fact, my understanding is it was the only country in Europe—in which there was a net increase in manufacturing employment. Opposition spokesmen have been so busy attacking the Government, the Industrial Development Authority and the various agencies that they have overlooked this fact.
Much play has been made of the fact that although new industries created 8,000 jobs this was offset by redundancies to the extent of 5,000. Emphasis was put on the fact that this meant that only 3,000 new jobs were created during 1971. I would remind the House that that was an achievement peculiar to this country and was not matched anywhere in Europe during 1971. The Opposition should remember this fact before they complain about the non-activity of the Government.
The Government concede that we have a higher rate of registered unemployed than we have had for a considerable time. Deputy FitzGerald is usually very anxious to bring in his records here and show the comparative figures with other countries but in this instance he has been careful not to present any comparisons because he knows the comparisons will redound to the credit of the Government. The Deputy has associated himself with a motion, on behalf of his party, with Deputy O'Higgins and Deputy Belton. He made the point that the economic state was such that the Government were in a position to tackle any problem that needs to be settled. In its back-handed way this is the greatest possible tribute he could have paid to the Government. Deputy FitzGerald pointed out that the external reserves were never at such a high level. If that were not so it would be a side of our economic situation which Deputy FitzGerald would be only too ready to attack. Due credit must be given to the fact that he conceded this, although it was from the point of view of making further points regarding more steps which the Government could take. Those further steps were not contained to any great extent in the motion which the Fine Gael Party put down. He criticised the Taoiseach for not having made any reference to the Fine Gael motion today. The difficulty from the point of view of the Fine Gael spokesman is that, arising from the steps the Government are taking, they are not in a position to criticise them unduly because there are no proposals contained within their motion which would in any way improve the situation further than the steps the Government have taken.
Deputy Desmond, I suppose naturally from his point of view, claimed that the Government have not been active enough in tackling this situation. The explanation I have given of an achievement which this country has accomplished and which no other country in Europe accomplished during the course of 1971, speaks in itself for the success of the Government's efforts towards the creation of new industries in this country. Naturally we cannot possibly be complacent because of the increased numbers on the employment register. I must reiterate what the Taoiseach has already said, that is, that the Government are concerned about the rise in unemployment and the rate of redundancies, have shown this and can be seen to be acting positively in this regard.
As I have said, the situation needs to be looked at realistically and certainly not over-dramatised or exaggerated as a number of people seem most anxious to do, to create a type of scare situation which can have a far greater depressing effect on the economy than the situation that actually obtains at present. In his contribution Deputy Desmond drew attention to the fact that to a great extent in connection with a number of our industries management did not take sufficient heed of or pay sufficient attention to the warnings contained in the CIO reports submitted in the early 1960s. Not sufficient action was taken by a number of firms and by some managements on the suggestions and recommendations made in the earlier CIO reports and the COIP reports which were published over the past two years and to which Deputy Desmond also referred. In spite of the progress made between the original CIO reports and the more recent COIP reports, many of these problems are with us still, in some cases to a greater and in more cases a lesser degree.
There is no doubt that one of the problem areas in this regard is management. Irish management is now facing a vastly different situation from that in which Irish industry grew up in the period between the middle 1930s and the middle 1960s. At that time the home market was secure and for most of our industries exports did not enter into the picture at all. Therefore, product policy as such and marketing in any real sense posed no problem. If security was threatened by imports the remedy normally sought was increased protection. There is no point in a developing free trade situation, a situation which has been definitely developing over the past ten years, in reverting to the type of situation which obtained up to the middle 1950s in which home industries could be built up and protected behind an overall tariff wall.
In relation to another factor which we will be discussing more and more over the coming weeks, the Labour Party and other people who are opposed to our entry into the EEC will be continuing to emphasise that home industries can be protected and maintained by building higher and greater tariff barriers and protection walls. Last night I was handed a document issued by a group who describe themselves as the "Dublin North West Anti-EEC Action Committee". There are headlines saying: "Danger", "No Entry", "Save Your Jobs", "Vote No". An extract from that leaflet creates the impression that on entry into the EEC every single factory in the Finglas area will close down over a ten-year period. It goes on to talk about the effects of the Anglo-Irish Free Trade Area Agreement. I want to introduce it at this stage because a great deal of reference has been made to it and to its effects. It says:
Irish workers are fortunate in that they have had a preview of this "milk-and-honey land" of Free-Trade, in the Anglo-Irish Free Trade Area Agreement signed in 1965. The politicians told us then that with access to a British market of 50 million, there would be more jobs and higher wages. So far we have only felt the half effects of the agreement, yet look at what has happened since 1965—the devastation of the Irish clothing and footwear industries, an extra 10,000 unemployed.
It goes on to deal with strikes and redundancies and the "8,000 redundancies in this year alone". This is the type of extremely false picture which is being presented in relation to the Anglo-Irish Free Trade Area Agreement. That document suggests that the situation since 1965 arising from that agreement has resulted in the devastation of the Irish clothing and footwear industries and the disemployment of 10,000 people.
They say that a promise was made that there would be higher wages and more jobs and they make the point that there are not higher wages and that there are 10,000 fewer jobs. The fact is that real wages in this year are twice what they were in 1960.
Real wages?
Real wages have doubled between 1960 and 1971.
Not real wages.
In actual fact in 1971 there were 55,000 more people engaged in the manufacturing industries than there were in 1960.
How many have left agriculture?
I am talking about the effects of the Anglo-Irish Free Trade Area Agreement and the false allegations made in connection with it.
If the Anglo-Irish Free Trade Area Agreement had nothing to do with it, why did you increase the duty on imports from Britain? I do not want to interrupt the Minister.
I understand that there is a time factor and I certainly did not interrupt any of the speakers.
I am sorry for interrupting.
Apparently whatever way I present my case to the House I always seem to invite interruptions. Thank God Deputy O'Donovan is not here or he would be in every second. I must say in reply to the Deputy's interruption that I never said that the Anglo-Irish Free Trade Area Agreement did not affect employment. I have always accepted it can be a contributory factor in the employment situation, but the main contributory factor in regard to redundancies has been the difficult trading conditions in export markets during the past 12 months. This difficulty has been brought about by the economic situations in other countries especially in the UK and the USA, which as the Taoiseach said, are the two countries to which we export most.
Regarding Deputy Tully's question, another factor which contributed to an increase in the figures on the unemployment register has been the continuing outflow of people from the land as well as the redundancies occurring in the services and distribution sectors together with the effects of the Anglo-Irish Free Trade Area Agreement on firms trading in the home market. For a number of years past Government policy has been that the main opportunities for increasing employment and economic growth must come from the manufacturing industry and that is why I am dwelling so much on that sector. As Minister for Industry and Commerce, it is my responsibility to create, through the IDA, new industries and to readapt existing industries so as to make them more viable. To this end considerable emphasis and attention has been placed on measures to adapt our older established industries to conditions of free trade and thereby preserve employment opportunities to the maximum extent possible.
There is also the question of attracting new industries to the country. The Government have made considerable efforts, by way of grants and the extension of the services of the State agencies, to encourage industries to adapt to changing conditions. By and large these efforts have been successful, but the Government could not guarantee the survival of every Irish manufacturing firm because in the last analysis survival depends on the efforts which individual firms make. Undoubtedly, the response from the different sectors of Irish industry in this respect has varied. Some firms have been less active than others in their preparation for freer trade, and even within various sectors the reaction of firms has varied also. Experience has shown that the responses to exhortations, whether through adaptation councils or otherwise, to take initiatives on an organised basis has been no more encouraging than what it was in the case of the earlier CIO reports, despite the fact that now there is less time left for action.
Various Government Departments and agencies can help and encourage but they cannot compel. Certainly, they cannot take over and, in effect, run industries, nor can they impose solutions on various sectors of industry. Deputy Desmond referred to this but I must confess that there are sectors of industry that are not taking sufficient stepts to readapt themselves for the situation that lies ahead. It is extremely difficult for us to deal with cases where management will not cooperate. Deputy Desmond also criticised Government Departments for being inactive, but I would remind the Deputy that the IDA, in association with my Department and various other State agencies, take every step possible to help industries running into trouble.
Our problems are not due solely to factors such as fashion, technological changes and free trade. Some of our problems are due mainly to developments within our own control. The most obvious and notorious of these is inflation. If, through inflation—inflation caused mainly by unreasonable income increases—we eventually price our products out of the export and indeed the home markets, these people who blame free trade for all our trouble will be only deluding themselves. Their reasoning seems to be that, if we had not the discipline of free trade, we could by increased protection shelter our increasingly uneconomic production. Anybody who considers the situation objectively will see clearly that it is stupid to endeavour to travel such a road. When wages and other incomes are pushed beyond the level that increasing productivity would justify, existing employment is jeopardised and opportunities for employment are reduced for those people who are unemployed. During the past few years, if instead of pushing inflation at a faster rate than was being experienced in the other countries with which we trade, we could have kept the rate at a lower level, it is probable that the trend of unemployment would be downwards rather than the reverse.
Did the Government not do that more than anyone else?
Any time we ever tried to curb incomes we ran into very serious difficulties with the Labour Party.
It was all the Government's fault.
I have only 45 minutes in which to speak here.
That is not bad.
Let the Minister read his notes. He is making a Civil Service speech.
Not only will Deputy O'Donovan have his 45 minutes but he will have also the ten minutes that he is taking from my time.
My interruptions are always short and sweet.
They may be short but they are not sweet.
They are not intended to be sweet.
Deputy Spring, of course, has only arrived but before he came I had been contributing to the debate portion of a speech——
I heard the Minister and that is why I have come in.
I wonder which part the Deputy heard? I just wonder how interested is the Deputy.
I knew the Minister was making a Civil Service speech. That is the only speech he can make.
This is not a Civil Service speech. It was written by the Dublin North West Anti-EEC Action Committee. I do not know whether the Deputy is a member.
Next week I will.
Good. I know they will appreciate in Kerry the fact that the Deputy is planning to prevent them reaping the advantages of entry to the EEC.
We have lost two factories in Kerry in the last 12 months and we have not got anything to replace them. The bacon factory has closed and the tannery closed this month.
The Minister.
I thought party speakers got their chance in turn.
Has the Minister any replacement? We asked him nearly nine months ago for a replacement. So far we have got no replacement.
If the Deputy puts down a question I will be only too happy to deal with it.
The Minister will tell me it is being examined. That is all we will be told.
That is too convenient for the Deputy. He only had to come in for a couple of minutes this evening to get that one across.
There is no doubt that small economies like ours have a very high dependence on foreign trade. Ireland's dependence on foreign trade is one of the highest in the world with the visible external trade equivalent to 70 per cent of our gross national product. A country in this position must continue to trade or stagnate. If we are forced into the situation where due to continued inflation the finished article which we hope to export to remunerative external markets is priced out of those markets we will have the stagnation to which I referred.
We had considerable expansion in our exports over the past few years and where there is that expansion it is necessary and will continue to be necessary for us to have increased imports. The Córas Tráchtála report of 1971 showed that our exports had reached the figure of £531 million. That was an increasae of 13.5 per cent which was well ahead of the world figure of somewhere between 11 and 12 per cent.
How did this happen if we have too much inflation?
What I am warning against is the end product of further spiralling inflation. With our increasing dependence on exports our ability to remain competitive in world markets is vital. Dependence on exports which in our case amount to 30 per cent of our GNP means that our industry can be vulnerable to recessions in world markets. I have already referred to the various factors which created the problem which led to our redundancies last year. The sectors and the firms where redundancies seem likely are under constant review by the Department of Industry and Commerce.
And no results.
I do not want to use up my time by going back over my speech. I obviously succeeded in upsetting the Deputy up in his room because he did come down.
The sectors and firms where the redundancies occurred or where they seem likely, which is far more important—it is a matter to which Deputies referred—are being constantly looked at by the officials in my Department in conjunction with the IDA and the other State agencies.
I hope they are looking carefully at Laois-Offaly.
The Deputy might care to come down and have a look at it some time. He should keep his eye on it.
I will.
Where it seems that a firm has no reasonable prospect of surviving, the IDA are alerted with a view to taking steps to provide alternative industrial projects for that town or for that area. Deputy FitzGerald this evening spoke in terms of the IDA being prevented from trying to help individual areas. This is not so. Where there is an indication that an industry cannot be saved, the IDA, in conjunction with various other State agencies, are immediately alerted and tackle the problem of endeavouring to attract an alternative industry to absorb the people who are likely to become disemployed in that area. The actual operation of this, from the IDA's point of view, is not as easy as it would appear to be. There are practical difficulties. The particular location might not commend itself to the promoters of a suitable project. It is possible that the IDA may find themselves endeavouring to steer in a likely alternative industry but the potential industrialist may not want to go to that specific area. As well as that, the proprietors of the firm which is tottering might not share the State's presumptions about the firm's future. This is a serious difficulty that the agencies of State and my Department run into In recent years the State, through Taiscí Stáit, has intervened to assist firms which, though potentially viable, were in danger of closing through their inability to raise finance commercially. In a number of cases this action has been criticised by other firms, by Press commentators and, to an extent, by the trade union officials themselves.
To keep firms alive?
Yes.
By trade union officials?
Yes.
I should like an example.
I have positive personal knowledge of trade union officials saying to me that the State was wrong to try to prop up a particular industry because there is no future in it; it is an inefficient firm. I will not criticise them for so doing. That is quite proper.
That is a different thing. It is an investment of State money.
Sin ceist eile.
If that industry had closed those same people would be in to criticise the Minister for not having taken positive action to preserve it. Only the other day a columnist in one of our daily newspapers wrote that some of the firms getting our money should be actively encouraged to go bankrupt.
Is the Minister sure he is an economist?
I did not say he is an economist. I said he is a columnist.
Will these interruptions cease? The Minister has ten minutes in which to make his speech.
In regard to firms in difficulty, there is general support for the proposition that help should be available but that because of the scarcity of money it must not be wasted on nonviable enterprises—that the money should be conserved to promote the establishment of viable industries or to help those which are already viable to expand.
Not for making planes.
The Deputy should be on the ground, not in the air. I could quote a number of largely unpublicised cases where the Department and other State agencies, on being appraised of the firm's financial difficulties, intervened and got the firm to reconsider their decision to close. I found a number of cases where firms appeared to be getting into serious difficulties very often because of straightforward bad management. I have been able to make the greatest use of the INPC to look into the affairs of firms, especially small firms, with a view to reorganisation. Their difficulties were often caused by the way in which they did business. Some of these firms are now spreading out in a most satisfactory way. The point is that the general public are aware only of firms that ran into difficulties and have gone down the hill. Deputies and others have been talking about the need for the Department of Industry and Commerce and the Government to set up some sort of early warning system. Such a system has been operating all the time but managements themselves do not become aware of the situation, perhaps, until they have received their auditors' report or until the banks——
If the banks are closed this difficulty would not arise.
Deputies Desmond and FitzGerald outlined the situation as they saw it. I am rather surprised Deputy O'Donovan does not have all that respect for economists. I always thought he was an economist.
I said publicly in reply to a straightforward question that I am an economic commentator. A lot of people around Dublin said I was an economist. That is on record.
The Minister is baffled.
The Deputy should ask Deputy O'Brien to come in with some of his encyclopaedias to straighten me out.
He is not an economist. He is a literary man.
I want to get across the message that despite the indications of Opposition spokesmen and other people outside the House that the situation in the country is chaotic, this is not so. I will go so far as to suggest that Deputies over there should read the contribution made by Deputy FitzGerald this evening. He, as an economist or an economic commentator, established that the creditworthiness of this State and its economic position were never healthier.
I should like to believe that.
Peculiarly enough, Deputy FitzGerald's contribution reminded me of similar speeches I heard from a colleague of his in my constituency some years ago. I want to make it clear as Minister for Industry and Commerce that there is no question of Government complacency in this matter. We are extremely proud of the progress up to now and I am confident of the effects of the additional measures announced by the Taoiseach. I am confident we will see a situation very shortly in which these unemployment figures, which at the moment stand at 76,000, will take a down turn and that the economy of the country will respond provided we are able to prevent any further new inflationary developments.
We will get Fianna Fáil out.
There is no prospect of that. If Deputies approach this in a practical manner and endeavour not to play politics all the time the country will reverse the present trend.
What about 1948 and the Supplementary Budget? It was wiped out in a month.
Despite the efforts of the Taoiseach, the Minister for Industry and Commerce and the Tánaiste to whitewash the situation with which we are confronted, despite the fact that the Taoiseach and the Ministers who have resorted to what has now become the well-known Fianna Fáil tactics of juggling with statistics and endeavouring to paint a picture rosier than reality, the blunt harsh reality is that we are confronted with a serious economic situation. I think the Taoiseach and the Ministers who have now spoken would have met the situation better if they had been truthful, realistic and honest. The present situation of redundancy and unemployment is something that should transcend party politics. It is something on which every Deputy should endeavour to make some practical contribution. We should all be constructive. The attitude adopted by the Taoiseach this afternoon set the wrong tone for this debate. Unemployment and redundancy are growing at an alarming rate. I do not profess to be an economist. Theoretical or academic arguments will not solve the situation. The situation can only be solved by realistic, dynamic Government action.
Fine Gael, in assessing the present situation, were concerned with examining practical ways and means for tackling it. We put forward a nine-point plan, outlining nine measures which we are convinced offer a short-term solution to the present serious situation. No matter what the Taoiseach or the Minister for Industry and Commerce say about the healthy state of the economy at present, no matter how much they try to attribute the present situation to external factors—the Taoiseach referred rather pathetically to the world situation and the phenomenon of inflation throughout the world-the plain, blunt fact is that responsibility for the present situation rests with the Taoiseach and the Government. No matter how much the Taoiseach and the Government dislike it, they have to accept responsibility for the present situation and particularly for their complete failure to recognise long ago the symptoms which were clearly evident several months ago and to realise that we were heading into difficulty.
The Government have failed to take the necessary action. I doubt very much if this Dáil would be debating the economic situation or would have faced up to this situation but for the fact that both Fine Gael and Labour called for action by the Government and insisted on this debate. We have put forward policy points and suggested practical measures towards meeting the situation.
The present economic situation is not something which has occurred in recent months. It is not solely due to the fact that for the past 18 months we have had no Government for all practical purposes. It is not solely because four or five of the present Ministers are Ministers by accident following the events of May, 1970, that the situation is so serious. The present economic situation is an inevitable consequence of its faulty economic thinking which has been a marked characteristic of Fianna Fáil economic policy since 1957. It is the same type of faulty economic thinking which produced the disastrous First, Second and Third Programmes for Economic Expansion. The country today is reaping the fruits of the failure of these programmes for economic expansion.
Over the past ten years, while speaking in various economic debates, I have referred to the fact that these programmes for economic expansion could not, by the way they were designed, produce the results which we were led to believe they would, or the results which were forecast with the aid of the Fianna Fáil propaganda machine. I recall Fianna Fáil speakers throughout the sixties stating that the acid test of the success of Government policy was the number of people employed and the employment created. If we examine the three programmes for economic expansion and the more recent economic policies introduced by Fianna Fáil, we find a situation where, when we apply that criterion of success, the policies and programmes have ended in abject failure.
I recall very clearly the introduction of the Second Programme for Economic Expansion and the setting up of the National Industrial and Economic Council. I recall having been critical of the fact that in that programme and in the establishment of that council no account was taken of the role of agriculture in the economy. No account was taken of the job potential in the agricultural processing industries. A situation has now arisen in certain food processing industries—notably in Erin Foods— where difficulties exist. The bacon and creamery industries and other agriculturally-based manufacturing industries are in difficulty. It is a terrible indictment of Fianna Fáil economic policy that we should have such a situation in a country which has some of the finest agricultural land in western Europe and enjoys a climate and natural conditions conducive to the production of certain types of food. If we had a realistic Government policy we would have today a prosperous agricultural industry which would provide employment for the maximum number of farmers and their families and thousands more jobs in various types of food processing industries.
It is a tragedy now that we are contemplating entry to the EEC that the one sector of our economy which should be able to compete successfully —the agricultural and food processing sector—should now be in difficulty. Everybody is well aware of the situation in regard to Erin Foods. My attention has been drawn to a statement made today by Comhlucht Siúicre Éireann Teoranta. The company announce the merger of two companies to operate under a single board. They state that despite the unavoidable temporary setback in vegetable acreage this year all present fulltime employees will be retained. I welcome the announcement that it has been decided to continue Mattersons in Limerick.
If there is to be continuous industrial development with the creation of more new jobs, surely the logical basis for those industries is the natural raw materials produced by the land of this country. How can the Government justify a situation in which Erin Foods have run into difficulties, in which we have been unable to supply our full bacon quota on the British market, in which we have been unable to fulfil substantial orders for milk products? Perhaps I am more conscious of the situation because the economy of my constituency is based largely on milk and on the bacon and meat processing industries. Not merely in the past 18 months or two years but since 1957 the policies of Fianna Fáil Governments have been dictated not by long-term considerations or the national interest but by short-term political expediency. Any changes introduced by Fianna Fáil have come at the time of a by-election or a general election or when some other political issue confronted them.
It is a terrible tragedy that this nation, in 1972, when we are contemplating entry to the European Economic Community, should be confronted with such economic difficulties, difficulties brought about by the failure of the Government to anticipate those difficulties and to take the necessary action in time. The same lackadaisical, unimaginative approach which has characterised Fianna Fáil over the last decade was demonstrated by the Taoiseach in his approach to this major national problem. The Taoiseach's speech lacked conviction and sincerity. There was nothing in the speech which indicated any new or revolutionary thinking on the part of Fianna Fáil. There was not even the smallest bit of original economic thinking in the Taoiseach's statement. The Taoiseach did not project the image of leadership; in fact he cut a pathetic figure.
It may be said that allowances should be made for the Taoiseach who has undergone considerable strain in the last 18 or 20 months, leading a Government which has been beset by internal difficulties. The attention and energy of the Taoiseach and his Government must have been, over the last year and a half, concerned mainly with self-preservation, with healing the internal rift in the Fianna Fáil Party, with putting the welfare of the Fianna Fáil Party before the welfare of the country. I do not normally deliver a political speech of this nature in the House. I always try to follow a constructive line, but we have now reached the stage when we must cail a spade a spade, and certainly I have no intention, either now or for the remainder of the term of office of this Government, of making any allowance whatsoever for the failure of the Taoiseach or any of his Ministers. There were 77,801 people unemployed in this country on 7th January, 1972. It is only when one has seen the human, psychological and social consequences of redundancy and unemployment that one very quickly departs from political or economic considerations and tries to find a solution. Automatically and inevitably one tends to be very harsh and critical of those responsible for creating such a situation. The latest unemployment figure for Limerick city is 2,649. We have had redundancy and closures in the Shannon Industrial Estate over the past 12 months. We have had redundancies to a lesser extent in other sectors as well. Two large factories are under construction on the outskirts of Limerick city. I sincerely hope the construction of these factories will go ahead with the maximum speed and that new employment will be created, particularly for those unfortunate people who have become redundant in the case of one or two industries in the Shannon Industrial Estate which had been operating for ten years or more, people with skills and expertise of various kinds who have been unable to find alternative employment. This is an appalling tragedy which any Government conscious of its responsibility to the nation and to the people who elected them would do anything to solve, even to the extent of putting their own political future in jeopardy.
This situation calls for the rallying of all the forces and the resources of the nation. Of course the Taoiseach and the Government are incapable of providing the leadership to achieve that. Fine Gael and the Labour Party have expressed concern during the Christmas Recess at this serious situation. There is no point in our having a two-day debate here on the state of the economy unless the Government take the necessary action. I hope that when the Taoiseach replies tomorrow evening he will have something more concrete to offer to the people, particularly the unfortunate unemployed, than the rather pathetic offering we had from him this afternoon.
I referred to manufacturing industries, redundancies and closures which have occurred in my own constituency. This debate might tend to deal exclusively with jobs in the manufacturing industries. I am very much concerned about jobs in another important sector of our economy, that is, the tourist industry. Tourism provides directly or indirectly 160,000 jobs. That is a very important sector of the economy. It is a very important source of employment. The Government, in relation to economic policies over the past decade, in relation to the creation of new jobs, in relation to industrial development and in relation to agricultural policy, have fallen down completely on the job. We can also say the same in regard to the tourist industry.
The year 1971 was a bad year for tourism and all the indications are that 1972 will be a worse one. There is no point in closing our eyes to the situation which is there. For three years now we have had to contend with very serious difficulties in the marketing of Irish tourism abroad but the Government have trotted out week after week and month after month the excuse that the problems in relation to the tourist industry were due to external factors outside our control. I could not recall the number of times the Minister for Transport and Power has said that the problems of tourism are due to external factors. The tragedy in the six north-eastern counties of our country has had a very serious impact on tourism, but the decline in tourist revenue and the reduction in the employment in tourism have been due to other important factors which are within the control of the Government.
Would it not be due to the lack of tourists?
Would the Parliamentary Secretary allow me to develop my own speech in my own way? He can speak afterwards although he may have very little to talk about. I have been trying to point out the mistakes the Government have made in the past two years in relation to tourism. The livelihood of the many thousands of people engaged in tourism and its ancillary activities could be safeguarded if the Government take proper action. There is no doubt that the inflationary spiral which the Government have allowed to go uncontrolled has had the most serious effect on tourism. This inflationary spiral has led to continuous increases in the cost of food, accommodation, transport and so on. Surely the Government should have done something about this.
This year, as well as the other factors I have mentioned in relation to tourism, we also have the fact that we have no car ferry between this country and the Continent of Europe at a time when we never needed it more, particularly in the light of our probable membership of the Common Market. There is also the question of the American landing rights issue. This has also been bungled by the Government. The Government should have ensured that there would be a ferry service between Ireland and Europe in 1972. I would not accept the excuse that no ship was available. Ships were available and could have been obtained. The fact that nothing was done about this will further decrease the number of people employed in the tourist industry.
In relation to the American landing rights at Dublin Airport we find ourselves faced with the serious consequences to the people employed in the Shannon region and in our national airline because of the American ultimatum. That situation is brought home very forcibly when we consider that a delegation from the aviation group of unions is at present in the USA to plead with the American Government to leave us alone. A delegation from the Shannon Region Action Group also went to the States some months ago for the same purpose. What did the Government do? The Minister for Transport and Power has done nothing to persuade the American Government and airlines to leave us alone. We have troubles enough in this country without having to contend with further unemployment because of this. If the American airlines are allowed to get away with this, the economy of the Shannon region will be further upset and it will result in a great loss of jobs in that region. There has been total lack of action from the Government and the Minister for Transport and Power.
I hope the Minister for Transport and Power will speak in this debate. I doubt if the Minister, who has never admitted to a problem in any situation, will admit to a problem now in regard to this matter of the American landing rights. There are certain steps which could be taken at this stage which would ensure the livelihood of those engaged in tourism, the transport industry and our airlines could be safeguarded in 1972. Let the Government make sure (1) that we have a continental car ferry service and (2) let the Taoiseach and the Government finally tell the American Government in no uncertain fashion that we are not having any of this muscling into Dublin by their airlines, that the national interest and the livelihood of thousands of people in the west can be protected only by maintaining the existing agreement. Muscling into Dublin is not acceptable and will be resisted vigorously, perhaps even violently, by the people on the western seaboard. It should be possible for the Taoiseach and his Government by utilising normal diplomatic channels to persuade the American Government to leave us alone. If the Americans bulldoze their way into Dublin the result will be unemployment, disruption of the economy and the upsetting of our tourist development. The blame for all this will lie with the Government. Now is the time to take action. Public opinion in America is coming down on our side. That has been shown by certain aviation magazines which accuse the American Government of high-handed action. I am worried about the tourist industry and the employment prospects in that industry this year and I demand that the Government take certain obvious steps before it is too late. It will be no use ullagoning and moaning about the tourist industry, or the lack of it next June, July and August. Now is the time to overcome the difficulties and the Government must provide the leadership and the means to enable us to do this.
When the Taoiseach replies tomorrow evening I hope there will be some evidence of realism in his reply. some evidence to show that the Government are aware of the situation and are prepared to face up to it, some evidence that they have short-term as well as long-term dynamic plans to put the economy of the country on the road to progress once more. If the Government come up with a realistic, dynamic and constructive policy, then the Taoiseach and the Government can rest assured that they will have the support of the Fine Gael Party. If, however, we have the same old rigmarole, the same whitewashing and the same juggling with statistics, then we will use every means in our power to focus attention on the situation and force the Government to take action. The Taoiseach and his Government must take action now before it is too late.
Listening to Deputy O'Donnell's concluding remarks about the landing rights the thought was going through my head that if we could hire the services of that little man in Malta, Dom Mintoff, we might achieve something. We might bring our bargaining on landing rights to a satisfactory conclusion. Dom Mintoff, from the stony acres of Malta and with only a dockyard behind him, has shown how one should bargain with a stronger power. If there was one person in the Cabinet, from the Taoiseach down, with a tenth of the courage and resilience of Dom Mintoff, we would not be giving in, as we are giving in, on the granting of landing rights in Dublin to the Americans. I believe the decision has been made to give in to American demands. We will hear by and by about the sugar coated agreement. We will find that all along the Americans were most reasonable and that it was we who were unreasonable. We will have achieved one of those spiritual victories in defeat, one of those victories on which the Government pride themselves.
Speakers earlier today emphasised that we are not here in these Opposition benches to gloat over unemployment figures. Too many of the people connected with our trade union movement and with the Labour Party find themselves without jobs and speeches from Deputies in the centrally heated atmosphere of Leinster House are poor consolation to people on the welfare level, as many people are today throughout the country. At the same time, the whole point of this Assembly is that there is a Government to govern the country and an Opposition ready to take over from that Government when it fails to govern.
We have today an abnormally high unemployment figure and a raging inflationary situation, a situation in which the morale of the Government has never been lower. This Government is clearly a coalition government tugging in opposite directions. I have nothing against coalitions, but coalitions should have a working programme. The leaders and members of the Fianna Fáil coalition are tugging in opposite directions. One of the charges laid against the Government is bad economic management. However much the Taoiseach may strive to shrug off his responsibilities the fact is that in a modern economy the Government have a tremendous influence on the whole management of that economy. It does not have to be an extreme socialist economy for that to happen. It can happen in our economy. It should happen in our economy. Influence and a driving force should be exercised by the Government.
What do we find? We find the Government accused of economic mismanagement, not by Deputies in this House or trade union leaders, but by such august bodies as the Confederation of Irish Industry and Mr. Don Carroll in today's papers, certainly not opponents of Government policy up to quite recently, but now coming out frankly in opposition to the Government. In that situation the most constructive thing we can do is to ask the occupants of the benches opposite to vacate those benches and permit the different elements in that coalition to go their separate ways, as is their Godgiven right. Let there be an end to the tyranny of their mediocrity and their petty rivalries up and down the country. The Taoiseach in Clare last Sunday in a speech nominally dealing with the economic ills of the country devoted two paragraphs of that speech to Deputy Dr. Bill Loughnane. He is a nice decent man but I wonder what the necessity was for the Taoiseach to devote so much of his speech to the excellence of the character of Deputy Dr. Bill Loughnane.
There is no easy way out of our difficulties and I am not pretending that there is some kind of magic Opposition wand which, when waved, will solve all our problems. I am not suggesting that the present situation is one that has just arisen; it has been envolving for some time and certain omissions have helped to create the desperate position of our economy. I shall deal with these items very briefly in the time at my disposal tonight.
One of the most constructive things the Government could do would be to get out. Anybody available in Irish politics who could provide an administration would be an improvement on this group of people at present masquerading as a Cabinet purporting to run the affairs of the State. I am reminded of King Lear and the passage where the old man is wandering in the storm and is met by the fool. Lear is unrecognisable because of the adversity he has encountered to any but his closest friends but the fool says to him: “You have that in your countenance which I would fain call master.” He is asked what is that and the answer is “authority”. This Government lacks all authority and credibility and should go. Because they have not authority, conviction is spreading through the country that there is no government. The people understand that nominally various people hold ministerial portfolios but the conviction is there throughout the country that there is no government and that there is no real Taoiseach any longer.
In that situation how can we offer any hope to the thousands tonight without jobs? How can we say we have an administration which will energetically tackle the problem, consult unions and employers and that all is well in Leinster House, that the Government is anxious to solve the problems immediately? We have a Taoiseach like Ludwig of Bavaria who does not know there is a problem: one minute there is a problem, the next there is none. It is doubtful if the Cabinet are agreed on a vote to say that there is a problem. It seems there is a magic date, 1957, in their minds and as long as there is that date and as long as there are a few thousand more votes, a few thousand more people out of work this Government are proud of their achievements.
It is clear to anybody who has listened to the Minister for Labour on broadcast programmes recently that the Government are waiting, not for an economic recovery within the State, but for an up-turn in the British economy which will take emigrants out of Ireland where the Government cannot provide work for them. We are waiting for Tory Britain which the Government, when it suits them, attack as the ancient enemy, to open the doors of its factories to our citizens for whom we cannot provide jobs at home. That is the recovery the Government are awaiting. They are hoping some miracle will occur in the British economy to take away all the awkward, hungry people at present unemployed. Then they can safely attack Britain once more as soon as she begins to look after our unemployed citizens for us.
Is it any wonder I say that one of the most constructive things the Government could do would be to make way for a change of Government? Belief in the relevance of this Parliament is becoming rarer, unfortunately. There are many good reasons why people generally should begin to lose faith in representative government in view of the Government we now have. I believe there is no relevance in this institution if the Government of the day are saying, apparently, that they can do nothing about our economic problems. I think it was General de Gaulle who, in one of his books, made the point that no State is worthy of the name if it does not provide for the defence of its citizens. Probably a more realistic mark is that a State which cannot provide jobs for its citizens is not entitled to the status of a separate nation. The Government, through the Minister for Labour and the Minister for Industry and Commerce and the Taoiseach, appear to say: "There is little we can do to influence the economy; it is not really our fault; some wicked employers did not do their job properly, did not adapt sufficiently rapidly; there are greedy trade unionists snapping up all the spare cash and everybody is at fault except ourselves; we did all that had to be done, made all the speeches and there is really nothing we can do at present." If that is the situation of democratic government in this country it is time for a different system. If it is proved to my satisfaction that this is the situation there is no point in having a separate Parliament and going through the rituals of the kind of democracy we have. It is time we wrapped up this socalled independent State and amalgamated with either the United States or Britain or permitted other people with other remedies to take over what is left in this country.
But I believe it is possible for a Government who are serious about this business and untrammelled by the internal party rivalries of the present coalition in power, who are bent on reform and economic recovery, to resolve problems such as unemployment and restore the economy to a growth position. These things are possible. The gospel that our problems are imported and part of a world-wide inflation I do not accept. The price rise here has been more rapid than in any other European country. Part of the problem is that the Government have not been over-concerned with mundane matters such as the cost of living, prices and jobs in the past four years.
Forgetting the record of the previous 11 years let us look at the past four years since 1968. That was the year when prices first began to rise, the year the NIEC warned of the direction prices were taking. What was the Government doing in 1968? They were, if you please, attempting to abolish PR. How many ministerial miles were clocked up in 1968 in attempting to abolish PR? How many technicoloured pieces of party literature did we get showing the beaming face of the Taoiseach telling us it was for our own good that PR should be abolished, that it was a national and not a party question? That is what was going on in 1968. How many unemployed tonight are grateful for that effort—a whole year spent trying to abolish PR? It was not the problem of the minority in the Six Counties, who when they get around shortly to discussions in that area, will be thankful for the boon of securing PR, that concerned our republican Government. The impact of abolishing PR in this part of the country was not the concern of the republican, united Cabinet at that period, the Cabinet that included all of the much-advertised republicans who have been marching around the country ever since.
They were attempting to abolish PR in 1968. We will forget about the previous four years when the plan to abolish PR was in gestation, when, under the chairmanship of Deputy Colley, the all-party Committee on the Constitution was sitting. They did not succeed in abolishing PR and the legacy of that year's waste, of all the rambling around the country by the Ministers, was that there was a crisis. The Minister for Finance appeared on television to tell us that was a crisis but it disappeared in the election held during that year.
If one takes the record of that four years what a panorama spreads before one: court cases, the rows and the divisions. How could one say that this Government were looking after matters such as the way the economy was run? Even if members of the Cabinet are lacking in university doctorates in the ordinary sense, certainly they are entitled to honorary doctorates in the matter of election techniques. They are specialists in that esoteric craft.
These doctorates are not honorary, of course.
It is a basic craft.
I concede it is a basic craft, as the Minister has pointed out. That is precisely the point. If the Government are going to run the economy properly, if they are going to avoid having 80,000 people unemployed in the next few weeks, there may be a conflict between the basic craft of winning an election and keeping people at work. I accuse this Government of putting the basic craft of winning an election before the problem of the unemployed.
In 1969 there was the priority of winning the election and the economic crisis disappeared between one television performance and the next. When the election was over the crisis reappeared, "no bigger than a man's hand," as Counsel Sorohan remarked. When looking back over this period I find myself confused between the drama in the Four Courts and the drama in the Cabinet, but I recall——
That is the Deputy's problem.
That is really our problem. Fianna Fáil could fight away as much as they like if they were in Opposition but now their quarrels damage all of us while they are in power. My suggestion is to let them go into obscurity of opposition and quarrel as much as they wish then. At the moment the Government are a collective threat to the security of the rest of the country, or what is left of it.
After the disappearance of the crisis in 1969 we had a series of Budgets. It will probably be the theme of Minister's speeches during this debate that the crisis we are experiencing now is due to a world-wide malaise and that they are simply the reluctant victims of this world-wide depression. However, we cannot forget that one of the single biggest political ingredients in the inflationary rise in prices was the Budget in which the Taoiseach participated. In 1970 the Taoiseach introduced the Budget to this House because Deputy Haughey had suffered his accident. The result of that Budget was a doubling of the turnover tax— the single biggest ingredient in the price rise in that four-year period. It was engineered by the Government who say now that it was not their fault, that it had nothing to do with them.
We then come to the Budget presented by the Minister for Finance. I know that this is a sad day personally for the Minister; his father has died and I am sorry on that account. However, he was the Minister who cut Government expenditure last year. I do not know which economists' school the present Minister for Finance follows. I am not an economist and neither is he but it is the job of a Minister for Finance to listen to economists who think in terms of the 20th century. Seemingly the people the Minister is listening to belong to the gold standard era; certainly he appears to run the economy as he would run a solicitor's office. Apparently he cut down on the blotters and the ink bottles in the last Budget; he pruned expenditure, but my economist friends tell me that the Budget had the effect of creating more unemployment. They referred to it as a deflationary Budget.
In the autumn in a panic measure an insignificant £20 million was put into the economy when it was in fullscale reverse and today the Taoiseach announced that a further £50 million would be put in next year. That is an extra £70 million put into the economy after the pruning exercise of the Minister for Finance in the Budget of last year.
It appears that this Budget presumably had the mature consideration of the Cabinet—if one can stretch the imagination to the point of thinking that this Cabinet are capable of giving mature consideration to anything as trivial as a Budget. It had their consent. That Budget certainly had a significant effect on the unemployment figures.
This Government have presided over the trading arrangements of this country and they had the honour of signing the Anglo-Irish Free Trade Area Agreement. The relevance of this agreement to our present economic problems has been a constant theme in this debate. We know how much of the home market has gone as the result of this agreement. We have called repeatedly, and now we reiterate this call, for a review of the agreement and certainly the postponement of the tariff cuts this year. I cannot see the logic of our home market being in danger at a time of growing free trade, when our industries must be stronger if the Government are to see us into the EEC. I cannot see the logic of continuing with an agreement such as the Anglo-Irish Free Trade Area Agreement which, as I understand from the Government side, originally was contemplated against a much shorter period of entry into the EEC.
This is a Cabinet of muddle and misjudgment. To be fair, they have not had very much opportunity to look at the real problems of the people. They have been preoccupied with their own extraordinary problems and they have scandalised the electorate in the last four years. The last days of the Roman Empire would hardly give us more gory pages in political terms than what we have seen in the past few years. Reputations were destroyed, police were called to the homes of Ministers, phones were tapped, although that is one of the more trivial charges. Not one ingredient in a popular thriller has been missing. There is just one consistent thread, that is, fidelity to the basic craft which the Minister mentioned here tonight, of remaining in power.
The electorate decides.
There is obviously a connection between winning elections and remaining on in power.
You win elections by getting the people to support you.
The Unionists can win elections too.
It is the people who count.
The Minister says it is the people who count, and 76,000 of them are unemployed tonight as we talk here. I can see only a slight gleam of hope for the unemployed in what the Taoiseach suggested here today. The amount of money he proposes to put into the capital programme next year will not do the trick of giving a recovery base to the economy. The Government are waiting for an uplift in the British economy. Of course, they cannot say that for home consumption. They are waiting for an upturn in Mr. Heath's economy.
The Taoiseach hinted about the necessity for trade unionists to behave themselves if what is left of our economy is to be salvaged over the next year. The trade unionists did all in their power to see that incomes advanced in an orderly way against a background of spiralling prices. What can we do about holding prices? There is no instant answer to the problem of price increases. In the recent report of the Prices Commission a number of items are suggested. Taken cumulatively they add up to quite a responsible approach to the problem of rising prices. Throughout that report the constant refrain is that the Minister for Industry and Commerce is acting, will act, and intends to bring in legislation. This is part of the fumbling response of the Government in the area under their control, but no legislation is proceeded with. The report of the Prices Commission is an indictment of the inactivity of the Goverment on the vital matter of prices.
I can only say to the Cabinet that they should implement the recommendations of the Prices Commission immedately and I stress the word "immediately". They should put their quarrels behind them. They show little signs of vacating the benches opposite and in that situation all we can do is to give whatever advice we can in this very serious and tragic situation for the unemployed. I would suggest that they should meet the employers and the unions as soon as possible.
It appears that the Government have lost completely the confidence of the trade unions with regard to their capacity to govern, and to have a significant say in the management of the economy and in the protection of jobs. There are also signs that they have lost the confidence of the business sector as well. About a week ago we had the President of the Confederation of Irish Industry accusing them of economic mismanagement. There is also evidence that inquiries by foreign firms with regard to investments here have fallen off. Political instability is a major reason for this. Internationally the stock of this country has never been lower and for this the people opposite must be blamed because of their behaviour over the past four years.
I do not know if they negotiated with the EEC at all. I get the impression that the Minister for Foreign Affairs woke up a few weeks ago to the fact that the EEC was all about negotiation. He received some heavy prompting from the Norwegians on the fisheries issue and began to get the idea that the whole thing was about negotiation. The finale of the sugar negotiations was not impressive. In this situation of desperate unemployment their answer is that next Saturday they go to Brussels to sign for whatever they have negotiated. Going on the evidence of the negotiated sugar quota, I can only tremble when I think of the kind of negotiations they carried out on other vital matters.
The Minister for Transport and Power says it is the people who matter and 625,000 of them are now dependent on welfare benefits, facing prices that have risen faster than they have risen in any other European country in the past four years. Government activity has contributed to price increases. I do not know what the situation will be this year when the trade unions set about deciding on the next wage agreement. I do not know what will be said in the different branches as their leaders seek to get agreement on orderly progression in incomes.
The trade unionists will have a very difficult job in seeking an orderly progression in incomes because of the startling price increases that have taken place over the past four years. It is no use pretending that the problem does not exist. It is no use saying that the problem was dreamed up by the Labour Party. This was the midnight court vision which the Taoiseach had in Clare last weekend when he singled out the Labour Party and spoke of their disgraceful attack on the Government. We were asked not to play politics but this is what we are here to do. This assembly is about politics.
Not playing politics.
There is nothing very playful about 76,000 unemployed.
78,000
I believe that the figure will be uncomfortably close to 100,000 in the spring. That is not our prediction. It is the prediction of the Irish Transport and General Workers' Union. The Taoiseach, who was so free with his accusations about the Labour Party's prophecies of doom, was silent when he was asked whether he was accusing the ITGWU of inventing scare stories. All credit to them and to the other unions who have been to the forefront in making public the tragic misery caused to so many thousands of people involved in these unemployment figures.
In this situation it is ridiculous for the Taoiseach to suggest that this is a story put out by the Labour Party and that there is nothing to worry about. The facts and the figures are there. Through their unions the unemployed have referred to them. Business is obviously alarmed. There should be immediate clarification of the Government's approach to the economy. We should have an early Budget to show what will be done with the economy in the next 12 months. The Government should prepare very shortly to renew their electoral mandate. This is very important. There is an economic and political crisis in the country. The Government have not looked after the economy and I do not believe that they have looked after the State under their jurisdiction properly over the past four years.
The report from the building industry is that men will be laid off. There is a shortage of money throughout the whole local authority system. The Taoiseach tells us that he has given guarantees in relation to the Sugar Company factories but any Member of this House who has any association with local authorities must know that there is unemployment facing people employed by the local authorities because there is not sufficient money to maintain them in employment. I recall that when another administration were faced with a problem of this kind they at least attempted to create relief schemes. Local authorities are facing a severe dilemma in so far as the provision of employment is concerned. It has been suggested that a new loan might be floated. Perhaps we could try that. At any rate, a much greater injection of capital into the economy is needed than that suggested by the Government. There is a lot of money in reserve but, perhaps, financiers would be equipped better to say whether we could bring this back.
There are some people, including members of my own party, who suggest that all is not the fault of the Government but that workers are merely casualities of bad management. I would not accept that line at all. In cases where money is given to firms for adaptation purposes it is the duty of the Government to ensure that the management structure of these firms is equally as efficient as the machinery and investment in the plant of these firms. We have been extremely careless in allowing the human structure of management in these firms to deteriorate. The unemployed person in such a situation is entitled to be critical of the Government who have permitted that to happen. It is all very well to sit here and listen to the Minister for Labour telling us in blasé tones that things will be better in the spring, but what choice of alternative employment has any unemployed person in any small town in the country? There are no such alternatives and neither are there any jobs for them in Britain. The Minister can gain but little consolation from the package produced here today by the Taoiseach. I do not know whether, in consideration of the debate, the Taoiseach will have anything further to add when he is concluding but my fear is that he will lapse simply into his usual political chit-chat, make various accusations against the Opposition and continue to blunder along in the same way as the Government have been blundering during the past four years. If that is to be the Taoiseach's attitude, it will be of little consolation to the unemployed man or woman in any part of the country. To many of the former supporters of the Government I would say that it may not be very long before they will have an opportunity of indicating their opinion on the record of this Government. To those masters of election victories opposite, I would say that, perhaps, this time you have made a mistake, that you have gone too far. I may be wrong in that but there is a fair chance that I am right. Their coalition of interests—the people who now run this Cabinet—is breaking at the seams and this break is a threat to the collective safety and security of the people of this State. Therefore, the Government should go. Despite all the republican alibis produced it appears from the latest evidence available that all the various rifts were caused by the rivalry of the various party chieftains as to who would inherit the Taoiseach's seat. Fianna Fáil should take these petty quarrels back to the cumainn and allow another administration, a reforming administration, to take their place. In the ranks of the Opposition there are men of sufficient goodwill and seriousness to take over from the present administration and to do a better job than they, although considering the records of the past four years it should not be very difficult for anyone to do a better job than that. As I said at the outset, I do not claim much for an alternative administration but they could not be worse than this one.
The Deputies are breaking that man's heart.
When we meet in Croke Park in April the Deputy will know all about my heart.
We will run the field as we did before.
In the words of the president of the Confederation of Irish Industries, not only have the Government mismanaged the economy but they have also endangered the future of democracy in this part of the country. They are a scandal to the electorate and it is a threat to the continuation of democracy that they bring this representative institution into disrepute by their continuance in office. Their incompetence can no longer be hidden from the world. It is proclaimed from the rooftops and from the lips of their followers. It can be little consolation to people of any creed, and particularly to the minority in the North, to note the way in which the Government have been running this part of the country. Their record is a very poor advertisement for a united Ireland. On every front, they are in retreat. In respect of the community schools they are running. On the question of the Constitution they are hiding behind all-party committees. The party who had a great way of dealing with croziers in the past have learned a very healthy fear of them in the present.
One would think there was no crack in the Deputy's party.
The land of fantasia.
This party have a fondness for discourse by means of the public media and I do not think this can do any harm to anyone. I suppose it could be regarded as being good solid entertainment for the people. The divisions in the Government are a danger to all of us. I would not worry about the cracks, in the physical sense, that are being delivered at the various cumainn meetings were it not for the fact that each citizen is endangered by the rivalry within Fianna Fáil. The situation is such that the Taoiseach goes to Clare to talk about the excellence of the character of Deputy Loughnane.
