Seanad Éireann - Volume 59 - 28 July, 1965
Public Business. - Finance Bill, 1965 (Certified Money Bill) — Second Stage (Resumed).
Question again proposed: “That the Bill be now read a Second Time”.
Mr. Garret FitzGerald Mr. Garret FitzGerald
Mr. Garret FitzGerald: Another point that must be made in connection with this proposed agreement is that the country to which it is proposed that we should tie ourselves more closely than hitherto is one whose economy has been in difficulties and, by continental standards, relatively stagnant in years past. Moreover, a recent OECD report published in the last day or two, in whose preparation I believe we ourselves have had some  share, offers no prospect of improvement in this situation for many years to come, and writes down Britain's maximum growth rate for the years ahead from the not very ambitious 4 per cent, which the British Government had hoped for, to a figure of 3 to 3½ per cent, which would certainly be one of the slowest growth rates in Europe. This raises the question as to whether it is wise for us to tie ourselves more closely to the “Sick Man of Europe” of the 20th century, as by doing so we may hold up our own long-term advancement.
Again, perhaps if this were a matter of an arrangement for a couple of years, pending membership of the EEC by ourselves and the United Kingdom, this would certainly be acceptable. It must also be recognised that the immediate impact of this agreement on the agricultural sector, within the first couple of years, will probably be beneficial and will help our economy for a few years. After that period, however, the slow growth of the British economy would inevitably tend to impede our growth rather than assist it. The whole economic purpose of the Government's EEC policy, which seems now to be forgotten, was to link us with the faster growing economies of the continental countries.
In making these points, I am certainly not speaking with any animus against Great Britain. On the contrary, I personally deeply value the relationship we have with Britain, to whom we owe so much of our traditions and culture. Our Parliament itself is owed to Britain. The integrity of our public service is derived from the British connection. So are the high standards of public life, our legal system and the language employed by the great bulk of our people. We also owe Britain a debt for protection during the war from the Nazis. However inadvertent it may have been, it saved us from a brutal occupation beside which our old friends, the Black and Tans, would really seem like family friends. But, no matter how close we feel ourselves to Britain, no matter how close our cultural ties and relationships with that country may be,  it would be unwise to place ourselves at her mercy. To do so would be bad for our morale. We have seen during the past 40 years how that part of Ireland, which was once so self-reliant, has become less self-reliant and less able to act for itself, while that part of Ireland, our own part, which was more lackadaisical, has become more self-reliant and has, in recent years, tended to lead Northern Ireland in this respect.
There is also a danger that too close association with the United Kingdom would reduce our freedom of action. One can readily imagine the kind of pressures that would exist to support British policies—that would have existed, indeed, at the time of Suez, had we then been in the position of receiving actual direct subsides from Britain. Moreover, in this relationship, we should have no control whatever over British policy, no voice even. At least up to 1921 we had a rather loud voice in the British Parliament!
Britain's spurning of her obligations to her EFTA partners to negotiate with the EEC jointly with them and her decision to negotiate separately and without them, despite that undertaking, and the imposition of the import levy on our goods last October, despite a solemn agreement with us not to use this form of control, even in a balance of payments difficulty, shows that even as civilised and liberal a country as Britain cannot be relied on to stand by her word when her vital interests are threatened.
The War of Independence won us the right to work towards sovereign in-independence in the Commonwealth. The Government of the 1920s used this right to push the Canadians, to wake up General Hertzog (which I understand was frequently necessary), to jolly along the Australians and New Zealanders, until in 1931 we achieved sovereign independence. This gave us power to separate ourselves from Britain as regards trade, currency and so on, should we wish to do so. We have not chosen to do so but we have retained the power and we could exercise  it now to join EEC without Britain. This would be uncomfortable and we prefer not to do so because of adverse economic effects. Would we in the Anglo-Irish free trade area retain in practice the same power? Theoretically, we could denounce the agreement and set up again on our own, but in practice how free would we then be to assert our independence? Should we give up our freedom of action even for massive gains, much less for the relatively small gains such as we might have from our closer association with the sluggish economy of the United Kingdom where we already enjoy the privilege of free entry for most of our products?
One must contrast this with association or membership of EEC about which so much was written and spoken some years ago. One must contrast dependence on a single power with participation in the deliberations of a group. One must contrast the proposed treaty relationship with Britain with the community arrangements of the EEC; participation in the work of the Commission and membership of the European Parliament, with the right merely to make representations to London which, like those of last October, might fall on deaf ears. One must contrast dependence on a single power wrapped up in its own problems against the carefully balanced voting arrangements of EEC; with its over-weighting of the voices of small countries; we must contrast its qualified majority voting, its balancing of the interests of six powers, three large and three small, against the prospect of dependence on one power.
What would be the effect of this agreement on our relations with EEC? We have a commitment here. Until a few weeks ago, the Government were insisting, unrealistically on the probability that we should be members by 1970. Our application for membership still stands. How will this move be viewed in Brussels? Have the Government been in contact with the European Commission and have they consulted the Commission in relation to this proposed agreement or have they, despite all their protestations of European-ness, ignored EEC?  Three years ago the Taoiseach in carefully chosen and deliberately ambiguous words, led European journalists to believe that we would join EEC even without Britain, but now the proposal is: Britain without EEC.
In a recent issue of Business and Finance, it was stated—apparently prophetically—that there was a growing feeling in Irish Government and semi-State circles that “both Britain and Ireland would gain if the present controversies on the `Six' led to its breaking up. They believe that there is a lot to be said for the 19th century British policy of a divided Europe.” Is this true? If so, it is a bad mistake, because the EEC, although going through difficult times, will survive, and the future lies there, as the Taoiseach and his Ministers have so frequently said, apparently without believing very much of what they said.
If this report is not true, it would be desirable that the contrary be stated. I think we are one of the few countries in Western Europe whose Government is not on record in recent weeks as regretting the difficulties the EEC is facing, whose Government despite what has been said about our anxiety to participate in EEC, have not put themselves on record as being concerned about what is happening in Brussels. It would be well, perhaps, if the Minister when replying to the debate, could say something along these lines: it would certainly be well received in Brussels where our lack of concern and lack of interest will not have gone unnoticed.
Can this agreement leave open the possibility of association with EEC along the lines now being negotiated by Austria? One must doubt whether this can be the case: I should like to hear the Minister's reply on this point. Just as the door to some form of association appears to be opening for Austria, we seem to be shutting it. If Western Germany can be a member of the EEC while permitting free entry of goods from East Germany and if Austria can negotiate, as she seems to be doing, an agreement for association  that would leave her the right to give free entry to some goods from Communist Eastern Europe without payment of the common external tariff, might we not have hoped for some such agreement under which we could have associated ourselves with the EEC and permitted free entry to this country of certain goods from non-communist Britain, in return for which we might retain a right of free entry to the United Kingdom for certain products which we might have difficulty in exporting to the EEC even with free entry to the Community? That is the kind of agreement the Government might have sought to obtain. It is not outside the bounds of possibility now, but it may become so if this proposal goes through in a few months time.
One must ask: why this reversal of policy on our part, in the direction of the United Kingdom and away from Europe? It is not in line with the older tradition of the Party on the opposite Benches. Is it, perhaps, a revival of our foreign policy of the 1950s when the then Prime Minister lined us up with Britain against European unity and in favour of a system of national sovereignty which means big boys can push little boys around.
Has the lesson of EEC as an answer to the problems of small countries not been learned, despite all the words spoken on this subject in this country in the past? Are we still fundamentally old fashioned, power-politics nationalists, favouring Britain, favouring the De Gaulle attitude of deep suspicion of the supranational community approach? Is this why the Minister for External Affairs never mentions EEC but keeps his face rigidly towards Africa and New York? It would be remarkable and ironical if the ultimate logic of the traditional nationalist politics of the Party on the opposite Benches were to line us up with isolationist Britain and to lead to the subordination of this country once again to Britain in an Anglo-Irish free trade area.
Having voiced these doubts and concerns, it must be said that judgment must be suspended, pending an early clarification of what is involved in this agreement.
Tomás Ó Maoláin Tomás Ó Maoláin
 Tomás Ó Maoláin: I was wondering when the Senator would come to that.
Mr. Garret FitzGerald Mr. Garret FitzGerald
Mr. Garret FitzGerald: Did the Government perhaps expect that the cat-in-the-bag approach might produce enthusiasm of the 1938 type that gave Fianna Fáil the only overall majority of votes ever secured in this country?
Tomás Ó Maoláin Tomás Ó Maoláin
Tomás Ó Maoláin: We had it three times. The Senator's figures are wrong.
Mr. Garret FitzGerald Mr. Garret FitzGerald
Mr. Garret FitzGerald: Not mathematically, you didn't. Was it thought wiser not to disclose the lines of the agreement until the people had been sold the “cat-in-the-bag” and then to let it out gradually in the hope that the actual terms would not be noticed? Is this why the negotiations were opened immediately after the Dáil had risen when there was no Question Time? Is it intended to have it signed, sealed and delivered before the Dáil resumes?
If this proposed agreement is in the national interest, not just in the short, economic term but in the long economic and political term; and if our people are told, before it is signed, sealed and delivered, the details of it, and what are the reasons for it, then they may then accept it, but a hole-in-the-corner approach will, I think, be unacceptable not only to the Dáil and the Seanad, but also to the people.
I should like to turn now to the economic problems which face this country at present. These difficulties, as the Minister has properly indicated, do not find their origin in any single cause. We are faced with a complex variety of problems, some of which have arisen independent of any possibility of control by the Government or anybody else, others of which have been the responsibility of the Government or of other sections of the community. We face difficulties arising from the temporary fall in cattle prices, from the impact of the British import levy, the overexpansion of credit by the banks last year, the magnitude of the wage increases agreed in one lump  in the ninth round and also from the abnormal rise in consumer prices— itself attributable to a multiplicity of causes. All these have contributed to our present situation. Above all, there has been failure by the Government to cope adequately with these problems to which, indeed the Government have contributed something, for example, by pushing up prices through the tax increases of the past two years, by failing to stand by the Second Programme targets in the current year's Budget, by failing to get off the ground an incomes policy and by failing to develop credit and prices policies in good time.
There are, in fact, four inter-related problems: the balance of payments, the credit situation, the sharp rise in prices and the confusion in regard to industrial relations and wage claims. It is worth while trying to disentangle these four issues so as to determine responsibility for the difficulties that have arisen in respect of each and to see how best to get out of these difficulties and to seek to avoid a recurrence.
The Minister has dealt quite fully with the present external payments position and the reason why this has arisen. He has not referred to one of the reasons which I believe has been important in the decline in the net inflow of capital, that is, the fact that from October to June our interest rate position vis-à-vis Britain was so unattractive to the Irish depositor, and perhaps also to English investors here, that there was an outflow of funds which might have been avoided if the Government or the banks—one is never quite sure who is responsible—had not pursued, during this period, an inappropriate cheap money policy which has been carried, up to recently, to extremes at the expense of encouraging savings.
Apart from that qualification, I would not disagree with the Minister's analysis of the reasons for our external payments difficulties. I would make one point, however, about the fall in our external assets. The Taoiseach, and the Minister if I recall correctly, spoke of a very sharp decline in these assets in the first six months of this year and it ought be said, and from the  point of view of maintaining confidence it is desirable to say, that some part of this decline—perhaps £10 million to £15 million—is attributable to normal seasonal pressures. When the Taoiseach spoke of a drop of £33½ millions, it should be remembered that only part of this, little more than half, represents a genuine decline.
Turning from the balance of payments to the credit shortage, it has to be said that a large part of the problems that have arisen are due to the over-extension of credit by the banks up to the spring of this year, often for indefensible purposes. This is something that should have been dealt with earlier. The banks are to blame for this and one cannot help feeling that the Central Bank should have intervened earlier and that the Government should have concerned themselves also about this over-extension of credit in the face of the quite evident certainty of a disimprovement in the deposit situation, with the smaller inflow of funds that was bound to occur after the British election and the raising of the British bank rate.
In the face of this certainty of a slower growth of resources, this overexpansion of credit was something that should not have been allowed to happen and which has contributed significantly to our difficulties. It must also be said that our credit difficulties are due not only to a temporary shortage of resources, and an over-extension of credit, but also to the fact that after a period of rapid economic growth and with the development of inflationary pressures this year, there have been exceptional demands for credit. The gap between the availability of credit and the demand for it has been widened by movements on both sides, by a rise in the demand for credit and a levelling off of the growth of the resources available.
A third problem is the increase in prices. It is worthwhile looking at this very closely. There has been a good deal of misguided talk and of oversimplification in regard to this matter. There have been two useful analyses produced about what has been responsible for this position, what are  the factors that led to it. One was in the NIEC comments on the Progress Report on the Second Programme and the other was in Economic Statistics, published before the Budget. Both are a little incomplete in one or two respects and neither is completely up-to-date. For that reason I have attempted to bring them up-to-date and to make them more complete and the results of the work which I have done in this regard come out as follows.
We have had an increase of 13⅓ per cent in the cost of living between August, 1963 and May, 1965, but it is only due to a technicality that the figure is not 14 per cent. It was only because we had a late Budget that the figure was not 14 per cent. If the Budget had been a few days earlier, the full effects of it would have been included because the work on compiling statistics on prices for the cost of living was then going on. However, we are faced in reality with a figure of a 14 per cent increase over 21 months, an increase which was more rapid in that short period than the increase for the whole of the preceding six years.
Of this 14 per cent, four and a half per cent was directly due to Government action, to increases in taxation and also, to some small extent, to the increase in milk prices. Two per cent was due to increases in meat prices, reflecting improved external demand for meat, inevitably to the disadvantage of the housewife. Two per cent was due to the abnormal rise in potato prices, due to last year's harvest. This is something that should remedy itself if this year's harvest is better, but if not, it will remedy itself next year. It is, in any event, a temporary factor due to special causes.
Minor items which have affected prices are higher import prices, (about one half per cent) and increased housing rents — three-quarters per cent. When you add up all those, you are left with a residue, an increase of four and a half per cent in the cost of living which must almost by definition, be due to wages and profits.
 I think we can track this down a bit further. In this country wages represent about 30 per cent of final consumption. If wages go up by 12 per cent—as they did in the ninth round—this pushes up the costs of the goods we consume by about three and a half per cent. That is the immediate effect. But in the months that followed the wage round, earnings have risen by only one per cent while labour productivity in industry has risen by six per cent in 12 months. When you take account of these factors, the net effect of the wage increases, allowing for increased output by workers during this twelve month period, on prices must have been something like two to two and one-quarter per cent.
You cannot of course assume that this applies generally outside industry as productivity rises in other sectors more slowly. Taking these factors into account, the effect of wages over this period of 21 months on the cost of living must have been something like two and a half per cent to three per cent. One is then left with a residue, an unaccounted-for residue, of one per cent to one and a half per cent, or perhaps even two per cent. It seems almost certain that this must have been accounted for by an increase in profits, as disproportionate to output as the increase in wages.
Between 1962 and 1964, profits, total profits including professional earnings, rose by over 20 per cent. In the past company profits have tended to rise more rapidly than total profits. We have not got figures for 1964, but relying on this past form, company profits must have risen by something like 25 per cent in this two-year period while output rose by 15 per cent. It thus appears that profits like wages have been outstripping productivity.
Thus the blame for price increases is not to be allocated solely to the Government although they have played their part; it is not to be allocated solely to the unions or to the workers, although they, too, have played their part. Some at least of the blame— this is implicit in the legislation introduced to control prices—must be due  to employers—to businesses which have raised their prices more than was necessary to keep their profits rising in step with the general increase in output and have thereby pushed up prices. In the past 12 months, there are indications that this process has been rapid. In the 12 months ended May last the price of sundries rose by four per cent, and the price of clothing rose by 2½ per cent. This was during a period in which output per worker in industry increased by six per cent but in which earnings rose by only one. It may perhaps be argued that this situation came about because industrialists did not raise their prices automatically, immediately, when wages went up by 12 per cent last year. That is not a satisfactory explanation. The increase in prices last year was approximately appropriate to the increase in wages that then took place, and if prices have gone up further since, then at some stage either last year or this year there has been an excessive increase in prices and profits.
Turning to wage increases, I have stated that the 12 per cent increase immediately boosted costs by 3½ per cent and thus prices. There was no prospect of recovering that, in the short term. The point which has to be made is that, since then, as labour productivity in industry has risen, prices did not come down—in fact they have risen further. The fact that this has happened is something that needs to be pressed home to the people responsible. It is something the trade unions should consider because many of the difficulties we face have arisen because a wage increase of such magnitude came about in one big jump. A 12 per cent increase in wages to cover a period of 2½ years is not, perhaps, in itself excessive. The problem arises not so much because we cannot afford a 12 per cent increase in each 2½ year period, even if this is perhaps a little excessive, but because it comes in a single jump.
A single jump of 12 per cent in wages pushes up prices. It forces the Government to raise taxes and forces industrialists to raise prices. But neither the Government nor the industrialists lower taxes or prices in the period that follows a general wage  increase. It would be much more in the interests of the workers and of the economy if the trade unions would face the fact that there would be much less disruption if wages rose by smaller jumps, say four per cent or five per cent each year rather than this enormous increase of 12 per cent in a single year. It would be much more in line with the practice in other countries.
Also, from the trade unions' viewpoint, 2½ year periods impose excessive strains on the unions. Workers get restless and their loyalty to their unions is tested. It is difficult for unions to do nothing for 2½ years and workers tend to look for other benefits such as shorter hours and three weeks holidays in between times. We aggravate these pressures by leaving too long an interval between wage rounds. We can take a lesson in this respect from what has been happening since the last wage round. All, with the possible exception of those who have made short-term profits, can learn a lesson beneficial to them.
The position may be summed up by saying that a temporary worsening of our external payments position, not in itself intrinsically serious, has been seriously aggravated by the emergence of inflationary pressures and this is due partly, though only very partly, to an excessive rise in wages, partly to an excessive rise in profits, partly to an excessive expansion of credit and partly to an inordinate increase in taxation, unaccompanied by a corresponding improvement in the welfare of the community. For this situation responsibility is divided—between the trade unions, the employers, the banks and the Government. Of course, the primary responsibility attaches to the Government whose responsibility it is to mantain equilibrium and to secure an orderly expansion of the economy.
This Government have secured much of the credit for our economic expansion since 1959 by virtue of coming into power at the bottom of the 1956-57 recession, by virtue of their willingness to abandon their traditional policies and by virtue of their preparedness to adopt policies proposed to them by their advisers. They have made obvious efforts to expand  the economy along lines that seemed appropriate to them. Having gained perhaps more credit than they deserved for the favourable evolution of the economy during the years 1959 to 1964, the Government must equally accept responsibility for our present difficulties to which, indeed, their own actions and inaction have contributed. I shall list the weaknesses of Government policy that have contributed to this situation. I emphasise “contributed” because it must be said that it is not all their fault.
Firstly, there has been the lack of a credit policy other than the shortsighted pressure in favour of low interest rates which caused part of the trouble. Low interest rates have led to an outflow of capital, for with unduly low interest rates, deposits in Irish banks have proved unattractive to Irish investors and the banks have been no longer able to attract the money. This has now been reversed by the decision of the banks not to lower their interest rates when the British interest rate went down. It is better to have a higher interest rate that will attract the resources we need, than to carry on with an out of date policy of low interest rates. This change in policy has been justified. Moreover, until recently the Central Bank and the Government did not have an active credit policy. This permitted the banks to expand credit excessively for the wrong purposes and blame attaches to them for this.
Secondly, the Government are to blame in that they have failed to secure, either internally or externally, the competition necessary to prevent prices rising. As prices rose sharply, the Government have been forced to bring in emergency legislation of the most repellent kind. There is no doubt that competition is inadequate and where the blame for this lies it is difficult to say. However, it is the Government's job to see that the machinery necessary is there—that, for instance, the Fair Trade Commission are given power to ensure the existence of competition. External tariffs should be lowered where necessary, a process which was begun but was halted by the British import levy. From the balance of payments point of view,  one can understand why this halt may have been thought desirable, but it had the effect of slowing down the development of competition.
Thirdly, the Government are to blame for their failure to act to control building. It has been evident during the past 12 months that the building industry's expansion has been too rapid, that its uncontrolled expansion has often involved heavy resources being put into buildings of limited economic and social benefit—office blocks, for instance. This has been overstraining the economy and creating pressures which are undesirable. It is both feasible and desirable that some control should be exercised on building, that some licensing system should be worked out in conjunction with the industry.
It need not involve an enormous bureaucratic mechanism. It requires some control that would enable the Government to know what is going on so that they would be able to put their foot on the brake or on the accelerator as the occasion demanded. A National Building Advisory Council has been established but it has proved remarkably ineffective. The only action it seems to have taken is to submit report to the Government in the last couple of weeks which is shutting the stable door when the horse has certainly left. Has the Council the necessary powers? It has been the subject of criticism within the industry. Should it be given power to go ahead with an investigation of the industry? The Government should give attention to this.
Fourthly, the Government are to blame for their failure to control their own current expenditure. The Government have announced that efforts are to be made to prune current expenditure. You do not prune something which has already been pruned or which has been kept under control. We know that much of the difficulty here has arisen because of increases in the remuneration to the public service. The Government point out that the increases which have been given to Government servants have been as a result of arbitration awards  which the Government are bound to meet. There are two possibilities here. On the one hand the arbitrator may give a fairly large increase in salaries and wages to Government servants, because those people have been left without increases while the rest of the community has received them. In other words, the arbitration tribunal grants these awards because a good case has been made to it that they should be granted and because it has been shown that there has been a time-lag in giving them, in which case the Government are clearly to blame for allowing this time-lag to take place. It is most undesirable that any group in the community should have its remuneration held back over a period so that at some point justice demands it be sharply increased. Other groups or other sections in the community will not remember that the remuneration to public servants has been allowed to lag behind. They simply notice the huge increases that have been granted and they in turn look for further increases.
The alternative to this is that the increases in remuneration to public servants are unjustified in which case they should not have been awarded. More probably, however, they are largely justified but are proof that the Government did not run their affairs properly, that they allowed a time-lag to occur which has caused the granting of these large increases to this big group of workers and has thus brought about this “leapfrogging”. There are so many different arbitration tribunals that a case could be made for having one particular one to deal with all public service cases. If there were only one tribunal, it would check the inherent disadvantages of the present system and would prevent any leapfrogging.
It is notable that almost all the industrial trouble with regard to wages in the past few months has been in the public service. The only major dispute outside has been the printing strike. The rest of manufacturing industry has been free from trouble. There have been no excessive claims by unions. There have been no large-scale strikes apart from the printing strike, caused  by a claim for a 33⅓ per cent status increase in line with the public service. When I speak of 33⅓ per cent status increase in the public service, I am including the 12 per cent increase given last year. The Government must take responsibility for what has happened in this matter.
Fifthly, the Government can be criticised for allowing their capital programme to get out of hand in the very first year of their economic programme. The Second Programme makes provision for a certain amount of capital expenditure. The purpose of the Programme is to put constraints on Government action to ensure that we proceed in an orderly manner. This does not mean that nothing can ever be changed but it does mean, particularly in the early stages of the Programme, that you do not permit expenditure to jump and then start cutting back within a matter of weeks. The Government's capital expenditure in this year's capital budget was in excess of what it provided for in the first year of the Second Programme. They must learn to accept the constraints of that programme.
Sixthly, the Government are to be criticised for having failed to control hire-purchase in good time. This led to excessive growth this spring in the demand for cars and other consumer goods. This is something in regard to which action could have been taken sooner. I shall give some figures in regard to this. In the 12 months ended November, 1964, the increase in the volume of car sales was nine per cent more than in the 12 months ended November, 1963. This was, of course, more than the increase in national output but cars are one of the things to which people give priority—the sale of cars always tend to rise more than the national output. During the following three months, ending February, there was an increase of 37½ per cent in the sale of cars over the same three months of the previous year. The fact that for three successive months the increase had been at this level was known in March or early April, I would have thought this must have been apparent to the Government and that they should have taken action then with regard to hire-purchase,  which of course is a controlling factor with regard to cars. The Government did not take any such action until July. Even the motor trade itself expected that earlier action would be taken. They expected that action would be taken in the Budget but nothing was done about it then.
Lastly so far as I am concerned— I am not suggesting this is an absolutely comprehensive indictment of Government policy because there may be others on these benches who will bring up other matters—there has been the Government's failure to evolve an incomes policy. It is of course easy to be destructively critical but the fact is that the Government's performance in this area has not been good. It has not been up to the level of their performance in other areas. Let us just run over the record. The Taoiseach, on 10th March, 1960 spoke in the Dáil on the seventh round of wage increases. This was an eight per cent increase. Our economy was recovering at that time and it was highly desirable that some of the benefits should be spread to the community at large and the increase given was entirely appropriate and timely. I am quoting from vol. 180, No. 3, columns 320 to 325. I am not giving the quotation in full but some extracts from it.
The Government have been most seriously concerned by the possible consequences of the recent general round of wage and salary increases. ... We were, and are, particularly concerned by three aspects of this increase in wages and salaries. The first of these is the effect on the cost of living; secondly, the effect of a higher general wage level for workers and those employed in industrial and urban occupations, at a time when agricultural income is declining; and thirdly, the possible effect upon the country's export trade... I think it is certain that because of these wage increases, some increase in the general price level will take place during the coming year.... All over the whole situation, it is inevitable that the effect of wages upon prices will begin to appear in the months immediately ahead of us. There is no good pretending that it may not  happen.... It is quite clear that unless the effect of these higher wages is completely offset by greater efficiency, by harder work, by all the measures which can contribute to improved productivity—measures to offset the higher wages bill upon the unit costs of production—our hopes for economic expansion can be entirely destroyed.
The unions cannot have been terribly impressed when one and a half years after this highly exaggerated indictment of a very reasonable wage round the Government repeatedly intervened in the electricians' dispute to push up the amount of the award with the result that the level of the eighth round as it had evolved up to that point was doubled. Government intervention in the electricians' dispute was entirely out of line with what the Taoiseach had said 18 months previously.
After this we had the Closing the Gap proposals to hold back wage increases for the time being, but which did not express any similar intention to take action with regard to non-wage incomes. This did not make a good impression on the trade union movement.
The Government launched the ninth round nine months later. Although the timing of this announcement was appropriate, and cannot I think fairly be criticised, the fact that the Government appeared to claim credit for it by announcing that the time had come for it, obviously undermined the unions' confidence in the Government, a confidence which it is essential to maintain if we are to build up an incomes policy.
The next intervention was in the ninth round negotiations. Having waited until ten per cent had been offered by the employers, the Government intervened and said that agreement must be reached because negotiations had at that stage broken down but that not more than eight per cent must be paid—after ten per cent had already been offered! This was an entirely inconsistent attitude.
The next thing we had was the mess up in the public sector because of the time lag in Civil Service status increases.  As well as all these “stop-go” policies there was a failure to launch an incomes policy, or to accept the need for restraints on incomes other than wages, which must be a prerequisite of any incomes policy. I am afraid the country is caught between, on the one hand, the Government's unwillingness to contemplate seriously restraint on the growth of non-wage incomes, incomes getting into the hands of individuals after taxation, and, on the other hand, the Labour Party's doctrinaire desire to control profits, dividends and prices, regardless of the impact of such policies on economic growth.
I think, however, a way out is now beginning to appear. The Irish Congress of Trade Unions at its conference in Cork passed a resolution which when carefully read seems to me to provide what the Government have not provided so far—a possible basis for a genuine incomes policy which would be in advance of anything so far achieved in any other country. The resolution states that an incomes policy must involve a just distribution of incomes but, recognising that this is difficult to achieve in the short term, it says that this is a matter for long-term negotiation.
For the immediate future it says that any incomes policy must involve reconciling claims of lower paid workers with those of higher paid workers. There must be substantial increases in the incomes of lower paid workers and pensioners, male and female and of persons dependent on social welfare benefits and public assistance payments. In other words, such a policy must involve a bigger increase for the less well-off than for better off members of the community. We can all agree with this. The increase in incomes of workers generally must be sufficient to offset price increases. That is not asking anything enormous. Again it says that the increases in workers' incomes must enable people to enjoy steadily increasing standards of living. That is what any incomes policy must involve. Finally, to achieve this, it says that Congress must resist any limitation on wage or  salary increases not equally applicable to other incomes, and not taking account of the level of such incomes. That is not unreasonable.
Here then we have, I think, the basis for an incomes policy. It will not be easy to achieve, but there is no fundamental obstacle in the way. There is the problem of reconciling the lower paid worker with the higher paid worker but this can be solved with the co-operation of the Irish Congress of Trade Unions, which is clearly available. With regard to social welfare benefits, all are agreed that these should rise as rapidly as possible, but we have discussed that already today.
In this non-doctrinaire approach of the Irish Congress of Trade Unions, I think there is hope of a solution. The greatest difficulty will be in devising some method of ensuring that the incomes people receive after taxation—what are described as unearned incomes—do not rise unduly. A solution to this will, I think, be found in the Fine Gael proposals during the election campaign for a Dividend Equalisation Tax. It would be quite undesirable, though I fear that some of my colleagues on the Labour benches may not agree, that any proposals should involve restraint or control of profits or dividends earned competitively. This could inhibit economic growth. But it would not necessarily be undesirable that the total amount of income which people in receipt of dividends get after tax should be so controlled. This would involve no disincentive to people to invest in progressive companies. They would get more than less intelligent investors because there would be the same rate of tax applying throughout to all dividends. But this would meet the reasonable requirements of Congress. I recommend this Congress proposal and the Fine Gael proposal to the Minister for his consideration because in these I believe we may find the beginnings of an incomes policy.
To sum up what needs to be done —first, the credit policy role of the Central Bank which it has taken on in the past few weeks must be maintained.  It must continue to co-operate with the banks and to guide them as to how much and for what purpose credit is given. It must avoid any repetition of last year's excessive expansion of credit. I think it should also initiate a general review of banking policy. It is 30 years since we had a Banking Commission here and during that time a lot of things have happened and there have been enormous changes in our economy and in the structure of our financial system.
There are many questions which could properly be examined by a Banking Commission. There is the question of whether the banks should continue to be permitted to hide a large part of their assets. I am not saying that this should be changed— I am inclined to think that it should still continue in order to ensure the maintenance of confidence in the Banks, but it should in any event be looked at. There is then the question of whether the banks should have power to disclose only a fraction of their profits. I am not convinced about this. I cannot see that the disclosure that bank profits are perhaps twice the figure disclosed would undermine confidence in the banking system, which is the reason given for permitting non-disclosure of all the profits. It seems to me there is no reason why they should not be disclosed.
Is the margin between advance and deposit rates, out of which bank profits come, too high? That is something which, I understand, is being examined in Northern Ireland. Should it not be examined here also? Is it in the public interest that bank advance rates should be agreed between the banks instead of being the subject of competition? Is this not contrary to the practice permitted in other sectors by the Fair Trade Commission? Is the duplication of banking facilities by having so many banks competing with one another desirable? This was criticised in Economic Development but nothing has been done about it. There has been a bank amalgamation since then but the bank taken over has been expanding more rapidly than previously and even more rapidly than the bank which took it over!
 What should our interest rates be in the light of the failure of our cheap money policy? What should our attitude be to external financial institutions coming in here? This is something to which, the Central Bank tells us, it is giving consideration. Should certain banks be able to take advantage of the Companies Act, 1963, to stop disclosing, as hitherto, data on the basis of valuation of their investments? I understand this Act was designed to strengthen the position of the shareholder and to require the disclosure of additional information, yet two of our banks have stopped disclosing certain information because they are permitted to do so by this Act! Is this desirable? Again, is it desirable that banks should publish accounts giving no comparable data for the previous year as one bank has done this year? Is it desirable that the consolidated accounts should be so drawn up as to make it quite impossible to distinguish relationship between the bank and its various subsidiaries? Is it desirable that bank chairmen should tell the public and their shareholders in their annual reports and speeches little or nothing about banking or the performance of their bank?
These are matters which should be looked into, and I think I have raised more than sufficient points to justify the setting up of a committee or commission for this purpose.
Secondly, the Government must initiate a permanent prices policy for which there is a need. The Bill now before the House is inherently objectionable in the powers it gives to the Minister and to the Government without appeal. It is intolerable that this legislation should be required in peacetime. It is also unnecessary. Either prices are fixed by agreement between firms, in which case the Government should ensure that they are dealt with by the Fair Trade Commission, or they are not fixed by agreement but by competition and no action is required except Government action to stimulate internal and external competition and restrain the development of monopolies.
 I was disturbed to find that the Labour Party have fallen for this Bill. In the terms in which it has been put to the Dáil, this Bill appears to be the most stringent piece of wage control legislation we have had in this country for a long time. This may not be the intention but it is certainly what it sounds like. We have been told that it is the intention of the Minister, using the powers under this Bill, not to permit any increase in price arising out of circumstances under the control of the firm and further that price increases will be permitted only where there has been an increase in the cost of materials, thereby specifically excluding increases in wages. If an industry chooses to increase its wages it may do so only if it is able to do so without increasing prices. This would clearly be the most effective way to put a curb on wages. It would be interesting to hear an explanation by the Labour Party of their support for such stringent wage freeze proposals.
Price control is always objectionable except as an emergency measure. It creates black markets, shortages and distortions of competition. It encourages combinations. It is undesirable in any mixed economy in the interest of the public. The answer lies in making the price system work. The Irish public—in this part of the country, anyway—are not, I think sufficiently price conscious. Indeed, if anything, there is a tendency for people to pretend that they do not care much about prices and to think it is mean to go from one shop to another to see where the cheapest goods can be found, but that is exactly what we should encourage them to do.
We have the example of a new town in Britain where the town authority there sets up a board showing the prices of goods in the different shops so that the people are enabled to see where they should go to get each item at the cheapest price. Why should we not do that here instead of having price control of the most brutal kind? Why should that type of information not be available to us here? Why should there not be a programme at 8.15 a.m. on Radio Éireann, say, telling people  where in the principal towns, they can get articles at the cheapest prices? Why should we not have that rather than this rigid price control? Some manufacturers and shopkeepers might dislike this but they will dislike price control even more.
Mr. J. Fitzgerald Mr. J. Fitzgerald
Mr. J. Fitzgerald: We know the shops that would be publicised on that radio programme.
Mr. Garret FitzGerald Mr. Garret FitzGerald
Mr. Garret FitzGerald: Also, there is this question of notification of increases in prices by manufacturers. While that might be practicable and desirable in some degree in the industrial sector, it is clearly not practicable for many agricultural products with fluctuating prices, or for shops. Price notification by manufacturers might be desirable and has been found to be practical in Norway and Holland, for example, where it has acted as a disincentive to price increases.
We need an active price policy, not negative controls which are most unlikely to be effective. Above all we need appeal machinery. It is undoubtedly contrary to the whole spirit of the Constitution, if not to its letter, that a Government Department can bankrupt any firm or prevent a wage increase, however justified, arbitrarily and without appeal. It is a most dangerous power which no Government should have and there can be no certainty that it will always be exercised wisely. I think we can reasonably be certain that such a power will not be used in any wrong way here to do deliberate damage to a firm or industry. I think we may be assured that no Government here will act like that but there is no certainty that a private investigation in a Department will always come to the right answer. In fact, I am aware of a price inquiry where one Government Department has even refused to take into account evidence from another Government Department about a matter and has come to a conclusion which seems contrary to the facts as stated by another Department.
Then there are the other matters that I dealt with—the need for building controls—a licensing system of some kind  in the interest of stability in the building trade and to avoid fluctuations; a review of the conciliation and arbitration machinery in the public service and of the whole salary negotiation system which encourages claims and leap-frogging and whose slowness gives rise to these problems; acceptance of the discipline of the Second Programme for Economic Expansion rejected in this year's Budget—which is something I want to come back to in concluding; the need for permanent hire purchase controls which should be kept in being permanently and varied according to the requirements of the situation; and, above all, an incomes policy. As regards the immediate economic situation, it was encouraging to hear from the Minister that the picture is somewhat better. One cannot, of course, rely on one month's figures—the June figures may be simply a freak. On the other hand the figures for April and May may have been somewhat abnormal and the June figures may represent a genuine improvement. It is particularly encouraging that cattle exports have recovered. It would seem most unwise in these circumstances to take further deflationary action for some months to come until we see how the situation evolves and how the measures taken work out.
Looking ahead to the future, I think perhaps one of the great needs here is for a fundamental acceptance of economic planning. The significance of economic planning is not yet appreciated inside or outside the public sector. Great progress has been made, of course.
The Report on Economic Planning by the National Industrial Economic Council makes this clear but we have a long way to go still. Much more needs to be done in involving management and workers fully in the planning sphere; much more needs to be done to secure the acceptance of planning in the public sector. Here, the NIEC report makes it clear that there are serious problems. It says, at Paragraph II of its most recent Report on Economic Planning, page 14:
There should be much less danger in the public sector, therefore, that  the plan will be ignored when new measures are being formulated or old measures modified.
It goes on to say, however, at Paragraph 12, referring to the Second Programme, that:
The need for steps to ensure that all departments of the public service and State enterprises play their full part in implementing the programme is reinforced by the priority given to the attainment of economic growth in the Second Programme. The implication of this development and the need for a realignment of policies and administrative machinery may not be completely realised as yet in some parts of the public service and in all the State enterprises.
Paragraph 13 states:
In our view, existing administrative arrangements should be developed and extended to secure a continuing overall appraisal of the policies and actions of the public service and of State enterprises so as to ensure that they are in keeping with the objectives of the programme, especially in such areas as manpower policy and policies which affect the level of costs of basic materials and services used by industry and agriculture. This will require continued development of the co-ordinating role of the Department of Finance in planning within the public service.
The report goes on to say, at paragraph 14:
It is of interest that some commentators on French planning believe that some of the main obstacles to effective planning lie in the public sector... We quote these views to emphasise the fact that it would be best if such problems were not allowed to arise here. French experience of nearly 20 years of economic planning suggests that when such problems do appear they can be very intractable.
Paragraph 23 states:
The Ministers and Secretaries Acts assign functions to each government department. In some cases,  the objectives and powers of each semi-state body are set out in the Act by which it was established; in other cases, where the body is incorporated under the Companies Acts the objectives are stated only in very general terms. The management of each body is responsible for its day to day running, but major changes in policy require Ministerial approval. In Ireland, the public sector accounts for almost one-fifth of non-agricultural employment and a much larger proportion of annual investment expenditure. Its activities, therefore have a considerable influence on the level and composition of national production. The public sector takes the initiative in economic planning and plays a key role in ensuring that the plan is fulfilled. The experience of other countries where democratic economic planning is practised would suggest that paradoxically it is within the public sector itself that the guide lines which an economic plan provides are least often followed, and that targets—especially for capital expenditure—are most often revised. Whatever the reasons for this, there can be no escape from the conclusion that an economic plan which is soundly based on available resources cannot succeed unless the public sector obeys its precepts.
There can be no escape from the conclusion that an economic plan which is soundly based on available resources cannot succeed unless the public sector opens its precepts. In this country, we do not have any proper co-ordination of the activities of Government Departments except at Government level. It is like a firm with a board of directors but no management. The Government itself does not seem fully informed on what planning is all about. A tendency is evidenced on the part of Ministers and Departments to regard the NIEC and the Programme as peripheral, with a nuisance value but no more.
Some teeth will be required before we get this sorted out and get a coordinated development of our economy with everybody pulling their weight instead of pulling in opposite directions. This may involve dismantling  some of the more independent fiefs in the feudal system, for instance the Department of Agriculture which still hangs on to the setting of agricultural targets and to the consultations with the farmers and which still rejects agriculture's participation in NIEC, thereby weakening the work of that body.
However, it is not only the Department of Agriculture that is involved here. The Department of Transport and Power comes into the picture, too. The Minister for Transport and Power has shown himself in this House in the past couple of weeks most unwilling to review policies in regard to the pricing of the services and goods provided by bodies under that Department's control which have the effect of pushing up costs and slowing growth —the very type of activity of a Government Department which has been referred to by the NIEC as something requiring action. The Department of Industry and Commerce have completely ignored the fact that free trade is on the way by expanding Irish Steel Holdings on an uneconomic basis at the cost of steel users whose tariffs are being cut. Strangely, this expansion involves the imposition of tariffs at a time when everybody else is dismantling them! Those are tariffs to protect the public sector while tariffs are cut in the private sector.
The Department of Local Government have dashed ahead creating their own planning regions and regional plans without regard to the national economic plan. The Department of Education have selected centres for regional colleges, regardless of where the development centres are likely to be set up. The Department of Social Welfare have failed, as I mentioned earlier, to produce a social programme to employ the resources allocated for this purpose.
This may sound chaotic. It is not really as chaotic as it sounds because the Civil Service runs along, but growth and progress can be unnecessarily held up by the fact that these Departments do not fully appreciate what economic planning is about and do not accept the discipline of programming. This is  to some degree an automatic reaction by civil servants against the threat to the independence of Departments. Sometimes they are supported in this by weak Ministers who are primarily concerned to protect their own areas and do not work as a team as a Government should. Sometimes the Ministers and Secretaries Act seems almost like a licence to administrative feudalism. This whole question is something which needs to be looked at.
As far as the Ministers are concerned, there appears to be a lack of contact between the politicians and the economic programming process. Oddly enough—and I do not say this in any critical way—this may be more marked in Fianna Fáil for a certain reason. The Labour Party have close contact with the economic programming process through the participation of the trade union representatives in the work of the National Industrial and Economic Council, the CIO and other bodies. Fine Gael are represented on the NIEC by Mr. McGuire. He is still a member of the Council and was until recently also a member of the Seanad. There is some link there. There is not any similar link between the Fianna Fáil Party and the economic programming process.
Mr. J. Lynch Mr. J. Lynch
Mr. J. Lynch: That is drawing a pretty long bow. I was prepared to listen to a lot of the Senator's suggestions, but is he suggesting we should put a Fianna Fáil man on this?
Mr. Garret FitzGerald Mr. Garret FitzGerald
Mr. Garret FitzGerald: I will come to what should be done in a moment. Even the Government's knowledge of economic programming appears to be limited, filtering through Departments, unlike the United Kingdom where a number of Ministers are in fact members of the equivalent council. I am not suggesting that that is necessarily the solution here. Even the Taoiseach himself has shown signs of being cut off from the whole process as when, at the first press conference launching the Second Programme, he rejected out of hand the idea of an annual review of progress when this was put to him, although in fact the whole process of planning is based on the annual review process which shows  up deficiencies and the need for action to remedy them.
The answer here is for Ministers to familiarise themselves more than has hitherto been the case with this whole process of planned programming. I think also that it is possible—I throw this out as a personal suggestion in reply to the Minister—that there may be something to be said for having a representative of each Party as an observer at meetings of the NIEC. At least, they would be fully informed as to what is going on. There would be no need to bring Party politics into it. If they were genuine observers and not allowed to speak, Party politics could not be brought into it! I should like to ask if it is the practice of the Government to meet and consult with their own representatives on the Council? The other bodies who have representatives on the Council do so. Do the Government keep themselves informed through contact with their own representatives?
Finally, I should like to stress in relation to economic planning the importance of regional planning. Because we are a small country, there is a tendency to disregard this question or to consider it in very broad or over-sentimental terms of saving the West. But even in small countries there can be—and there are in our case—very marked deficiencies in income levels and the level of unemployment between different parts of the country. This is something we need to tackle within the framework of our social programme. The solution to it is not an easy one. Among the things which would contribute to it would be acceptance by the Government of development centres instead of putting off a decision on the question by referring it from one committee to another. Throughout much of the country, the nomination of development centres and the concentration of activity in these centres could provide focal points for regional development which could remedy the existing concentration of industry and economic activity in Dublin and, if I may say so in the presence of the Minister, to a lesser extent in Cork. This would not be a solution for all parts of the  country. In the northern part, from Monaghan to Mayo and up to Donegal, you have really no centre, except perhaps Sligo, of a size that could be readily developed into a major industrial centre. Perhaps what is required there is a policy that would involve closer co-operation with Northern Ireland. Certainly, it is difficult to see how the problems of Donegal will be solved unless a much closer link is forged between Donegal and Derry.
A third measure to assist in regional development could be a concentration of educational development in these regions. It is an interesting fact that in Norway the problem of regional im-balance—the fact that some parts are poor and others are rich—has been tackled by putting much more effort into the provision of educational facilities in the poorer areas. This is something we could consider.
Above all, I would suggest that regional development programmes must be formulated within the general economic plan framework. We must avoid the mistakes made in France where for years regional planning went on independently of central economic planning to the confusion of everybody until finally co-ordination was achieved within the framework of the central economic planning mechanism. There is a danger of that happening here. There is a danger that Foras Forbartha will dash ahead with regional planning out of line with or in disregard of national economic planning arrangements. This is something we should look at to ensure we are not faced with the difficulties they were faced with in France.
Our basic policy may be summed up as follows. First, economic development by incentives; secondly, social progress in the fields of social welfare, housing, health and social services; thirdly, and this is something to which we have not paid sufficient attention, cultural development — educational reform, a revision of some of our attitudes on matters such as the preservation of amenities, censorship and perhaps some of our national aims: there should be a broader approach to our whole cultural heritage rather than thinking  simply in terms of one single aspect of it as we have done hitherto; fourthly, a stronger link with Northern Ireland and—I would end deliberately on this note despite recent events—a strengthening of our links with EEC where I believe our future ultimately lies, whatever direction these new developments may take.
Mr. Murphy Mr. Murphy
Mr. Murphy: In this debate we have a variety of things to which we can address ourselves. In view of the fact there are many speakers with much to say, my contribution will be as brief as possible. I want to start with the Prices Bill. It is welcome, but it is long overdue. I recall the efforts of the Irish Congress of Trade Unions away back in March 1964 to persuade the Minister to do something about prices. That was immediately after the ninth round when it was quite obvious many people were using the excuse of the 12 per cent increase to pass on undue increases in prices. Quite frankly, we in Congress felt our representations and our efforts in this respect were being treated with contempt by the Minister. We were told, and this was emphasised by the Taoiseach, that competition was the best way of governing prices. Now, apparently, there is an acceptance by the Government that, in fact, competition is not real competition in this economy. In other words, we are now having an effort to control prices more than a year too late, at a point in time when the benefits of the ninth round for the workers negotiated by the unions and the employers have largely been eaten up by price increases.
This places the unions in a great difficulty because not alone have we the current situation of which it can be said that the cost of living has gone up by 11 per cent since November but —and this is more important from the unions' point of view—the cost of food has gone up by 14 per cent in the same period. This means—and Senators, I am sure, will appreciate this—that lower paid workers who proportionately spend more of their income on food and buying the necessities of life are struck particularly hard and we now find that whilst we negotiated a national agreement in good faith to lift the  position and give the benefit to trade union members, before the term of the agreement had expired, particularly in the case of the lower paid workers, they are worse off than before the agreement was negotiated.
We blame the Government for failure in that respect. I do not want to go into details in regard to the figures—we have already been given them by Senator FitzGerald—about the effect of wage increases on the cost of living. Anybody who looks at these figures will realise and agree that the 12 per cent, while having some effect on the cost of living, does not come anywhere near explaining or accounting for the very steep increase in the cost of living which has taken place since the national agreement was signed.
However, the Minister is now taking power, very belatedly, but we want to stress the importance, now that he is being given this power, as I assume he will be by this House, of his exercising it, that the Prices Act will not be something to be put away in a pigeonhole, something which he cannot avail of, but that he will exercise his powers effectively.
In this respect, I want to urge the desirability of having public investigations. I do so because I feel that the fact that there is no public investigation of prices tends to reassure the public and it is also a deterrent on people who are inclined to put up prices unduly.
I accept that there are bound to be price increases, that you cannot in all circumstances and for all commodities keep prices at a certain level. There are occasions when a price increase is quite justified but what I am critical of is the atmosphere which has been engendered or encouraged by the Government in recent years, that price increases are all right, that it is good business to increase your prices and get as much as you can for the commodities you have to sell. I think it is true that there is this atmosphere. I blame the Government for permitting or encouraging that atmosphere. If they had done something about prices legislation, or at least given an indication that they were concerned about it,  we would not have the situation we now have facing employers, the trade unions and the Government.
In regard to the investigations, as well as the desirability of having them public, I should like to stress that regard should be had not merely to the factors causing the increases but— and this is important—to means by which these factors can be mitigated or overcome. In other words, where there is inefficiency, where there is bad management, where there is inefficient distribution, these should be pinpointed and it should be publicly stated that this is the situation and we should not have a situation in which inefficiency is glossed over no matter in what quarter it exists and price increases excused simply because this is the position. The policy of the British Government in this direction as far as I understand it is to pinpoint inefficiency and where price increases can be avoided by improved efficiency and by other methods, to show that they are against such price increases.
Again, on this question of fixing the level of prices, I do not think they should be fixed at levels which provide profits or a cushion for inefficient concerns. In other words, we should not have a situation where the inefficient producer, the inefficient merchant, should have a price level geared to his position, thereby providing excessive profits for the efficient concern, the efficient manufacturer or producer of the same commodity. We must bring down prices and at the same time, it would be a useful method of improving efficiency both in regard to production and distribution.
I notice that the Minister accepted an amendment by the Labour Party in the Dáil on notification of price increases. I welcome that. I think it improves the Bill somewhat.
The trade union point of view in regard to prices legislation is that we would not simply be satisfied with stabilisation of prices at the present level. We feel that in many cases prices are excessive and must be rolled back. We are not asking simply for a price freeze. That would be impossible.  We must in many cases look for a rolling back, a reduction, of prices at present being charged. In this respect— this has been analysed by Senator FitzGerald—the trade unions have in the present circumstances behaved responsibly. The line they have adopted at their recent conference is a responsible line and I think we are entitled in this respect to ask the Government to recognise that and to act forcefully and quickly in regard to prices so that the members of trade unions can be similarly asked to maintain their sense of responsibility in the present situation.
Turning from prices to the economic situation, again I agree with Senator FitzGerald, we are not facing a crisis. It has been said, and rightly so, that we might be in danger of talking ourselves into one. The actual burden of the speech we have had from the previous Senator was that what we are facing are problems of growth, that you are bound to have these difficulties when you are trying to encourage the economy to grow and to grow as quickly as possible and we will always have to face such difficulties and try to learn from previous mistakes.
We are not facing 1956 all over again. We are not facing a situation that the Opposition Party are engaged in sniping the Government in any economic difficulties that come about and we on the Labour side here are prepared to adopt a responsible approach in the present circumstances. We hope, referring to 1956, that this Government have learned by previous mistakes. Mistakes have been made on previous occasions and it behoves us all to learn from these mistakes and not make similar ones again. Granted, this Government, any Government, may make other mistakes but what I am saying is that we must learn from mistakes previously made and not allow the same thing to happen again.
In this respect I want particularly to refer to a danger that it might be thought that credit restrictions leading to a slowing down of the building industry might help in present circumstances. I want to say that, personally, I feel there is an awful lot to be said  for physical control of building but what I am against, especially in the circumstances in which we are at the moment, is that the Government would consider it desirable in the present circumstances to restrict credit for building which would inevitably lead to a set-back in the building industry. I feel —and I think this is widely accepted— that building is the touchstone of our economy, that if there is a slowing up in building it finds its way throughout the whole economy. We would all agree that a slowing down and consequent unemployment in the building industry would lead to the loss of skilled workers which would be to the detriment of the economy not simply at the present time but in the long term as well. It would completely close off any hopes there are of improving or developing new techniques in the building industry. It is essential if new techniques are to be agreed and applied that there should be confidence in the long-term prospects of the building industry, that the workers do not feel there is a danger of being thrown out of employment and having to emigrate once again.
I want to urge that the Government should give top priority to the flow of capital for house building. I want an assurance from the Minister on behalf of the Labour Party that money will be available for building and that decisions are not now being taken which would lead to a cut-back later in the building programme.
It is true, as Senator FitzGerald said that the principal factors creating difficulties in our economy are of external origin, Britain's economic difficulties, the import surcharge, restrictions on the export of capital from other countries. We in this House, indeed in political Parties and in the trade union movement need to emphasise the desirability of positive measures to meet the situation. In this respect I want to refer to the desirability of doing everything possible to encourage industrial exports. I know the Government have already taken positive steps in this direction but they should consider whether they could further encourage exports.
 The great bulk of exports from this country are accounted for by a small number of firms. The British Prime Minister, Mr. Harold Wilson, has been telling manufacturers in Britain to get up off their backsides and to go out and find export markets. The same remarks could be directed to many firms in this country. There are only a comparatively small number of firms engaged in exports. They should be forced by whatever means are available to go out and find markets as best they can outside the country. It would be worthwhile to give further consideration to the possibility of co-operative exports. This was considered previously but no action was taken. This might be an appropriate time to reconsider that matter and see whether any positive steps could be taken by the Government to encourage firms who are not already exporting to do so.
To turn to the Finance Bill for a moment, there are two points of detail I want to make and it might save time later on in relation to amendments if I were to refer to them now. The first one is a point which was mentioned in the Debate on the Second Stage of the Finance Bill in the Dáil. Deputy Corish referred to it at Columns 1369-70 in Volume 216 of the Official Report of 23rd June, 1965. He said that income tax was imposed on co-operatives some years ago, agricultural and fishery co-operatives were then exempted from income tax but the tax was left on what we call industrial co-operatives. Deputy Corish was particularly concerned about one co-operative which is a real co-operative in every sense of the term and which is being hard hit by the imposition of income tax. Perhaps between now and the Committee Stage the Minister might look at the matter. It was discussed in an amendment on 9th June, 1964, at columns 924-926 of the Official Report. Reading the exchanges on that occasion I gather that the then Minister was accepting the point. He thought it was desirable that the matter referred to should be dealt with but that there was difficulty in finding legal words specifically to deal with the problem and there was a promise that the matter would be considered  in the Department. I should like to raise it on the Committee Stage and perhaps the Minister would have an opportunity of looking at it between now and then.
The second point I wish to raise is in relation to sections 10 and 11 of the Finance Bill. Here provision is being made in regard to notification of interest held by credit companies, banks, etc. and the disclosure of deposits. The position is, I understand —the Minister is probably more familiar with the details than I am— that help is being given to commercial banks, etc., but similar assistance is not being given to friendly societies, registered societies. I want to refer to this matter also on the Committee Stage and again perhaps the Minister would have a look at it in the meantime.
We also have before us the Appropriation Bill and this gives us an opportunity—the only opportunity the Seanad has—of dealing with the administration of various Departments. Again I do not wish to delay the House. I know there will be many speakers after me but I should like to say a few words about Local Government. We have all had experience in recent months of getting around the country and I was horrified, and I am sure other Senators were also, at the condition of the roads. I was horrified at the condition of roads in Donegal which is a major tourist resort. Considering there are many visitors from across the Border, it is deplorable that the Minister responsible does not seem to be looking after his own county. There is a major road programme being carried out there but the ordinary roads seem to be neglected and it struck me as being the worst in the whole of the Twenty-Six Counties.
On the subject of roads, may I make this small point which may seem very unimportant in dealing with this major Bill but which is nevertheless worth making. It is the question of the ivycoloured trees along our roadsides which ruin the appearance of many of our beautiful places. I do not know  if it is the responsibility of the Minister for Local Government but some encouragement should be given to or pressure brought to bear on the owners of these trees, which will eventually prove dangerous to road users and which spoil the beauty of our countryside.
In connection also with the Department of Local Government, I am apalled at the way the Department apparently deals with appeals from ordinary citizens against planning decisions. I was following up recently a case of a member of my trade union who was a year waiting for a decision on a simple appeal. Another Senator here had exactly the same experience and I am sure he met with similar frustration in trying to get a decision, where an ordinary person could not be told by a Government Department or by the local authority what he should do in order to get permission to build a certain structure. He could not be given a straight answer. After about 18 months he got a decision. It was a satisfactory decision but what I am complaining about is the fact that a citizen could not get a straight answer from a Government Department: No decision could be taken; somebody was sick: somebody was on holidays; the file was with somebody else. I made about 20 telephone calls in this regard. I do not know if that is typical. Other Senators may know more about it than I do. It is bad that citizens should be treated like this. It gives the appearance of inefficiency in a Government Department which should not be the case.
Coming along to this debate today, many of us did not expect that we would be faced with this problem of a free trade area, this possibility of a free trade agreement with Great Britain. I should like to be cautious in this matter. I would not like to say anything which would be unhelpful in the circumstances, and I would not like to be thought irresponsible. However, the Minister did strike me as being rather casual in this whole matter. I would have thought that if this was to be debated at all we would have a clearer statement and a greater effort would have been made to explain the  implications to this House and to the public.
What is involved in this? Does this mean that we shall go back to the situation where we shall be simply the rancher, the food producer, for Great Britain? Does it mean that for the doubtful benefit of agriculture our industries and our industrial workers will be sacrificed? I do not know. We are entitled to some better explanations and some firmer undertakings from the Minister or from the Taoiseach. This must raise with many of us great fears. I was never terribly keen on this idea of EEC membership. The only thing that encouraged me about the EEC was that I felt that here at last was the possibility of getting away from dependance on our larger and more powerful neighbour. I am not anti-British but if you are living next door to a big and powerful country you must be affected by that very fact alone. It is our nearest and our biggest market and while it is the duty of the Government there to act in its own best interests, sometimes it harms us as it did in the case of the recent import levy. I thought that with the possibility of joining the Common Market we would have the opportunity of getting away from the difficulties in which this situation places us, that we would be part of a larger unit and would have more say in our economic future.
Now apparently, that is not to be. Under the present situation we are tying ourselves more firmly to Britain. It is envisaged that there will be a free trade area, with all that that involves. Again, I want to speak with restraint in this matter. I do not want to be irresponsible. The Minister introduced it. I think he might have given us a better explanation and, from a trade union point of view, we are at least entitled to assurances in regard to the future of the workers at present employed in industry here. We cannot allow a situation in which they would be sacrificed for the sake of what I describe as rather questionable benefits for agriculture, benefits about which nobody seems to be very clear. I hope the Minister, in reply, will give us more  information about this free trade area and that, when we come to deal with the Committee Stage of the Bill, he will try to help me in regard to the two small points I mentioned.
Mr. Crowley Mr. Crowley
Mr. Crowley: It is important, I think, that the House should be reminded that we are discussing three separate measures in this debate. This is the first occasion I can recall over quite a long period of years in which we have adopted this type of procedure and I have yet to be convinced that it is the best type of procedure. However, I appreciate the situation in which this position has arisen. What I am troubled about is that, this afternoon, I felt we had quite a full bill in being expected to deal with three important measures at one and the same time. Like Senator Murphy, I certainly did not anticipate that, on top of that, we would be expected to deal also with the serious, if not momentous, matter which has arisen as the result of the announcement within the past couple of days of the establishment of a free trade area between here and Britain.
I shall deal with the last subject first and offer my own comments, for what they are worth, on the situation as I see it. I shall begin by saying that I regard it as rather poor treatment of the Oireachtas that this particular matter should be announced within a matter of days after the Dáil has risen. That is one of the worst features of the present situation. It seems to me— I hope I am wrong — to indicate a rather callous disregard of the Oireachtas. I certainly am not prepared to accept that the Government did not know a week ago that this announcement was, in fact, to be made.
Mr. J. Lynch Mr. J. Lynch
Mr. J. Lynch: We only had our meeting on Monday.
Mr. Crowley Mr. Crowley
Mr. Crowley: I accept that, but I still am not convinced that the Government did not know a week ago that this announcement was to be made this week. What troubles me is that we have had the announcement within a week, more or less, of the Dáil having risen. If we are to accept the statement of the Taoiseach, which I heard him make on  television, he estimates that, in a matter of two or three months, we will be within sight of complete agreement, it appears to me from that statement that we could well have a situation in which agreement would be accomplished, completed, finalised, signed, sealed and delivered before either the other House or this House had an opportunity of discussing it. I hope I am wrong in that, but that is the way it appears to me.
Tomás Ó Maoláin Tomás Ó Maoláin
Tomás Ó Maoláin: The Senator means it should not be signed until it is first discussed.
Mr. Crowley Mr. Crowley
Mr. Crowley: My belief is that no agreement of such far-reaching consequences as this would appear to be, should, in fact, be signed without the full sanction and authority of both Houses of the Oireachtas. Compare this with the long discussion about the merits and demerits of EEC which preceded even the opening of negotiations.
Tomás Ó Maoláin Tomás Ó Maoláin
Tomás Ó Maoláin: That reminds me of the National Busmen's Union.
Mr. Crowley Mr. Crowley
Mr. Crowley: As I said, I hope I am wrong.
Mr. J. Lynch Mr. J. Lynch
Mr. J. Lynch: But the Senator does not mind saying it anyway.
Mr. Crowley Mr. Crowley
Mr. Crowley: I expect the Minister will be quite categoric in his assurance on that point if he expects us to leave here in any way satisfied. In introducing this matter in conjunction with the three Bills that have been alluded to, the Minister went to some pains in an effort to dispel any notion of a crisis. Perhaps I am uninitiated in these matters—I may even confess that, perhaps, I am—but if this is not a crisis I should like to ask the Minister what is? Why all the concern and all the haste? I should like to think we have not a serious crisis but I feel, however, that at the present moment there is every reason to be at least apprehensive of the future. I assert there are thousands of people in the country who are very apprehensive of the future as a result of the announcement made in the last few days and if  that is not a crisis I do not know what is.
For some 30 years we have been deluding ourselves, it would now seem, into the belief that we could make this country entirely self-sufficient and independent of anything we were getting from our neighbours across the channel. Overnight we have a situation in which our people are supposed to forget all we have said over those years and start re-thinking their entire economic outlook in new and different terms. That is a crisis for every citizen and yet the Government approach this in such a manner as to expect the people to believe that we have not a serious problem on our hands.
I should like to ask: what are the circumstances that either prompted or forced the Government seriously to consider at this stage of our development the possibility of promoting a free trade area with Britain? Only a few years ago some of us at least were trying to convince our neighbours that the best thing that could be done for this country would be to cut it adrift entirely from Britain. Obviously something has happened which is fundamental to create the new situation and it is something that needs very definite and detailed explanation. The Government owe that explanation to every citizen in the utmost detail.
While not quite sure of my dates I am prepared to throw my hat into the ring and say that two, or perhaps, three years ago we had quite a lot of people convinced of the tremendous advantage and benefit it would be to us if we could march into the Common Market with or without Britain. In anticipation of that we had already undertaken to reduce tariffs at an agreed rate of 10 per cent per annum. I am not quite sure whether that reduction was effected over one or two years. I believe it was two and that, at the least, it was one.
I am aware that the decision to reduce our tariffs was suspended last year because the door was slammed in our face so far as EEC was concerned and the urgency in regard to the reduction of 10 per cent apparently no longer operated. However, some reduction has taken place and I want  to know who benefited from it. Is there anybody here or in the country who can say that any part of the benefit of that reduction has been passed on to any section of the community either by way of reduced prices or better service or otherwise? I do not think so and if we are to be honest with ourselves we must accept a situation already alluded to by Senator FitzGerald and Senator Murphy who reminded us that over the past 18 or 20 months we have been speaking of an actual increase of not less than 14 per cent in prices. At this stage we should do a little plain thinking and talking. People are asking questions.
I was among the 400 or 500 delegates attending the Trade Union Congress meeting last week and many people there were asking many questions but I am not thinking in terms of those people but in terms of the ordinary man in the street and his wife who must go shopping every Friday or Saturday, if they can, and who week after week over the past 12 months could tell us a great deal more about these prices than we appear either to know or to admit in this House. I think you will not find any of those people prepared to accept any suggestion that any of the developments which have been alluded to in any way benefited them. Today, they find themselves in such a position that even the 12 per cent wage adjustment of a year and a half ago is no longer of any use to them and now in July of 1965 after some 20 months they are worse off than they were in November or December of 1963.
That is a fact we must face and admit and be finished with and, having done that, we should ask ourselves what we should do about it. Is the cure the promotion of a free trade area with Britain in which our industries must be thrown open to the blast of competition in which as was pointed out earlier many of our products can hardly be expected to survive?
Over that same period, as we have been reminded, we have seen profits going in the opposite direction and they are still going in that direction, I suggest. In the year ended in May,  1965, over the same period in which consumer prices were steadily rising, profits were still soaring although we know that the actual cost of production in terms of wages fell. I think Senator FitzGerald also mentioned that point. Somebody obviously is benefiting from a situation in which that sort of thing can occur. Clearly it is not the ordinary worker, the farmer or the ordinary man in the street. I do not have to be an expert to point out that if you eliminate those main groups you are then left with the suspicion, at least, that a very small number of people are doing very well out of the type of situation which we are now reviewing.
The Prices Bill has now been introduced and I regard its introduction almost as a confession of failure on the part of the Government, failure to face up to the reality of the situation, and a failure to admit that at any time they could have been wrong. On more than one occasion in this House I have heard appeals being addressed to the Government for some effective form of control over prices and profits and on every occasion there has been the same answer, that the free play of competition and so on, was the most effective safeguard the public could have. I would ask them are they now satisfied that that in fact is not the case? Clearly by their actions they tacitly admit that it is not. Why not come clean and tell us plainly what is the position? Again I would ask what has happened to convince the Government that there was a necessity to introduce a Prices Bill? Even at this late stage——
Mr. J. Lynch Mr. J. Lynch
Mr. J. Lynch: We are not doing it for fun.
Mr. Crowley Mr. Crowley
Mr. Crowley: —the Bill must be welcomed. I am not objecting to the introduction of the Bill but simply trying to emphasise that the Government have no monopoly on clear thinking either in this House or outside it.
Tomás Ó Maoláin Tomás Ó Maoláin
Tomás Ó Maoláin: I am beginning to think they have.
Mr. Crowley Mr. Crowley
Mr. Crowley: Perhaps the Senator is right, in one sense. One must admit that some of the facts to which we are  alluding make it pretty obvious that in some aspects of their thinking they have proved to be very much wrong in the last two and a half years. However, I am not prepared to castigate them at this stage; I want to make the point that the lesson should now be benefited from. I hope this Bill is not going to be a bit of showmanship or another bit of bluff, pretending to do something while we are not serious about it at all. The Bill must be made to work and while Senator Murphy a moment ago said that the Bill should be implemented by public investigation and inquiry into prices where necessary I assert that it must be made fully effective and must provide for public inquiry and must provide also that these inquiries or investigations will not be confined to further increases in prices but addressed to the present level of prices of many commodities.
I submit that it is not sufficient to peg prices at present levels. I am saying this as a trade unionist, that we cannot restrain people from demanding compensation for the present level of prices unless we make a serious effort to bring back these prices or reduce them effectively. I would hope that the manufacturers and retailers who have been responsible for pushing up prices to their present levels would now examine their consciences and assist the Government to overcome some at least of the present difficulties and by voluntary effort on their part effect some reductions in those prices. There is not the slightest doubt but that there is plenty of room for reductions and if these people would examine their consciences and make their small contribution to the public interest at present they would be doing something which they owe to the people, the country and to the Government who have been pretty good friends of theirs in the past. Like Senator Murphy I am looking forward to the Minister's reply and I hope he can be specific in his assurances on these points. I hope he will be clear in his explanation of why we are faced with this situation, where on top of three major measures we also have to debate this wide and momentous question of a free trade area with Britain.
Dr. Sheehy Skeffington Dr. Sheehy Skeffington
 Dr. Sheehy Skeffington: We are engaged now on a triple debate, or perhaps a quadruple debate if we consider the free trade area question which has been touched on, but I do not think that this is altogether a bad thing. In the past some of us found that if we tried to talk in detail on one of these Bills we were told that it was the wrong Bill on which to discuss the matter, and if we talked about general policy we were again told that it was on the wrong Bill. I intend to say something in some detail on some matters which arise on the Appropriation Bill. I want to speak mainly about education, but before I come to that I want to mention some initial points connected with a variety of attitudes in Government policy and administration.
The first point I want to make is in connection with pensions. We had what seemed to me to be a very enlightened attitude put before us by the Minister for Justice on the Succession Bill, with which we have not quite finished, when he desired us to recognise the legal right of the surviving spouse to a specific proportion of her dead husband's property, recognising that it was in fact joint property. We had in another recent debate a semi-formal recognition, by some Senators at any rate, of pensions as being a manner of deferred salary payments. What I should like to see is a general Government policy on those pensions over which they have control, and can therefore set an example to others, that is to say the pensions of retired State servants. I should like to see a recognition of the simple fact in justice, of widows having a legal right to one-half of the pension. At the moment the right of the widow of a civil servant as far as a pension is concerned is nil, unless her husband has made some sacrifice in regard to his pension some years before he dies. I should also like to see a recognition by the Government of the fact that when the cost of living goes up for people in the Civil Service it also goes up for retired State servants, and there should be recognition of the fact that pensions ought be raised whenever salaries are raised.  In all equity, former State servants should be treated as requiring every bit as urgently, if not more so, increases in allowances when present State servants have their salaries increased.
This brings me to the old question of the cost of living. The Government seem to me to speak with two voices here, because they preach that the cost of living must be kept down, that prices must be kept down, that as far as possible wage demands must be restrained. Twelve per cent is considered quite enough, but when the Government decide to put up the cost of telephones and postage charges, they think nothing of putting them up by 25 per cent or 33⅓ per cent, at the very time that they are telling others that they must realise they have to hold demands back to 12 per cent or less. Senator FitzGerald, in an extremely able speech, mentioned a figure which I do not think will be contested. He said the cost of living in less than two years has increased by very nearly 14 per cent.
Now, this Government who have put up quite an amount of cost in telephone charges, postage and so on, and admitted the raising of other prices, are now talking about “price fixing”. I should like to feel as optimistic about this Bill as other Senators apparently do. It will admittedly have some effect, in terrorem, on people who have been raising prices without any justification. However, the mechanism is so cumbrous that the whole thing seems to me to be largely windowdressing. If the prices bodies do not hold their inquiries in public, the Prices Bill is not worth the paper on which it is, not printed but duplicated. Consequently, I remain very wary about it and wonder whether it can be efficacious.
I pass to a point not so much of detail as of general Government policy —the whole attitude towards the national health scheme. We were told many years ago by a former Minister for Health that five-sixths of the people of the country were then covered by the national health scheme, and he was very proud that the other sixth were rugged individualists who insisted on paying for their hospitalisation,  their doctors' fees, and their medicine or, if they liked, they could engage in a very expensive voluntary health insurance scheme. I urge on the Minister tonight the necessity for a national health scheme which will be an over-all scheme without a means test—in other words, not so much a radical change in Government policy but an extension of the health scheme so that it can be in fact a national over-all scheme, and not a scheme applying to a portion only of the population.
I should now like to say something about State companies. We can be quite proud of the achievements of many of the State companies but I do not think we, as Members of Parliament, can be so very proud of the present lack of parliamentary control or even check, or even the right to question the way in which these companies are being run. It seems to me that we have to consider whether as part of our policy, we are willing to consider the setting up of some sort of Joint Oireachtas Committee, somewhat like the Committee of Public Accounts, with power to put questions and inquire into the running of these companies. At least we should avoid the situation in which Ministers, asked in Seanad or Dáil to justify certain attitudes or actions of State companies, are able to say that the affairs of State companies are not matters of Ministerial responsibility. While independence can be useful, it can be carried too far if Parliament has not some responsibility or capacity to check.
There was mention earlier, certainly indirectly by the Minister, of the attitude and policy of the Government towards city development. We see city development going on all around us in Dublin and elsewhere. It raises a very big potential danger. The Minister today at least hinted he felt somewhat this way about it. What we should very much oppose is city or municipal development of an area of this city which, by community effort, puts up the theoretical value of the land all round the community development, a situation in which speculators thrive and in which the increment accruing to the speculators is out of all proportion  to any contribution they have made or ever will make to the city. What I should like to see is the municipalisation of city land, because the value of that land depends not on its owners' efforts but on the community living and thriving around it. I should like to see any increment-return from the enhanced value of that land going to the community which produced it.
The free trade area was touched on, surprisingly, by the Minister—surprisingly for some, but those who were most surprised had carefully prepared answers to this surprising reference by the Minister. The suggestion in newspapers and on the radio is that we might have a little EFTA with Britain —a free trade area. Free trade area is a relatively new term. It used to be called the United Kingdom. I do not know whether everybody here is old enough to remember that phrase. We used to be in it. We were entirely united, and we had what you could call in modern terms a free trade area with Britain. We did not like it, and there were many aspects of it which thoroughly justified our dislike.
I felt that Senator Garret FitzGerald, in pointing out the possible disadvantages extremely cogently, looked far back into 1927, and made a Fianna Fáil out-of-office speech on the dangers of being under the domination of the United Kingdom, of our not being self-sufficient enough, of not having our own industries or the freedom in protecting them. All the dangers were brought out by Senator Garret FitzGerald, and it seemed to me to be like old times—like Fianna Fáil out of office in 1927 and anytime up to 1932. I looked forward, consequently, with a certain element of detached amusement, to hearing a strong Fine Gael answer coming from Senator Ó Maoláin, or from any of the Senators on the Government side. What we are asked to argue about is whether we should now drop all tariff barriers. One of the things which was so extremely important in the past was our right to erect these barriers. Now, in a wonderful new solution, we can move in, dropping all barriers, with the United  Kingdom. It would be unfair to make the kind of criticism of the Government in this respect made by people thirty years ago writing slogans on the walls: “Heads up and into the British Empire.” Those slogans were then written of course by Fianna Fáil against a Cumann na nGaedheal Government. This is the kind of thing then felt by them to be relevant to the political situation of that day. To use this slogan today would be, in my opinion, wrong and unfair.
Mr. Garret FitzGerald Mr. Garret FitzGerald
Mr. Garret FitzGerald: No empire left.
Dr. Sheehy Skeffington Dr. Sheehy Skeffington
Dr. Sheehy Skeffington: It would be exaggerated. Nevertheless, Senator Garret FitzGerald, I felt, was quite right to enter a caveat to make us realise that if we were to enter a free trade area with Britain alone the increased dependency on Britain, economically and industrially would be enormous. It would be disingenuous of us not to recognise that now. I hope I am not misquoting the Minister, but he seemed to say rather plaintively that in recent years Britain had not been treating us quite as well as they used to. He talked about “the erosion of benefits which we previously enjoyed.” What particular right had we to enjoy such benefits, if we were in effect a separate nation, having full control over our own destinies? What right had we to expect “benefits” from them? Why should we whine because Britain preferred to offer these benefits to the Scandinavian countries? Can we say to them “Well you used to be nice to us, and now we must make up to you again. We would like to wipe out all barriers now”.
I find myself wondering whether, in getting into such close economic association with Britain, we should be in a very different position from what would have been accepted fifty or sixty years ago by the old Irish Party, the Nationalist Party, who wanted a local Government here, but Ireland still within the United Kingdom. This Irish Party policy had scorn poured upon it by the more revolutionary republicans at that time, but it seems to me we are getting back to the  situation which would have been approved of by John Redmond. This does not condemn the situation or the solution now offered but we might perhaps now be a little less rude about John Redmond, if we find ourselves asked to recognise that perhaps we have tried to be too independent.
I have said many times in this House before that if an industry requires the protection of a tariff of 50 per cent in order to start off and in the first five years or so, and if at the end of those five years or ten years it still needs this level of protection in order to keep going, then, in my opinion, there are one or two things wrong: either the industry has been supremely inefficiently run if it still can be run only behind the same tariff protection after ten years as it needed when it was started off, or else it has been making grossly exaggerated profits behind this unnecessarily high tariff barrier. I remember making this point in the presence of the same Minister who is here today, when he was Minister for Industry and Commerce, but in those days he was quite uninterested in the possibility of dropping these tariffs. He used then to come before us with successive Imposition of Duties Bills raising individual tariffs from 25 per cent to 33⅓ per cent, from 33⅓ per cent to 50 per cent, or from 50 per cent to 75 per cent. He was quite indignant then, when I suggested that this sort of thing was being done rather in the manner of the “bargain” sale: “Let us put up our tariffs further now before we go into the European Common Market, so that later we can claim to be `slashing' our protective tariffs.”
Apart from the European Common Market it has always seemed to me that our Government in trying to build up protection for industry has failed in its duty to the country, by not demanding that these over-protected industries should make themselves sufficiently efficient to do with less tariff-protection year by year or at five-yearly intervals. I feel that the present Government stands indicted in this respect, because they have not made any attempt to say to the industries, which they have over-coddled and over-protected “You must learn to  make yourself sufficiently efficient to do without excessively high tariff barriers ten or 20 years after starting off. These are the points I have in mind when I hear representatives of the same Government, and the very same Minister, coming before us now vaunting the desirability of dropping all tariff barriers in order to get us nicely and cosily close to the United Kingdom.
Senator Garret FitzGerald has made the point better than I can, but there is no doubt that a case can be made for a continued measure of protection and of self-sufficiency, and that there is a grave danger that if all barriers were dropped we should be, as has been suggested, simply swallowed up. We already have, of course, very great economic links with Britain, and we do not, in fact, so very often publicly recognise them. I remember seeing long accounts of our adverse balance of trade with practically every country in the world being printed in various newspapers, almost all of which omitted to mention that we have a favourable balance of trade with Britain and that we have very close and useful links with them. I do not think however, that these links should ever again be allowed to become chains. I feel almost as if I am being more Fianna Fáil than Fianna Fáil itself when I say that a large measure of our independence must surely be retained, even economically.
This, of course, all goes back to what was said nearly 70 years ago by James Connolly when he said: “If you could drive the English Army out tomorrow and hoist the green flag over Dublin Castle, unless you set about founding the Socialist Republic your efforts will be in vain.” His reason for saying that was that as he said in effect: “You will be in the power of the financiers, banks, industrialists and merchants of your great and powerful neighbour, unless you set about genuine planning in the community interest and not just in the interest of the privileged few.” This, in fact, is where the present Government and successive Governments have fallen down.
It is true the Taoiseach told us, not so very long ago, that the time  had come to go a little bit more to the left. Senator FitzGerald has been telling us quite clearly we must have more planning. I would say Socialist planning, and by that I mean planning for the community good and not simply for the satisfaction of the greed of the privileged few. After having said that, I want to turn to the main point I want to speak on tonight, and possibly tomorrow, I am afraid, and that is the question of education in this country.
I was very interested by the speech of the new Minister for Education in the Dáil. I am quoting from the English version of his speech, page 16, when he said:
The House may naturally wish to inquire of a new Minister where he expects to go from there. For this reason I propose now to discuss some of the matters to which I intend to devote special attention.
This seems to me to be not only excellent, but though one might say perfectly normal, but not so very usual, I am afraid, in this country. In fact, I would be inclined to say it is entirely new for a Minister for Education, and I say that in the presence of a Minister who, as well as having been Minister for Industry and Commerce, was, once Minister for Education, to say that. It is entirely a new thing that a new Minister for Education, and I salute him as a man in whom one can place a lot of hope, should say that he is going to tell us about what kind of policy he is going to devote special attention to. I recall, in sharp contrast, a speech made by a previous Minister for Education, Deputy General Mulcahy, in July, 1956. General Mulcahy was asked by a Fianna Fáil Deputy what was his ministerial policy and general attitude towards education. In his reply to the debate on the Estimate for Education, the then Minister for Education answered thus, on 19th July, 1956:
Deputy Moylan has asked me to philosophise, to give my views on educational technique or educational practice. I do not regard that as my  function in the Department of Education in the circumstances of the educational set-up in this country.
He went on later:
I regard the position as Minister in the Department of Education as that of a kind of dungaree man, the plumber who will make the satisfactory communication and streamline the forces and potentialities of the educational workers and educational management in this country. He will take the knock out of the pipes, will link up everything. I would be blind to my responsibility if I insisted on pontificating or lapsed into an easy acceptance of an imagined duty to philosophise here on educational matters.
This was Deputy Mulcahy representing, in fact, the attitude of every Minister for Education up to now in this country, that all they were there to do was to “link up” the various mysterious forces. They were not to be concerned with what was flowing through the pipes. They were there to see that there were no leaks. They were to keep their dungarees clean, and they would be all right. It was not their duty to “philosophise” about education. I make the point now that I welcome a Minister for Education who is prepared to get up and say: “Here are the things I would do in regard to education.” I regard that a big difference from those Ministers for Education who did not aim to do anything.
Mr. McQuillan Mr. McQuillan
Mr. McQuillan: The Senator will frighten the Minister is he says that.
Dr. Sheehy Skeffington Dr. Sheehy Skeffington
Dr. Sheehy Skeffington: That is one of the risks one has to run.
Mr. McQuillan Mr. McQuillan
Mr. McQuillan: Let him do it without realising he is doing it.
Dr. Sheehy Skeffington Dr. Sheehy Skeffington
Dr. Sheehy Skeffington: I have already praised Senator Garret FitzGerald which will probably ruin his career, but I should not like to do that any more than I want to ruin the career of the present Minister for Education. Nevertheless, I must give  praise where it seems to me that praise is due.
I should now like to make some detailed references to what the Minister hopes to do, and to his remarks on the position of education. I find, for instance, in his speech he talks about the scholarships which will be available thanks to the Department this year. He mentioned that £30,000 will be spent by the Department this year on university scholarships. I am not quite sure how many scholars £30,000 will cover. There obviously is some progress, but I want to make the point that progress has been far too slow, and I hope it will move faster under the present Minister.
The Minister says that post-primary scholarships have been increased from 2,668 in 1961-62 to about 7,500 in the year 1964-65. These are post-primary scholarships, but you will recognise readily that the figure for 1964-65 is very small indeed still when you compare it with the total of half a million children in the primary schools, or even the 60,000 or 70,000 children leaving the primary schools every year. The expected expenditure, he says, by local authorities for 1965-66 is estimated at about £550,000. This compares, he says, rightly, most favourably with a total expenditure of £150,000 four years ago. Things are moving forward, but I want to make the point that we still have a very long way to go, if we are in any sense to implement the expressed desire both of Fianna Fáil and of Fine Gael and also, for a long time past, of the Labour Party, to give an equal chance of education to every Irish child. It is no good saying that 7,500 post-primary scholarships, though it is certainly an enormous increase on four years ago, is giving an equal share to every child or, according to the words of the proclamation, cherishing all the children of the nation equally.
On page 5 of his speech the Minister says:
By 1970, I expect that, on the basis of the present values of scholarships, about 20,000 pupils in post-primary schools will be in receipt of scholarships and that there will be  nearly 2,000 university scholarship holders.
Again, the Minister is here concerned with something which should vitally concern the whole country. Nevertheless, I see, for instance, provision for only 2,000 scholarship holders out of a total university student population of between 14,000/15,000. About 15 years ago, figures were given for Oxford and Cambridge, which are not regarded as unusually democratic institutions, which showed that 65 per cent of their students were by then grant-aided students. If we manage by 1970 to have university students to the number of 2,000 thus grant-aided, I feel we still shall be pretty far short at university level, just as we are short at the primary and secondary levels, of what we might legitimately hope for after forty-three years of Irish Government.
I should like to quote figures from the Irish Times of 9th April, 1965. The figures given were figures for the nine counties of Ulster, six of them being part of the United Kingdom, to which we will be turning hopefully soon, and three which are still part of the Republic. The local authorities in the six Ulster counties gave for the year ended 31st July, 1964 a figure of 2,456 university scholarships at a cost of £698,978. For a similar year the three counties of Donegal, Cavan and Monaghan, which admittedly are not amongst the wealthiest counties in the Republic, gave a total not of 2,400 university scholarships but of only 54, at a cost of some £10,800.
One could add to what was spent by the six Ulster counties a further 1,236 such scholarships granted by Belfast Corporation alone at a cost of £295,270. I quote these figures from the North just in case we might feel too smug and self-satisfied at the progress we have been making in this regard, and to point to the fact that we have still a long way to go if we are to fulfil our ambition to make education freely available to all who merit it among our children.
The Seanad adjourned at 10 p.m. until 10.30 a.m. on Thursday, 29th July, 1965.
Seanad Éireann 59 Public Business. Finance Bill, 1965 (Certified Money Bill) — Second Stage (Resumed).