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Economic Situation.

Tuesday, 25 January 1966

Dáil Éireann Debate
Vol. 220 No. 1

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Minister for Finance (Mr. J. Lynch): Information on John Lynch Zoom on John Lynch I move:

That Dáil Éireann agrees generally with the views and recommendations contained in the Report of the National Industrial Economic Council on the Economic Situation, 1965, which was laid before Dáil Éireann on the 24th November, 1965.

The Report on the Economic Situation in 1965, prepared by the National Industrial Economic Council and published last November, contains an authoritative review of recent economic developments and a valuable statement of the principles which must be followed to avoid a recurrence of the economic difficulties experienced during the past 12 months or so. The fact that its members are nominated by the Government, management and unions gives particular weight to the Council's conclusions and recommendations. In a statement which accompanied the publication of the report, the Government accepted the validity and relevance of its principles and recommended them to the earnest consideration and study of all sections of the community. The Government also undertook that proposals on matters of detail which concerned Departments [62] and State agencies would be examined and implemented to the fullest extent practicable.

The report covers a wide ground and raises many important national issues. I propose in turn to deal with the Council's conclusions on the nature and causes of the economic difficulties in 1965, to outline recent economic developments, and then to discuss the Council's more important recommendations, relating these to the needs of the present situation.

It is particularly opportune that the Dáil is considering the report at the present time. The Council's main conclusion was that recent economic difficulties have been caused largely by excess demand—in other words, by excessive spending—and by reduced competitiveness. As the House is aware, the Government took various measures during 1965 to remedy this position. It is appropriate, at the beginning of the new year, to review the effects of these measures, to assess their adequacy and to consider how far they continue to be needed in 1966.

Special consideration must be given to the two major factors which determine the total level of spending and, therefore, the pressure of demand on prices, costs and external payments. I refer to Government expenditure, current and capital, and to money incomes generally. Changes in these two items can have so great an influence on the economy that the decisions now about to be taken in relation to both of them are of critical importance. We cannot hope to accelerate national production on a sound and lasting basis unless the right decisions are taken in the coming months on the level of Government expenditure, and on the increase in money incomes, which it is within the capacity of the economy to sustain. It is most helpful, therefore, when these important issues are coming forward for decision, to have available this thorough report, with its agreed recommendations, from the National Industrial Economic Council.

In its survey of the economic position the NIEC report pointed out that in the first seven months of 1965 the balance of trade deteriorated by £23 million—imports rose in this period [63] by £14½ million and exports fell by £8½ million. If events in 1965 were looked at in isolation, the deterioration could be explained by three factors: first, the British import surcharge, which held back an expansion of exports that might otherwise have occurred; second, the levelling off in the rate of expansion in Britain since the first quarter of 1965; third, a falling off in the net exports of cattle since mid-1964. The adverse developments in external trade were accompanied by a reduction in the rate of net capital inflow, and the result was a fall of external reserves from £242.1 million in December, 1964 to £203.3 million in July, 1965.

The report drew attention to the rise in consumption expenditure in 1965 and the fall in personal savings; to the rise in building and construction activity and fixed capital formation in 1965; and to the falling off in the rate of increase in industrial production.

The Council stressed, however, that developments in 1965 should not be considered in isolation. Since 1960, merchandise imports had risen faster than merchandise exports and the balance of payments deficit had increased at an annual average rate of £7.6 million. The deficit was more than covered by the net capital inflow but, if the trends in merchandise trade since 1960 continued, the rate of increase in the net capital inflow that would be required to cover the deficit would be far greater than could normally be expected.

The continuing increase in the trade deficit was due to the rising pressure of domestic demand and to a decline in the competitiveness of domestic production. I would remind the House that I am dealing factually with what is contained in this Report. The prices of home-produced goods had risen faster than the prices of imported goods. Unit wage costs here rose faster during 1961-1964 than in Britain, though British unit wage costs had been catching up somewhat since the beginning of 1965. This reduction in competitiveness was particularly serious in view of the high proportion of industrial production that was exported. [64] If Irish goods ceased to be competitive, then not only would any increase in exports be jeopardised but existing exports would cease with a loss of 30,000 jobs. Again, this is adverted to in page 25 of the Report of the NIEC.

The increase in the volume of domestic expenditure since 1960 was not matched by a corresponding increase in output. Increased spending led to an increase in imports and thus contributed to the deterioration in the external trade balance. Up to 1963 investment was by far the most buoyant element in total expenditure; this buoyancy was maintained in 1964 but consumption also rose significantly in that year. The demand pressures of 1964 continued into 1965. They created an environment that favoured and facilitated price increases and reduced competitiveness. While credit creation did not cause the excessive increase in demand, it provided the monetary means of putting the inflationary expenditure plans into effect.

The Council concluded that the increase in the trade deficit in 1964 was the result of a decline in the competitiveness of the Irish economy, especially as compared with Britain, and an increase in domestic inflationary pressure. The inflationary pressure was in turn the result of increases in money incomes, and a substantial increase in investment, facilitated by an accelerated rate of credit creation. Accompanying these factors were changes in the distribution of the real national product, and growing and active dissatisfaction with wage and salary differences and with differences between wages and salaries and other forms of income. The dissatisfaction with income distribution and with differences between incomes was a real danger to economic stability in the immediate future.

The statistics on which the Council based its comments did not, in general, go beyond July or August last. It is encouraging to find that the economy has shown signs of improvement since then. Exports, which fell by £10½ million in the first half of the year, increased by £12 million in [65] the second half, despite the slow rate of recovery of cattle exports. In December alone, the rise was £3 million. The rate of increase in imports has slackened. The rise in the last quarter was only £2½ million as compared with an average increase of almost £7 million for the earlier quarters. As a result of the trend in exports and imports in the second half of the year, the import excess in that period improved by £3 million, as compared with a deterioration of £24 million in the first half of the year. Industrial exports have begun to revive. In the third quarter, exports of manufactures, including chemicals, machinery and transport equipment, rose by £2½ million.

The narrowing of the trade gap, which to some extent is seasonal, has been reflected in a partial recovery in the external reserves of the banking system. In the first seven months of 1965 these fell by almost £39 million, whereas in the four succeeding months, that is, to November, the latest month for which information is available, they rose by £20 million.

Other sectors have also shown an improvement. Consumer prices have been virtually stable since last May, a rise of only 0.3 per cent having been registered in mid-August, with no change in November. The high rate of personal spending in the early part of 1965 has tapered off. For the year as a whole the increase in the volume of personal consumption is likely to be significantly less than the increases recorded in 1963 and 1964. Cattle numbers are at a record level. Stocks at the end of 1965 were probably over 300,000 higher than at the beginning of the year. The ratio of fixed capital investment to gross national product was 18.6 per cent in 1964; in 1965 it was probably of the order of 19½ per cent. The potential for increased output and exports will therefore be greater in 1966 and it is essential that no obstacles be raised to its realisation.

The general economic improvement since the middle of 1965 is a measure [66] of the efficacy of the corrective measures taken during the course of the year. They underline the point, which has been made by independent commentators, that there are no grounds for pessimism regarding the country's future. The economy is basically sound, and though adjustments have become necessary, as happens from time to time in most countries, progress is still being made but at a temporarily slower pace. While, however, pessimism must be rejected, optimism will be justified only if we continue to follow the right course. We are not out of the wood yet and it would be premature and disastrous to relax the restraints to which the improvements on the prices and export fronts are due.

Turning now to the recommendations in the Council's report, I should say at the outset that, while examination of some of the detailed proposals is not yet complete, it is possible to indicate the Government's views on most of the important recommendations. These fall under three broad headings:

(1) Control of aggregate demand

(2) Credit Policy

(3) Incomes Policy.

The report states that responsibility for determining the desirable rate of increase in total demand within the country for goods and services, and for taking action to prevent demand rising at too fast a rate, rests inescapably with the Government. The Government specifically affirmed in the Second Programme that it will use the means open to it to maintain adequate—while avoiding excessive— demand as a basis for maximum economic advance. They agree with NIEC that, when the pressure of public and private spending exceeds the resources available to sustain it, there is need for greater attention to priorities, particularly in regard to the public capital programme. General guide-lines for public capital expenditure were laid down in the Second Programme and, more recently, in the White Paper on Public Capital Expenditure, but more explicit guidance is required from now on because a [67] larger volume of Government spending is not feasible having regard to the resources available. Greater use is being made of the system of forecast estimates of public capital expenditure, and new control procedures are being drawn up in the Department of Finance to ensure that expenditure is kept within the limits of resources. New methods of assessing the national value of Government investment projects will be employed so as to select those investments which, in relation to their cost, yield the maximum economic and social benefits to the community.

The Government agree with the NIEC view that control of aggregate demand may from time to time require the establishment of priorities in consumption expenditure. The Government will influence consumption expenditure in a number of ways —by encouraging savings; by favouring a credit policy which gives priority to productive purposes; by controlling the growth of current public expenditure; by promoting understanding of the need for keeping money incomes in line with increased production; and, if necessary, by hire purchase controls and changes in taxation.

The report urged the need to ensure a smoother and steadier growth of the building and construction industry. This is in accordance with Government policy as announced in the White Paper on Public Capital Expenditure. Means of giving effect to this policy are at present under examination and will shortly be announced.

The Council also drew attention to the need for improving the statistical and other information available for economic management. The Government have asked the Central Statistics Office for a report on how this may be achieved.

The Council drew attention to the danger that an abnormally high capital inflow might, by increasing the liquidity of the banks, result in a rate of credit expansion which could not be maintained when the inflow returned to more normal levels; similar difficulties could arise in the case of [68] abnormally large issues of Exchequer Bills. The Council pointed to the need to prevent an undue expansion of credit under these headings. The Government approve the principle of these recommendations and are aware that the Central Bank has for some time been active in devising practical solutions to these problems.

The Government endorse the NIEC view that an incomes policy must embrace all categories of money incomes and should not be confined to wages and salaries alone.

A central theme in the report is the need to examine the long-term social objectives which should form the basis for policies concerned with the distribution of income and wealth. The Government have already recognised, in the Second Programme and elsewhere, the social obligation of ensuring that all sectors of the community share in the rising standards of living which will be made possible by increased national production. They will encourage the necessary studies, in the public and private sectors, on which a balanced and integrated programme of social development must be based. They will at the same time continue their policy of improving social welfare services as improvements in national production and prosperity permit.

The report draws attention to the dissatisfaction with excessive differences in wages and salaries, and also with excessive disparities between wages and salaries, on the one hand, and all other forms of incomes, on the other. It warns that an incomes policy could be endangered by competition between groups or sectors to restore previous relationships.

It is the extent, rather than the existence, of differences between the various types of incomes which was the subject of the Council's comment. Differences in income are necessary and appropriate if individual effort is to be adequately recompensed and incentives to increased production are to be effective. On grounds of social equity and need, a lessening of differences—a redistribution of incomes through taxation—is an accepted [69] obligation of Government but not, of course, to the extent of carrying redistribution so far as to stifle the personal effort and enterprise on which economic expansion depends.

The Government fully recognise the danger of continuous pressure for readjustments of pay by reference to previous relationships. It was because of this danger that the Tribunal on Clerical Pay Levels was established.

The Council pointed out that, if workers are to feel economically secure in face of the prospect of technological change, the costs of such change must be equitably shared; if this requirement were not met, an incomes policy would not have the support of all sections of the community. Action here is not primarily a matter for the Government but there are a number of ways in which the Government will help. During this session of Dáil Éireann legislation will be introduced to provide for redundancy compensation. Consideration is being given to the introduction of legislation which will entitle employees to a minimum period of notice of termination of employment and will require employers to give their employees written particulars of their main terms of employment.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish Would the Minister repeat that?

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch Consideration is being given to the introduction of legislation which will entitle employees to a minimum period of notice of termination of employment and will require employers to give their employees written particulars of their main terms of employment.

Mr. M.E. Dockrell: Information on Maurice E. Dockrell Zoom on Maurice E. Dockrell Would the Minister elaborate on that?

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch I cannot anticipate——

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins That is what the Conservative Party in Britain did last week.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch The Deputy may not be aware that not so very long ago I announced that we envisaged producing legislation to provide for fairer [70] terms of employment and all this will be involved in trying to achieve that.

The council recommended that, if necessary, tax or other measures should be utilised to ensure that the rate of increase in aggregate post-tax purchasing power derived from investment is no higher than the rate of increase in aggregate post-tax wages. The Government recognise the undesirability of increases in profits and other non-wage incomes which are not justified by increased output, enterprise or investment, and, therefore, do not represent a real contribution to national production. We consider that effective competition is the best guarantee against excessive profits and this will be increased by the progressive reduction in tariffs and the enlargement of quotas required by the terms of the Anglo-Irish Free Trade Area Agreement. In addition, the Fair Trade Commission will be active in ensuring that restraint on competition does not result in excessive profits. The report of the Council suggested that the role of the Fair Trade Commission should be extended to enable it to deal with monopolies. The fact is that the Commission has power already not only to deal with price-fixing arrangements but also with monopolies. Effective price surveillance will, as recommended by the Council, be also used to correct any tendency for aggregate profits to rise excessively.

These measures make unlikely the emergence in 1966 or later years of an increase in aggregate profits markedly at variance with the general movement in other money incomes. Should, however, an increase take place which is not justifiable in terms of increased output, enterprise or investment, the Government will take measures to offset it. An examination is now being made of the most appropriate means of achieving this objective, due regard being had to the need to avoid detrimental effects on production and to the methods adopted or contemplated in other countries. The Government are also considering another recommendation by the Council, namely, that more information should be made available regarding aggregate profits: in our consideration of this recommendation, [71] regard will be had to the practice in other countries.

Agricultural incomes are subject to a variety of factors many of which are of a physical nature and not capable of being controlled. Nevertheless, the Government agree that the trend in such incomes must be taken into account as an integral part of a general incomes policy

The Council's recommendations provide a sound foundation in principle for an incomes policy but it will necessarily take time to complete the process of examination and consultation by which comprehensive and acceptable arrangements for the future may be worked out. Meanwhile, attention cannot, without grave danger, be diverted from the basic findings of the Council regarding the state of the Irish economy and the trends that urgently need to be corrected.

The immediate problem, therefore, is to assess what increase in money incomes in 1966 would be consistent with the national interest. The Government's view, supported by the findings of the Council, is that the national interest requires observance of the following principles: maintaining and, if possible, increasing competitiveness; achieving the highest possible rate of growth of production and employment; and, at the same time, ensuring greater stability in prices and a reduced deficit in the balance of payments.

The Council has stated that the first principle on which a policy for the development of incomes must be based is that increases in total money incomes must be related to increases in national production. The Government accept this principle, which is in full accord with the policy on which the Second Programme for Economic Expansion was based.

Government statements have already called attention to the need for a “holding operation” in 1966 to enable national production to catch up with the present level of expenditure sufficiently to avoid a bigger deficit than £30 million being incurred in Ireland's external payments. Because expenditure is at present excessive, the [72] over-all national interest would be most clearly served by a large measure of stability for most of 1966 in wages and salaries, and this would offer the surest prospect of an increase in competitiveness through stabilisation or reduction of prices and of early restoration of a high rate of economic growth. It would, in any case, be clearly contrary to the national interest to countenance a situation in which money incomes were again raised ahead of production. This would inflate the spending pressure which results in both higher prices and excessive imports. The consequences of any such development at present would be disastrous. There would be a serious upset to national progress, and a balance of payments crisis would be created which could be solved only by reductions of employment and living standards. Unless the community, both in the public and the private sectors, lives within the real resources available to it in 1966, planning for a better future would be a useless exercise.

Under the settled procedure, the Department of Finance will shortly make available to the NIEC a projection of the main economic prospects for 1966, so that the Council can, in accordance with its terms of reference, give its views “on the principles which ought to be applied for the development of the national economy and the realisation and maintenance of full employment at adequate wages with reasonable price stability and reasonable long-term equilibrium in the balance of external payments”. Without prejudice to the conclusions of the NIEC, the preliminary indications are that it should be possible to reduce the external deficit to £30 million in 1966, mainly through increased exports, and to increase national production by about three per cent, provided the average increases in money incomes is kept within the rate of growth and there is no substantial loss of production through strikes. Money incomes rose in the aggregate by over 20 per cent in the last two years, as against a rise of 6½ per cent in the volume of national production. If incomes were again to exceed national production this year, there would be further inflation [73] resulting in increased prices and an unmanageable balance of payments deficit. At £30 million the deficit is probably higher than the inflow of external capital that can be relied upon as a continuing supplement to the domestic savings available for productive investment.

The inescapable responsibility of the Government is to emphasise how important it is for the national wellbeing that the aggregate increase in money incomes in 1966, however it arises, should not go beyond the expected 3 per cent rate of growth in national output. Improvements in earnings resulting from changes in working conditions can contribute to the aggregate increase in incomes as effectively as direct increases in rates of pay. If wage and salary increases and other improvements in earnings are negotiated individually, the overall economic limitation which the national interest requires should be the first consideration in the minds of negotiators and arbitrators. This consideration will guide the Government's approach to any pay claims in the public services and the Government will resist all claims on behalf of classes whose present remuneration does not in their view call for revision this year. In the regrettable event of any material breach of this general economic guide-line in the private sector, the Government will consider themselves obliged to take action to counter as far as possible the adverse effects on the national economy.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish Would the Minister repeat what the guide-line is?

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch It is set down in the Report of the National Industrial Economic Council—that the increase in money incomes should not exceed the rate of increase in national product. Without prejudice to the findings of the NIEC, and having regard to the usual practice of the Department of Finance conveying certain data for comment by the NIEC, it appears we can achieve a three per cent growth rate in the present year and therefore the guide-line in money income increases ought to be kept within that rate of growth. It [74] would be in keeping with the NIEC recommendation that, in the event of an excessive increase in money incomes, the Government should take fiscal or monetary action to limit the rise in total demand. I do not have to remind the House that fiscal action means taxation and monetary action means credit control and hire purchase control.

It is now clear that increases of taxation are unavoidable in this year if the present level of Government services is to be maintained. It will be necessary that such taxation increases as are required to meet public expenditure in 1966 will be accepted without seeking offsetting increases in money incomes, as these could not be conceded without injury to the national economy.

Deputies will naturally expect me to refer to the recent recommendation of the Irish Congress of Trade Unions on wage increases, and to relate it to the Government's views on the increases compatible with the national interest. The operative part of the ICTU recommendation is that:

Conscious of the needs of the low-paid workers, Congress recommends that trade unions should strive to secure wage increases at this time of not more than 20s. per week for their members with effect from such a date as it may be possible to secure in each instance.

It can be inferred from the recommendation that the figure of £1 covers increases both in wage rates and in other benefits. It is also recommended as the maximum increase to be sought. If, however, this figure were to become the general rate of increase sought and conceded, it would represent an overall increase in wages and salaries of about 7½ per cent. This would be more than double the increase which the economy could afford. It will be evident from what I have already said that the effects on the economy would be harmful not only in terms of increased prices and increased external deficit, but also in regard to competitiveness and, therefore, employment. While the ICTU recommendation expressly recognises the present [75] economic difficulties and the need to maintain economic expansion and employment there is no doubt that, if the £1 a week recommended as a maximum became, in fact, the average increase, our present economic difficulties would be aggravated, and output and employment would suffer.

The ICTU recommendation refers to the particularly difficult position of low-paid workers having regard to the rise in prices during the past two years. There is undoubtedly a case for special consideration of low-paid workers and, with the general agreement of unions and employers, this could be arranged within an aggregate increase in incomes of three per cent, thus preserving price stability and competitiveness. An approach on these lines would be in accordance with the recommendations in the NIEC report and also with the principle of the ICTU recommendation. It is an approach which would not alone recognise the special position of lower-paid workers but also best ensure expansion of production, exports and employment. It should be earnestly considered by all the interests concerned.

As I said earlier, public expenditure and money incomes are the dominant influences on the state of the economy. Before I conclude I would like to say a little more on the subject of public expenditure.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Would the Minister care to say anything about the banks and their dividends?

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan The Deputy has just come in. He does not know what has been said.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon That is true.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch It is absolutely essential that Government spending in the coming financial year be kept within limits which help to contain— and certainly do nothing to increase —the excessive pressure on national resources. This excessive pressure is reflected in the 1965 deficit of some £45 million in the balance of payments and in the need for external borrowing to finance this deficit, in addition to the use of our own reserves and of the [76] voluntary capital inflow for this purpose.

It was announced over the weekend that the International Monetary Fund had agreed, at our request, to lend us the equivalent of $22½ million — roughly £8 million — to support Ireland's reserves in the present period of balance of payments difficulties. This, I should emphasise, is a short-term loan which we must make provision to repay within the next five years. While it helps to meet our present level of expenditure, it is not an appropriate substitute for the longer-term dollar borrowing by way of bonds repayable over ten to 20 years which we had to postpone in December because of the congestion in the market. This congestion has not since eased—indeed, various other prospective borrowers have had to suspend their negotiations and turn their minds elsewhere—and I cannot say when the circumstances will enable us to go forward again with this particular project. Apart from the drawing from the International Monetary Fund which has just been arranged, it will be necessary to have recourse to external sources over the next year or so in order to have sufficient finance even for a stabilised level of public capital expenditure.

This being the case as regards capital expenditure, it is evident that borrowing to meet current expenditure cannot continue. In the present financial year, a large deficit on current account is certain to be incurred. The financing of this deficit as well as of the heavy capital programme has made it necessary to obtain exceptional finance from the Central Bank and to have recourse to the International Monetary Fund as well as borrowing from the commercial banks on a scale which encroaches on their capacity to lend to the private sector. A deficit in the current budget not only draws upon the limited funds available for private and public capital needs but impedes our aim of reducing the balance of payments deficit to a more tolerable level. It is a matter of urgency to redress the budgetary balance on current account—this will necessitate increased taxation—and to fix public [77] expenditure, current and capital, for 1966-67 at levels consistent with the broad policy aim of early re-alignment with the Second Programme targets. In view of the urgency, I am trying to have everything ready for a very early budget this year. Clearly this is a year in which, more than ever, public spending must be determined by what is possible rather than by what is desirable, a year in which reforms and new departures, however praiseworthy and desirable, must be deferred until the growth in national resources makes it possible to put them into effect.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Let Lemass lead on.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch This temporary restraint must be the guiding principle for the Government and for all sections of the community. The basic national need is to avoid any action which, by making Irish goods and services less competitive or by seriously interrupting the flow of production, threatens economic growth and employment. We need greater harmony in industrial relations and greater concentration on safeguarding and improving our competitive position. If we fail in this, we cannot hope to reduce unemployment and emigration and provide a living for greater numbers in Ireland. Already there are grounds for national concern at the inadequate rise in employment in recent times. During 1965, the slowing down in the rate of increase in industrial output was accompanied by a more than proportionate slackening in the growth in industrial employment.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange The Government are to blame for that.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch Despite the increasing rate of growth in agricultural output in recent years, the outflow of labour from the land has not diminished. If incomes increase this year at a faster rate than output, we would price ourselves out of export markets. Not only would this strike at the main source of increased employment, but it would imperil the existing employment of the 30,000 people directly engaged in the production of goods for exports and of the many thousands more whose employment [78] is indirectly dependent on exports. The reduction in protection required by the terms of the Anglo-Irish Free Trade Area Agreement will make competitiveness at home no less imperative than competitiveness in export markets. A rise in costs would present a threat not only to employment dependent on exports but also to employment dependent on production for the home market. The level of wages, no matter how high, would have little relevance to standards of living unless increased output can match increased wages, thereby preserving the real value of the wage packet. For every pound paid in wages, there ought to be a pound's worth of work. It is the duty of management to see the workers have the tools, the means and the work systems to produce to full capacity. It is likewise the duty of workers to avail of those tools and of these means and systems to their fullest capacity.

I do not think we can ever start to evolve an incomes policy unless we can establish such a degree of understanding, mutual responsibility and an identity of interest between the worker and the employer. If the labourer is worthy of his hire, the employer is entitled to his reasonable profits. I do not think we can blind ourselves to the fact that the profit motive is the mainspring of our economic activity. I think this is recognised now in the Soviet Union. If profits are excessive, there will naturally be unrest among the workers who help to earn them. There are, I think we can safely say, very few excessively wealthy people in this country. Profits must be such as to give a fair return for investment and to be sufficient to stimulate reinvestment; otherwise, any economy would stagnate and no economy can stagnate for very long without going very fast downhill. It is of the essence of human nature to seek higher standards. This indeed will be one of the mainsprings of our economic policy. Sometimes there is a tendency to enjoy higher standards before they are fully earned. That is like hire purchase facilities which can facilitate this process but it too often creates the temptation for some people to go too fast and to incur hire purchase repayment [79] obligations which prove too heavy for them.

I suppose politicians and others will always deliver admonitions on those matters and on industrial relations but the relationship between the employer and the worker will always be basically a personal one. The employer himself will know whether he is giving a fair deal to his worker, not only in pay, but in the conditions under which he expects him to work. Good conditions of employment create a happy atmosphere which makes for higher output in work and therefore higher standards generally. Likewise, the employee will know in his own heart whether he is giving a fair return for the wages he receives. Whether that employer be a small man, a commercial corporation or a public authority, the worker owes it to his employer to do an honest day's work as dictated by his own conscience. He should not permit less conscientious people to set lower standards for him. There is, therefore, a mutual interest between the employer and the employee. A conscientious effort on both sides will be to the advantage of both of them in making a success of the undertaking on which they both depend for a living.

What is required of us now is intelligent restraint, a greater sense of the national interest, and of the economic and social interdependence of the various elements in the community. Despite our temporary difficulties, the country is in good shape, despite what Deputy Dillon has said. If we have the good sense to act prudently and reasonably now, we can look forward with confidence to a higher rate of economic growth, a higher rate of employment and higher incomes in 1967.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Let us have applause for the Minister.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch No, I do not want applause.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon No applause? Oh!

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins The Minister has moved a motion, the terms of which he read as follows: [80] That Dáil Éireann agrees generally with the views and recommendations contained in the Report of the National Industrial Economic Council on the Economic Situation, 1965, which was laid before Dáil Éireann on the 24th November, 1965.

The Minister might well have moved a motion in the following terms:

That Dáil Éireann agrees generally with the views and recommendations with regard to control of aggregate demand, banking and incomes policy contained in the Fine Gael policy document entitled “Towards a Just Society” and published in March, 1965.

It must be a rare occurrence that in such a short space of time there has been such a complete justification of the principles and policies which were clearly, resolutely and courageously laid before the people a short while ago.

I propose in the course of my remarks on this motion fully to establish what I have just said. I propose to show that every principle that has been praised by the Minister, and contained in this report, was fully published and advocated by this Party during the recent general election. One way in which this motion can be viewed by us is that it is, in fact, an endorsement on the part of the Government of the proposals we advocated and the principles we suggested should be followed. This motion in its demand for approval of the NIEC report can also be regarded as a very severe condemnation of Government administration and Government ineffectiveness over the years under review. It will also be possible fully to establish that suggestion during the course of this debate.

First of all we have the principles which in the Minister's motion he recommends should be generally accepted. They are three in number: first, a demand for the acceptance of the logic, benefit and merit of an incomes policy; secondly, control of demand; and thirdly, banking and credit policy. With regard to an incomes [81] policy, I should like to ask the Minister and any member of the Fianna Fáil Government, or any other Party in this House, when did they hear an incomes policy advocated except from these benches—advocated time and time again.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch The Deputy never heard of George Browne?

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I have here a copy of the policy document “Towards a Just Society”. I propose to read portion of this document so that I can demonstrate exactly what I say. In March, 1965, in the section dealing with prices and incomes, it is stated:

Ireland has not been unique in suffering from a constant rise in the level of prices since the end of the war. Whilst there are some economic arguments in favour of a steady and small rise in prices, it is generally accepted that price stability should be one of the principal objects of government economic policy. Rising prices can produce undesirable inflationary conditions; in an open economy they can bring about Balance of Payments difficulties either because rising costs make our exports less competitive or because of increased import demand; increased prices result in increases in the cost of government expenditure which are frequently not matched by revenue buoyancy resulting in budgetary difficulties.

In criticism of the prices policy then being adopted and pursued by the Fianna Fáil Government, it goes on to state:

On social and economic grounds a policy on prices and incomes is urgently necessary.

Further in the same section, it is stated:

In an attempt to slow down the rise in prices the Fianna Fáil Government have attempted to influence the rise in wages alone. Consideration, however, should have been given to the desirability of influencing other kinds of income, and modern discussion [82] has centred on the need as well for influence on the level of profits and other non-wage incomes as well as on wage incomes. Policies in this connection, known generally as “Incomes Policies” have been advocated for Ireland by Fine Gael for a very considerable time. We stress the view that such an approach is the correct approach, and we can see the success with which such policies have been operated in other countries.

It is accepted that an essential prerequisite for the formulation of any incomes policy must be an accurate estimate of future economic trends. Fine Gael, therefore, proposes to strengthen the existing arrangements for economic forecasts.

The Government must have an accurate estimate of future economic trends, particularly of increases in productivity, and must be in a position to state with accuracy the average increases in wages appropriate to the economic situation, consistent with price stability, Balance of Payments etc. It can by these means indicate a norm for increases in wage and non-wage incomes. The Government must establish machinery providing for consultation between Trade Unions, Employers' groups and the Government itself, so that the Government's views can be considered, and so that norms for increases in wages and non-wage incomes can be agreed.

Those statements are contained in the Fine Gael policy document on what an incomes policy should be. There are many more details in that document as to how it should be worked out, but the point of principle made in that document was that, in modern social conditions in a highly competitive world, it was essential, if proper planning were to take place, that an incomes policy should be adopted and pursued. We were the first Party to say that here, and we were the first Party to seek to get public conviction on that score.

[83] How were our views greeted? In the course of the last general election, the Taoiseach, whose Minister for Finance has moved this motion today, dealt with our policy in relation to incomes in a speech in Mullingar on 5th April, 1965. I deliberately recall what he had to say in view of what is now urged here today. In the Irish Times of 6th April, 1965, there is a report of the Taoiseach's speech in Mullingar and in Navan on the previous day. It reads:

The Taoiseach, Mr. Lemass, speaking at Mullingar and Navan yesterday, said that during the course of this election, the leader of Fine Gael, Mr. Dillon, had referred many times to what he called an incomes policy. He has not attempted to define this in any respect. He probably meant, and certainly intended the public to understand, some system of regulation of wage and salary increases by the Government.

We of Fianna Fáil do not believe that any system of this kind is workable. It has never been successfully operated in any country, except the Communist countries. I want to make it clear that we are definitely against it. If we are in Government, we will not apply it; if we are in Opposition, we will oppose it strongly.

There is the Taoiseach, the Leader of Fianna Fáil, only ten months ago, dealing with a new idea in the economic development of our country, and an idea which he now accepts, an incomes policy. He would not apply it if in government, and if in opposition, he would strongly oppose it. Perhaps he did not understand what was involved. If so, one can only regret his lack of knowledge. Or did he intend by that opposition to confuse the people and try to suggest that an incomes policy meant the regulation, in a unilateral way, of wages and salaries without regard to economic growth? If so, it is perfectly clear that the Taoiseach was deliberately trying to confuse the people.

Again, during the course of the election, the Fine Gael Party announced in [84] their policy document new views—I suppose they were new views because they were not commonly expressed—or certainly fresh views in relation to banking and credit. These views were introduced in the section dealing with the banking and monetary policy and read as follows:

The Irish banking system has many striking peculiarities, not the least of which is the lack of informed discussion on it. In other countries a great deal is written on banking matters and the actions of the monetary authorities are discussed and criticised by experts both inside and outside the banking world. Not so in Ireland. In the absence of expert discussion and with only a minimum of information being made available to the public there is little wonder that when the subject is discussed it is frequently debated on an emotional rather than an intellectual level. By this comment it is not intended to imply that only the critics of our present system are at fault. It is true, of course, that slogans such as “breaking the link with sterling” are frequently more influenced by a misplaced patriotic fervour than by an exact knowledge of the workings of redeemable currencies and of the Legal Tender Note Fund. For it is equally true that the defenders of our present system tend to conduct the controversy in similar types of clichés, and emotive slogans such as “Hands off the banks” or “It's your money they are after” are used instead of rational arguments to frighten the ill-informed and fainthearted.

The document, having discussed the undue rigidity imposed by the suggested 30 per cent ratio in the external assets to deposits in Ireland, then went on to suggest a positive role for the Central Bank. In relation to that, the role, the suggestion was that the Central Bank should be given the power and authority, by fixing without rigidity, certain ratios, to control the amount of credit which at any time would be available in this country in relation to our economic difficulties.

Reference was also made in the [85] document to what appeared to be the situation in the early part of the year and what had gone before, that balance of payments deficits were being incurred but that they were being concealed by the large inflow of capital into the country which had occurred and was occurring in 1964. The policy document went on to say:

Balance of payments deficits will certainly recur in the future (at the moment we are facing a considerable one). Is it prudent to rely on the inflow of capital from outside in the hope of avoiding restriction of bank credit? We do not believe that it is.

There again in relation to banking and credit, the Fine Gael Party, with courage and with clarity, proceeded to chart the way for new thinking, to suggest that the Central Bank should be made a real Central Bank, given a role to play in consultation with the Government, in consultation with a proper planning programme, and that the amount of credit available at any time should be tempered and tailored into the economic requirements of the situation and of the future.

How were our views in this regard dealt with by Fianna Fáil? I have here a cutting from the Irish Press relating to a speech made by the Taoiseach in Castlebar on March 29th, 1965 and the report had this to say:

The Taoiseach said in Castlebar last night that if on April 21st a Fine Gael Government was elected with its declaration of intent already made to control banks and banking credit that was the day when the flight of capital from Ireland would start.

He went on to say that:

those people with money on deposit in the banks would start transferring it out of the country to protect themselves against Government interference with their plans.

How proper was the introduction to the Fine Gael policy document when it said that in relation to any discussion [86] on banking or credit policy, the emotive term was always used by the man who wanted to protect what was there, who did not understand or wish it and had to use terms like “It's your money they are after” or “Hands off the banks”. That is what the Taoiseach proceeded to do in the last general election, although the Fine Gael proposal was precisely the proposal which he, through his Minister for Finance, now asks Dáil Éireann to approve of with precisely the same banking proposals.

The position now is that the Central Bank in the course of 1965 have operated as a bank, as a proper Central Bank, applying no rigid ratio but determining the amount of credit that should be available related strictly to the economic circumstances of the time. That is what we proposed and now, ten months later, we find that our proposals are apparently accepted.

Also in the course of the general election we referred to the necessity for the control of the Government's capital programme, with its effect on the creation of demand and so on:

A good deal of the total investment in the State is undertaken in the public sector of the economy by the Central Government, Local Authorities and State bodies. Whilst some portion of the public capital programme depends for its implementation on decisions outside government control, the bulk of the investment undertaken in the public sector is under the direct control of the Government. Government forecasting of its own expenditure has, however, been inaccurate to a considerable degree. Reform in the machinery of government will be necessary to ensure that detailed and accurate estimates of future investment in the public sector can be undertaken. At present, investment, particularly social investment, is haphazard and uncoordinated. A further defect lies in the lack of adequate machinery for inspection and criticism of the capital programme of the Government.

Today we have the Minister saying that, in relation to this question of the capital programme, the aggregate [87] demand, he now accepts what is contained in the NIEC Report, that there is need for greater attention to priority, that guidance is necessary and that some machinery must be devised to inspect and co-ordinate the expenditure decided upon. Again, in that regard our views have been justified.

I mention this because I saw in one of the newspapers this morning or yesterday some comment to the effect that this debate here today was a peculiar one. It follows the tabling by the Fine Gael Party of a motion which is being discussed with the Government's motion. Fine Gael tabled their motion on 23rd November before this Report was published. In that motion Fine Gael again call for an incomes policy and ask the Government to take steps to initiate such a policy “designed to secure a continual and orderly growth in the economy.” We were informed last week that the Government were going to give time for the discussion of our motion, and that was agreeable to us. Shortly afterwards, we were told: “no,” that the Government would put down a motion of their own, and they put down this motion moved by the Minister today. It is precisely the same thing. It is rather peculiarly worded. I suppose the object has been to enable the Government to have the last word in this debate. If that is what they are after, there will be no hard feelings in that regard.

We are faced here by a proposal which is in accordance with the things we believe in. It is in accordance with the policy we have advocated. We are entitled to point out that those who now proceed to advocate our views and assert our principles were the people who not only strongly opposed the things we stood for in the last general election but who also have on their own account a pretty poor record as far as administration and industrial relations are concerned. Remember that part of what the Minister asks us to approve here today is this statement—and if I were Leader of a Government who could have this said of his administration I would be tempted to get out—here is what the [88] Minister for Finance asks Dáil Éireann to approve of. It is a comment on Government administration in this country over the last couple of years. On page 6 of the NIEC Report the point is made:

The acceleration in the widening of the trade deficit in 1964, therefore, was the result of a decline in competitiveness and an increase in domestic inflationary pressure, which were in turn the result of increases in money incomes and a substantial increase in investment facilitated by an accelerated rate of credit creation. These developments were accompanied by changes in the distribution of the real national product and by growing and active dissatisfaction with wage and salary differences and with differences between wages and salaries and other forms of income. The dissatisfaction with income distribution and with differences between incomes must be regarded as a real danger to economic stability in the immediate future.

That is a comment on the effect of the manner in which this country was governed in 1964 and the years before it.

What kind of leadership had this country in those days that could have permitted a situation of this kind to develop? We were in the process of ending one Programme for Economic Expansion and embarking upon another. What kind of planning took place that could have resulted in a situation in which there was a decline in our competitiveness on the export market, an increase in domestic inflationary pressure and a substantial increase in investment facilitated by an accelerated rate of credit expansion? What kind of planners had we that could not have enabled some programme to be drawn up that would have allowed this country to trade on satisfactory terms with our competitors abroad and, at the same time, provide for the development of our economy the necessary credit and secure that it would be available?

We are entitled to point out that a Government of whose period of office [89] that appalling indictment is made in this Report, have a particularly poor record in relation to this whole question of wages and incomes and industrial relations. It is worth recalling that in 1960 the Taoiseach, as head of the Government, opposed the seventh round of wage increases. He said the country could not afford it, although it is now clear, and is made clear in this Report, that that increase was fully justified. But the Leader of Fianna Fáil opposed it at that time and said the economy could not support it. In fact, the seventh round, judging by this document here, did not affect our competitive position abroad. In other words, what increase was granted in the seventh round was quite within national productivity and was a proper increase.

In 1961, just prior to the general election of that year, the Taoiseach personally, as Head of the Government, by direct Government intervention in the ESB dispute of that year brought about the eighth round 12 months later by actively convening Dáil Éireann in the month of August. Forgetting why he had brought us here, he initiated the eighth round arising from the ESB dispute. Whether the eighth round was justified or not in 1961 can only be decided by the result. The result undoubtedly was that in 1962 this country lost its competitive position on the export market and there was a definite down-turn in the economy. Therefore, the eighth round, if considered in relation to our competitive position, was probably not justified— but it was the Taoiseach's responsibility.

When the economic recession of 1962 was upon us, when it was being experienced, we had the next step—the publication of the document Closing the Gap in February of 1963, in which, in paragraph 4, the Government condemn the eighth round of wage and salary increases and declare that the granting of the eighth round had, in fact, upset the balance between incomes and output. Having made that condemnation in the document, Closing the Gap, an appeal was made for a voluntary wage restraint until national production would have caught up with [90] the eighth round and a guarantee given, in paragraph 18, that the Government, on their part, would ensure that there would be a reasonable stability of prices and external payments. That was set out in Closing the Gap in February, 1963—the Government asked people to restrain wage and salary demands and, at the same time, guaranteed a maintenance of stability in prices. Six weeks later, in came the turnover tax and, with it, as Deputies will recollect, a spiralling of prices all over the country.

When the turnover tax went into operation in November of that year, it resulted in one of the most dramatic upward surges of prices this country had seen for a long time. We know the result was the coming into operation, at the beginning of 1964, of the ninth round of wage increases and the result from that, throughout 1964, was a further spiralling of prices and of the cost of living. Up to that, I think it is fair to say that whoever was responsible—whether or not Government Ministers have the facilities available to them, one would imagine they would— there was no mind trying to work out the proper operation of our economy.

Decisions were taken in a stopgap way. The ESB dispute, on the eve of a general election—give them what they want. More difficulties in relation to other elements—a sudden decision. The result, over the years we have been considering, has been a stop-go in relation to our economy. There has been no planning, no leadership, no assessment of what was required to be done. Throughout all that time, this Party was demanding an incomes policy; this Party was trying to get the Government to have regard to projected growth in national output in relation to incomes generally; this Party was trying to suggest that this vital matter of industrial relations should not be settled at the point of a gun: this Party was suggesting that a crisis should not be allowed to develop but that the matter should be settled immediately, logically, in a planned way and that, if that were done, we could look forward to retaining our competitive position abroad, because we exist on exports, and that [91] the economy could expand at least logically and inevitably. But there was none of that.

After the introduction of the ninth round, we went into the year 1964, the year of the great spree, the year in which unfortunate workers in this country found suddenly they had a larger pay packet but, when they went to use it, they found it was just so much illusion; the year in which credit was doled out all over the country; the year in which anyone wishing to speculate on the Stock Exchange could go to his bank manager and could immediately ask for a loan; the year in which millions and millions of foreign money came pouring into this country—some £36 million in all— the year in which prices were rising, inflation was rampant. What were the Government doing? How were they controlling the situation? Ministers were going around to banquets, like so many good-time Charlies, talking about the golden days, talking like golden boys about the wonderful prosperity that was around the country. All this euphoria was created and all the time, abroad, our competitive position was disimproving but it was being concealed; the widening crack was being covered by the inflow of foreign capital.

I suggest that a Government responsible for allowing that situation to develop are a Government that have not done their duty by the people who elected them. Surely the Government had available advice from their Departments to see what was happening? The Fine Gael Party saw it. In this document, published eleven months ago, we pointed to the fact that there was danger in an undue reliance on an inflow of foreign capital. We pointed to the fact that industrial relations and an incomes policy should be developed. We pointed to the fact that there was no inspection, no control. no mechanism for doing it in relation to the development of the Government's capital programme. We pointed to the fact that the demand upon the resources available to our community was not foreseen or controlled in a logical way. We asked for planning, [92] for leadership, for some effort by Government Ministers to sit down and work out a sensible programme. That has not been done.

Fianna Fáil won the last election. It was a democratic election and they were elected properly by the people. It may be one of the bitter things in politics that, when an election is over, one's opponent proceeds to wear one's own clothes, to run away with one's pants: that cannot be helped if it will add up to the national benefit. When I criticise Fianna Fáil for their opposition to our policies in the past, that is not to say that I resent their advocacy of those policies now: I welcome it. I consider it a good augury for the future that a political Party can, in so short a space of time, realise the evils in which they had been floundering and realise the mistakes they made in opposing principles that had emerged so clearly as being the right and proper ones.

At the same time, I am bound to assure the House that these are late days. This is the month of January, 1966. How different Ireland's story might have been if, last March or last April, before the storm clouds proceeded to throw down the heavy rain, in a period of calm, a better incomes policy had then been embarked upon and if thought and consideration had then been given to the development of the things which the NIEC now suggest. Of course, that was not done and, in the period since, we have had an appalling situation. The Government, having been elected back to office, found themselves—whether or not they expected it, I shall not dwell on now—with the economic indicators pointing to stormy weather. That stormy weather has come in the months which have ensued. But, throughout all this, our industrial relations in this country have taken a nose-dive.

I have here the International Labour Organisation assessment of the effects of industrial disputes in this country compared with other European countries. The position is that in relation to the number of days lost through industrial disputes per 1,000 persons employed, this country has the highest figure of all countries in Europe. We [93] have 1,580, the next nearest being Italy with 1,270. The amount of productive time lost in this country through industrial disputes is the highest in Europe. It was that danger we in Fine Gael had in mind when we suggested an orderly development of a prices and incomes policy so that decisions would not have to be made in the height of a crisis, with two sides with their hackles up, the danger of many thousands of others being hurt, and then a panicky concession or a panicky acceptance of an offer. Those are not industrial relations. They lead merely to further disaffection; to revenge on one side and to a determination on the other to be tougher next time. All that leads to industrial disputes.

Over the past 12 to 18 months, our economy has been pock-marked with strife and dissension, with bad feeling, with bitter complaints in relation to employer-employee relationships, and all the time the Government have been going around not knowing what to do, with ministerial speeches at dinners tut-tutting this and that, but with no leadership given. It is the logic of events that is forcing inevitably—and has forced inevitably—a realisation of principles which guide this Party. It was last October, before the NIEC Report was published, that the Taoiseach announced, despite his earlier rejections, his support for an incomes policy. In a speech published in the Irish Independent of October 27th, 1965, having condemned our incomes policy in the past, he suddenly came out to say:

An incomes policy is a fundamental requirement of continuing economic growth, and it is also the foundation of a just social policy, which must involve a degree of income redistribution.

That was on 27th October. The NIEC Report was published on 25th November. It is, I suppose, a coincidence that that particular paragraph which I have quoted appears precisely in those words in the NIEC Report. Was it just accidental, or did the Taoiseach happen to get an advance copy and decide to climb on the bandwagon [94] quickly and make a speech in favour of an incomes policy because he knew the NIEC Report was coming out in favour of the Fine Gael view?

In any event, the argument is over and on all sides of this House—I assume this to be so—there is now general agreement on the validity of the proposition that if we are to continue to be a viable country in the competition that lies ahead, we must be intelligent in the way we plan our own efforts. We cannot continue to price ourselves out of export markets; we cannot continue to take decisions affecting the economy as a matter of political gesture, or in the height of a crisis, or something of that kind. We must plan what we intend to do. The NIEC Report mentions that if we allow a completely uncontrolled series of industrial disputes throughout the length and breadth of the country, we may jeopardise the employment of 30,000 workers and, indeed, jeopardise the viability of this country in the immediate future.

That brings us to what now has to be done. The water which has gone under the bridge cannot even be put into a bucket: it is gone, and what might have been will not solve the problems of the present. It is here I want to express some concern. I did not gather from what the Minister has said any real idea of what is the Government's advice in relation to the present situation. The Minister used a number of—and I hope he will pardon me saying this—clichés, that wages and incomes must keep within the growth of national production; we must preserve the real value of wages —and words of this kind which we have all heard so often—but what does he suggest be done? At the moment we have in this country almost two armed camps—the employers and the employees poles apart. What is going to bring them together? How far should they come together? What is the Government's lead and advice on this matter? Leadership is required at this juncture. It is no good the Government or anybody else pooh-poohing the present situation and saying: “Lads, do the best you can.” That will not solve our problems.

[95] I had hoped that the Minister would have given some indication of Government thinking in relation to this. How far can the economy afford to go? How far can we afford an increase in purchasing power this year and for how much of the year? The Minister says that the £1 a week suggested by the trade union movement would represent an increase of seven per cent, or something around £37 million. Is it suggested that everyone was to get £1 a week—male and female workers? Is it to be suggested that the £1 a week is to operate throughout this calendar year? The Minister says if it does, it will represent seven per cent and, apparently, the economy cannot afford that.

There are other things which should be mentioned. We will have a lesser increase in stocks this year, cattle stocks and other agricultural stocks. That will mean there will be that reduction in demand—of what order one does not know. It is suggested that it might be of the order of £10 million.

The Government come in for some justifiable criticism even on recent events. There certainly has been a sharp drop in the number of persons employed in building construction works, according to the latest figures in mid-December which show a drop of about 1,370. Although most employers held on to their employees at Christmas because of Christmas boxes, bonuses and so on, there has been a marked recession in the past two or three weeks in that industry. Did the Government know of that? The fantastic things is that unless the Government get some results very quickly, this will continue to be true. Despite the reform of the capital building programme, the Government at no stage were aware of the volume of building work actually in operation. I have no doubt it came as a shock to them to find a marked reduction in building employment in the figures for mid-December. But anyone could have told them that: anyone could have told them that in the past eight or nine weeks there has been a definite reduction in a number of starts in building and a reduction in the amount of building being done, [96] largely due to the fact that the Government too peremptorily and too drastically cut their own building programme. This indication shown by the building barometer is a most serious one, if we are to have a recession of that kind in building employment, which in my view is totally unnecessary and should not have taken place if the Government had the means of carrying out its own capital programme.

The Minister for Finance assured the House that some £31.9 million would be spent on public buildings this year. It has not been possible to do it because he had not the facilities available and this again is something in which we, I think, have been proved right. If there had been a Ministry of Economic Planning whose concern it would be to see that a capital commitment in the country's yearly programme was carried out we would not have had these difficulties nor the situation in which the Government suddenly find they do not know from one stage to another what the volume of building in the country is likely to be. I do not believe it is intended unemployment—I am certain that would not be so—but if we have unemployment growing in the building industry, undoubtedly the Minister need not worry about difficulties in regard to aggregate demand because there will be room left for wage adjustments. Whatever the figure may be, if we can afford this year another £25 million or £20 million in increased purchasing power because of the run down in stocks, the reduction in employment, how is this to be divided? Could the Minister indicate what the Government's view is on that point?

The Minister for Agriculture tells us that we are going to increase cattle exports by 150,000 to 200,000. I hope we do; certainly we have the means to do it. If we do, that is £10 million more coming into the hands of our farmers. Do the Government approve of that or will they stop it? Will they prevent £10 million being earned by the farmers by fiscal or monetary methods? And if the margin for increased purchasing power is £20 million with £10 million going to the farmers, does it mean that the workers [97] and salary earners will squabble about the remaining £10 million? These are the things the Minister should tell us. After all, the Government should not be a sleeping partner in the country; they have an active role to play, to guide, to lead, to plan and to give the country the advice required particularly in times of crisis. In this regard I fear the Government are failing us sadly at present.

Whatever the industrial setup may be at present I hope it does not happen that anyone will allow the present situation to bedevil the development of an incomes policy, because, mark you, even if it were possible—I do not know whether it is or not; I have neither the figures nor the information —to settle the present wage demand by the wholesale application of a £1 increase, that is not an incomes policy and if a settlement were achieved in that way I hope the Minister and everyone else will not breathe a great sigh of relief, put away the economic statistics and so on and go off to play golf or something else. It is only when this crisis is overcome that the situation and climate can be ripe for the development of an incomes policy. It can only be done with the co-operation and approval of all sections of the community and a general feeling of goodwill. That is why it is so urgent that the rancour and cancer of industrial dissension should be removed as soon as possible from our economy.

In my view, we have a very short time to gather our resources and build up our economy in relation to competition abroad. We must develop an intelligent knowledge of how to do it; we must get all sections of the community working in agreement for the development of our resources and the development of our ability to sell goods abroad and to beat our competitors in so doing. That is why industrial dissension, while it may have the immediate effect of reducing progress and undoubtedly we suffer more than any other country in Europe in that respect, it may also have the effect, if there is a lack of foresight or knowledge, of depreciating our competitive position abroad. That also would be disastrous.

It is only when the entire field can [98] be cleared of difficulties of this kind that everybody can get down to doing what should be done, that is charting in an intelligent way how our resources shall develop in future; how we can make a partnership of employers, employees and the Government so that the country can expand. We in Fine Gael are gratified that so many of the things we stood for are now being more generally recognised. We are gratified that the courage and resolution that 12 months ago enabled a political Party to come out in a strong and assertive way with new ideas and principles, who had to face and suffer from misconceptions and misconstructions and from the old cries of “It's your money they're after” and all the rest of it, have borne fruit. We are glad that we have survived it and that now, at a time of crisis in this country, the Dáil is listening in assuredness to the things we advocated and the country is likely to follow.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish I am very doubtful whether the discussion initiated here this afternoon by the Minister for Finance will bring the results forecast by at least certain sections of the press. Frankly, I am at a loss to know why the Minister for Finance came in here at all to speak. Apart from the ineffectiveness of the motion, his contribution, while it could not be described as being controversial, did not add anything new to what is already known about the state of the economy of the country. His motion asks Dáil Éireann to agree generally with the views and recommendations contained in the Report by the NIEC and the Minister proceeded for 45 minutes to give us, in the main, quotations from the NIEC Report, with a few interpolations to the effect that the Government agree with this or that. The NIEC in this Report concede that while, for example, it is desirable to have an incomes policy, a great deal of work has to be done before we even start to introduce legislation or to make proposals, regulations or financial arrangements for the purposes of such an incomes policy.

In view of what has been described [99] as the deterioration in the economy, I expected the Minister to make some proposals to the House. He made none. I do remember him saying something to the effect that in future under industrial legislation which it was proposed to introduce, the employer would give written conditions about the employment to his employee. Apart from that detail, we heard nothing from the Minister for Finance but a great deal of vagueness.

I do not think we should have a rehash of the debate we had in November or December of last year, when the economy of the country generally was discussed. It has been said in certain places that the country is “broke”. I would not go along with that idea. I believe that while there is a near crisis, the situation is not disastrous and that all sections of the community can ensure that the country can do very much better, particularly in the field of production and consequently in providing a better standard of living for our people. It is fair comment to say that the Government are “broke”. That is evidenced by practically every single letter that Deputies get with regard to grants or assistance. The Minister for Finance in the last Budget did not do his work properly. If he had done his work properly, we would not have unfortunate people at the present time waiting for moneys due to them to pay their debts or to complete work they have started. It is evidenced by the fact that the Minister for Finance has been scrambling around recently in order to raise more moneys abroad. It is evidenced by the fact that the last National Loan was not, to say the least of it, an eminent success.

The Minister for Finance and the Taoiseach in a recent debate spoke here as if the Government had not the major responsibility for the situation in which the country finds itself. If the country is in a bad state economically, it is the Government's responsibility. They tried to shed that responsibility in their recent speeches. The Minister for Finance, in particular, endeavoured to shed that responsibility today. It is true that the Minister did not place specific blame in simple terms on this [100] section, that section or the other section, but there certainly was an amount of evasion.

There is no use going into details on the situation as we now see it or the events that took place in 1965. It is sufficient to mention very briefly some of the indications of the state of the economy. The balance of payments problem was dealt with pretty adequately in the discussion that took place in this House in December last. In that respect, the Government must be held responsible for allowing that situation to occur. I do not think we should be too much worried by the fact that we had what was described as an artificial inflow of capital over the past five years because we must remind ourselves that, while a certain amount of this capital was of a speculative nature and some of it was used for the purchase of land, some of this capital was brought into this country to work. If it is capital that built factories, if it is capital for the setting up of machinery, the benefits of that will be seen in the years to come. Again, let me say, the Government did show a certain amount of complacency in seeming to assume that that sort of capital would flow into this country for very many years to come.

I remember the Taoiseach saying on occasions that the evidence of the wellbeing or otherwise of the economy could be the employment figures. The employment figures for the year 1965 cannot be said to be encouraging. It is reckoned—and I think the Minister for Finance and the Minister for Industry and Commerce would agree with this— that the overall position as far as 1965 is concerned is that there were 7,000 fewer employed than in the year 1964. That is not to say that we lost employment in manufacturing industry. The big decrease in employment was due to the fact that we lost something like 12,500 people from rural employment, employment on the land, as compared with 1964.

Again, at the risk of boring the House, might I remind the Government that it does not appear that the target which they set themselves, to provide 7,800 jobs on an average per [101] year in the decade 1960-1970, will be realised because, if we have regard to the figures for the years from 1960 to 1965, it would appear that in order to achieve that target, we would have to have 15,000 or 16,000 new jobs per year in the next five years. In my opinion, the Government have not planned properly.

Fine Gael spokesmen say that they have converted the Fianna Fáil Party to an incomes policy and to various other things. I think we can claim credit in this House for the fact that, not even in my time but ten to 20 years ago, the Labour Party advocated that there would be emphasis on planning. It is presumptuous to imagine that the mere setting of targets means that the targets will be achieved. In view of the general world situation and particularly of the situation in Britain in the years up to 1963-64, these targets could have been achieved if the minimum had been done. But if we are to attain the targets set out for us in the Second Programme for Economic Expansion, the Government will have to do much more than they have been doing.

They have been converted to the extent that they now accept another recommendation of the NIEC in relation to private industrial zones. I trust that recommendation will be implemented. I trust they will go even further and utilise the industrial centres they have, and which are now decaying, because, if they do not take positive steps for the establishment of industry, I am firmly convinced that, despite the generosity of grants and tax reliefs, private enterprise will not do the job. Whether or not private enterprise has reached saturation point I do not know, but all the evidence in the last two years shows that the establishment of industries is not going on at the same rate as heretofore or, if it is, it is not providing the same amount of employment. The increase in industrial employment in 1965 is much lower than the increase in 1964, 1963 and 1962. The Government must certainly be concerned about the trend shown in the figures for unemployment and emigration. The revised system of compiling the live register, while it is a [102] little confusing, and I suppose it is only natural that it would be at first, indicates that, as far as unemployment is concerned, it is running at 5,000 or 6,000 more than it did in the same period in 1964 and 1963.

The House should, I think, express its debt of gratitude to those who are members of the Economic Council and to those who signed the document, the members of the Joint Purposes Committee, who, I assume, had the bulk of the work thrown on to them. I do not believe in a rehash of what happened between 1960 and 1965. It is very well detailed in this document. The reasons are also pretty well detailed. The inference seems to be that we should correct what now appear to be obvious mistakes made between 1960 and 1965 and that we should make proper plans to ensure that these mistakes do not occur again.

I doubt if the Minister's speech today provides any sort of solution. Mark you, there is a great deal of vagueness on both sides of the House and I do not say that I myself shall be either very specific or very detailed as to what an incomes policy really means. I do not believe the NIEC would be absolute in their definition of an incomes policy despite the fact that they spent much time on it and devoted many pages of this particular document to that proposal. The Minister today did not refer at all to many specific recommendations and views in this report. I suppose it was for that reason that the motion in the name of the Minister was so very vague.

We all accept, of course, that increases in incomes depend on an increase in production and an increase in exports. We should also recognise —it does not seem to be recognised by some—that an incomes policy is not a policy designed to control an upward movement in salaries, wages and other incomes. Its purpose is to regulate such incomes in order to ensure there will be a fair return from the economy to people generally, whether they be salary and wage earners, self-employed, or members of some other profession or occupation. Many people seem to be under the impression that an incomes policy [103] should not be related to wages and salaries. Others believe its function is to control the upward movement of salaries and wages. A prerequisite to the implementation of an incomes policy is a fairer and more just distribution of total money incomes, having in mind, in particular, the lower income groups. One thing NIEC have copperfastened is the idea that a wages and incomes policy should not be applied merely to wage and salary earners but should apply to professional earnings, rents, profits, realised capital sums and, I suppose, to that other sector of the economy, the farming community. They do not deal at any length with the latter but they were not charged with dealing with that particular sector of the economy.

The report also emphasises that, if our difficulties have been due to overspending because of higher incomes, the blame should be shared by others than wage and salary earners. Whether we like it or not there are very many people who believe, in their ignorance, that the difficulties the country has had have been caused by members of trade unions and members of the professional classes in trade unions demanding more money, shorter hours and all sorts of fringe benefits. An increase in incomes can come only as a result of an increase in productivity and an increase in exports. We have not had any positive policy designed to raise output or to increase productivity. I do not believe exhortation—the Minister said this himself—is enough whether from the Taoiseach, members of the Government, politicians or anybody else. I do not believe exhortation is sufficient. A job of work has to be done. I do not think one can legislate for ideal relations between employer and employee. These have to be cultivated and, so far as I can see, no real worthwhile effort has yet been made to cultivate these good relations.

I have said many times before, and I repeat it now on this 25th January, 1966, that in the vast majority of cases the only time employer and employee meet is on occasions such as we have seen in the last two or three months [104] when there is a demand for an increase in wages or a request for a reduction in working hours. There is a Government agency which can do valuable work provided it gets the necessary encouragement and the necessary funds from the Government. I refer to the National Productivity Council. I had one experience of that body when employers and employees met, not to talk about wages or conditions of employment but about productivity.

A great many workers in this country simply do not know what they are at; they are told to do a job of work, for which they get paid, and that is an end to it. I do not suggest the worker does not know he is assembling a motor car or laying a footpath, but in many cases he does not know to what end he is working. If employers showed greater frankness towards their employees and took them into their confidence to a much greater extent there would be a better understanding of the difficulties on both sides and a greater interest in the work generally. I remember a report of NIEC which started by saying that the Second Programme for Economic Expansion was all cod—those were not the actual words used; that is my paraphrase— unless one could bring the details of it and the reason for it right down on to the factory floor.

If you asked tens of thousands of workers what were even the broad terms of the Second Programme for Economic Expansion, I do not think they would be able to tell you. I believe that only when we educate our people to the extent that they know when the balance of payments problem is at crisis level, when they know that productivity must be jacked up by another one or two per cent, when these fundamentals are brought home to them, then and only then, will they have a full appreciation of the problems that confront not only their own industry but the economy of the country.

I spoke a moment ago about redistribution of income. That is a necessity, particularly in respect of the lower paid workers. On page 42 of this Report, there is a statement to the effect that wages and salaries [105] represent over half the total of money incomes. I forget in what context that was said but I think it was meant to impress readers in regard to the amount of money wage and salary earners were getting out of the economy. It must be stressed that these people represent half the population and, as far as I can see from another report of the NIEC, collectively they do not seem to be getting their fair share of what are described in this booklet as total money incomes.

I should like to have heard the Minister for Finance or Deputy O'Higgins saying whether or not he agreed with the view on page 42 of the Report which suggested that adequate information in regard to private companies should be disclosed at least to employees. These are vital things we should be prepared to face up to. There is no use in glossing over an incomes policy and saying we agree with it and saying it should apply to all sections of the community. There are certain recommendations or views contained in this Report in regard to making an incomes policy work, and we ought to be prepared to say whether or not we agree with them. Personally I agree with that recommendation. It is a good thing the Minister for Industry and Commerce is here because for quite a while he pursued the policy of his predecessor, the present Minister for Finance, in insisting that price control was daft, in insisting that price control should operate only during times of war or emergency or during times of scarcity. If he wants to describe this as an emergency, I shall accept his view on it, but he ought to read the paragraph of the Report which states that within an incomes policy there will always be the necessity for price control or, if not absolute control, for price review, not only in times of war, in an emergency or in times of scarcity but during normal times to ensure that profits will not be unduly high. It was heartening for me, in any case, to see that the view of the NIEC was that while profits should not be curtailed, they should not be allowed to grow at an excessive rate. I did not hear a view from the Minister for Finance or from Deputy O'Higgins on that. I may be wronging [106] the Minister for Finance because he did speak about profits.

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery The Minister did refer to it. The Deputy went out when he said that bit.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish I think I heard him talking about that, but he was not specific in regard to the recommendations of this Report on profits. We applaud also the view of the NIEC on monopolies, and would ask the Minister for Industry and Commerce to pay a little more attention to monopolies. The NIEC Report was pretty strong in its view that the Fair Trade Commission should keep a better eye on monopolies.

There was also a view—it is very difficult to decide whether these are views or recommendations—to the effect that there should be disclosure of information about profits and all other incomes. There was a view that directors' fees, fringe benefits, expense accounts and allowances for cars and houses should be disclosed. I do not know how far the Revenue Commissioners go in ascertaining what is the value of these fringe benefits to certain people attached to institutions or attached to the managerial or administrative side of industry, but the inference from the NIEC Report must be that these things are not disclosed.

There is also a recommendation in this Report that there should be a stricter watch on professional earnings within an incomes policy, and I suppose this would be desirable, too, from the point of view of the assessment of income tax. There is a recommendation here which is in substantiation of a recommendation in the Seventh Report of the Commission on Income Tax to the effect that records should be kept by those in receipt of professional earnings. I am sure that in respect of some of those professional earners there must be some record from which the Revenue Commissioners can make an assessment but I think it would be fair to take the inference that all professional earnings are not disclosed, disclosed also for the purpose of ensuring that those incomes will not get out of line and will bear some relationship to incomes generally.

[107] We in this country have always placed great emphasis on the part agriculture plays in our economy, making a substantial contribution to our exports, particularly in regard to cattle. It is regrettable that agricultural representatives were left out of the NIEC and that members of the Commission were not charged with the task of investigating the agricultural industry or farmers' incomes within the context of an incomes policy. The sooner it is done the better—suffice it to say that— because if the farming community have certain advantages they also have responsibilities.

The Report dealt particularly with those in the lower income group and said the reason they are in the lower income group is that their productivity is low or that they are unable to secure a fair determination of wages. They said there must be efforts to raise productivity but they did not pursue that. I do not know how it can be done and there was no effort in the Report to define the category of workers who could do it. There was a suggestion to the effect that the incomes of the lower income group could be raised by family allowances. I suggest the Minister for Finance should comment on that. Nobody will hold him to any specific sum or suggestion but he should say if he is accepting this principle in this very important matter.

Those who are not members of the trade union movement, apart from those who are in direct negotiation with them, seem to have an exaggerated idea of what wages and salaries are in certain types of employment. As far as I can gather, in the manufacturing industry, which, I suppose, could be said to be the most remunerative, in September, 1964, the average weekly earnings of a man were £14. I do not think anybody would suggest that £14 per week for a person engaged in the manufacturing industry was exorbitant. Many people, particularly those who lecture the trade union movement, should take pains to find out exactly what conditions are. Mind you, we cannot be too proud of an economy that, in 1966, can afford to pay only £14 a week to persons engaged in [108] manufacturing for export. I do not have to go through the different items of expense—rent, food, coal, light— to be able to demolish that £14 in a matter of seconds. It should be noted by those who would lecture the trade union movement and the workers genrally that the average weekly hours of work in September, 1964, were 45¾. This gives the lie to those who suggest that all workers, in the manufacturing industry and elsewhere, have a five-day week of 40 hours.

Mr. Booth: Information on Lionel Booth Zoom on Lionel Booth Is the Deputy including overtime?

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish It is exclusive of overtime.

Mr. Booth: Information on Lionel Booth Zoom on Lionel Booth Where did he get the figures?

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish From the Central Statistics Office.

Mr. Booth: Information on Lionel Booth Zoom on Lionel Booth I do not think so. The Deputy should check this.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish Let the Deputy check them, and if he finds they are incorrect, I shall accept that. These figures were supplied to me by the trade union movement who got them from the Central Statistics Office.

Mr. James Tully: Information on James Tully Zoom on James Tully The only mistake they made was when they gave a figure for emigration of 12,500 when it should have been 25,000.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish The average weekly earnings in the manufacturing industry were £14, exclusive of overtime and bonus.

Mr. Booth: Information on Lionel Booth Zoom on Lionel Booth I doubt that.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish The weekly hours were 45¾.

Mr. Booth: Information on Lionel Booth Zoom on Lionel Booth I doubt the accuracy of both figures.

Mr. James Tully: Information on James Tully Zoom on James Tully Somebody should be sacked.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish Those in receipt of social welfare benefits and of pensions have been referred to and there is a suggestion that they could be helped by transfer to them of money from taxation. It was suggested that part of [109] the turnover tax might be transferred to the benefit of this group. Again, we did not have a comment, good, bad or indifferent, on this subject from the Minister.

Mr. James Tully: Information on James Tully Zoom on James Tully Not even about the next turnover tax.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish My Party will view favourably, as we did in the last Budget, any attempt to raise money for the specific purpose of helping people in the social welfare and pension group. Last year the willingness of the taxpayer generally to have so many pennies from the tax on the packet of cigarettes devoted to that group was indicated clearly. That has been our view in the Labour Party for a long time and we supported the Government last year when they brought in such a proposal. Any future proposal to transfer money from taxation to the benefit of those in need will be approved by us.

The NIEC also took the view that money incomes should be adjusted more frequently and in smaller steps. I suppose one might venture the opinion that that was one of the weaknesses in the National Wage Agreement commencing in January, 1964. It was believed then we would have economic and industrial stability for a period of 2½ years but, because of the Government's failure to do certain things, that was not possible. This also had effects on unit wage costs and on production generally but the trade union movement, the Government and Members of the House will agree that if there are to be adjustments in wages, salaries and incomes generally, this should be done more frequently and consequently in smaller steps.

Deputy T.F. O'Higgins spoke about industrial disputes in 1964 and quoted International Labour Office figures to suggest that we were the worst in Europe in this respect. That may be so, but Deputy O'Higgins should realise that in 1963, 1962, 1961, 1960, down through the years, this country has not had a bad record. We have had a good record in the matter of loss of days through strikes.

In the matter of industrial disputes, [110] particularly in recent times, politicians, members of the Government and pseudo-economists have begun to lecture the trade union movement, speaking in terms of wildcat strikes and lightning strikes. They have been talking about the efforts of trade unions to get more for workers than they deserve, to get more out of the national economy than they put into it.

Those people should remember that there are two sides to a strike and they should have regard to the type of people who are striking. They are not reds, they are not anarchists. They do not want to cause trouble for the sake of causing trouble. My experience is that they go on strike as a measure of last resort because they believe they are denied something the other side should but will not give them. That is so in 99.9 per cent of cases. Does anybody suggest that the people outside the Board of Works in Stephen's Green were there for fun, to disrupt the economy, on a biting cold day in December—men of 60 years and more who got employment there because of their services to the country in the IRA? There must be rethinking by those who criticise the trade union movement because the vast bulk of those speakers refer to the trade union movement when they speak about industrial wages.

They say this has gone beyond restraint. It is true we have had many strikes that upset the economy to some extent. It is true also that as far as the manufacturing industry is concerned there have been few, if any, withdrawals of work in any wage or conditions of employment disputes. I believe the Irish Congress of Trade Unions, in the resolutions they put before their special conference last week and which were accepted, again showed restraint. The Minister for Finance read out the resolutions here and he regarded them as having been put before the conference advising the conference to do certain things but also to have regard to the state of the economy and also to the situation of the lower paid workers.

The trade union movement have demonstrated a sense of responsibility over the past 15 years or so. Since the [111] war, there have been nine rounds of wage increases. The figure arrived at in five of those rounds was by agreement with the employers. I think the trade union movement were reasonable in the extent of their demands in the other four rounds. This was proved by the fact that there was not an undue disruption of the economy even in relation to the rounds of wage increases on which there was agreement with the employers' side. Any man who is honest with himself would agree that a ceiling of £1 at the present moment would not compensate workers, the salary earners and the wage earners, for the increase in the cost of living since November, 1963. Even having regard to the wages of many scores of thousands of workers in this country, £1 per week could not be regarded as excessive when one remembers the commitments of the family man today.

The Minister for Finance hinted that trade union or industrial legislation was being contemplated by the Government. Again, many people are inclined to assume that the utopian Bill or legislation on trade union law would be to ban strikes. I do not know how people can become so silly as to assume that even if this House enacted legislation to ban strikes, it would be operative. The man who works with his hands or with his mind has only one commodity to sell. He is entitled to bargain for the best price he can get for it as any other man selling a commodity such as a motor car or a sack of flour. I believe he has also the right to withdraw his labour, to refuse to give it, unless he can get a proper price for it. I believe the Minister for Finance has said he would like to have regard to certain factors, both national and local. I believe that by and large, to intimidate trade union workers to the extent of bringing in repressive legislation would do much more harm to industrial relations than I am sure the Minister for Industry and Commerce anticipates.

The Minister for Industry and Commerce, I am informed, has notified the Irish Congress of Trade Unions that he intends to introduce industrial legislation and trade union legislation. [112] I should like the Minister to give an undertaking that there will be consultation with the trade union movement before such Bills are printed or introduced in this House. I believe that if the Minister does this without consultation with the trade union movement, he will again do a certain amount of harm. When the Minister for Justice has occasion to bring in what would be regarded as a purely legal Bill, a Bill in which barristers or solicitors are interested, he takes great pains to consult them. Similarly, when other Ministers have occasion to introduce legislation which affects a certain section of the community, there is always consultation, as far as I know. I believe that, if the Minister for Industry and Commerce introduces legislation in this House after consultation with the trade union movement, he can get an improvement in industrial relations. None of us will say that the industrial relations machinery we have is perfect. If it can be improved, let it be improved, but let it be improved, not by the Government by order, or by a single action on their part, but in consultation with the Irish Congress of Trade Unions, representing the bulk of the trade unions in this country.

I want to conclude by saying again that while the Minister, as in this motion, approves generally—whatever that means—the views and recommendations in this Report, he has not been specific. If anybody assumes, because this Report has been published and because the Government accepts its views in general, we can have an incomes policy next week, next month or next year, he is wrong. It will take quite a long time. In the meantime, I would suggest to the Minister for Industry and Commerce that he take particular note of the NIEC Report which says that they believe, as far as the incomes of wage and salary earners are concerned, in a continuation of the study of collective bargaining.

Minister for Industry and Commerce (Dr. Hillery): Information on Patrick John Hillery Zoom on Patrick John Hillery When you wish the community to be conscious of this significant document, it should not be [113] in six months' time or 12 months' time but now when we are facing a problem with which we have to deal. Despite what anybody says, I believe the responsibility for dealing with those problems does not lie solely with the Government. The motion by the Minister for Finance wants Dáil Éireann to show general agreement with the views and recommendations in this very significant report from the National Industrial and Economic Council. I am not so sure that much of what we say will have a significant effect on the economic situation. Perhaps our economic fate might be more in the hands of people who will not read the Dáil debates or to whom the ordinary economic words and phrases are meaningless. It would be a step ahead for the common good, and for this country, if Dáil Éireann did approve of this motion by the Minister for Finance. From the speeches already made by Fine Gael and Labour, I think I can assume that the Minister is pushing an open door in seeking this agreement to the need for planning and the need for implementing certain agreed policies. I was a little shaken to hear Deputy Corish say that the Minister for Finance was vague and did not produce anything in his speech which was specific. I do not think he could have been more specific when he told us what could be afforded this year in relation to the economy, the consequences of going beyond what could be afforded by the economy and the determination of the Government to act and to take whatever possible action was open to them.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish I meant wage and salary earners.

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery The Minister for Finance made a long statement. I hope Deputies who did not catch it all will read it when the Dáil debates are published. He did apply some of his time to profits and matters other than wages, despite what Deputy Corish has said. I would like to say, having said that much about communications and about the Minister's motion, that my own view is here we have a plan or a series of recommendations and views which, if generally accepted, not alone [114] by the Dáil but by the various sectors of the community, could lead us through this difficult period, however long this will last, and be a guide to some better times. Certainly, it could protect us against the adverse effects of not having our own house in order when meeting with problems created outside the country.

When I hear Fine Gael saying they had a plan, and the Labour Party saying they had another plan, I am inclined to go back in my own mind to the words of Cardinal Newman over 100 years ago when he said: “Quarry the granite rock with razors, or moor the vessel with a thread of silk: then may you hope, with such keen and delicate instruments as human knowledge and human reason to contend against those giants, the passions and the pride of man.” I am less concerned with the possibility of having a plan than with the possibility of getting everyone to agree to implementing for the common good what should be implemented. If, at this time, we could get one fundamental basic agreement that the economic health of the country must be protected, and if every sector of the community subscribed to that agreement, we would have gone a long way. Discontent, dissatisfaction and disagreement can from time to time shadow our common interest in protecting the economy but they should not be permitted to over-shadow and hide the real danger to the economy, that is of offering ourselves higher standards of living than we can afford.

We cannot afford any longer to ignore this common target of maintaining the economy healthy. Anything else is less than we want. The House has probably in mind some thoughts of the attempt—and a great deal of work has been done towards it—to have a new national wage agreement. The negotiations between the Federated Union of Employers and the Irish Congress of Trade Unions broke down last month. It seems that the breakdown of those talks produced a certain amount of consternation in some places. I think we should be [115] more sober and critical in our attitude to the breakdown of negotiations of this nature. Those taking part in the negotiations were representatives of the highest standing in both organisations, and all of them had the most intimate detailed knowledge of the working of the 1964 National Wage Agreement. There was no question of weak representation on either side, and certainly no question of the Government being involved. This was, in fact, a sophisticated exercise in free collective bargaining, and the fact that the negotiations broke down is something that can happen within our system of industrial relations. I do not think the trade unions ever gave a hint that they were prepared to abandon this free collective bargaining, and I do not think anyone has attempted to ask them to do so up to now.

The impression that by failing to have this national agreement, we have seen the abandoning of a time-honoured piece of machinery that has served us well, seems to have been created in some quarters. The fact is that the 1964 National Wage Agreement was the first of its type, and it was expected at that time to bring about a period of peace and stability of from two to two and a half years. Looking back at it with the experience we have, we can ask ourselves: “Did the 1964 National Wage Agreement bring this peace? Was it a success judged by the standard of bringing peace to our industrial situation?” The year in which the agreement was made saw this country at the head of an international list of hours lost through strikes. An explanation that a high contribution was made to that record by a strike in the building industry would be received in other countries with a certain amount of cynicism. The fact is that we had in that year the highest number of hours lost through strikes.

The idea of having an agreement was a good one, and the fact that the high hopes were not realised does not mean that we should go around wringing our hands. We have the benefit of our experience of the 1964 Agreement. The question we want to ask ourselves [116] in the light of that experience is: “Do we want to see another agreement of the same type just for the sake of having an agreement?” To my mind, the answer to that must be that we do not want an agreement just for the sake of saying that we have an agreement. The Government would be glad to see a good agreement, and by a good agreement, I mean an agreement that will be clear-cut in all its parts and negotiated by people in a position to ensure its implementation in the letter and in the spirit. The Government would expect, and rightly so, that any amount of wage increases awarded under such an agreement would be within the ability of the economy to bear, and the Minister for Finance has been quite specific about what he considers the economy could bear this year.

I said earlier that the people who might have the biggest influence on our economic situation might not all read the Official Report of the Dáil debates, or might not all find themselves attracted to the terminology of the economists, as seen in the papers. I have a feeling that we do not get our meaning across when we talk about wage agreements in terms which would normally be used by an academic man. Let me say that any agreement that would give us more money than we can afford and less peace than we can afford would be a bad agreement, and a bad agreement would land this country in trouble, and would land the workers in trouble. If the expressions the “state of the economy” or the “imbalance of payments” mean nothing to some people, unfortunately unemployment means something, and has a very real meaning.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan Hear, hear.

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery It is foolish in the extreme to think that any jobs or all jobs are insulated against the cold blast of costings, and we must try this year to get away from the idea that the glow of instant satisfaction when we give ourselves a new round of wage increases or salary increases is something that will last. It seems strange to me that within the trade [117] union movement, where solidarity is so cherished, we so often find a sectional interest being so vigorously pursued, irrespective of adverse effects on other workers. It is this question of a real threat to employment which makes me qualify the type of agreement which I think the Government would be glad to see, an agreement we could afford, as I said, a good agreement. I have already said that free collective bargaining is a tenet of trade union faith in this country and if employers and workers have not been able to draw up a new national wage agreement, then they can revert to what they were doing before 1964 and the unions can engage in that type of bargaining. I cannot say that the country was in a state of collapse at that time.

As I say, the Government will welcome a good agreement which is clear-cut and negotiated by people in a position to ensure its implementation. Economic planning is a fine concept but the assumptions on which it is based must envisage that the component parts of the plan can be managed. I have appealed from time to time to abandon the side of the angles in hoping for good industrial relations but it may well be that industrial relations are the unmanageable component of our planning because people do not seem to show a docile inclination to be managed. If this is so, we have to face it as a fact, and not try to pretend that things can be otherwise, or that the Government can make things otherwise. I think Deputy O'Higgins went very far away from reality when he talked piously of the lovely industrial relations we should have. We have no business at all if we do not face reality and face these very difficult——

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange The Government did not face reality for the past one and a half years.

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery I have spoken to people on both sides who were trying to arrange a new national wage agreement and I am satisfied that the failure to make this agreement was not due to any lack of a sense of responsibility [118] on either side. I do not subscribe to the idea that some people have that a free-for-all is the equivalent of open warfare. It is a normal process and I have no reason to think that if it is followed in the present context, and with the responsible attitude of most of those leading both sides, the atmosphere will be devoid of a sense of responsibility. As I said before, I cannot accept that any sector of the community thinks it has no responsibility for maintaining the common good.

The way Deputy O'Higgins and other people talk reminds me of the old story of putting the bell on the cat. I am reminded of it more acutely because I am expected to put the bell on the cat. As I said before, strikes are built into any industrial structure and they are something we have to reckon with and continue to reckon with. If there is an obvious solution, or if the Government do not appear to find an obvious solution to settle a strike in a dramatic way, some people think the Government are not worried about strikes. Of course we are worried about the disputes and the damage caused by strikes and I know that the workers themselves, the leaders of trade unions and of industry must be seriously worried about the damage being done. I am not prepared to say, as some people do say, that the current pattern of industrial unrest is deliberately maintained as a challenge to the nation by the trade union movement, any more than I believe the position should be calmly accepted as a normal thing to be grafted on to our industrial life and to be a burden for us in the years ahead.

I am quite prepared to work, and I am sure most responsible people in the community are also, to find some prospects of reasonable industrial peace, but, as I say, the responsibility and the powers are not concentrated in the Government. We exercise freedom in the management of our own affairs and we provide in the industrial sphere machinery to help us in solving disputes. The machinery consists of an impartial conciliation service and a Labour Court. This machinery was not imposed upon the workers: nobody is dragged before the Labour Court.

[119] The machinery is there to be used if the parties in the dispute wish to use it, but it can achieve nothing unless the parties seeking solution and wanting the help of a third person, approach it in a spirit of goodwill. We all know you will not always get what you want when you submit your case to a third party and it is no sign of weakness to accept the decision of a third party if we agree the common good is best served by settlement and peace. The workers and the trade unions have always insisted, as Deputy Corish said, that they must have unfettered freedom to strike. In the nature of things, they must have complete freedom to walk away from the conciliation table. They insist on freedom to reject Labour Court recommendations.

When a strike occurs in these circumstances—in a community where the power is not with the Government, where freedom of action is with two parties, where there is available machinery to help them reach settlement—then is somebody from the Government supposed to stand up to lecture them and say: “You should have accepted that recommendation from the Labour Court”? Does anybody in this House think—because I presume most people in this House are sensible —that if I or somebody in the Government stood up and recited these pious things which some people want us to say, it would stop a strike? Would a strike come to a sudden end if we said that they should have accepted a recommenation? I have spent a great deal of my time recently trying to get people to face reality and to deal with industrial relations in the context of the freedoms which we have. I said time and again, and Deputy Corish said it tonight, that legislation alone could not guarantee industrial peace. You could fill the Statute Book with law on industrial relations and still have a strike at the docks or elsewhere. The whole matter of industrial relations is now crystallising into a question of power, the use of power and the abuse of power. The workers and the trade unions want to retain complete freedom of action and they know they have this [120] power and this can be an exhilarating situation.

It is the duty of the leaders of the trade unions to remember this point and to present it to all their members. A worker can be in dispute with his employer only if he is in employment. If the economy is seriously damaged by continuing industrial strife, this must lead to unemployment and that cannot possibly help the worker. If, at the present stage, where trade unions enjoy this freedom and power, a union thinks it has no responsibility beyond what it feels to be the immediate welfare of its members, I can do nothing to force it to think otherwise. I can only hope that the progress of events may well do what I cannot do.

We all share the responsibility of building up this country. Somebody spoke of the newspapers at one time as having power without responsibility. There are too many attempts to thrust responsibility without power in my direction. I am not averse from having power, but if we are to work with the freedom I have outlined, with the common good in view, we must all feel our equal share of the responsibility towards protecting the common good.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne That applies to the employers, too?

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery Most certainly.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne The Minister did not mention them.

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery If I could get agreement that the basic thing is to protect the health of the economy and find some other way of solving lesser problems, I would have achieved a great deal; but I do not have that much hope for my powers of oratory. People say that what is bothering the worker at present is not wages but dissatisfaction from various causes. We are told that what bothers the worker is insecurity due to fear of what the future may bring because of the rapidly changing pattern of our society. No doubt there are going to be big changes in our society during the next ten years, big changes in the employment situation. There have been major changes here over the [121] past ten years. Most of these changes have been for the benefit of workers. However, it is reasonable to expect that, if we continue to talk about redundancy, factories shutting down, the geographical changing of workers from one place to another—and much of this talk has been exaggerated— that workers will become a little unsettled. The main aim of the Government's manpower policy is to minimise the fear workers have that change is bound to affect them adversely. Most of the changes that can be envisaged are changes for the benefit of the workers, changes which would bring them increased job opportunities in their own country.

We have prepared a scheme of redundancy payments and resettlement allowances to help the worker financially during the period from the disappearance of a job, if such happens, until a new job is available for him. This scheme is at present being considered by the Manpower Advisory Committee, which is representative of the Irish Congress of Trade Unions and the Federated Union of Employers. It will be discussed later with other bodies who might be expected reasonably to have an interest in it. After that, we will have legislation introduced in this House. The time of the introduction of the legislation I cannot say. Much depends on the consultations with the interested parties. I hope the Bill will be introduced before we rise for the summer recess.

The House knows that an Industrial Training Bill, which provides for the establishment of a training authority and gives that authority wide powers to deal with all aspects of training and re-training, has already been introduced. This legislation in itself provides insurance for the workers. The fact of having skills or of being able to acquire new skills, plus the availability of redundancy and resettlement payments, should go a long way towards reducing the anxieties of workers at this time. I hope to be able to circulate the text of the Industrial Training Bill within the next month.

Deputy Corish mentioned the industrial relations legislation, which will [122] have of necessity to be accompained by incidental amendments of the trade union law. He asked me if I intended to consult the trade unions on this. My predecessor consulted them at the very beginning of contemplation of new legislation. Now that my own thinking on it and my consultations are far advanced, I am approaching the time when fairly definite proposals will be possible. I will consult the Irish Congress of Trade Unions at that time.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan And the Federated Union of Employers?

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery And the other people concerned. Because of the promise to consult and because of the difficult nature of the problems involved, I cannot name a date for the introduction of the legislation. I hope to have it before the summer recess with the other legislation affecting workers. I had hoped to have all this legislation in by Christmas, but when you consult, you have to take extra time.

Deputy Corish criticised my earlier attitude to the problem of price control. He also said the Minister for Finance had not touched on profits at all. I will refer him to the Minister's speech in which he said the Government recognised the undesirability of an increase in profits and other non-wage incomes, not justified by increased output, enterprise and investment, and therefore not representing a real contribution to national production. The Minister went on to say that he considered effective competition to be the best guarantee against excessive profits and that the progressive reduction in tariffs and the enlargement of quotas brought about by the terms of the new Trade Agreement would make this competition even more keen and more effective. Profits earned by manufacturers have always been, and will continue to be, a factor of cardinal importance in our price increase investigations, whether carried out by the Advisory Committee or by the Prices Section of the Department. These investigations have covered a very wide range of commodities, including most of the essential commodities. In only one case was it [123] considered that the net profit margin was so high as to warrant a request to withdraw the price increase immediately. In general, our experience has been that, in a community in which free competition has been maintained by the activities of the Fair Trade Commission and otherwise, profit margins are kept within reasonable limits. In fact, with the exception of the one case I mentioned——

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne Which one was that?

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery It was a long time ago.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne Was there not a recent one?

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery It was in my time. I think they have had enough by being told the increase was not accepted. Public hangings never appealed to me.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne Some people look for them.

Dr. Hillery: Information on Patrick John Hillery Zoom on Patrick John Hillery I mentioned this question of profits. To get back again to my original theme, if we can get agreement between us all—this House and the different sections of the community —that we will protect the health of the economy and follow guide-lines set out for us in this very significant document, then we shall be doing exactly what we should be doing to protect our economy in these difficult times and to see that we have continued development after these difficult times have passed. But, if each section of the community, in turn, finds an excuse for not participating in this main theme of protecting the common good, even though agreeing with it— excuses are plentiful; one person can say that prices have gone up, and another that profits are too high, while another can complain about wages— then we have not much hope of succeeding in protecting our economy to the day when it can see another advance.

I do not think there is need for me to say anything further. However, in view of what was said by two speakers, I should like to repeat that [124] the Minister for Finance was quite specific in his speech as to what the economy could afford in this year and what the consequences will be if we go beyond, or if any sector goes beyond, what the economy can afford. He was quite specific about the Government's determination to take what action is necessary to counter any adverse effects of going beyond what the economy can afford.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan At the outset, it is right to point to the manner in which this debate came about. Fine Gael, quite properly, put down a motion drawing attention to the fact that the NIEC, which is a very representative body, were now in agreement with the prices and incomes policy which they had expounded at the last general election and which did not get them into power. The Minister for Finance then put down a motion, on behalf of the Government, which meant that he had the right to speak first and the right to reply. We on this side of the House have no complaint whatever about this. In a parliamentary democracy, you play the game according to the Queensberry Rules and you do just as much as you are allowed to do. The Government played it that way and, as such, they are merely taking the proper line as far as they are concerned in strategy within the House. It should not, however, be allowed to them to take from the fact that the NIEC document is a complete vindication of the work done by the Fine Gael policy committee, in association with very eminent people in this country who gave of their time and abilities, and is now being produced by the Minister for Finance as a headline for a copybook and a blueprint for what we have to do in a situation in which his Government have placed us.

I want to say, here, that we must not allow the parliamentary strategy of the Minister for Finance and the Government to get us away from the people who should properly appear within the gun sights, namely, the Government, as that group of people, because we have to think of the time and the manner in which all this arose. It arose after eight years of [125] government by Fianna Fáil. It arose after a period of eight years in which the terms of trade did not move to any great extent against this country. It arose at a time when there had been six to seven years of plentiful credit and plentiful capital, at a time when it was the right of the Government, as the Government yearly proceeded to take a slightly larger slice of this capital cake, to direct it towards the employment of our people and the building of an economy that would have sheltered us against a situation such as that in which we find ourselves today.

I am not afraid to compare the present situation with that which faced the inter-Party Government in 1956 and 1957. There was a time when, from the benches opposite, it was impossible to hear a debate on any subject for one hour without being harangued about what happened in 1956 and 1957. Neither in the speech by the Minister for Finance nor in the speech by the Minister for Industry and Commerce today was a word mentioned about that crisis, even though there is a complete analogy between some of the problems that faced us then and those which now face the country. We cannot allow the Government to get out by the side door. We are not afraid to point out that we saw this years ago and were prepared to do our home-work to ensure that we had a plan to circumvent it. We are not afraid to compare the situation with that which existed in 1956 and 1957.

I want to tell the House and the country why the Government have failed and why they must take the blame. There are several reasons. They have been in office for eight years. In 1956, the inter-Party Government had been in office for only two years and had arrived there only because of the catastrophic Budget passed in 1952 by the Fianna Fáil Government, which caused a very considerable amount of the difficulty in 1956 and 1957. The inter-Party Government had not arrived until 1954, when this Budget had been written into the economy and when it was impossible to remove it. Furthermore, during 1956 and 1957, helped by the [126] disgraceful behaviour, which will never be forgotten to him in this House, of the present Minister for Transport and Power, cattle prices were dropping and dropping until the price was as low as £5 10s. per cwt. Our people did not sell their cattle. If they could stave off the bank manager and the merchant, and if they could sell anything else, they held their stock rather than give it away at a loss and the Government of that day were faced with that difficulty and an almost impossible balance of payments situation.

The position today is that while there has been some slight reduction in cattle prices over the past six months, which, happily, now seems to have corrected itself, cattle prices have been excellent and yet this Government find themselves in this balance of payments difficulty. They, and they alone, had the free credit and free capital at their hand over the past eight years and were in a position to direct the full sums the Government had taken from that capital cake towards the employment of our people and the setting-up of a wider economy. They failed to do it. Furthermore, for eight long years, this Government had the right, in the Budget, if they used it as a weapon of economic policy, to direct private enterprise along the right road and to see that private enterprise was encouraged and directed in every way possible to set up that wider economy that would see to it that what happened in 1956 and 1957, when the terms of trade went completely against us, could not happen in 1966. They failed. That was their opportunity and right in those eight years but they failed to do it. We now find ourselves in the position of again facing a Spring in which we may have grave unemployment, of an early Spring in which there are 8,000 more persons unemployed than there were before Christmas, of an early Spring in which people may have to emigrate in their tens of thousands—and this Government have been in office for eight long years.

What were the things this Government have done that were wrong?

[127] That is a question which any Government Deputy is entitled to ask? We must remember the political savagery of their attack on us. While we shall try, in every way, to see to it that there is no such thing as savagery from this end that will injure anybody's opportunity for work or for profit, we must at the same time point to the things the Government did that were wrong. Let us agree, then, that when the Government, in a recent Budget, created a situation whereby all our life insurance policies, which we had wished to go to our wives without being affected by death duties, were to be affected by death duties, they did wrong. At the same time, in that recent Budget, they created a situation whereby, for the first time, deposits in commercial banks in this country could be examined by the Revenue Commissioners. This resulted in a flow of capital out of this country in the last year which resulted, again, in £11 million less foreign capital being available here than in the previous year. The two figures are £36 million input of capital in the previous year and £25 million last year. If this is so, then would that £25 million not have considerably helped when the Government failed to get £7 million from America and is now getting £8 million from the International Monetary Fund?

Let us remember also what comes of their bad handling of the financial affairs of this country. When they take this £8 million from the International Monetary Fund, not one penny of the interest they pay on that money will get into the Irish Exchequer; whereas, if they had gone to our Irish people with a larger National Loan, or if they had conducted their housekeeping so as to be able to live within their budget, then it would have been true to say that the money borrowed from our own people would have returned two-fifths of the amount paid out. If one is to take six per cent out of the International Monetary Fund—so that the State ship does not go under—and add approximately two per cent to it, one realises that by comparison with a National Loan here, there is a rate [128] of eight per cent being paid for the money the Government could not get because they, and they alone, had dissipated the resources here to such an extent that it was not available.

Let us remember also that a sum of £1,165,000 was paid to Potez on the Naas Road and, at the same time, we in this House are at the stage where our unfortunate constituents cannot get a grant or loan from a country council of £100 or £200; and where 1,700 men were to have been employed there are 45. That was a mistake and we on this side of the House are right in saying that they should pay the political penalty, which is a loss of votes.

Again, the Minister for Finance comes in here and tries to draw a lovely circle around the whole economic situation—those from the trade unions, those nominated from other employer organisations, those from the Federated Union of Employers and all who produced this Report and that supposedly absolves the Government from blame—which immediately suggests that this just happened, that it came from the blue. Nobody on this side of the House who looks into his own mind could agree with anybody that this just happened as a bolt from the blue. It happened, as I said before, after eight years of Fianna Fáil government, at a time when theirs was the steering wheel, theirs was the opportunity and theirs was the loss caused.

Let us remember also how the Taoiseach behaved during the past year or so in relation to the economy and how his Ministers are behaving now. It was quite noticeable that when this debate was opened, it was opened by the Minister for Finance, followed by the Minister for Industry and Commerce. No two more quiet, more decent, more gentle or less likely men to give offence could the Government have produced from the Cabinet, and that includes even the Minister for Education, who has a little more bite. The Minister for Finance never made a speech in his life that was not water with a little whiskey in it. Today was exactly the same situation. Today we had a situation where he went just so far, when [129] he did not insult or annoy the trade unions or anybody else and left everything in a glorious sort of mythical state, where nobody had said anything much but everybody had had the finger pointed at him. That is no good.

So far as we are concerned, there is a problem facing this country. There are 8,000 fewer employed than there were at Christmas. It looks as if there will be another 10,000 unemployed within another six to eight weeks and we sit in this House and have the Minister for Finance and the Minister for Industry and Commerce coming in and giving us classroom lecture but never telling us what they are going to do. But the man who has the bite in him, the man who looked across the House here today when Deputy T.F. O'Higgins was speaking and grunted, was quite vocal in times of yore. One must remember that when the employers and employees were stuck at eight per cent and 14 per cent —and when there were two by-elections—he went in and settled it for 12 per cent. But when he was sending somebody in today to talk about a maximum of three per cent, it was the quiet, gentle and unassuming Minister for Finance with his drink of water with a little whiskey in it instead of whiskey with some water. That is the sort of thing which Fianna Fáil——

Mr. Colley: Information on George Colley Zoom on George Colley The Deputy need not worry; I think he will be hearing the Taoiseach.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan No doubt, but the tenor of the debate has been set. If we were foolish enough, we would choose our remarks and say: “This is a national situation and we must all rush and look after the ship of State and do everything right.” We will not put people on the emigrant ship by our criticism. Our criticism will be levelled against the people who deserve it and they are the people who for eight years had the opportunity, were at the steering wheel and did nothing about it. In the last economic debate we had here, there was discussion on the 12 per cent and while Deputy T.F. O'Higgins today clearly indicated the savage attacks of [130] the Taoiseach at the election on our prices and incomes policy, now today we have the prices and incomes policy lauded by the Minister for Finance. This is the sort of thing you get from a group of people who would stay in power, in my opinion, just as long as it is humanly possible, with no thought at all for the country or the economy or those who depend on them and believe in them for an honest and proper approach.

The working man is, as usual, in the front line trenches. It is very very necessary that he should not become the cannon fodder of this economic position. It is not today or yesterday that he was the cannon fodder. When things get bad, when capital investment stops in private investment firms, when things have to be cut down, one of the easiest things to cut down is the employment of the lowest paid worker. Everybody begins thinking of efficiency, gets ruthless and decides that he can do without this or that, but you do not get an executive worker knocked off. The lowest paid worker is knocked off. This has been the experience over the years and I do not think this spring will see any difference at all. There is grave danger that the lowest paid worker, who is now worse off than he was before the 12 per cent, may find himself the person out of work. The Government have a responsibility towards the building trade, towards private enterprise and towards our people to create the climate, if they failed to do it up to now, in which those people can have some hope of continuing in employment.

I want to point now to the situation in regard to local authorities and the building of houses under the Small Dwellings (Acquisition) and Housing of the Working Classes Acts. I can tell the House that an unfortunate old age pensioner hired a taxi 15 miles away from me the other day and arrived at my house with his hands shaking because a firm to which he had owed money for some months were going to take out a writ against him because Louth County Council could not pay him two grants he was owed since last May. This old age pensioner, who has a married son living with him, had [131] spent £650 on a bathroom and extension, and naturally enough there was a gap. They had worked out carefully their supplementary grants and taken them into account. Now this unfortunate man was to be handed a civil bill within seven days, if he did not pay £121. Louth County Council owed him £215 since last May. I telephoned the secretary of the county council, who said readily enough that he would have the matter on his desk within 15 minutes. He did so, and on the following morning I got a letter intimating that Louth County Council could not pay him now, but if he wished to instruct Louth County Council to pay the purveyor of the goods as soon as they had funds available, they would send the money on to him and on this basis the matter might be settled.

That is how far the Government have gone. Louth County Council could not get funds from the Local Loans Fund for this excellent purpose. At present I know of local authorities whose building contractors are owed amounts of £25 or £30 and there are phone calls from the Department to know if they could be fobbed off with payment of half these amounts. This is being done by people who attacked us with such political savagery—I remember it as a young Deputy: I can still recall the horror of it and I still believe it is something that should not have happened—when we were in office. Now, with the slick appearance of honesty and integrity, we get this twist whereby a simple motion calling attention to the fact that the NIEC report has agreed with Fine Gael ideas has been turned into a situation in which we are all supposed to march in behind the Government and say that we must put our shoulders to the wheel. The Government are at fault for this situation. The terms of trade were with them. We now have the right to criticise them.

Everybody who speaks in this debate says the economy is sound. This is like taking out the Tricolour; one is meant to say this. If you say anything else, you are being a traitor. You must say that everything is all right with the [132] country and that these are temporary difficulties. Is the economy sound? Have the right things been done? Has any Deputy or Minister looked at the figures for crops and livestock that reached them in the morning post? Mark you, this is the Government of “Grow more wheat” and “Speed the plough”. We find, as between June of this year, when the wheat crop was being sold, and June of the previous year, there is a drop of 32,300 acres, or 15.1 per cent. The Leas-Cheann Comhairle may wonder whether this is relevant but the balance of payments is relevant to this debate, and if we have 32,300 less acres of wheat, it means that approximately 38,000 tons of wheat at £33 per ton must be imported. That is the fault of the Government who have been dealing with the farmers and the flour millers for the past eight years. In oats, there is a reduction of over 4,000 acres, or 1.5 per cent. In the case of barley, leaving out malting barley, and going to feeding barley, the crop about which the Minister for Agriculture boasted here that he had increased the price up to 45/- per barrel and as a result we were going to produce as much coarse feeding as we would need, we find it is down by 100 acres, notwithstanding all he did. Do the farmers believe in this Minister? Rye—we have not much of it—has gone down by 24.7 per cent. The total reduction in corn crops is nearly three per cent and it was down again in the previous year.

Let us consider whether the much vaunted increase in livestock numbers can bear examination, and indicate that the Government are trying to cure the balance of payment difficulties, and that bad handling by the Government has not been a feature or factor in the crisis now facing us.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange Beet is down by 14,000 acres.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan We observe that notwithstanding the heifer scheme, the number of heifers in calf is down by 9,000, or 4.5 per cent. I agree that the number of milch cows is well up and that does indicate that the previous year's heifers are now cows and that some of them have stayed with us, but we must remember that the people who [133] jumped into the heifer scheme because they had not enough mating cattle on hand in the first instance have got their £15 and are now jumping out. We have to wait for a year or two to find out if cattle numbers are going to be everything the Government say they will be and whether they will be sufficient to pay for imports of industrial goods to maintain employment. We have stated what we thought was the cure for the situation, but Fianna Fáil could not accept what we said, of course. We had been advocating this scheme four years before they thought of it. It is a bit disturbing to govern from this side when you find that what you have been advocating for years is eventually taken on by the Government in power and they make a mess of it. We now find the people are jumping out of the heifer scheme and I do not know whether we shall be able to support our industrial imports by our agricultural exports.

While pig numbers are up, the number of gilts in pig is down by 27.5 per cent which means that the pig cycle has started again and that we are now going into a situation in which for two years, we shall have a reduction in the number of pigs and after that the figure will go up again. At present, we have a situation in world feed prices that indicates that these are going to go up and up. What will happen here if our profits on pigs and poultry further deteriorate to such an extent as to produce a loss? I do not think the Government can point to any success in that field that will help our balance of payments.

Is the economy sound? We have just concluded a Free Trade Agreement with Britain which provides that in 1968 the footwear quota goes. We export 24 per cent of our footwear and use 76 per cent at home. Can we increase exports to such a level as to compensate for the share of our home market which by 1968 will certainly be taken by those who wish to send their shoes in here and cannot now do it because of the quota arrangement? I do not think we can do this. I think the economy may not be sound. I think the Government should have proposed some measures to deal with what [134] is a crisis situation. The whole intention seems to be to water the position down so that nobody is unduly disturbed. We are supposed to be good boys.

I do not want to go into any detailed examination of these matters on this debate but to me there appears to be a choice of solutions. The first is to prescribe blood-letting for a patient suffering from anaemia: by general credit restrictions, we place all the organisations, factories and farmers in the position in which for some years they cannot expand. As the Minister for Finance said today, the national cake continues to expand as every cake does, but it expands at a lower and slower rate than heretofore. Immediately, people who will not accept the same or a lower standard of living will emigrate. The policy that I seem to hear from Fianna Fáil benches, a policy of general credit restriction, of keeping things down at present, of non-expansion, indicates to me fewer people in the country and more emigration. It is a policy of blood-letting for a patient suffering from anaemia.

On the other hand, the Government could have said, “These are the problems and we will do certain things about them. We will have a tough Budget. We will use moneys for certain purposes. We will see to it that credit restriction is selective. We will see to it that the purposes for which money will be obtainable from banks are purposes that will permanently employ, first of all, our men and then our girls”. There was not one mention of such a policy in the speeches of the Minister for Finance and the Minister for Industry and Commerce today.

If a person goes into a commercial bank at the present moment seeking credit for a project that will produce repayment in three or four years he will get the money. If a person goes into a commercial bank or any finance institution seeking credit for a project giving a slow repayment rate but which at the same time will create employment, increase production and help to redress the balance of payments, he will not get the money. We advocated that credit should be selective [135] rather than restrictive. That is the difference between ourselves and Fianna Fáil. They are not prepared to do their homework. They are not prepared to see to it that this all-important matter of credit for expansion and capital investment is selective rather than restrictive.

In the middle of a year when the Agricultural Credit Corporation were heading towards lending a figure of £7½ million and had many commitments made, the Government told the Corporation that they would give them that year the same as they got the previous year—£5.3 million—and instructed them that, first of all, they must give no money for bank debts and, secondly, they must give no money to buy land. Money lent to farmers for productive purposes could have immediately resulted in production for export. All extra agricultural production here is for export. We consume only two-thirds of the produce of the land. The Agricultural Credit Corporation were deliberately restricted by the Government at the same time as there were certain schemes allowed to proceed and moneys were given to abortive industries, one of which I have mentioned here tonight, which were allowed to proceed unchanged.

That is something to which we can point, where credit for capital investment was merely restrictive and was handed out like sweets to orphan children, rather than selective, so that money would be available for things which would give an immediate increase in production for export, would benefit the economy and would increase employment.

We on this side of the House absolutely abhor any suggestion of restriction of credit for agricultural productive purposes. This was done. The Agricultural Credit Corporation were restricted to £5.3 million.

Let me now deal with the way the banks were behaving in the situation that obtained. I have no objection to criticising them. Farmers who had borrowed considerable sums from the banks but who had plenty of security [136] were being pushed by the local bank manager over to the Agricultural Credit Corporation. That was why the Government had to instruct the Agricultural Credit Corporation not to issue money to pay bank debts. The bank managers were told to reduce overdrafts by 10 per cent. Instead of selecting the overdrafts to be reduced by, perhaps, 50 per cent or 40 per cent on the basis that they were not contributing towards the economy, towards expansion and exports, the banks picked the best 10 or 20 farmers who had taken large sums from them and were in process of repaying them and put the screws on them with the intention of sending them to the Agricultural Credit Corporation. Anybody in agricultural business knows that and knows that the attempt had to be circumvented by the Government and was circumvented. That is no excuse for the restriction of agricultural credit where perhaps 90 per cent of the production represents new exports, in respect of which there was no previous import. There is no excuse for Government in so restricting this type of credit.

The Minister for Industry and Commerce chose to give us a classroom lecture on industrial relations. If he wanted to make some real contribution to the debate, he had a fair field. It was his Taoiseach who arranged this 12 per cent increase and arranged that it would last for two and a half years. A first year student of economics would appreciate that, if you increase the general wage structure prices must follow that wage structure in a period of from nine to 12 months. The unfortunate people who got their 12 per cent found themselves in the position of being worse off than they were before. The important thing is that they were better off immediately they got the 12 per cent, just as they were tripping to the polls in the Kildare and Cork by-elections. They were very much better off and for a few months enjoyed the increase. The Taoiseach is a good economist. He knew perfectly well that that benefit could not last. It lasted long enough to get him off the hook. When the workers had to return to their previous [137] situation or to some point below it they would not accept it.

The Minister for Industry and Commerce talks about the responsibility of trade unions and the responsibility of employer organisations and the fact that nobody must throw on to another section of the community responsibility for the work that now has to be done to restore the economy. Does he not accept, as I accept as a small employer, that the job of the trade unions is to get a bigger slice of the cake for their members? They look at profits and dividends and the wages and salaries paid as a cake from which they want a larger slice. That is their professional job. That is the way industrial relations work. Anybody who thinks they will work any other way is barking up the wrong tree.

We must, of course, try to have a national wage agreement but I agree with the Minister for Industry and Commerce that if we do not succeed in getting it, as appears likely, we must leave it to a free for all. But, do not give a holy lecture in which you tell the trade unions that they must not ask for more, in which you tell the representatives of the Labour Party that they have to do their share, and so forth. They are all doing their share. Trade unions in this country are very responsible bodies. Where a trade union find that one of their members is behaving incorrectly or not doing enough work for his employer, they give him very short shrift maybe faster than the employer. They have a sense of responsibility. At the same time, it is their job to get more of the cake and there is no use in the Minister for Industry and Commerce telling them there must be restraint. It is not their job to exercise restraint. It is their job to get a bit more for the workers. It is their opinion that workers are underpaid. Whether that opinion is well- or ill-founded is something we can all discuss but, when we have finished discussing it, the effort by the trade unions will be to get a bit more of the cake for their members and less for dividends and profits.

It is patently absurd to say now there cannot be any higher profits. Remember [138] we have no wealthy colonies. We have no large sources of income, except emigrants' remittances. Remember the forward movement of our country, the expansion of our private enterprise economy, and Government expansion, depend entirely on profits. It is from profits and wages the Government get the income with which to repay the interest and principal involved in their Capital Budget. It is on profits, wages and salaries that the Government seek to do all the things that will give this country the forward impetus we all desire. It is a bit naive, therefore, to come in here and say we must not think in terms of higher profits. The job of everyone in industry is to try to get, not by higher prices but by greater and more efficient production, higher profits. The corollary to that then is to meet the unions fairly in the realisation that they are there to get as large a slice of the cake as they can for their workers. The Government should behave as mature adults and not like people who want to throw away the mantle of sin and failure which now enshrouds them, which is what the Government want to do, suggesting that everyone must be a nice little boy and stop doing the things it is his natural inclination and his responsibility to do. It is trade union responsibility to seek better conditions and better wages for its workers.

The Minister for Industry and Commerce made a point with regard to the success or failure of the 12 per cent increase. That was a ghastly failure. If the unions and the employers had been left, as it is now suggested they are being left, to hammer out an agreement between themselves, we would have had a more sensible and a better arrangement brought about by these professional practitioners in the field. The Minister for Industry and Commerce has said that the unions must in future fix their own wages. Had that been done two years ago we should have a healthier position today. But, because two by-elections were pending, that type of agreement was not allowed to emerge and we had the premature birth of something that proved to be deformed, something which has put us in the position in which we now find [139] ourselves, something brought about by maladministration on the part of the Government, something which has put us in crisis again.

The Minister for Industry and Commerce said that unions are inclined to lose sight of first principles, inclined to seek a higher share of profits, and so on. That is their job. It is in that light one has to deal with them. There is nothing wrong in that at all. He also said that strikes are built into our industrial structure. That is a monstrous suggestion. The right to strike is there for all. One of the things which create a strike condition is prices. Prices are the responsibility of the Government. This Government introduced a Prices Stabilisation Order four or five months ago, about five years too late. The blame for the present position rests on the shoulders of the Government because they did not do something about prices much earlier. Had they done so, trade unions would have been a great deal easier to deal with and there would have been fewer strikes.

It is all very fine to make a statement that the strike weapon is built into our industrial structure, but surely that is something we do not really want. Surely we want to avoid strikes. Surely we want to point to absence of strikes in order to encourage industrialists to come in here in the realisation that they will have a healthy labour situation. For the Minister to say that the strike weapon is built into our industrial structure and that the Government have nothing to do with it is simply dodging the issue. The Government have created the financial situation on which we make our decisions one way or the other; as employers whether we will pay our men more, as employees whether we will work for what we are getting or go on strike for more. I believe that it is the maladministration of the Government over the last eight years that has caused all the strikes, all the unrest and all the difficulty with which we have had to contend during the period of the 12 per cent ninth round agreement, which, it has been suggested, was a success.

[140] We want to hear from the Taoiseach and his Government something more than a mere suggestion that we must all tighten our belts. I do not know how many times we have had this before. I remember a gentleman on one occasion who, during an election campaign, went around the country making extremely rosy promises; he would not put on any extra taxation; he would not remove the food subsidies. When he got back into power we had nothing but statements about hair shirts and the necessity for tightening our belts. The Minister for External Affairs is a great dab at this “Tighten your belt” effort. We want to hear from the Government, who have been in office now for eight years, what they intend to do to improve the present parlous situation. It is their job to tell us. It is not our job to tell them what to do. If they want to know what we would do, then they can have another look at our prices and incomes policy published before the last general election. They will get some help from that. It is our job to ask the Government what they propose to do. As far as the first two Government speakers today are concerned, their answer is “Nothing”.

Mr. James Tully: Information on James Tully Zoom on James Tully It is difficult to know how to approach the motion before the House. This is the third major economic debate within a period of a few weeks and, even though Christmas intervened, it is difficult to understand why the economy of the country should be highlighted like this at this time. We are having, in fact, an adjournment debate at the beginning of the session. Possibly the reason is because the Industrial Injuries Bill, which was to have come up this week, was not ready and the Government decided to fill in time. This is, I believe, a cover-up for the fact that there was no business.

The matter before the House has so many sides to it that it is difficult to understand why the Minister for Finance approached it from the angle he did. He said nothing very extraordinary, nothing new, except that he tried to argue that, because he and the Government felt that production inside [141] the next 12 months could be expected to go up by only about three per cent, that was a good reason why three per cent should be the increase wage and salary workers might expect. I do not know whether the Minister for Finance was really serious about this or whether it was just a matter of having to say something and using the first argument that came into his head because he read out the proposal put before the Irish Congress of Trade Unions special conference last week and said it was a sensible approach. He then proceeded to say that since three per cent was the maximum production that could be expected, three per cent should be the increase expected in wages and salaries and that the £1 would represent more than twice that amount.

I do not know what the Minister was trying to prove but if, as he said, he has the interests of the lower-paid workers in his mind he should remember that the wages of those workers have been reduced by one per cent since 1st January; stamps have gone up by 1/5d. a week for all industrial workers, and for agricultural workers by almost the same amount. Men who are earning between £7 10s. and £7 15s., road workers in County Donegal—road workers in the rest of the country have £8 to £8 7s. 6d. and a few of them have around £9—all those have had to pay an extra 1/5d. per week for their stamps. There are deductions for the complete stamp, for their superannuation, and, if they are single, for income tax. Many of them take home a wage of between £6 and £7 per week, and the Minister for Finance feels that a three per cent increase is what they can expect this year. Farm workers are slightly worse off. The majority of farm workers have less than £8 per week. The deduction for the insurance stamp brings it down to slightly over £7 10s.

I do not know whether the Minister meant in what he said that these people should get an extra £1 and that others should get the three per cent, but he did not sound as if he meant that. It sounded to us in these benches as if he meant that no worker in this country should expect more than a three per [142] cent increase, and he used as the argument that that is the likely increase in the gross national product for 1966.

Here we have the type of argument which was used when the ninth round of wage increases was negotiated— apparently it is being tried again by the Government—that the increase being granted or the increase, in this case, being sought, is to cover increases in the 12 months following the wage negotiations. The ninth round wage increase of 12 per cent with a floor of £1 covered the previous year and a half from the time the eighth round finished. I do not know how the Minister for Finance can say that the increase which will be granted, I hope, within the next few weeks to workers should take into account only what the increase may be from this until the next round and completely ignore the amazing increase in the cost of living which has occurred since the ninth round wage increases were concluded.

If we start talking about a three per cent increase, a matter of a few shillings, for workers who are attempting to live on a miserly wage, we are asking for trouble. Deputy Corish has pointed out that the average wage for the industrial worker over the past year was around £14 per week, and the average wage for a local authority employee, for a farm worker, an employee of the Forestry Division, a Board of Works employee, a Land Commission worker, most rural workers, is something around £8 per week. Somebody must wake up. The Government must know they cannot continue trying to hold down the wages of these lowly paid workers and talk about saving the national economy by suggesting that a three per cent increase would be in order.

The NIEC Report makes very interesting reading. I suppose it all depends on one's attitude of mind or one's background when reading it. The Government seem to be able to take things out of it which we most certainly cannot see in it. However, there is one question I should like to ask the Minister which, perhaps, he will answer when he is replying to the debate. The NIEC has no agricultural representatives [143] in its composition. It is generally agreed that agriculture is the primary industry in this country; still a body is set up in an attempt to regulate the economy or to pass judgment on the economy without a single representative of our primary industry. I do not know whether the agricultural community are deliberately left out because to have such representatives on it would be an embarrassment to the Government. Certainly from the employment point of view, they would be an embarrassment to the Government because over the years the rate of drop in agricultural employment is so big that it would be pretty hard to explain it away. We know that the average number of people leaving agriculture for a number of years has been 10,000 per year. The figures for last year, the latest figures available, appeared to show that they have gone up to about 12,500. It is now suggested that in addition to hired hands leaving agriculture, the small farmers, who find they cannot exist, are selling out their farms and joining the rush from the land. The number of jobs created in industry over the years could not counterbalance this and the result is that there is an increasing number of people unemployed, a decreasing number in employment, and if the views expressed here a few weeks ago on the new Agreement with Britain mean anything, it looks as if we shall have a reduction even in industrial employment as well as agricultural employment. It is not a very happy outlook for the ordinary people of the country.

It is quite easy for people in authority here to say what they consider to be the popular thing, to criticise the trade unions, to say that the workers are wrong, that they are upsetting the economy of the country, that they are always going on strike, that they have no sense of responsibility. We hear this being said. Sometimes it is said out openly, sometimes in a veiled kind of way, and there is talk of a new trade union Bill “which will keep these fellows in their place” when it is passed.

The trade unionist, the ordinary working man, does not go on strike [144] for fun. I admit there are from time to time irresponsible people who will cause what is referred to as a wild cat strike. There are, unfortunately, in this country and other countries such people who have very little responsibility to anybody, usually people who have no family responsibility and, therefore, if they have a little fun at the expense of the boss, they consider it relieves the tedium of their lives. However, the majority of workers are men who have family responsibilities and who, if they do not have their wages, at the end of the week will have to look at their families going hungry. As Deputy Corish said, these people do not go on strike lightly.

I am sick and tired of listening to people talking about the terrible workers, all the trouble they are causing and that the employers are the people being sinned against. It must be remembered that the people who cause the trouble in this country in nine out of ten cases are the employers, who believe this is 1866 and not 1966—people who have not yet wakened up to the fact that along with rights they have responsibilities and that they must realise whether they like it or not that the people they have working for them should be treated as human beings. I suppose in every country we have people who are only too anxious to try to make what the Americans call the fast buck—to pick up a few easy pounds—and who do not worry very much if they do this out of the sweat of their employees. There are unfortunately, even in this country, people who are not content with sweat.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy They want blood.

Mr. James Tully: Information on James Tully Zoom on James Tully No matter how we condemn the people who are prepared to walk the streets on strike we must remember they are fighting for a principle—that if they are out on the streets and if their union has given notice to the employers, they are taken out in pursuit of a just demand that the employers do not want to concede. A very eminent churchman in this country some years ago told me when I, as a trade union official, was being condemned by some of the lesser breed [145] for causing a strike or for insisting that the men should have a right to go on strike, that while he believed it was too bad anyone should have to go on strike, the day the right to strike was taken away the worker became a slave.

It is as true today as it was then and it will remain true. The only thing the worker has to sell is his labour and we have been too long looking at the situation in which a man worked hard all his life, got very little for it and when, through age, he was no longer able to do his job, he got a pat on the back, his insurance card was pushed into his pocket and he was shown the gate. So long as conditions remain like that in Ireland so long will we have people who believe it is worth fighting for a principle, that it is worth fighting to have security in their jobs and a living wage; and the people who preach to them in this House and at dinners outside should remember they are talking about fellow human beings, people who work hard for their living and who are entitled to the best the country can give them.

To suggest, as the Minister for Finance did today, that they should be satisfied to accept a three per cent increase is asking for trouble. Indeed, the Minister went further and suggested that the three per cent would not be restricted to the wage element alone but should include any fringe benefits which might be negotiated at the same time. I do not know whether the Minister was just filling in time or trying to make a serious statement in the House, but he should have remembered that this debate, if it is worth having at all—I have very grave doubts about it—should at least have served the purpose of pointing out how the Government expect to remedy the situation. All the Minister said was what he thought could be done but he did not give one concrete example of how the country was to get out of the awkward situation into which it had been plunged by mismanagement of the Government.

I was rather amused—I do not suppose it will be amusing after the Budget—to learn from the speeches [146] which are made every year except, perhaps, last year, about the terrible state the country is in and about the necessity for extra taxation. We have not yet heard about the need for a tightening of belts but no doubt it will come. Of course, the soldiers have been told to get their weight down. It is rather amusing to find that such a short time after the Government had stumped the country in a general election, declaring from every platform that we never had it so good—that we had an expanding economy, that the outlook for the future was never so bright, that all we had to do was put Fianna Fáil back into office and that for years to come we would be a land flowing with milk and honey—all we can see are the bees and they are not all honey bees.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange What about the drones?

Mr. James Tully: Information on James Tully Zoom on James Tully The Deputy is taking the sting out of it. In their report, the NIEC approached this whole question in a very intelligent way. They did not try to paint a rosy picture. They gave the causes of our economic difficulties as they found them. They mentioned the deterioration in our external trade balance, the increases in imports and decreases in exports, the fall in the net capital in-flow—all things which most people would know. They mentioned the rise in personal consumption expenditure and the fall in personal savings, all things most of us appreciated were happening. They mentioned that the rate of increase in industrial production was falling off and that the increase in the numbers of people engaged in industry was the lowest in any year since 1960. Their approach was that the things which caused our present trouble, as listed by them, were things which a Government doing their job should have recognised earlier on and should have been able to deal with them. But for some extraordinary reason, while this was building up 12 months ago, we were being told there was nothing wrong, that no matter what happened the country was getting better and better. Then, last July, we witnessed the extraordinary spectacle [147] of the Government having completely to reverse engines, to tell everybody that money had become scarce, that it was non-existent. They told the local authorities they could not get money to build houses, while the Minister for Local Government in this House told us that the local authorities were about to build more houses than they ever built before.

The very least the Government should have done was to take the House and the country into their confidence. We all appreciate that in difficult times united effort can help to solve problems. The Government cannot blame the Opposition Parties in this House or the people of the country at a time when one Minister says everything is grand and there is plenty of money for everything, while another Minister, behind his back, is saying that things were never so bad, that we must wait. The Minister for Local Government today, when asked by Deputy Treacy why certain grants were not sanctioned for Tipperary, said they were under consideration and that in a few weeks the decisions would be given. Before Christmas, I asked him about a grant for my constituency and he told me it was under consideration and that in a few weeks it would receive attention. He actually said on one occasion that it might be dealt with before Christmas. It has not been dealt with yet. I am quite sure it will not be dealt with until as near as possible to next June when there are local and Presidential elections, and when the present Government will want to give the impression that everything in the garden is rosy again.

I feel this is not a matter with which people should play politics. It is something which should be dealt with in a reasonable way. I do not think anybody, even the best friends the Government have in this country, can say they have met this in a reasonable way. Even their own people throughout the country are absolutely disgusted with their approach to the national finances and the national housekeeping. Members of local authorities who support the Government [148] have been most critical of them for the way matters are being handled, and small blame to them.

Those who are in the same position as I am, as a member of a local authority, find that people come to them to know why they are not getting a grant for reconstruction or a grant for the building of a house. They also want to know why the county council cannot get money to build a certain cottage. The Minister for Health must be a little sore that the Government have not been rather more careful because his health scheme, which we have been hearing so much about in the last couple of days, cannot become operative until November, 1967.

I believe, taking everything into consideration, we seem to have walked straight into a situation which the Government do not seem to be too anxious to get out of. We had the Christmas trip to London which resulted in the so-called Free Trade Agreement. As I said before, when they came back, they did not even have the courtesy to wear beards. We all knew they were not Santa Claus, but at least they could have covered their faces after what they had done. They did not succeed in taking the minds of the people of the country, as they had hoped they would, off the situation. I grant you, for the few weeks while this thing was red-hot, people were wondering if this new Trade Agreement would get them out of their difficulties. They now realise that is not the case. They know the situation is that this was another gimmick which bought a little time, and we have gone back to the old story that there will be money next week, the grant will be coming in a week or so, and we will be able to do this, that or the other thing in a week or so. Most people are getting desperately tired of that story. They are wondering whether the Government have in fact any idea at all of how the country should be run.

We heard about the dynamic policy which the new Fianna Fáil Government were to operate as soon as they got into power after the last election when a number of the old people [149] were swept off the front benches and new people appeared. It was felt—let me be honest; I felt it myself—that there was hope for improvement. I felt they could not be very much worse. Now we are back to the old story that we have those who do not know what they are doing and therefore cannot do anything. We have those who do not want to do anything, and who are not doing anything, and we have a few unfortunates who are anxious to help but who are left holding the bag without anything in it.

I honestly believe the Government would have been far better engaged this week in discussing the policy we hear the Parliamentary Secretary, Deputy Flanagan, talking about occasionally, this new Bill on redundancy, and so on, which would hold out some hope for the people of this country. At the present time, all we are getting are half-truths and half-promises. Nobody seems to be in a position to give a categorical statement about any question he is asked in this House or outside it. I honestly believe the situation has got so bad that the Government are just waiting, like the Dickens character, for something to turn up. If some of the stories we hear are true, there is not very much hope that anything which will help the Government out of their problem will turn up.

When we talk about an incomes policy—the Fine Gael motion is directed towards an incomes policy— we must consider this matter very carefully. I have listened on more than one occasion to Government Ministers standing up and holding forth about an incomes policy. On one occasion I heard the absent Minister for Transport and Power talking for a quarter of an hour out of one of the 1¼ hours after-dinner speeches he usually makes, giving a mass of figures and talking about an incomes policy. It was only after a quarter of an hour I realised it was the same old Fianna Fáil claptrap. He was not talking about an incomes policy; he was talking about a wages policy. Every Government Minister I have heard, either in this House or outside, who talks about an incomes policy, starts talking about it at the [150] beginning, but finishes up by leaving every other element out of it and talking about a wages policy.

As I said at the start, the ninth round wage increase had to cover the period of price increases and the increase in the cost of living until the ninth round was negotiated. When the ninth round was negotiated, if the Government had made the effort, which they had subsequently to make as a result of the pressure put on them from this side of the House, and if they had made an attempt to try to control prices, then they might possibly be in a position to say that a three per cent or a four per cent increase would be sufficient now because it would represent a fair estimate of what was likely to happen within the next 12 months.

When they allowed prices to go completely out of hand, and allowed the wholesalers and retailers to take out of the pockets of the workers the increase which they had got, and a lot more along with it, within the first 12 months, they now have the hard neck to tell the House that all they are entitled to is a three per cent increase, 6/- on £10. I have been talking about £8 per week, which most of the rural workers enjoy and attempt to live on. This three per cent increase would represent about 4/6 on that £8 per week and I do not think they will be terribly happy with that at all. They will certainly not upset the balance of payments by rushing out and buying a Mercedes-Benz, or anything like that, with the few pence they will get.

There is another matter to which I think the Government have the wrong approach. It is assumed that when an increase is given, inflation is caused because people have a bigger purchasing power. After the ninth round wage increase was negotiated—I was one of the team on the workers' side who negotiated it—one of the employers' side said to me that the increase which was granted then would cost the country about £44 million per year. He said: “At the end of 12 months, do you know who will have that £44 million?” I said I did not know but I hoped the people we had been negotiating for would have it. He said: “They [151] will not; we will have it. The manufacturers, the importers, and particularly the wholesalers of this country, will have that back in their pockets because if a working man gets an increase in wages, he does not go to the bank with it. He does not go to the Post Office with it. He buys something he needs for himself and his family. It is a shot in the arm to the economy of the country and it eventually goes back into the pockets of the people who are paying it out.” Despite this, we heard the Minister saying today that if a wage increase was given, it would do terrible things, would completely upset the balance. He suggested that every worker who got 10/-or a £1 increase rushes out to buy some imported article. I do not know whether the Minister will agree with me or not.

For a long number of years past, the price of cattle has been the deciding factor in whether or not our external balance of payments was in balance. A few shillings up or down per cwt in the price of beef was the difference between balancing and not balancing. A new element is coming in now, and I am sure the Minister is aware of it. It is estimated that the two mines—the one that has started in Tynagh and the one at Gortdrum that should come into operation in a few years' time—will make a greater contribution than the entire cattle trade of the country per year. It is quite possible that the accent will go off cattle and, in fact, that for no reason for which the Government can claim credit, our payments will balance, and we will be able to say: “OK; we have not got an adverse balance. As a matter of fact, we have a credit balance.” I do not think we will be one bit better off if the present Government are still in power, because even if they have not got the excuse that our balance of payments is wrong for the mistakes they make, and for trying to keep down the people who are trying to get a frugal living and for trying to keep down wages and adding extra taxation, we will finish with the same old story, whether our balance of payments is right or wrong. [152] I had a rather interesting letter this morning from the Parliamentary Secretary sitting on the front bench now. It was in reference to an arterial drainage job which his predecessor had promised would be started in February, 1966, which is next month. The drainage of the Boyne was to start in 1960. Since it was getting on towards February, 1966, and we did not see any machines arriving to do the job, I wrote to the Parliamentary Secretary. He sent me a very courteous reply by return of post saying that the matter was under consideration. I wrote to him again and in his reply which I received this morning, he said he hopes to be able to start it some time in 1967, or that he hopes to be able to advertise it in 1967. I think it would have been much better if the Parliamentary Secretary had simply said: “Look, we have no money. We cannot do the job. We are short of money. I hope to have it by 1967 and we will do the job.” While I agree that I did get a reply of sorts, I think it would be much better if the Government were honest with the people, and honest with this House. If they were, they would get far more appreciation from the ordinary Deputy. I am not blaming the Parliamentary Secretary at all.

Mr. J. Gibbons: Information on James M. Gibbons Zoom on James M. Gibbons I am grateful for small mercies.

Mr. James Tully: Information on James Tully Zoom on James Tully The country would welcome small mercies. I hope it does not turn out to be another Shannon. Shannon has decided a number of by-elections down through the years.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy The Boyne decided the real issue in this country.

Mr. James Tully: Information on James Tully Zoom on James Tully It did not, as a matter of fact. The unfortunate thing is that the Boyne never decided anything.

We have heard Fine Gael claim that they were the authors of the incomes policy. I will say that when Deputy Donegan was speaking, he made a very fair comment, but some of the people who spoke before him took quite a different attitude. If we go back on the records, we will find that we in the Labour Party—not last year, [153] and not during the last general election, but for a long time—have been asking for planning in the economy, and an incomes policy which would embrace everyone, not a wages policy which appears to be the thing Government Ministers talk about every time an incomes policy is mentioned.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass Deputy Tully has pointed out that if we take away a man's right to strike, he becomes a slave. I think he so stated this as to convey the idea that someone was suggesting that such a move might be in the offing. No such suggestion has been made and, in fact, I think we can safely say that no such suggestion will be made. Deputy Tully went on to say that Government spokesmen, when talking about an incomes policy, invariably ended up discussing a wages policy, whereas, in effect, what we have here is the Report of the National Industrial Economic Council which deals with incomes policies as distinct from wages policies. Deputy Tully said that Deputy Donegan's speech was very fair. If I may say so, I think Deputy Donegan more or less claimed that the Fine Gael Party had written this and given it to the NIEC for publication.

I can understand how Deputy Donegan gets elected. He is a master of overstatements and makes them sound like very reasonable and practical facts. He is a very good debater indeed. He was disappointed not to hear the corrective measures which the Government were going to take. The corrective measures which the Government have taken are listed on page 19, at paragraph 18 of the Report. He went on to say that the Government have dissipated all the national resources and left the country bankrupt. Table 10 discounts that. Deputy Donegan's speech was loaded with these overstatements that sounded so right that one has to charge through one's reference file to find the contradiction.

I agree with Deputy Tully in the theory that the cutting of personal spending can sometimes be a bad thing. The Report states that increased expenditure will in effect mean increased imports. Paragraph 24 states:

[154] ... total imports depend mainly on gross domestic expenditure. If these expenditures rise, imports necessarily rise also... this dependence on imports can be reduced only by the production here of goods previously imported and this will occur only if it is cheaper to produce these goods in Ireland.

I think that is the keynote. If we could ensure that we would have progressively and regularly increasing incomes and if we could be sure that this would lead to increased production of Irish-manufactured goods, we would have the ideal situation, but that is not what we have, unfortunately. That is why we have so much stuff flowing to Deputies which requires a lot of study and debate on the general economic problems.

Deputy Donegan accused the Government of not doing their homework. It is very difficult for a back bench Deputy to do all the necessary home-work with the amount of documentation that has been coming to him recently.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear. There is plenty of documentation, but nothing else.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass On page 38 of the Report, it is stated:

If the achievement of the social purpose is not to be endangered by economic difficulties, an incomes policy must be considered in the wider context of a policy for income redistribution.

On the same page, it is stated:

The minimum objective of an incomes policy is to ensure that aggregate money incomes rise at the maximum rate which is consistent with maintaining competitiveness and avoiding excessive pressure of demand.

It is also stated in this Report that real incomes cannot rise faster than real resources. Now here I think is the summing up of something we all know but the authors of this document are to be congratulated because they put down these things in a way in which [155] they are easily recognisable and understood. However, they express concern in the introduction regarding industrial production and the fact that the numbers engaged in industrial production in the first half of 1965 were the lowest since 1960. A lot of people have said that many of these problems are due to bad industrial relations and industrial unrest, and I decided, when preparing a few notes for this debate, to ask myself some questions on this matter. I have come up with some answers to these questions and I put them forward not as expounding any political policy but as thoughts which may be of some help to some people.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon The Deputy did not look at paragraph 80 of the Report, on page 55?

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass I have not marked it for quotation.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Ah, that does not surprise me.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass I have no doubt that Deputy Dillon will be quoting it in due course.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon I will, at length, please God.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass I think part of the difficulties within trade circles is that some years ago there was general agreement that there are too many trade unions catering for the same type of employees. Some people may ask me why I think this is the cause of some of the difficulty. When the Government, the Irish Congress of Trade Unions and the Federated Union of Employers all sounded agreement on this point, the Irish Congress of Trade Unions sat down to study the problem, and they have come up with two reports suggesting ways in which a number of trade unions could be grouped and therefore reduce the number of trade unions representing different types of workers. The problem however is that the Congress can do nothing more than suggest these amalgamations. They have no power to enforce them.

[156] If each small trade union would sit down and examine its own position, it would consider the status it has gained as an individual union and the fund it has managed to put by in its lifetime; it would consider the value of the work it has done to influence trade union policy as an individual unit; it would consider also the position of its paid and honorary officials; and last but not least I am sure it would consider whether or not the rights of individual members of that trade union would be as well attended to in the larger trade union bloc. The answers I produced to these questions which the trade unions would put to themselves are that if a union is not proud of the status it has gained for itself, then it is not even worth the title of trade union and should pack up. I think you will find that most of these small trade unions are rather proud of the part they have played in the trade union structure and to hand over the control of their hard-won reserves to a much wealthier body, and lose control of these reserves, would go against the grain of most people concerned in building up these reserves. I do not think it could be done without the strongest of guarantees or the maximum of intimidation.

No union official will ever believe that the official of a different trade union could look after the interest of the members of his particular union better than he can do it himself. There is not a doubt in the world that, in particular, honorary executive members of trade unions are quite positive that they can influence national trade union policy when they have the right to do so in a small trade union. In other words, a man dedicated to the trade union movement, who rises to the top in that small trade union, and who has the authority to attend the highest trade union conference in a position of authority, is not easily going to give up that position to become, perhaps, a very small wheel in a very big union. I think, too, that the members of the small trade unions have got to know and respect their honorary and paid officials and would be inclined to fight to keep to them in these key positions. The larger unit, it would appear to some of us at any rate, is reluctant [157] to act for one individual when hundreds may be involved in protecting this individual's rights. This may have been the prime consideration in some of the breakaways that have taken place over the years.

From this it may seem that I feel we should despair of a reorganisation of the trade union movement taking place. I do not believe this, but I believe that there are very many difficulties which must be faced before any such reorganisation can take place. Given goodwill, and there is no doubt that there is plenty of goodwill, an agreement can be hammered out, but if such agreement is arrived at, power must be given to the Irish Congress of Trade Unions to enforce it, or else the Government, with the agreement of the Irish Congress of Trade Unions, must agree to bring in the necessary legislation.

Such an agreement would not easily be arrived at. Only the most protracted negotiations can bring it about. Each union to be absorbed into the larger unit must be guaranteed the maximum autonomy at least for a trial period, and the rights of individual members which are now protected must continue to be protected in the very same way, or else you will find they will break away again. In the event of a breakaway, it would be only proper that whatever funds were brought by the small union to the larger unit should be restored again to the small union and this should be written into whatever agreement is arrived at. Perhaps it would be better if at first some type of loose federation of these groups of unions, suggested by the Congress, could be brought about and let this loose type of federation be responsible for funds, including the collection of subscriptions and the payment of professional staff.

I think this is worth considering because if such a loose federation is formed in the first instance, it will become easier to bring about a more solid type of association, and integration, at a later date. If such a reorganisation successfully takes place, the result will be that a smaller group of trade union representatives will be the [158] people to frame and implement a national trade union policy. We all know that usually the smaller the committee, the more efficiently it can work. We would have less trouble with small splinter points of view that must arise on a larger committee.

The type of federation I refer to would help to do away with what I term inter-union competition, from which my own union suffers and against which it has to fight. There is no doubt that, so far as the rank and file members of this trade union are concerned, whatever efforts or money are required to maintain their individual identity will be forthcoming. If some form of integration can be achieved, it should be possible to have only one union for a particular type of worker. If it is not possible at that stage to re-allocate members from one union to another, then the allocation of new members coming in should be to the union designated by Congress. All this will take a great deal of time. The Government have stated that our problems are immediate. They are already showing signs of improvement and, given a certain amount of marking time, they should not remain with us very much longer.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon We hope not.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass It is a fact that we have unemployment in this country.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass We know this unemployment problem is causing concern at present. I do not believe the solution lies in rationing out the available work in the way of shorter hours, instead of going the other way and producing faster, cheaper and better. If we can achieve higher output per unit cost, no doubt there will be greater employment opportunities available in the country and we will be better able to use the opportunities presented to us by the Free Trade Agreement entered into with Great Britain.

Deputy Tully was concerned about the lower-paid workers. It is all right to be concerned about them, but there [159] should be some policy drawn up, either by the Government or by Congress, to do something positive about them. I know a percentage increase suited some of the skilled unions. Some people in them were happy because they could maintain their differentials with other classes of workers. On the other hand, the proposal adopted by the special delegate conference in Liberty Hall last Thursday of a fixed sum increase will be to the advantage of the lower-paid workers as distinct from the higher-paid workers; but I believe some more positive plan is required in this regard. It is very hard for people in specialised trades to agree to these differentials being pulled down, particularly when through ordinary negotiating machinery, they can prevent this taking place. They will insist—and I think my own committee would insist—on maintaining the status of their members, unless some positive agreed policy is followed by everybody.

I think we have now arrived at a stage where we can define a minimum wage. In earlier years, I do not think this was wise. It may even be too soon to do so now. But I believe we are at the stage now where the Government could insist on a minimum wage. In this way the lower-paid workers about whom we have all expressed concern— the £8 a week road workers and so on —could be protected. I also believe we are at a stage where the Government could define a national working week.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Does the Deputy believe that £8 a week is the present minimum wage in Ireland?

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass No; I know it is less than that. The figure I would have for a minimum wage would be around £10, not that I think it is an adequate wage.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon No agricultural worker gets £8 a week as a minimum.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass Agreed. I am putting forward some suggestions I have thought about and not in any spirit of political barter. I invite argument only [160] in so far as my suggestions might prove to be unsound. I have tried to approach this question in that way because of my concern outside the House with the trade union movement in a very small way.

I was going on to say that I think also the Government, in consultation with Congress, might now consider defining the working week—the hours to be worked in a week in 1966, 1968, 1970 on estimated developments during that period. I remember this question of a minimum wage was a great issue in the election in 1948, the first in which I had an interest. It is a cry that has been dropped. I think it was the Labour Party who were making a plea for it at that time.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish About 1943 we were looking for only £3.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass I could not remember 1943. I started in politics in 1948.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish The Fianna Fáil Party laughed at that time. They thought it was too much.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass Without any spirit of animosity or argument, I am saying that I think the situation has arrived where we might reconsider defining a minimum wage.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon This is the time to forget the past.

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass Since Deputy Corish pulled me up in my references to the economy of the United States in the Free Trade Agreement debate, I want to say that we should have a fair distribution of incomes and proper social justice and social order. If the higher paid workers are going to insist on maintaining differentials or claiming in excess of what has been produced, the people to suffer will be the lower-paid workers, and more so the people in receipt of social assistance. The State can raise only so much by taxation. Already we have been told that the anticipated revenue from tobacco is below what we expected. When a higher-paid worker is considering what increase he is entitled to as a result of an improvement [161] in his firm's productivity, he should also consider the effect his going too far might have on the State's ability to continue its small but essential annual increases in social benefits.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange What about the £4 million status increases to the civil servants? Did that not rock the boat?

Mr. N. Lemass: Information on Noel T. Lemass Zoom on Noel T. Lemass On the balance of payments, one thing is clear in this Report, that is, that a large part of the problem was the importation of new machinery for future manufacture. This is something we should never be afraid of and we should be quite happy to use our external reserves, if necessary, for this purpose. Up to as far as this book goes, our external reserves have, in fact, been increasing year by year.

I am afraid that a gulf has developed between employers and employees and between the Government and the electorate. It is becoming increasingly difficult to explain, in full, Government intention and Government policy and to have that clearly and properly understood by the electorate as a whole. I hope that, through the usual media of the newspapers, television, and so on, whatever gulf may now exist will be eliminated before too long.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte I do not for a second believe, nor will I ask anybody else in this House to believe, that I am expert in economics. However, as a person who believes in simple commonsense, I am led to believe that economics are guided by commonsense. Therefore, to take this argument and this debate and to put it into a nutshell, I believe that economics mean that you either have money or you have not money, and if you have not got it, you must either earn it or borrow it. I am convinced that this Government have got the country into the present financial crisis and that they do not even care to let the people realise how serious it is. This Government have led the country into this position on the simple basis that you either have money or you have not and, if you have not got it, you must earn it or borrow it. Let me explain.

If you have not got money, if the [162] family has not got money, someone must go out and work. If he does not, the family will go into debt and eventually that will catch up with them. Likewise, nations find themselves in the same position. If their balance of trade becomes upset, if they import more than they export, then, likewise, they will head for the rocks, if not immediately, then before very long.

As Deputy Tully of the Labour Party mentioned, this is the third major debate in this House within the past three or four months on the economic situation of this country. Immediately after Christmas, we had a discussion on what was loosely described as a free trade agreement with Great Britain. Some very rosy speeches were made and some very nice English was spoken. I wonder what the worker down the country thinks of it all when he listens to the radio or looks at his television set, if he is lucky enough to have one, or a neighbour's television set, or when he reads in the national newspapers reports of the flowery speeches by the Taoiseach and his Ministers on the economic development of the nation, the great progress this nation has made since Fianna Fáil took over office eight years ago— they never say in 1957.

The acid test of a sound economy, in my judgment, is the population. If we have a steady population, it is reasonable to argue that the economy of this nation is reasonable. If there is a decline in the population, there must be only one reason for it, that is, that the breadwinner cannot earn enough to support his wife and family and must therefore emigrate. It is worth noting that, in the past eight years, over 300,000 people left this country to find employment in the Americas, in Great Britain and indeed, on the Continent.

Does Deputy Corry believe what he says about the economy of the country? If the people who read his speeches believed everything that was stated, surely they would not seek a living in a foreign land? Irrespective of whether we are Fianna Fáil, Fine Gael or Labour, Catholic or Protestant, we look on Ireland as home. I have spoken with emigrants who are prepared [163] to come back to Ireland, and to work for a lesser pay packet, just to be in Ireland. It is not the love of going away that takes them away: they go for the simple reason that they cannot earn a living in this country. Whom do we blame? Do we blame the trade unions? Do we blame the employers? Do we blame the emigrants? I do not think we can single out any of these people and blame them. The blame rests fairly and squarely on the shoulders of the persons who are in office by virtue of promises such as 100,000 new jobs. The House has heard that slogan before.

In 1957, when the second inter-Party Government were setting a headline to increase productivity, to build up a nation that had remained static in its economy from 1932—in fact, I would say it went in reverse from 1932 to 1948—certain political and financial difficulties existed in the country. When Deputy J. A. Costello, the then Taoiseach, decided to allow the Irish people to decide in a democratic manner on the issues at stake, the present Taoiseach, who was then Minister for Industry and Commerce, introduced what he then called his Five Year Plan and that Five Year Plan was to create 100,000 new jobs. He asked the Irish people to give him a mandate to run this country and to govern this country and that he would create 100,000 new jobs.

He got that mandate. His Party got the greatest majority ever enjoyed by any political Party in this House to govern the country. He got what he asked for—a strong Government—and he got the co-operation of the Opposition Parties. After three years, on his own admission, 30,000 fewer people were employed and approximately 70,000 had emigrated. Out of the ashes and ruins of his Five Year Plan, which he re-christened the First Programme for Economic Expansion, he introduced his Second Programme for Economic Expansion. That, needless to say, was on the eve of another general election.

We heard the calls of the Fianna Fáil public speakers at election meetings; [164] we saw their television programmes, professionally produced, to sell their ideas to the Irish electorate, and we read their speeches in the public press. It was all tantamount to asking the people to give them another chance. They got another chance. They got a chance, even if they were a minority Government, supported by two people who are not in this House now, two people who helped that Party put through the turnover tax. Deputies opposite may remember that during the heated debates in this House, it was pointed out by prominent members of the two Opposition Parties that the trend of the turnover tax would be increased cost of living, resulting in claims by workers for increased pay. That was denied by the Government. It was pointed out by the Ministers and the Government that industry and business people would share the tax and that, in fact, there were £13 million to be collected by the Government in a form of taxation unknown to the Irish people—it would fall on the nation, as it were, like a shower of snow. The result, of course, was that due to circumstances beyond the control of any person in this House there were two by-elections and the Taoiseach, knowing the dilemma he was in, announced a ninth round increase—the 12 per cent.

I remember in one of those by-elections in Kildare speaking from outside chapel gates and trying to convince people that I was not terribly in agreement with an increase in wages, that I could see no great sense in giving a man double wages if you increased the cost of living by something more than double, that you were giving him a bigger pay packet but he could not buy the same quantity of goods with it. Human nature being what it is, the people at that particular time—the man in the street—did not really want to know where this money was coming from or who was going to pay it. All he was concerned about was that if he got an extra £1 or £2 in his pay packet, he would enjoy it.

It appears to me that the Government have lost all sense of proportion. Indeed, I often ask myself did the Taoiseach even know where he was [165] going when he asked the people in the general election of 1965 to let Lemass lead on—lead on where? Because, as a young boy, I was taught that when we got away from barter and when it became popular or modern to employ a monetary system the function of Government was to keep down prices. Despite all the attention given by Governments in every country to the matter of keeping down prices, inflation always took place and that was not a bad thing but it was a natural inflation. Now we have a Fianna Fáil Government believing that instead of keeping down prices we should be generous and throw money around, in the hope that people can be lulled into the belief that there are better times ahead and, therefore they should vote Fianna Fáil.

But the net result is that by adopting this practice, Fianna Fáil have bought Irish industries out of the export markets. Every Fianna Fáil Deputy knows that if, for example, a shoe industry here were exporting shoes to the Continent at £1 per pair in competition with shoes manufactured in Italy at one guinea per pair we would be competitive but if the cost of living goes up and the workers must get an increase the Irish shoes could not be sold on the Continental market at £1 per pair. The cost would have to go up and automatically we would buy ourselves out of the export market. Consequently, we would export less and import more and make the country a poor nation.

I heard it said not so long ago that certain Ministers, speaking at dinners and functions outside the House, about the national economy say, to use a Donegalism, that these people are flying aeroplanes when they should be riding bicycles. The difference between Fianna Fáil and Fine Gael is that Fianna Fáil policy is a policy of promises and Fine Gael policy is a policy of promise. Deputy Corry may laugh. During the recent debate on the Trade Agreement I took time to read some of the Dáil debates dealing with the period leading up to the Economic War and during that time prominent speakers on the Opposition Benches pointed out to the Government the [166] wrongs of the Economic War. Lest, perhaps, future generations might forget, as indeed the generation to which I belong have largely forgotten. I do not think it would be out of order to refer briefly to it.

The economic structure of the country depends on agriculture and livestock accounts for 75 per cent or 80 per cent of that and with 52,000,000 hungry people 50 miles across the Irish Sea waiting to be fed it surely does not take an economist or any expert, or the propaganda that we now expect from Fianna Fáil, to tell us that if we had free trade with Britain in agricultural products the economy of the country must be sound. Deputy Corry, who is listening to me, remembers, probably better than I do because he was in the House during those debates, that the first argument or dispute the then Taoiseach had with Britain was the refusal to pay the Land Annuities.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin How does this arise?

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte We are discussing the economic structure of the country.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin The Deputy seems to be going back a long way.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Before the Leas-Cheann Comhairle took the Chair I explained to the Cheann Comhairle that, lest the future generation might forget, as this generation has forgotten, I felt I would be in order in referring briefly to the position at that time.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin The Deputy is in order in referring to this particular motion and the subject matter of the Private Members' motion now before the House.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Deputy Corry may remember that when the then Taoiseach refused to pay the land annuities, Britain retaliated by putting an embargo on our livestock. The present Taoiseach, who was then Minister for Industry and Commerce, said we would put an embargo on British imports. The then Taoiseach went further and said that all state capital investments [167] in this country would be 51 per cent Irish. At that point, for the first time in our history we were in isolation and we had an economic boundary between the Six and the Twenty-Six Counties.

It is also remarkable to note that in 1931 we exported to Britain 750,000 cattle, store and fat, and in 1947, after 16 years of Fianna Fáil rule we exported—I cannot get the figures accurately—but 112,000 head, less than half that number. If the Government of the day had listened to the sensible arguments put forward here by men who went before me, instead of trying to appeal to the Irish people who were still suffering from the effects of having fought an alien nation, and if they had looked at the realities of life, how much better would the economy of our nation be? Would we be borrowing money or would we have earned money in export markets? I shall allow Deputy Corry to explain this to the House, as no doubt he will when he speaks later in this debate.

We heard Deputy Lemass speak of social justice and give us a lecture on labour relations. Not so long ago a certain section of our society who were then in receipt of £121 per week got an increase of £17 per week and at the same time the old age pensioners got an extra 2/6d per week. Is that social justice ? I believe that society was formed and evolved around the thought that we must all share alike. It is a deplorable thing that a public representative should admit that while people here have got rich in the past four or five years a woman in this city died of starvation in the past few days.

Mr. Moore: Information on Seán Moore Zoom on Seán Moore Would the Deputy give some particulars about that?

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte The Deputy is a member of the housing authority of this city——

Mr. Moore: Information on Seán Moore Zoom on Seán Moore That is why I know more about it than the Deputy does.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte ——and if he were paying more attention——[168]

Mr. Moore: Information on Seán Moore Zoom on Seán Moore The Deputy is evading the question.

(Interruptions.)

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Read all about it in the papers. The sensible thing is not to read about these things but to do something about them before they happen.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte That is what I am trying to preach to Deputy Moore. Is it not a terrible thing that public representatives and people out of public spirit must band themselves together and form voluntary societies to help the mentally handicapped, the disabled and the blind? Is not this part of the society? Is not this the responsibility of the Government? What has the Government done about it? Nothing, but if Deputy Burke were here he would tell us about the Constellations flying from Shannon to New York. These things are good but in my simple ethics I am a solid believer in putting first things first: charity begins at home.

I know people in my own constituency who go hungry one or two days a week, people who must go to bed to keep themselves warm, people who come on bended knees to public representatives and to the county council begging for houses. Is this social justice? I know of one case in County Donegal of a brother and sister. The brother is a handicapped person and the sister cannot go out to work. They have £2 2s. 6d. per week to live on. I wonder what these people think when they read in the newspapers that the Judiciary got £1,500 of an increase on top of a salary of £4,500. If communistic thoughts enter their minds who is to blame, we or they? For the past few years we have heard Ministers repeatedly telling of the different plans they have drafted for their own Departments. I am surprised the Minister for Local Government is not in the House, when we think of all the houses he was to build in 1957. As a member of the housing authority like myself the Chair will know the position as well as I do, as a person in possession [169] of facts which would possibly make darkest Africa blush with shame. We can proudly say in Donegal that we build 32 houses a year and the late County MOH in a report submitted to the local authority based on his findings in an area in North Donegal bluntly told the county council that unless they stepped up their housing programme it would take 250 years to rehouse the people living at present in houses unfit for human habitation.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin The Deputy seems to be embarking on a debate on housing in Donegal.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte I am pointing out the reason the houses are not being built.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin In a general way, yes, but the Deputy is talking about north Donegal now.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Come now; you are not that much embarrassed.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin The Chair is not embarrassed at all but just wants to get his colleague back on the rails again.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon On a point of order, surely, general statements unsupported by specific evidence such as Deputy Harte now tenders ought to be deplored in this House? Deputy Harte is giving facts, figures and specific cases.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin Deputy Harte is going into too much detail on the housing question in this debate.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon If the county manager says it will take hundreds of years to rehouse people in Donegal, it is relevant to this debate, I submit with respect.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte I do not wish to take up the time of the House.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Go on. You are doing great—I never heard you better.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte I should like to point out to the Leas-Cheann Comhairle that the economic situation in Donegal and the bad housing situation in Donegal [170] enough to admit it, to the fact that they have no money in the kitty.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte There are contractors in the Leas-Cheann Comhairle's constituency who are the same type of people as those who build houses in my constituency. He is a public representative and people must have gone to him, as they have come to me, asking why the local authority are not advancing money.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte The Leas-Cheann Comhairle agrees that that is the position.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear, and the answer is that they have not got sixpence to rattle on a tombstone, and that is economics.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish They did not allocate it properly.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Whatever they did with it, they have not got it. That is economics of the purest kind.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish They had plenty of money over the last few years and did not allocate it properly, did not direct it into housing.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin Deputy Harte.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish I beg your pardon.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte There is a situation in Donegal that supplementary grants are, not refused, but not being paid. People have created debts for the purpose of improving their housing conditions because the local authority and the Government were not building sufficient houses. The people were promised State grants and supplementary grants. It was a secret up to a few weeks ago but now the position is that if a member of the council goes into the housing section and asks why there was a delay in the payment of a supplementary grant, he is bluntly told that there is no money in the kitty, that no money has come from Dublin or that certain papers which [171] are required for the payment of the grant have not come through from the Department of Local Government.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte These are matters that one must think about when Deputy Lemass talks about social justice. A person who is entitled to get a house provided for him by the local authority but who knows that it will take three and a half years, at best, must produce two sureties in order to get an SDA loan. The Minister for Local Government is a representative from Donegal. Donegal is one of the few counties where two sureties must be produced for the purposes of an SDA loan.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne Is that right?

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte That is correct.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne Scandalous.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte It is a scandalous situation. I know I have the support of Deputy Dunne.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne Definitely.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte The economic situation in Donegal is bad and rumour has it that road works are about to close down. Why? Is it because people in Donegal are not paying enough rates? I do not think so. The rate in Donegal is the third highest in the country. It is simply because the Department of Local Government, the Department of Finance, the Department of Health, the Department of Defence have slowed down the grants which they should have paid to Donegal County Council. Therefore, men must be paid off. In fact, the position is so serious that for the first time on record the county manager made an order last week to tax the motor lorries on credit in the hope that the money would come later from the Department of Local Government.

If this is prosperity, I do not know the meaning of the word. Is this the prosperity which Deputy Corry's Party boasted about? If this is the net result of the policy which [172] Fianna Fáil have dangled in front of the Irish people for the past 35 years, it is time the Taoiseach abolished the Party and forgot about his policies.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear:

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte It is a terrible thing for a young man newly elected to this Parliament to come into the House and listen to all the rosy flowery speeches by Ministers——

Mr. Dowling: Information on Joseph Dowling Zoom on Joseph Dowling And all the nonsense by the Opposition.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte At least, it is a contribution. I have yet to listen to the Deputy's.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Hear, hear, and he will not open his beak. There will not be a whimper out of him.

Mr. Reynolds: Information on Patrick J. Reynolds Zoom on Patrick J. Reynolds It is hard for him to open it in the situation.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon I do not blame him.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Before I was so rudely interrupted by Deputy Dowling, I was saying that it is frustrating for a newly elected member of this House to listen in the House to flowery speeches by Ministers of Government as to the corner, which has been there for the past 20 years, which we are just about to turn, describing the plans for economic progress the Government have in store, while at the same time one remembers the 300,000 people who have emigrated since the Taoiseach made his promise of 100,000 new jobs and that people were killed in this city of Dublin when houses fell on top of them, that people die of starvation and spend their last few days——

Mr. Dowling: Information on Joseph Dowling Zoom on Joseph Dowling Paddy McGilligan said that they died in this country on the side of the road, and they probably will die again, when your people were in power.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon This statement is an ancient, hoary falsehood.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Completely untrue.

Mr. Dowling: Information on Joseph Dowling Zoom on Joseph Dowling I will get you the volume.

[173]Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Go out and get it.

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Off you pop; go and get it.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne The Deputy is listening to too many of the old men's tales. A young man like him should not be taken in.

Mr. Dowling: Information on Joseph Dowling Zoom on Joseph Dowling It is contagious.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin Deputy Harte.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte In conclusion, let me say this——

Mr. Dillon: Information on James Matthew Dillon Zoom on James Matthew Dillon Give Deputy Dowling time to go and get the quotation— the poor fellow.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Who is making the speech?

Mr. Reynolds: Information on Patrick J. Reynolds Zoom on Patrick J. Reynolds It is not Deputy Corry, anyway.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Whenever Deputy Corry gets up to make a speech, there is no one who sits more contented than myself listening to Deputy Corry telling us of the state of the nation.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I hope I am teaching you a little lesson.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte I have no doubt that when I sit down, Deputy Corry will get up and I hope he will tell us some of the things he said and which I have read in the Dáil debates leading up to and during the Economic War. It would be most interesting if Deputy Corry were to go back and read some of the things he said then and, having read them, perhaps he might agree that some of the things he is advocating now are the things which he refused to accept during those times. I do not wish to hold up the proceedings of the House.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne Deputy Corry is a very fair man. He never speaks well of his own Party.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte This I will say in conclusion: The Fianna Fáil Party took a wrong turn in 1932. Despite all the advice given by leaders from this side of the House, they remained steadfastly on that wrong course, which [174] has cost this country millions and millions of pounds. Deputy Corry knows that statement is correct. When Ministers come into this House today and tell us that circumstances are different now, that instead of a policy of isolation, we must now have a policy of free trade, that they saw this position 30 years ago, and when we hear the Taoiseach conclude the debate on the Trade Agreement and modestly say to the House that he was born 20 years before his time, let me say that when in 1932 Deputy Corry was told the arguments put forward by the Taoiseach in 1966, he refused to believe them. When the Taoiseach, Deputy Lemass, was told those arguments in 1932, he refused to believe them. When whatever members left in the Fianna Fáil Party who were present in this House during that vital stage of Irish history were told the course that should be taken to keep this country economically sound, they would not take it. It will bluff no one for members of the Fianna Fáil Party to stand up here now and say this is the end-product of a policy initiated by Éamon de Valera as Taoiseach in 1932.

This is a crystal-clear admission on the part of this Government that they were on the wrong course, but they would not listen to rational arguments from this side of the House. We have been told many things, but I am glad I have been a member of this House to see a Fianna Fáil Government freely admit and go on record as saying that the arguments put forward and the stand taken by the leaders of this nation in the 1920s and by the men who led the Opposition in the 1930s were right. All the things those men remained steadfast to have been vindicated by the Agreement which has just been signed. The only thing of which I am convinced is that that Agreement was signed 30 years too late. If it had been signed 30 years sooner, the economy would not be in the state it is in today.

Mr. Dowling: Information on Joseph Dowling Zoom on Joseph Dowling It would be worse.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Deputy Dowling does not even know where the Border is. When we talk about the Border he thinks it is in a sitting-room.

[175]Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry The Fianna Fáil Party got a mandate from the people to hold the annuities in this country and use them for the service of the Irish people. They got that mandate in 1932, in 1933, in 1936 and again in 1938, right through the whole period of the Economic War.

Notice taken that 20 Members were not present; House counted, and 20 Members being present,

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Despite the fact that the people gave that verdict, certain sections led by gentlemen who were the predecessors of Deputy Harte set to work here in an endeavour to force the people to pay that tribute to Britain. Despite the fact that 12 months afterwards, in 1933, Éamon de Valera again invited the verdict of the people and got it, those people still formed themselves into a semi-military mob known as the Blueshirts, came into this House in that uniform endeavouring to smash this Government and advocating the payment of tribute to Britain to which she was not entitled.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin The Deputy should get back to the motion.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I would not have gone so far, were it not for Deputy Harte. Deputy Harte told us about the number of houses built in Donegal. He said that some learned gentleman there stated it would take 250 years to build houses for all the people in that county who are living in houses unfit for human habitation. I have said here on many occasions that the housing position in any local authority area is the responsibility of that local authority. If in 1966 it would take 250 years at the present pace of the Donegal County Council to replace unfit houses——

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Hear, Hear—it is a Fianna Fáil-controlled council.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Deputy Harte has served some time as a member of a local authority. How many houses did he propose to build, say, in 1955-56 or at any time during the past ten years?

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Three times as many as Fianna Fáil did.

[176]Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Why were they not built?

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte They were built.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry If they were and if at the present speed of house building in County Donegal, it will take 250 more years to build houses for those who are living in unfit dwellings, what was that local authority doing?

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte It is being handled by the Minister for Local Government.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin Would Deputy Harte restrain himself?

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte It is very difficult.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange It is a Fianna Fáil-controlled county council.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Deputy Harte made a statement here and I am proving its falseness. In Cork, in the area that was taken away from us, we gave supplementary grants amounting to over £600,000 in four years, and in those four years we lent £4 million to people building the houses.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte You did not lend it to them.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry What were Deputy Harte's people doing with their 32 houses a year in Donegal? Fianna Fáil policy obtains in the Cork County Council as well as up in Donegal.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange Fianna Fáil do not control Cork County Council. Donegal County Council is controlled by Fianna Fáil.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin Would Deputies allow Deputy Corry to make his speech?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I did not interrupt Deputy Harte when he was speaking because he was entitled to make his statement. I am now giving the facts as I see them, and I am referring to the facts as Deputy Harte put them before me, the Economic War and the houses. I have dealt with both matters.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Fianna Fáil have ruined the country.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Our job was to build [177] up this country not alone agriculturally but industrially as well.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte They have done neither.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Within the past 12 months Deputy Harte and his friends over there did their best to wreck an industry that at the moment is giving employment to 1,100 men, that is, Rushbrooke dockyard. One of the gentlemen who now sits on that front bench, Deputy Fitzpatrick, based his election address on it and went before the people in Cavan stating: “If we are elected, we will do away with uneconomic industries of that kind.”

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte That is completely untrue.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange The Taoiseach said he would do away with uneconomic industries.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I can produce in this House for the benefit of the Deputy and for the record Deputy Fitzpatrick's election address.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte It does not state what the Deputy said.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I could produce it here.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte The Deputy should have it with him.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange The Taoiseach said he would do away with uneconomic factories.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin Will Deputies allow Deputy Corry to make his speech?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry When I was speaking here last, I suggested to the Deputy that he was on the wrong side of the Border, and I think he proved that tonight.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Was the Deputy ever across the Border?

Donnchadh Ó Briain: Information on Donnchadh Ó Briain Zoom on Donnchadh Ó Briain He was in Belfast Jail in 1918.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I made two trips across the Border, on both occasions with a pair of bracelets on my hands going to Crumlin Road Jail, if the Deputy [178] knows where it is, and I smashed up their jail before I left it. I hate hearing the kind of stuff being dished up here by Deputy Harte. Either they believe in democracy or they do not. If a Government get a mandate to do a certain thing and they do it, what right has any section of the Opposition practically to go out in armed resistance to that Government? That is what they have done. They got their answer, though, on every occasion they went to the people afterwards.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange The Deputy is confusing the Parties.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte He is preaching Cumann na nGaedheal policy.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Our job here is to try to find out as well as we can how to remedy the present economic position. As I said before, our job in 1932 was to build up industries to give employment to our people and keep them at home.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Why did you not do it?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Shut up; if you have not got manners, get out. When we took over, in Haulbowline there was employment for a fortnight each year for seven men. Their job was to pick out certain parts of machinery left there by the British and get them ready for a scrap auction. That was the extent of employment in that town when we took over. All the young men in the town had to travel. Today, even with the slack, there are more than 600 employed in Irish Steel, and within a mile, in the Rushbrooke dockyard, which Deputies over there tried to wreck, we have 1,100 men employed. They were so sure they had wrecked it that Deputy Fitzpatrick prepared an election address on it for the people of Cavan.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange Produce the election address.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry He thought he was far enough away. I shall have it for the Deputy tomorrow, if the Leas-Cheann Comhairle will give me an opportunity of reading it. I hope it will shut them up. When we took over, there were three days' work each week for 20 [179] men in the town of Midleton. Today in that town you cannot find a man idle—not one.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte They are all in Birmingham.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Send us down some of your Donegal buckos and we will teach them how to work.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte They are all in Birmingham.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Right through my constituency the same conditions prevail. During the couple of times when there was a change of Government, those people did their damnedest to wreck the industries there. If they want an example, there is a man in Dublin today who has started a fine industry. They drove him from Haulbowline when they were last in office. That is one side of the picture. There is another side about which I have been concerned for some time. I hope to make it sink in on this occasion. The people in charge of subsidising industry have been handing out money to foreign countries. I have asked questions about it but could not get answers to them. I did poke out that the Government and the country, in their wisdom, laid out some millions of pounds to start Irish Shipping Limited. Last year we took over the B & I. Altogether we have 26 ships. We have a dockyard at Rushbrooke capable of giving employment to 1,100 men and another on the Liffey capable of giving considerable employment also. Most of the ships we own derive their trade from this country. The “Innisfallen”, for instance, trades into Cork three days a week and the “Munster” and the “Leinster” trade into Dublin daily. Surely, since these companies are deriving their trade from this country, they should give work on these ships to Irish dockyards.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Hear, hear.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry The “Innisfallen” went to Dumbarton in Scotland, which never gave it a pennypiece worth of trade, and the “Munster” and “Leinster” went up to Harland and Wolffs in [180] Belfast, Deputy Harte's pals. I found on investigation that 23 of the 26 ships, the property of this Government, of this country, went to foreign countries for their annual overhaul. They took out of this country in that way between £200,000 and £300,000. They are bitter facts to which we must face up. Like it or not, they are things we must remedy.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman Very embarrassing for the Government.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte Mention it to the Minister for Transport and Power. He will solve it.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Will you shut up sometime? If the Deputy will try to go to school he will get a few lessons. I shall send him across a few infant books if he is short.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman What school does the Deputy go to?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry While the “Innisfallen” is in Dumbarton in Scotland having her annual overhaul, the company must pay £1,000 a day for five weeks to hire a ship to take her place. Apparently we have loads of money.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman Surely this is for a Fianna Fáil Party meeting and not for the Dáil?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Those are the facts. If all the little dwarfs over there would shut up, we might get somewhere.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman Now, hangman, keep quiet.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry It is an awful pity that some hangman did not get the Deputy.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin I think Deputy Corry should be allowed to make his contribution.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman Such a contribution.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Some lawyers come in here to make a livelihood when they cannot make it outside.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman The Deputy could not make one outside, that is certain.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry There is one thing [181] Deputy Sweetman says. That is only one part of the story. I want to see that money kept in this country to help to straighten out our balance of payments.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman Why can the Deputy not tell it to his own Minister?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Ah, shut up, you idiot.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman That is most unparliamentary, is it not?

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin The Deputy may not address a Member of the House in that fashion. He must withdraw that expression.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I withdraw it.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin I would ask Deputies to refrain from interrupting Deputy Corry.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I withdraw it, but I think the same anyway.

Mr. Harte: Information on Patrick D. Harte Zoom on Patrick D. Harte The Deputy found himself in the wrong.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry The next thing I want to deal with is the position where a State firm in my constituency has to lay off men, whilst at the very time that is happening another State-subsidised company is using that State subsidy paid by the taxpayers in this country to bring in foreign iron and steel. I think that is a scandal.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman So do I.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry It is nothing less than a scandal to have that condition of affairs here today. Surely we did not get a present of that iron and steel from Britain.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish Is this free trade?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry It had to be paid for. It has gone in against our balance of trade. If I were to continue on that line, I could straighten out a lot of our adverse trade balance altogether. Is there any justification for this? I remember Deputy Sweetman coming in here one time and he thought he could straighten out the adverse balance of trade by putting a tariff on ladies' curling pins. You know what they are.

[182]Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman The Deputy did not know much about them, that is certain.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish The Deputy's Minister put a tariff on icecream cones.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry He thought of curling pins. However, those are matters, to my mind, for which there is no justification. Is there anyone here who can justify, or who thinks he can justify, the importation into this country during the past 12 months of musical instruments costing over £1 million?

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman I knew the Deputy would come back to that. The Deputy has to have something to play on.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry That money left this country and that is portion of our adverse trade balance.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman Somebody has to make up for the Garda Band.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry There is no justification for that. You could stop an old banjo when you could not catch them with curling pins.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman Not a banjo band.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Those are only some of the things that are in my opinion causing a lot of disturbance. Over £3 million worth of printed matter came into this country during the past 12 months. Where did that come from?

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish Free trade.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry There was no free trade when that was here.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish They do not make musical instruments here.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Those people are bringing in printed matter and if they can bring in foreign iron and steel under present conditions without free trade, where do we find ourselves? I compare the position with the position of the ordinary farmer and the ordinary agricultural community. If I go to build a haybarn and I put one sheet of British corrugated iron on to that barn, I lose my £60 grant straight away, but my money and the farmers' money which goes to subsidise CIE is used [183] to purchase foreign iron and brought in here.

Mr. Corish: Information on Brendan Corish Zoom on Brendan Corish And bus scrolls.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry There is no justification for it. I suggest that £2 million subsidy which CIE is getting is something which could be practically wiped out. There is no justification today for handing over the whole road freight of this country to a monopoly. There is no justification whatever for that. I want to say one other thing on that. The agricultural community are not prepared to take those people on their backs. That is what they are doing.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman What is the Deputy talking about?

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Last July we had occasion to invite tenders for the removal of some 3,500 tons of farm produce within a six mile radius into a little factory we had.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin I do not see how the Deputy can relevantly discuss the administration of CIE on this particular motion.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry It is not exactly relevant but——

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin It does not seem to arise.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry It arises because we are losing £2 million. It arises because of [184] the fact that the difference between the CIE tender and the tenders of the local hauliers was 25 per cent.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Surely this is a time when we could find very good use for the £6¼ million that we paid under the 1956 Agreement for permission to send our sugar to Britain?

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman I knew the Deputy would come to that.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry This is a time when we could find room to build all the houses which Deputy Harte wants. We paid roughly £1,200,000 a year for permission to export our sugar to Britain.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman What about your butter?

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange You were given that free with a 1/6 postal order wrapped around it.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry We paid that, and Deputy Sweetman sat silent here, and we did not hear anything about that agreement. Poor Jim Dillon knew nothing about it.

Debate adjourned.

The Dáil adjourned at 10.30 p.m. until 3 p.m. on Wednesday, 26th January, 1966.


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