Seanad Éireann - Volume 89 - 24 May, 1978

White Paper on National Development: Motion (Resumed).

Debate resumed on the following motion:

That Seanad Éireann takes note of the Government's White Paper on National Development, 1977-1980.

— (Senator E. Ryan.)

Professor Conroy: We have reached the point of discussing social issues in relation to the National Development Plan. The Senator who was speaking before me was emphasising one particular aspect of social issues, the absence of it from the plan, and was commenting that there are a lot of things that both sides of the House would like to do, that if we have not the necessary economic situation it is not possible to provide all the social services which we would like. Nonetheless, in the White Paper we do have references to education, health and social welfare services generally. There is one aspect which comes in the national plan, in particular, to the priority which we have or should have—that the question of employment and the opportunities and prospects for our school leavers. Section 7 of the plan points out that the Department of Education estimate that the number of pupils in national schools will increase by almost 5 per cent from 536,066 in 1976-1977 to 563,000 in 1981-1982. That is over half a million in primary schools. At secondary level there is reference to a total of 310,000, allowing for a 10 per cent increase. Then we come to the third-level education and there is a figure of 45,000.

There is a major point here about the developments and the progress which we had in the sixties, a point which I think is overlooked to a very considerable extent. We did have increasing employment and prosperity in the sixties. We did have many improvements. One of [306] the factors which was of crucial importance in relation to employment, and which tends to be overlooked, is that we had a vast increase in the number of children who had the chance to go to secondary school, to get a secondary education, shall we say, so as not to get confused between the various types of secondary education. This had an immediate direct effect in that you now had children who had an opportunity to get education which preceding generations did not have. This in itself had a direct effect.

It also had two other effects. One of these is one which can only be postulated, but it is probably true that having had a secondary education, having stayed that few years longer in the country, the children and people concerned were, perhaps, less likely to leave. Certainly it had the important social implication that one did not have the tragic horrific scenes of young Irish children of 14 and 15 arriving in places like London and Liverpool with literally no jobs and literally no education, which I think was one of the most appalling tragedies and disgraces of previous years. With the increase in secondary education, one also had a considerable increase in the level of education of the population. This has already been of very significant importance in relation to the type of modern industries which we have and were able to succeed in attracting during the sixties. It is extremely important for industrialists who are concerned with establishing industry to know that we have a population which has a certain level of education. This situation had double effect. One, the children had the secondary education, they were occupied by it, they had better opportunities. Two, the mere fact that they were educated to secondary level made it more attractive for industries with a higher technological basis to come to this country.

One of the aspects which we must emphasise in the late seventies and eighties is the third-level sector. I say third-level sector because we must include all elements and, in particular, emphasise the technical and the technological aspects. We had had for far too long a post-colonial hang-up on [307] the idea that third-level education of the right sort is a baccalaureate in arts. Indeed, it was tragic until recently to hear quite eminent people in certain of our colleges and higher institutions talking about a university as though the key of the university was its arts faculty. I do not deny that it is a very important part, but that was a Victorian British concept. The top-class universities tended to have a far more specific professional basis to them. In the post-war years we have had remarkable developments in technological universities. I must say one of the most advanced, impressive and excellent that I have visited was in Hanover, which consists of a medical school, technological engineering and related professional training trend of excellent standard which we could well copy.

Therefore, I would suggest that an important part of our planning over the coming few years should be an emphasis on third-level education with a technical and technological bias. Not only do I think that this would be very important directly to the people involved who would have this opportunity, but, quite frankly, it is essential for us if we are to continue to attract the sort of industries with potential, computer-based industries and so on, which we need if we are going to maintain any sort of competitive edge. Let us face it, there is no way in which we can compete solely on the basis of low incomes. We have to compete on the basis of having technology, having the modern equipment, of using it to the fullest extent. To do that we must have people who are able to manage, work and operate in such circumstances.

There is another social issue, and one which I would regard as the most important of all, and that is specifically the question of employment. Basically, this is what we should have as our absolute priority over the coming few years. This is basically what our national development should be over this few years. I think we have to be very careful to make sure that we keep this in the forefront of our minds. I am afraid that there is a definite danger and very good arguments will be put forward. Unfortunately, and one must say this, one got this impression [308] from one of the Senators speaking at the previous debate, that questions of financial orthodoxy, very good arguments of financial orthodoxy, will be allowed to take precedence. I am not saying that financial orthodoxy is not very important or that financial probity is not very important. Of course we must take cognisance of it, but it is not or should not be our first priority to consider balancing our national budget, to consider the degree of our national debt, to consider the degree to which our trade balances or imbalances are developing. Obviously we must take it into account. It may well be that, from time to time, very severe financial measures will be necessary in order to maintain employment, but let us not in any sense put the cart before the horse. The financial measures should take second place to the employment measures. That is what must come first.

The suggestion of financial precedence is also coming to us from the EEC. I think the EEC Commission have recently made some comments in this direction. We have to be very firm about this in our relationship with the EEC, make it very clear to the EEC that our primary problem is that of employment and employment opportunities for our school leavers. It is not a question of the precise financial balances which we may happen to have or may not have.

I am very sorry to have to do this, but one must take some degree of difference with Senator Whitaker. May I preface that by emphasising my great admiration for the tremendous work which Senator Whitaker has done. There is no doubt that, as far as I am concerned, at any rate, he is very much the prophet of the fifties — the man who paved the way and put forward the plans for our previous development. I am sure that it is not really his intention, but I am afraid that what is tending to come across through the media is an emphasis on finance and the idea of employment is getting slightly lost. This could be a very dangerous and, if I may be permitted to say so, a pernicious emphasis.

Senator Whitaker referred approvingly to Dr. Kieran Kennedy and I should like to refer to the book which Dr. Kennedy [309] and Brendan Dowling have written. I am referring, to Economic Growth in Ireland: The Experience Since 1947. Chapter 111, page 48 reads:

If the amount of public discussion on a subject were taken as an index of its importance, then the state of the balance of payments and the behaviour of prices would seem to be of overwhelming importance in the post-war Irish enonomy. Maintenance of the external and internal value of the currency are, of course, legitimate areas of concern in economic policy. But the priority accorded, particularly in the 1950s, to the preservation of external balance seemed disproportionately greater than concern for output and employment.

That was the financial orthodoxy of that time, this tremendous concern with that particular aspect of financial matters. Now I fear we are turning towards a matter that Senator Whitaker mentioned, and he is absolutely correct to mention it, that is, the question of the inordinate volume of public indebtedness. Senator Whitaker suggested that this might rise to a figure of about £500 million by 1980 and, of course, I would not dream of attempting to contradict his figures. At the same time, we really have to remember that in the White Paper, first of all, we do take cognizance of these financial features and on page 84, in relation to public expenditure priorities, it is stated that in formulating policy changes to moderate the growth of public expenditure the Government will give first priority to expenditure directed at enlarging employment and maintaining existing employment in the directly productive sectors of the economy.

I am sure that Senator Whitaker is aware of this, but I must point out that that is really what we are doing.

I should also like to refer to some facts and figures about our financial situation, and I am taking these from the 1978 edition of the OECD Observer which is the 14th year of it. Our total official reserves, as of the date quoted here, which was 31 December 1977, in millions of US dollars were 2,372. To put that in perspective, this considerably [310] exceeded the figure of Denmark which was 1,670, and was virtually equal to Australia, a much wealthier country than we are, standing at 2,383. Admittedly it does not compare with countries like Switzerland, the United States and so on, but it is still a very satisfactory position. On the other hand if we take our private consumption expenditure per capita — again, there is a slight suggestion here that in some sense or other we were spending too much or something or other of this nature — the total amount as at current prices in US dollars was 1,580, which was lower than a very poor country such as Greece, which was lower than Italy, which was scarcely above that of Portugal.

We on this side of the House would disagree very much with people on the far side of the House in regard to capital formation. We consider that capital is one of the things that we urgently require. Measures taken by the previous administration, unfortunately, had a most pernicious effect in that direction, and it is essential that we have capital. But one must point out that our gross fixed capital formation taken as a percentage of gross domestic product at current prices came to 24.5, which was considerably above that of Italy at 20.3, or Greece at 21.5 or Denmark at 21.5. Admittedly it is far below certain countries such as Japan and so on. Nonetheless it is still a relatively high and good rate of fixed capital formation. So let us not over-emphasise our financial poverty or indebtedness.

Senator Whitaker referred to the Central Bank, and he is perfectly correct and proper to make a reference to it. Can we cast our minds back just a little bit to the time when we were having the advances of the sixties and there was one hiccough during the period of that advance, a hiccough in 1966? Again, I quote from the authors whom Senator Whitaker has referred to, Dr. Kennedy and Brendan Dowling. On page 233 they point out that:

The only serious set-back to the expansion of total output occurred in 1965-66.

On the following page they go on to say:

[311] Action to check demand was initiated about the middle of 1965. In May 1965 the Central Bank advised that the rate of credit expansion should be decelerated and that priority should be given to loans for productive purposes,...

The following paragraph reads:

In retrospect, it appears doubtful whether a cut back in public investment was necessary.

We have to be terribly careful that we do not again start to listen to well intentioned statements but statements which, no matter how much praise they happen to get in financial circles in London, New York, Zurich or in financial circles anywhere else, or what halos we may put around ourselves in relation to our extremely satisfactory financial standing in world circles, what matters and what should come first, within reasonably prudent financial limits, is employment. That is what must come first.

In regard to planning in general, with great respect to him, I must say I found Senator Whitaker's speech rather extraordinary, and vague and even confused in certain aspects of it. I quote from Volume 89, column 185 of the Official Report:

Let me first make it clear, however, should that conceivably be necessary, that I am not against planning in the sense of a comprehensive and coherent programme of development. Indeed, I have been complaining for years about the absence of a plan and I warmly welcome the early restoration of planning by the present Government. The question of what Department should be in charge of planning has now been resolved and I have no more to say about that. A much deeper question remains to trouble us all — whether we have the kind of society in which planning is relevant.

I find that an extraordinary statement. When I was last speaking on this subject I quoted the excellent book which Senator Whitaker wrote as a relatively young man on credit creation. That [312] book was written a long time ago, but perhaps one can come back to the seventies and quote from a speech of Dr. Whitaker's which was printed in the journal of the Institute of Public Administration of Ireland, Vol. 25, No. 3 of 1977. The second paragraph on page 288 reads:

Plan A Supreme Policy Document

First, let me indicate what I think a plan should be in a democratically-governed country. It should be a complete and internally-consistent statement by Government of the policies and actions to be followed in order to achieve specified objectives of an economic and social character. It is, in my view, the supreme policy document of the Government in power. For that reason, the basic plan should appear very early — within the first year — of the term of office of any Government, its life should coincide with the normal four to five year life of a Government, and the degree to which the plan's objectives are achieved should be the foremost measure of the success or failure of a Government's economic and social policy.

I am afraid I agree wholly with that statement. I find it a little hard to relate it to his speech here the last time we were debating the subject. He goes on to say:

It is, I believe, indispensable to good management — and therefore, to good Government — and it can, through its combination of realism, dealism,——

To my astonishment last week, Senator Whitaker was criticising idealism. We need a lot more in this country, not a lot less.

——equity and purpose, be a strong community—binding force and a generator of the confidence and cooperation needed to achieve difficult goals. Our experience shows that the psychological factor can, at times, be the most powerful factor of production.

That is something for all of us to bear in mind. The psychological factor is very important and it is not necessarily [313] helped by the sort of speech that we had last week.

Senator Whitaker's own study on economic development, which was correctly lauded by Kennedy and Dowling, lauded for a number of different aspects, goes on to say, and I quote from page 254:

And the overwhelming achievement of Economic Development was in dissipating the prevailing pessimism, even before recovery from the economic depression had begun.

What an optimistic attitude prevailed at that time in the midst of so much pessimism. I would be very, very sorry if the prophet of the fifties were to become the Cassandra of the seventies.

There was one further point, and it epitomised the very grave serious divergence between financial theory and the realities of life, and this was the reference to Santa Claus. I suppose most of us smiled and I suppose that most of us could afford to smile at the reference to Santa Claus not calling. If you are really out of work, if your father really is unemployed, if you have given preference to all these excellent financial plans and references to national development, have given them priority, and the effect is that the father of a family is out of work, the children do not see Santa Claus very often in most circumstances.

Mr. Connaughton: I am disappointed that the Minister himself is not here to listen to the debate. I might add that under normal conditions and if we were discussing agriculture we would be extremely delighted to be talking to the Minister of State. As far as this debate is concerned the relevant Minister should be here, and I was given to believe that he would be here after 7 o'clock. Considering his opening remarks about the importance of this White Paper I find it inconceivable that he is not here to listen to it. There is not much point in having a debate on this topic if the man primarily concerned with it is not here to listen to it as he said he would welcome all views and details of it.

I should like to preface my remarks by referring to Senator Conroy's contribution. [314] I thought for most of the time that Senator Conroy was not speaking on the White Paper but on Senator Whitaker. It led me to believe that he would like to say out straight that he did not particularly like what Senator Whitaker said, but would not like to say a thing like that out straight. He is right and he is wrong at the same time. The very sensible argument made by Senator Whitaker was what we were pursuing when in Government. It must be fairly difficult for the present Government to swallow what Senator Whitaker has been saying. I agree that it is a fine thing to have open discussion, and we welcome that from all sides. I certainly thought that we had a very pronounced and dedicated debate on Senator Whitaker, and it is a pity he was not in the House to hear this type of contribution.

Professor Conroy: I informed Senator Whitaker, before the House met, that I would be expressing this criticism and I would make that clear to the Chair.

Mr. Connaughton: We make the point for and against, primarily against, but not in public. Just before the last general election, Mr. Colley, when interviewed on television on more than one occasion, gave the example that the economy at that time was like an aeroplane on its way down the runway, that it was taxiing along, and what was vital and necessary at that stage was a huge injection of capital to ensure that it got smoothly off the ground. It got the injection of capital. It got £831 million to be exact, more than the economy got at any other time in our history. I suggest that the aeroplane never took off. I suggest that if we are not careful it will do worse than that, it will soon grind to a halt and with it, to use the parallel, an awful lot of money that this country does not actually own. We had to borrow that £831 million and we have to pay it back. It will have to be paid back by every citizen in one way or another.

We borrowed that money, we were told, to do a number of things. We borrowed it to provide badly needed extra employment, to increase productivity and to reduce inflation. Inflation is certainly reducing but I should like to make [315] it clear that it is reducing everywhere else as well, particularly in Great Britain with whom our economy is reasonably well linked. There is no credit due to anybody for that. I believe that the way the present position is, it might be as low as we are going to see it for this year. In fact, some economists are on the point of saying that we might have a slightly increased inflation rate at the end of this year. All economists are not happy with the amount of money we borrowed. The Green Paper when published will be more to the point than the White Paper is and it will give us a better idea of where we are going.

This £831 million did not cure all our ills. We all know the benefits of the budget: we did not have to pay our car tax but we paid double insurance a few months later. We have had more than 130 price increases — I believe it is near to 150 now — and that is not generally known. Those increases come at a time when we were supposed to be levelling out. We had several price increases about which the Government were not in a position to do anything. However, worse was still to come. During the 60s and into the 70s at least one of the boasts we had was that we were providing employment for all our people. In the last couple of months the dirtiest word in my opinion in the English language, “emigration”, has crept in. Unfortunately for everybody it appears from the short, medium or long-term plans of the Government that a certain number of our people will have to emigrate. Nobody can put a figure on it at present or say whether it is 10,000 or 15,000 but it is a considerable number of people. It is a trend I would not like to be part of at any time.

Another important question in direct relation to the White Paper is: how many people are out of work here at present? Are more out of work now than at this time last year? Have we a different method of calculating the live register? I was led to believe by the then Opposition last year that we had 170,000 people out of work. I have been told that at present it is officially 112,000 but we certainly did not create that number of jobs. I am of the opinion that [316] the number of jobs created in the last six or eight months would be about enough to counteract the redundancies plus no more than a few thosand. That was for an investment of £831 million.

Senator Brennan in his contribution last week said he is not an economist — I am not an economist; I was not trained in that business — and he directed his views to the ordinary people and said that all one has to do is to ask them about the economy to see the beam on their faces. He must be like the ostrich in the sand; he only saw the people he wanted to see. While a certain section of our community benefited greatly by the Government our boys and girls who left school last year cannot be too happy, and the boys and girls who are about to leave this summer will be less happy. No matter what Government are in power the question of employment is a very difficult one for them. It is something that should not be made into a political football. Any young person reading the Fianna Fáil manifesto last year would be led to believe that his problems were over but on reading the White Paper one can see that the problems are still there. In my opinion they are getting worse.

Another important factor in the White Paper is our rate of growth, predicted to be 7 per cent. Most economists and commentators now suggest that that will be about 5½ per cent. That is a big and important difference as far as the benefits of the budget are concerned.

Dr. Whitaker mentioned the changing realities since the manifesto. I contend that the realities were there all the time and the primary objective of whatever Government was in power was to get our own people back to work here. If the next document being prepared on the subject by the Government is not more specific than the White Paper we will have despair all round.

I noticed in the White Paper that agriculture comes in for very little comment. It is important if we are to do what we would all like to, that the agricultural sector must be given a chance to contribute more. At this stage there are too many acres of land lying unproductive. Several million pounds should be [317] pumped into structural arrangements of farms. Land drainage, which we hope is on the way, is an important scheme. We hope that processing agricultural products will create more sustainable long-term jobs. I hope the Green Paper will dwell on and give a clear commitment to this.

On a number of other issues relating to the White Paper and promises made one could not but be upset about the industrial unrest here in the last five or six months. One must ask the question: where does the fault lie? For any period of five or six months in the history of the previous Government, the incidence of strikes and closures would not have been as great. Where does the fault lie? I am not blaming the Government but somebody must be at fault. If we are to pull our weight in Europe on an industrial arm we must do something about our industrial relations. What happened about the proposed industrial development consortium of which we heard so much? Certain commentators suggested at the time that it was going to do lots of things but I have been told that it met only three times since it was inaugurated—I am not sure if that is the correct figure—but if that is anything like the correct figure it is close to inactivity. What happened the Export Credit Finance Corporation? We have not heard a lot from it. Is the Employment Action Committee on which we pinned such great hopes doing enough? If there is to be a future for our young people whatever is necessary for this committee by way of finance and legislation should be given to it.

I am not at all impressed by the results to-date, and I am perturbed about the number on the live register. The number of people employed between this time last year and now is very small. I shudder to think what will happen when the school doors close in one month's time and all our students come on the employment market. The National Manpower offices around the country will have their busiest season ever. I hope the Minister for Economic Planning and Development, Deputy O'Donoghue, will be as good as his word. It is not a political matter at this [318] stage, and that is why I find it difficult to understand why he is not here to listen to a debate which he termed to be important.

We are a small nation with a huge national debt. At a time when our economy was improving we poured our money into a situation that led to a certain type of individual getting richer and a greater number of people coming out worse. I hope that when we get the Green Paper more positive action will be taken and that we receive from the Government the type of promises we were led to believe they could deliver only 10 months ago. I will be the first to congratulate any Government that will get our young people back to work, no matter who they are, but I am afraid from the way they are shaping that it will not be the present Government. Our national debt will be so high and the repayments so large that those who will be around next budget day will get a greater shock than they got last budget day when so many goodies were given out. If we got our people back to work by those incentives that would be all-right, but the point I am making is that we spent over £800 million in a number of specific directions but we have not got a return for it yet. Economists are saying that we are not likely to. If that is the case and if we have over-borrowed the Seán Citizen of Ireland will have to pay. When budget time comes around there will be a fair amount of fleecing. The majority of our people will be of the opinion that Senator Whitaker's philosophy will certainly be the best one.

Mr. Lambert: Whilst one might agree with Senator Whitaker that this first White Paper on National Development is a mirror of the election manifesto those of us in the private sector were glad to see that the election promises and policies were confirmed in a document which clarifies the Government's purpose in establishing the framework by which longer-term plans and activities can be motivated. The next step which we appreciated was the identification of the incentives for Irish industry granted under the budget, and there can be no doubt that the private sector is responding as is evidenced in the [319] buoyancy within our economy at the moment. It does, however, take time to adapt to the new and more encouraging circumstances, to recast internal budgets and current corporate plans and to plan the implementation of revised policies in accordance with the more favourable opportunities which are being made available. Furthermore, I must remind the House that for the first 55 years of our national independence, the private sector has had to operate in an environment that has been fraught with misunderstanding and a lack of appreciation by most politicians of the practical problems which have confronted private enterprise and, in particular, Irish manufacturing industries under continuously changing circumstances.

In my short sojourn in the House I have listened to many disparaging references to the private sector which I consider unfair and lacking sensitivity towards the practicalities of operating under a competitive enterprise system. In my opinion, the basic reason for many negative comments is that we are an agricultural community and that the inherent attitudes of the majority of those who have entered politics over the years from all over the country have quite naturally been influenced by a rural background in one form or another. This empathy, together with the superb lobbying and expertise of the farming confraternity in managing the news media, account for a certain bias against those operating in other economic activities. I am the first to admit that Irish business and Irish industry as a total entity has not been able to communicate adequately over the years the important part which it has played, and must play, in our national development, and this deficiency is even more obvious to me since I entered the periphery of politics.

It is a fact that communication is improving and that both Governments have listened more alertly to the voice of industry in recent years, as evidenced in the fact that, in the past year or so, no one can dispute that a full realisation has emerged of the necessity to generate [320] wealth through production and processing of goods before it can be spent, and at long last there is a growing awareness of the need to initiate a more encouraging environment in which the manufacturing sector can develop and expand its output.

Looking back 30 years to the post-War period, or the post-Emergency period as we call it, I can recall my own experience of working in a traditional industry of national significance which has survived despite the problems which bedevilled the Irish private sector.

Before the War we were exporting all over the world. However, this initiative was disrupted during the Emergency period, and in 1947 when the possibility of resuming exports emerged, the Irish Government refused us permission to use whatever ingredients were available for any of our products to be exported, ordaining that the home market must be supplied first. This policy was obviously a result of the large post-War credits owing to our agricultural community. Our neutrality probably accentuated the isolationist policy which dominated the 1930's. At any rate, the economic necessity to export was not foreseen at that time and we all lived in a fool's paradise.

Incidentally, the various Irish distillers suffered from similar Government restrictions, and this accounts for exports of Scotch whisky getting off to a much faster start than Irish whiskey in America after the War. However, even more frustrating was the fact that from 1948 to 1956 the private sector was price controlled and then profit controlled during the period of rapid inflation, which meant that by 1956 Irish industry was still trying to operate within an unbalanced price structure and to a profit standard set by the Government years before.

I bring these historical facts to the notice of the House in order to recall how Government controls at that time stifled growth, precluding us from making enough profits to provide for replacement of machinery at inflated prices, never mind planning for modernisation or expansion. Throughout the depressing fifties political bias was still strongly orientated towards agriculture, to such an extent that many private businesses [321] failed during that period and many of our best brains had to emigrate through lack of opportunities. By 1957 we had had eight years in Limbo compared with British industries, whose automation and growth bounded ahead during those years due to the type of incentives to modernise and expand which now are being introduced here. Not until 1958, when Seán Lemass saw the light and gave Irish industry a lead in the first economic expansion programme, were we able to restart almost from scratch again from that period. The prospect of Ireland joining the European Common Market and the discussions and debates which took place on that possibility during the 1960s marked the beginning of a greater awareness within the Department of Industry and Commerce of the important part which Irish industry must play. In fact, the present Taoiseach, when Minister for Industry and Commerce, was foremost in encouraging overall greater efficiency through the CIO and gave solid support to the Buy Irish campaigns which were then run on very limited budgets, when I was president of the old NAIDA during the 1964-65 period. His appeal for practical patriotism evoked satisfactory responses in the short-term.

I hope we shall receive and review some statistical facts on the success or otherwise of the current “Buy Irish” campaign in the forthcoming Green Paper. However, despite the growing support from various Ministers for Industry and Commerce, my assessment of the past situation was confirmed recently in a paper read at the Statistical and Social Inquiry Society which indicated that successive Government attempts at planning since 1958 has been doomed to failure, both due to lack of political commitment and a lack of necessary policies.

Mr. Katsiauoni's paper goes into detail on the targets set in various plans which were not adequately worked out, that as a result of the lack of clarity, the provision of information by which firms like ours could make long-term plans was negated and that during that period there were many casualities in the industrial sector because most targets [322] were established by purely mechanical estimate to fit in with the overall target. Contrary to its canvassed status as the main agent of economic growth, the industrial sector tended to be relegated to a subsidiary position with little attention paid as to how it was to be developed.

Another major setback for private enterprise took place in the supplementary budget of 1970 when the Government decided to raise company tax from 50 per cent to 58 per cent, a decision which included a retrospective element of corporation profits tax which for many firms meant an effective tax levy in 1971 of over 70 per cent. This put a severe strain on those who were involved in capital investment and once again resulted in Irish companies having less funds available to plough back for their re-equipment programmes at a time when dangerous inflationary policies and pressures and large increases in costs were eroding profit margins and firms were feeling the effects of the Anglo-Irish Free Trade Agreement as imports from Britain increased rapidly.

Subsequently many of our food industries were hit by the flour crisis. The Russian great grain robbery in 1973, which took its toll before the oil crisis, caused a world-wide recession and we are all familiar with the dramatic effects on both public and private enterprise since that period. Although once again Industry and Commerce lent a sympathetic ear, the lack of any national planning during those years, for whatever reason, kept private enterprise in a perilous position. The two periods of Coalition Government in 1955-57 and 1973-77 have great similarity in that the Fianna Fáil Party, when in Opposition, seemed to have had more time to examine the practical economic factors affecting the nation's growth and more time to plan alternative ways out of our difficulties and out of our recession. This is a valid reason to be optimistic about the immediate future because it has resulted in the setting up of a separate Department for Economic Planning and Development on a permanent basis so that the exigencies of being in office will not overtake the practical aspects which need ongoing attention.

[323] I am more acquainted with the time-consuming commitments of Ministers under our democratic system of parliament since I joined the Seanad. I am, therefore, confident that with the introduction of planning units into each Government Department charged with the implementation of plans set out in the forthcoming Green and White Papers hopefully over the years the private sector should be able to look forward to a period of stable support and encouragement from all Government Departments undiverted by ad hoc political expediency.

Now, we have the Minister's word that the White Paper we are discussing today is the start of a new statutorily based planning process in Ireland. He has promised consultations with social departments and other relevant groups, and I hope that the women of Ireland, represented by Senator Hussey, will be included in these discussions, so that whatever the aspirations of sectional groups there must be greater public understanding of the underlying reasons for Government policy in the context of what the country can afford and the priorities for creating jobs.

Furthermore, in reviewing the pattern of the past 50 years, I must emphasise that while one cannot expect miracles overnight, the recent change in the political stance is the most encouraging prospect for the private sector which it has ever encountered. Some of the incentives will not become effective for a period of time, and the effect of the additional public expenditure will also take time to infiltrate the whole economy. As Irish industry takes up the challenge proferred, Government and Opposition, in fact all Members of the Oireachtas, must understand that its response must be carefully planned, organised and directed to ensure the longer-term benefits to the national economy. Therefore, we need the realistic understanding and support of all sections of the community. Certainly, private enterprise welcomes the inference last weekend by the leader of Fine Gael, that they would give support to progressive Government policies and will not just [324] oppose them for the sake of political gain.

In the face of critical attacks on the private sector in the past, the voice of Irish industry has been most tolerant in its assessment of the failures of some State bodies to perform adequately. The telecommunications and Aer Lingus disputes provide the most recent examples, and one must observe that the frustrated private sector was obliged, as usual, to refrain from too outspoken comment on such disputes at the critical times so that negotiations could proceed in a calm atmosphere.

Subsequently, there is seldom any statistical assessment of the damage caused by such public sector disputes. If company chairmen happen to refer to such adverse effects one year later in company reports, such serious set-backs are well forgotten and overtaken by other events. Journalists and politicians tend to regard such comments in retrospect as lame excuses.

I have listened in recent months to deserved praise being heaped upon the State enterprises which have had a successful record, when increases in public expenditure are being appropriated. But let us also remember in the future the number of successes in the private sector, companies like Waterford Glass, Smurfits and Cement Roadstone, which give a great deal of employment, a great deal of added value, and have earned prestige across the world for the image of Ireland.

Aside from Irish industry, let us not forget the distributive sector, where private enterprises have saved this country from absorption into the British economy. For instance, the Irish grocery trade is amongst the most progressive sectors of our economy and foremost in co-operating, promoting and selling Irish products. Therefore, I appeal for a more balanced attitude this year towards what the Minister for Finance has already described as our mixed economy which is neither a private enterprise nor a socialistic State. The private sector is very conscious that agriculture must always play the major role in our economic affairs. But a mixed economy [325] such as ours could indeed be the envy of many countries if only our national planning can develop the correct balance between the public, private and farming interests. Then, in my opinion, we have enormous potential for our future growth, for job creation and social prosperity.

I intended ending there but I had sympathy for Senator Martin who earlier today highlighted the frustrations of the independent Senators in connection with the Joint Committee on State-sponsored bodies. I share with him some of the frustration that when a backbencher like myself has the opportunity to speak it is almost always to an empty House obviously because the Press gallery is manned by one person. Such is politics. But I consider it a tragedy that the parliamentary procedure gives priority to those who are alert to the media, to their availability, rather than to the seriousness of the public debate. I have noticed that the Senators who bleat most about the under-utilisation of the Seanad——

Acting Chairman (Mr. Harte): May I just draw the attention of the Senator to the fact that a lot of his remarks are not related to the discussion on the White Paper?

Mr. Lambert: One must admit that I am talking to practically an empty House on the Opposition. It is a pity that the Senators who bleat about the under-utilisation of the Seanad are not here to hear my remarks. It is an unhappy situation for the private sector.

Mr. Jago: As has been said already, the White Paper is basically an extension of the Fianna Fáil manifesto. I cannot go along with the suggestion that this should have been discussed before being published because, when all is said and done, the manifesto was discussed, it was commented upon, it was criticised; this went on for many weeks before the general election and the present Government were returned in no uncertain manner to implement it.

Why was this plan produced? We were going through a period of inflation [326] which was caused mainly by outside elements. Our country, during that time, made no attempt through planning or otherwise to counter that action. The worker found prices increasing rapidly and his purchasing power dropping equally rapidly through inflation. It was every man for himself because there was no leadership or guidance available to him. What he had to do was put in for large wage increases and he had to get them. He now found that, having got his wage increases, he was taxed more and, with this reduction in his take-home pay, then he put in for more wage increases and so a spiral began. The employer found himself in a position that he was faced with a trade recession. He had ever increasing wages, increasing costs generally, and with no plans or forecasts to guide him all he could do was play safe. He cut back, stopped investment and by so doing created redundancy with added unemployment. The Government, at that time, faced with more unemployment and higher bills, had to meet this cost by heavy borrowing. There was no census of population, no way of seeing what the extent of the likely unemployment was going to be. Some people had an idea of how many school-leavers there were going to be in the years ahead — there were many comments on it — and the serious situation that was likely to obtain in this country if no action was taken to counter it; it could have meant even revolution.

I want to stress that this situation is still with us. It can be very serious if we are not successful in conquering it. As some Senators may have heard, in Italy they blame the Red Brigade as being caused by a problem similar to this.

Therefore, in that context this plan was born and obviously its basic aim is to get jobs. Firstly the trend has been created, where year by year people just put in to get higher wages every time inflation caused prices to increase. One of the first things to do was to break the spiral. Therefore, in this plan there were reduction in car tax, rates off private dwellings, £1 off the stamp for people earning under £50 per week, and increased personal allowances in income tax. All of these concessions were given to prove that the only way to keep up [327] one's standard of living was not necessarily to get an increase in one's basic wage. In this plan it was recommended that a wage increase of 5 per cent would give a real increase in actual terms to the workers. It was essential to prove to workers that there are other ways of improving their standard of living and that it was essential to have wage restraints if we were going to create jobs. As you all know the result was wage restraint but not down to the 5 per cent. I would have been happier if it was 5 per cent. Wage restraint must continue for the future because, if we do not get jobs, then what it means is that people who have increased their earnings to improve their individual situations will have to pay for the people who are unemployed, and they will get less money in the end because the money will have to come by way of taxation.

The aim of this plan was to create jobs. Therefore the plan was to create jobs quickly in the public sector. This has already been done to a certain extent and is carrying on. Then, in the private sector incentives were given to industry to increase their output. Senators are already aware of those incentives; I will not go through them in detail. There were also incentives to the farming community to increase their output. Senators are also aware of those and therefore I will not go into detail.

What happened? One of the first difficulties was — as already referred to here — the industrial relations situation which this Government, to a certain extent, inherited. We had Ferenka — 1,400 extra on the unemployment register. We have had the telephone strike, an upset in communications. We have had the Aer Lingus strike, another upset in communications, and we have unofficial strikes everywhere. In this area there is something wrong. If this is not corrected no plan to get jobs can be successful. As Senators are all aware this Government took immediate action. I understand that the commission which the Minister for Labour has formed is now sitting, and I sincerely hope and trust — as I imagine does everybody here—that a solution to this situation will eventually emerge.

Despite all this what has been the [328] result? Jobs have been created in the public service. Jobs have been created in the building trade. I do not know the up-to-date figures of the jobs creation. No doubt the Minister when summing up will tell us. Last week a conservative body like the CII reported a 10 per cent increase in output in the private sector; 5 per cent increase in productivity for 1978 for the 100,000 jobs. It must be remembered in this case that in the private sector, at the time this plan came into operation, in most cases they were under capacity. It must be remembered also that in the private sector they have to watch productivity to remain competitive. Therefore one has to wait until the under-capacity is taken up before one can reach the stage where one gets increased jobs. Therefore the jobs to come in the private sector will come now probably at a greater rate than they have up to now.

What else have we seen? The live register is continually mentioned to us as an indication of how jobs are being gained but the live register is not a true indication of what jobs are gained because people who are not registered at all have got jobs and the indications are that there are quite a number. Despite that, on 12 May the live register number was down 8,000 on the same week of the year before. Also in April of this year as compared to April last year, our import excess in the balance of payments was down by £12.9 million. In the four months period to April this year compared with the same period last year our import excess was down £63.8 million. These are figures which show the growth in the country. It has been mentioned by various economists that our growth must retard next year. Economists base their forecasts on figures. But if we base it on human beings, I see a different picture. There is nothing whatever to prevent our farmers continuing to increase their production. If our farmers increase their production then we must get more jobs, irrespective of what any economist says. Our meat processing industry, now that some of the difficulties have been removed, can create jobs. If we honestly deal with all the problems which prevent competitiveness in the private sector, if we can get together and find out what is [329] wrong with our industrial relations position — is it our personnel officers; is it the trade unions; is it the Labour Court set up, or what is wrong—get that right and make our private sector competitive, there is nothing to prevent us expanding and creating more jobs; even if we ask the housewife to consider seriously the Buy Irish Campaign. On the figure for this month if we had a switch of 4½ per cent, we will correct our balance of payments.

I welcomed this plan when it was produced because during periods without a plan we were like a ship without a rudder or a chart. We have a plan, we are working to it, we are showing that our economy is better now than it has been for goodness knows when. We have great hope, we have the people to work. What we have to do is give them the work to do.

Professor Murphy: When the economic history of late 20th century Ireland comes to be written this White Paper will be a crucially important source document because of the light it will throw on the bankruptcy of the socio-economic philosophy it enshrines. Long before it is considered by the historians, however, it will constitute damning evidence in the trial of the private enterprise system in Ireland, a trial which has already begun and is being conducted before the jury of the youth of this country. The White Paper may be considered as the third volume in what to date is an economic trilogy. Volume I was the pre-election manifesto, volume 2, an even livelier work, full of stirring fictions and entitled the Budget 1978, and the most important volume to date now lies before us.

I propose to address myself at some length to this debate on the White Paper so that my detailed comments will be recorded in the Official Report of the House. By way of preface I reiterate what many of my fellow Senators have said in their case, that they are no economists; I am no economist but perhaps this is just as well, because that distinguished body of conventional wisdom has greeted the strategic economic and social choices that face [330] this society with a thunderous silence. Confronted with a demographic explosion that offers us the boundless opportunity of building a vibrant and dynamic nation state, liberated from the national and economic delusions of my own generation and of my own peers, faced with a spectacle of renewed emigration and even of social disintegration, confronted with what is at once a unique peril and a unique opportunity, our economists, by and large, have regrettably opted for micro-economic papers on microscopic subjects and have offered no large vision to our people. At any rate I have studied this White Paper with a care and attention sharpened by a recognition of my own limitations in what is for me unfamiliar territory. But I soon found out that it required no particular expertise to penetrate the flimsy patchwork of orthodoxy in pursuit of disaster that goes by the name of the White Paper on National Development.

The central exercise I carried out is related exclusively to the most important theme of the paper and which I think the Government would admit, namely, the creation of employment. The exercise I carried out hinges on three fundamental questions: first, how many jobs does this document state the Government will create, given the thousands of school leavers and undergraduates — some of them now passing through my hands — who are marching out into “their country now”, bravely summoned to confidence by the clarion call of the Fianna Fáil manifesto. Secondly, to whom do the Government give the responsibility of creating these vital jobs? Thirdly, how well have these trustees discharged their stewardship in the past?

So, to the first question, the number of jobs. There was in 1975 a very broad measure of agreement on this. Professor Brendan Walsh then projected that our society would have to create some 30,000 jobs each year and every year for ten years. Recently he has revised these massive figures downwards. It now seems that we need fewer jobs, a mathematical point that must give us pause since the main demographic projections of Professor Walsh on birth, [331] marriage and death have not altered. On investigation I find that in 1978 Professor Walsh thinks we need fewer jobs because of what he calls a longer retention rate, which is a euphemism to describe parents keeping their children at home longer and subsidising their idleness. One is not impressed with this kind of sophistry or statistical repositioning of the stark truth of Brendan Walsh's 1975 projections. Any study of the population and school-leaving trends confirms the 30,000 jobs per annum figure. Incidentally, Professor Walsh calls in that grim old abductor, emigration, which may once again kidnap the unwanted children of the nation for whom jobs cannot be found.

Acting Chairman (Mr. Harte): Might I please ask the Senator not to attack somebody who cannot defend himself here? It is not really relevant to the debate, as I see it anyway, so perhaps the Senator could stick to the motion?

Professor Murphy: With respect, we are discussing the economy as a whole. Professor Brendan Walsh has been cited several times by Senators on this debate. I am referring to——

Acting Chairman: It is the tone of the remarks the Chair objects to. It is not the practice to attack somebody outside.

Professor Murphy: With respect, I would like to be informed of the difference between a wrong tone and a right tone.

Acting Chairman: The person to whom the Senator has been referring cannot defend himself here. All I am asking is that the Senator adhere to the White Paper.

Professor Murphy: With respect, is it not a debate on the economy as a whole? Why should I be halted when no other Senator was halted?

Acting Chairman: I am not halting the Senator on the question of the White Paper but on his remarks in regard to somebody who is not present in the House and is not in a position to defend [332] himself. If the Senator were attacking another Senator or a Minister, that would be different as the attack could be answered here.

Professor Murphy: With respect, I am not attacking. I am commenting on the well publicised statements of one of our leading economists in a debate on the economy.

Acting Chairman: We have to keep in our minds what is before the House. What is before the House is the Government's White Paper on National Development, 1977-1980.

Professor Murphy: With respect, Senator Lambert has just finished a long review of the background to the handicaps of the private sector over the last 50 years.

Acting Chairman: I also found it necessary to take Senator Lambert to task on a remark.

Professor Murphy: That was clearly an irrelevance at the end of his contribution. However, I do not want to argue with the Chair. I am mystified by its comments.

Deputy Máire Geoghegan-Quinn, the Minister of State at the Department of Industry, Commerce and Energy, who is not present but who is well able to defend herself, hints in an Irish Times report of 6 April 1978 that our people should look forward to emigrating to Western Europe. She and the Government must be left in no doubt that they are not going to get off the hook in that way.

Let us suppose that we need, not 30,000 new jobs per annum but something less than that figure. What has this White Paper to say? Its simple message boils down to three figures. In a jargon language, which prefers negative statements to positive assertions, we are told that unemployment will be reduced by 20,000 in 1978, by 25,000 in 1979 and by 30,000 in 1980. Or, putting it positively, the Government will have created 75,000 jobs by the end of 1980. In regard to the present year do Senators or anyone [333] know whether 20,000 new jobs will have been created by the time this lovely summer fades through autumn into a winter of discontent? The Government knowing that the live register will tell the tale now informs us that these 20,000 new jobs will not be reflected on the live register.

This sleight of hand erodes a vital cornerstone of faith in the White Paper. Whether the first year's target is reached will be like the existence of God — beyond literal proof. We are told then not to look to the live register — Senator Jago has told us this also — but rather to trust the Government and to sense the burgeoning feeling of confidence in the economy. Indeed if business optimism, that intangible sex appeal of the money market, is our only guide then the people who inhabit the house the bankers built can be happy with their Government. Perhaps these are the select people Senator Brennan had in mind when he told us last week to ask the man in the street — perhaps it was the man in Grafton Street — for his views on the economy. We may or may not have 20,000 new jobs by the end of the year. It is becoming increasingly impossible to discern what is the criterion by which we will know that the promises in the manifesto and in the White Paper have been fulfilled. If we are not to look to the live register what are the definite criteria by which we will know whether Fianna Fáil have delivered or not?

Well, we may or we may not have 20,000 jobs by the end of the year but we certainly have a jump in bank profits — as I pointed out here two weeks ago in the debate on youth unemployment. The Bank of Ireland profit is up 26 per cent and the AIB an incredible 44.9 per cent up on last year. Meanwhile the beef ranchers have expanded their income by 34 per cent while the budget, in an extra burst of generousity to this hard-pressed group, brought in a number of extra subsidies and remissions of taxation under the pretext of giving them the same crack of the whip as the industrial worker. However, while the industrial workers have sent up production by 14 per cent the beef barons have settled for a derisory 3 per cent increase in output. [334] These are good times indeed for the bankers, the beef barons and the lucky people whose business and taxation is their own business, not accountable to the nation. It certainly seems to be “their country now.”

Having considered my first question on the number of jobs to be created, we move on to my second question: to whom has the Government entrusted the awesome responsibility of delivering 75,000 new jobs in the next three years? Why, to none other than the bankers, the beef barons and the bright boys. With what surging confidence can the teachers and youth leaders across the land face their classrooms and tell the children of the nation who it is that will bring them to the promised land? Who but these Moses of finance, these Goliaths of cattle production, these Solomons of double-entry bookkeeping and scandalous land speculations at the public expense; in short these. Old Testament figures of the Irish private sector, with their fundamentalist beliefs in hard work for everybody else, perpetual poverty for a fifth of the population and perpetual frugality for the working class. How they must have applauded the conservative utterances here last week of that austere grey eminence of the public purse Senator Whitaker. Observe, by the way, that contrary to the impression given by the media, Senator Whitaker does identify himself with the Government's socio-economic philosophy. He may have some differences with them on fiscal policy or on bookkeeping, but even these differences are disappearing according as Government Ministers come to emphasise the need for cuts in present public expenditure and in future borrowing. The rapprochement in the lovers' tiff between the Senator and the Government was evident here last week——

Acting Chairman: We have reached the agreed time for adjournment. Would the Senator like to move the adjournment of the debate?

Professor Murphy: Would it be possible for me to finish a section of my speech?

Acting Chairman: The order was [335] agreed today that the House would adjourn——

Professor Murphy: At what time then is it likely that the debate on the White Paper will be resumed next week? This will be particularly important for me since I will have to resume the debate.

Mr. E. Ryan: There are only two items, as far as I know, likely to be on the Order Paper next Wednesday. One is [336] the White Paper and the other is the Agricultural Rates Bill. I cannot say which will be taken first.

Professor Murphy: The Committee Stage of the Landlord and Tenant Bill (No. 2) was fixed already this week for next——

Mr. E. Ryan: For Thursday.

The Seanad adjourned at 8.35 p.m. until 2.30 p.m. Wednesday, 31 May 1978.