Wednesday, 25 June 1980
Dáil Eireann Debate
That a sum not exceeding £3,638,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1980, for the salaries and expenses of the Department of the Taoiseach, and for payment of certain grants-in-aid.
Mr. Keegan: Before lunch I spoke of the advantages and disadvantages of Ireland entering the European Monetary System. While we are on the credit issue, I would appeal to the Taoiseach, the Minister for Finance and members of the Government to ensure that no company and no individual suffers because of the credit restrictions which are in force at present. Only this morning information was made available to me that officers of the Agricultural Credit Corporation were actually issuing threats to farmers who are unable to make their loan repayments. That is a very serious situation and the Minister for Finance will have to take issue with the officers of the ACC about it. This has never happened before. They are going around now and issuing threats. I know of a case in my own county of Westmeath where a farmer has had problems with animal disease. Only yesterday an officer from the ACC came to him and told him he would have to seize his stock if he did not make his repayments. This is a very serious situation and it is something that is beyond the farmer's control. In normal circumstances he would have been in a position to make his loan repayments and there would be no problem. That is only one case. There may be thousands more. I am sure the ACC are going beyond their bounds in issuing threats of that nature to those people. Something must be done to ensure that there is no recurrence of this tactic which is new on the agricultural scene. I understand that even the banks are reluctant to go that far in their efforts to try to get farmers to make their repayments. I would mention that the commercial banks and the ACC were themselves responsible for the indiscriminate issue of capital. They went around in person asking people to avail of their credit facilities. They got many farmers into debt and they will have to accept their share of the blame if there are credit restrictions or if farmers are in financial difficulties, or indeed if small businesses are in financial difficulties because the farming community is not alone in this issue. I hope that matter will be taken care of and that there will be no  further threats to the farming community.
The Fine Gael leader and the Labour leader spoke this morning about security in the Border areas and about security in general. If security is an issue with the British authorities and with some of the Northern Unionists the blame must be laid where it belongs and that is with the British Government and those people who want the continuation of the Border. If they want the continuation of the Border between North and South they should be prepared to pay for it. The Irish taxpayers are hard pressed at present and they cannot afford to pay. We are spending millions of pounds of taxpayers' money today to exercise a maximum amount of security. If the British people and the Orangemen in particular want greater security, they should go to Mrs. Thatcher and ask her to spend more of the money she saved in the EEC to introduce greater security measures along the Border.
Mr. Keegan: On their side, not on this side. If the members of the IRA have such easy access to this side of the Border there is no one to blame, because I am informed that security there is very lax. It is no use for Ian Paisley to have rallies along the Border and talk about security when the blame must be laid fairly and squarely on the shoulders of the British Government. They are the people who will decide sooner or later whether they are going to continue with the Border or not. If they want security measures they will have to ask the British taxpayers to pay for them, because the Irish taxpayers can not afford to pay any more.
Reference was made to the fact that the Garda should be shielded against political interference. Political interference in Garda affairs is nothing new in Ireland. I need only go back a few years, when the Coalition Government were in power, to a case of an 11-year-old girl who was raped. The assailant was brought before the courts and sentenced to three years' imprisonment. He  spent one night in prison and was a free man the following day because——
An Leas-Cheann Comhairle: The Chair will be accused in a moment of getting on to Deputy L'Estrange, but what else can the Chair do in this case? I have told Deputy Keegan that under no conditions will the Chair have any allegations made against people in the House or outside the House, and that goes for everybody in the House today. I am asking Deputy Keegan to get away from that matter, please. There is enough scope in the debate before the House without doing this sort of thing. We are not going to drag this debate down into the mud at all.
An Leas-Cheann Comhairle: Political allegations are one thing, but when Deputies are making allegations about people inside and outside the House they are not in order as far as the Chair is concerned.
Mr. Keegan: The Taoiseach in his speech mentioned the efforts made to increase our exports as a means of improving our balance of payments situation. This is something which I wholeheartedly support. We need to improve our marketing arrangements wherever possible. I wish to pay a tribute to the various agencies who have done a wonderful job  over the years in regard to the marketing of our agricultural produce and of our manufactured goods.
Bord Báinne have been very much to the fore in the field of marketing. They have travelled to the ends of the earth in their efforts to secure additional markets for our agricultural products and must be highly commended. However, they will have to intensify their efforts if we are to avoid building up the butter mountains and milk lakes which we hear so much about. The board have done a wonderful job. Any support which they may require to improve marketing arrangements throughout the world should be forthcoming in future years.
With regard to our beef exports, we must have an alternative to intervention, which is not a solution to the problem of beef surpluses. We must have better marketing facilities in preference to intervention. Intervention is only the lazy man's way out and is just a means for our beef factories here to dispose of their surplus without making any positive efforts whatsoever to improve marketing arrangements throughout the world.
We here have many problems today. What is required is the co-operation of all responsible people in every stratum of day to day life. I avail of this opportunity to appeal to the trade union movement to exercise greater responsibility in the control of their individual members who are responsible for such turmoil and strife throughout the country at present. They should take strong action against those people who cause wildcat strikes, doing untold damage not only to the economy but in many cases, to the weaker section of the community as well. Something will have to be done to ensure that we have no more unofficial strikes here because they will wreck the economy. Otherwise we will see the day when we cannot continue  any longer as an industrial nation. I would hope that commonsense and goodwill will prevail and that we shall have an end to these wildcat strikes to which we have become so accustomed in recent times.
The Fine Gael leader said this morning that the present Government were doing nothing for the protection of the environment. We need not go beyond this city to see the neglect of the environment by a city council which is completely composed of Fine Gael and Labour people. They are responsible for the activities of the city council which looks after the services in our capital city and the blame must be laid on their shoulders.
Mr. O'Toole: A debate of this type traditionally is an opportunity to review the performance of the Government of the day. It is time that we took stock of what has been done and what is being proposed by the Government to improve our social and economic situation. Deputy Keegan, who is now leaving the House, has surprised me in the simplicity of the solutions he has offered for the enormous difficulties which now confront our people. He has blamed the banks for the problem of the farmers. He has blamed the present Dublin Corporation, for what is happening to the environment. He knows, as we all do, that the reasons go much deeper than that and, indeed, many of them must be laid at the door of Deputy Keegan and his colleagues.
A three year span in Government is regarded as being a reasonable time to hold a Government responsible for their policies, their activities or inactivities, as the case may be. The assertion of the Taoiseach this morning that the nation is performing well expresses to me a frightening indifference and a frightening failure on the part of the Government to realise the actual position and admit frankly without scaremongering, that there is a very serious economic problem confronting us now. It has been said by Members of the Fianna Fáil Party that any kind of severe criticism of the Government is looked upon, as I said before, as somewhat less than patriotic.
We must at least be prepared to admit that there are problems because unless we do we cannot even begin to seek solutions to them. At present the Government seem to be more concerned with off-loading the reasons for the problems on to the energy crisis than anything else. They have repeatedly said that  current economic difficulties are solely the result of the price of oil. Deputy Keegan said that the reason we were able to solve the energy crisis in 1973-74 was a co-operative Opposition that acted responsibly. Perhaps I could refresh the Deputy's memory and that of his colleagues by quoting from volume 291, column 2311 of the Official Report, a statement made by Deputy Haughey, now the Taoiseach, on 1 July 1976 referring to the then Government when he said:
It is no longer possible for either the Government or their apologists to claim that any particular failing is a result of the situation they inherited or the outcome of policies for which they are not responsible. They have had ample time to manage our affairs as they saw fit and to implement their own strategies.
The position is that the Government are not prepared to accept what everybody knows, that the state of the economy now is disastrous. The country is in a shambles. That is the reality. We have the ESRI, the Central Bank, the Confederation of Irish Industries, and the Irish Exporters Association, all independent agencies with no political axe to grind all coming to the same conclusions. That is no accident. Do the Government accept what these agencies give as their considered opinion of the present state of the economy?
Some weeks ago the ESRI predicted that we were facing a 20 per cent inflation rate and an unemployment figure in excess of 100,000. These two predictions have not been refuted. Indeed, the figure given by the ESRI for inflation was borne out only last week when we had the enormous increase amounting to 20.2 per cent for the year ending mid-May 1980. And there is even a worse trend which can be seen for the quarter ending in mid-May which tells us that  the inflation rate is running at 7.4 per cent for the quarter. At a time when the average EMS inflation rate is in the region of 10 per cent this is something the country cannot afford. Yet, we had this whistling-past-the-graveyard attitude by the Taoiseach this morning assuring the nation that everything would work out all right if left in his hands. That is not tackling the problems and the malaise in our midst at the moment. The Taoiseach and his colleagues know that. This Government, which gave categorical assurances in writing that they would ensure single figure inflation within a short time of assuming office, now have a 20.2 per cent inflation rate.
In the same volume of the Official Report, at column 2315 on 1 July 1976, Deputy Haughey referred to the ESRI report of that time and said: The institute suggests that the rate of inflation this year will exceed 18 per cent. That surely is a prediction which must cause the deepest and greatest anxiety to the Government and to our economic planners.
That came from the man who is now Taoiseach and has the reins in his hands to do what he proposed in 1976, but we find him as Taoiseach in 1980 telling us that we have been performing very well in difficult circumstances when we all know that the reverse is true.
Ireland is facing a serious balance-of-payments problem. The deficit on current accounts was estimated at £740 million last year, equivalent to 10 per cent of GNP, a proportion exceeded only once before, in the early 1950s. Relative to GNP, the deficit  was also very high by international standards, being more than twice as large as that recorded in any other EEC country.
On an occasion like this one would have expected from the man who proposed this in 1976 some plan, or at least a promise of a plan, to overcome our difficulties. Instead we get, as we did from Deputy Keegan, what I regard as nothing more than pathetic pleading for cooperation and consideration of the problems by the public generally. If the general public saw that the Government were prepared to assert themselves and propose remedial measures to eradicate the malaise in the economy I think they would get that cooperation, but in the absence of that kind of leadership and that kind of grasping-the-nettle approach by the Government, I fear—and I regret to say this—that the kind of cooperation necessary to solve our problems will not be forthcoming.
The Confederation of Irish Industry in repeated statements and in commentaries have made their case requesting and latterly appealing for some form of recognition of their difficulties. Ample warnings have been issued by them of stocking problems because of very high interest rates. We are told there is now a reduction in orders and the confederation gave irrefutable evidence of this only three weeks ago. In a survey carried out in a number of firms 87 per cent said that their order books had contracted.
The question of growth rate was mentioned today by the Taoiseach. The ERSI have spoken on this and mentioned a growth rate of 1.25 per cent this year. The Central Bank feel that this 1¼ per cent is even too optimistic and feel that we will not even reach that. This is the scenario which we now face. One request of many which was persistently pursued by industry was an undertaking that the Government would underwrite the exchange risk in foreign borrowing, but this has not been done. Three weeks  ago during the debate on his Estimate the Minister for Industry, Commerce and Tourism said that he had under consideration a scheme which would be selffinancing. The Taoiseach said today that this is still being looked into. This matter is being looked into for a number of months now. While this is happening the country is suffering a haemorrhage in job loses and lost orders on the international export markets. This is the one thing which might inspire these people to have more confidence in themselves, to seek capital abroad at a reasonable rate underwritten by a Government to whom they look and on whom they depend. The Government's indifference to them and to their pleadings is nothing short of appalling in the present circumstances.
The result of all this, despite the assertions of the Ministers and their Taoiseach, is that we have a very serious trend in unemployment at the moment. Over the past five months we had an average of 2,000 job losses per month. The most recent figures available indicate that for the month of May job losses reached 3,900. Two weeks ago, in reply to a question of mine in the House, I was told that systematic short-time working for the month of April reached 3,058. The systematic short-time working for the first four months of this year matched with the same period in 1979 has doubled and, in fact, has more than doubled for the month of April. There were 1,400 odd in April 1979 and 3,058 in April this year.
Last week, in reply to a question by me in relation to the job creation prospects resulting from the transfer of 3 per cent of the expenditure of consumers to Irish products, I was told that this particular campaign, which was set on a three year target, has not yet been completed and that the Minister was not in a position to give me exact details. We must recall that in the manifesto the three year campaign of Buy Irish was to produce 10,000 extra jobs. After some supplementary questioning by me last week the Minister, with some reluctance, admitted that as of now, with two and a half years of the three year period elapsed,  the number of jobs which could be put down to a transfer of consumer expenditure to Irish produce amounted to in the region of 1,300.
I am not decrying the efforts of the Irish Goods Council, who are doing a very fine job. This year they received less than 1 per cent increase in their grant-in-aid over 1979. This is in a year where a 20 per cent plus inflation rate is raging. If that is the way this particular agency, which have been given the onerous task of producing this campaign and ensuring its effectiveness, are to be treated, how can anybody expect the degree of success which might be expected if they were given sufficient money to carry out this job? So much for job creation.
This is a very sad day for me because I discovered that in my town a major industry have gone on a three day week. This was a nationally known industry, part of a multi-national company on whose shoulders we pinned our prospects for the future in the textile industry. This company, because of the international recession and because of mismanagement at home, are now forced into putting their employees on systematic short time. I have also been told that this morning a receiver moved into a factory in my town where 250 people are employed. Will this be a feature of the industrial scene for the rest of this year and possibly 1981?
We are still awaiting a frank admission by the Government that there are problems. People are not put on systematic short time and receivers do not walk into premises just to pass the time. There are very grave reasons for this kind of thing happening. Yet we are told that with the co-operation of all concerned we will ride out the storm. That kind of indifferent approach is not good enough.
On the farming side, there is a total lack of confidence among farmers many of whom supported Fianna Fáil in 1977 on foot of the promises made but which were not honoured. If we look at the figures for the index on farm incomes and if we take 1971 as a base of 100 we find that the position in the intervening  years has been as follows: 1972, 130; 1973, 149; 1974, 117; 1975, 139; 1976, 133; 1977, 161; 1978, 169; 1979, 141, and that for 1980 the figure will be betbeen 121 and 125. These figures have been issued by the ESRI and by the Central Bank. They indicate that since 1978 there has been a reduction of almost one-third in farmers' incomes. In this sort of situation, how can farmers have confidence? Last week a farmer told me that he was getting as much for bullocks four years ago as he is getting for them today. This is the situation despite the extent to which feedstuffs and other inputs have gone out of control in terms of prices.
Despite this, Deputy Keegan in a puerile and simplistic fashion blames the banks for the problems being experienced by the farmers. The banks may be at fault in many respects but I do not think that we can blame then totally for the problems of the farmers.
The assurance given by Fianna Fáil in respect of farmers' tax has gone by the board. Last year there was some fancy footwork so far as the imposition of a 2 per cent tax on produce was concerned while this year the capacity of Government Ministers to dance is nothing less. Only yesterday in the Seanad the Minister for Finance, when under pressure, would not give an assurance that the resource tax would be discontinued at the end of this year but less than 24 hours later the Taoiseach gave an assurance in this House that this tax was only a passing phase and would be abolished by the end of 1980. One would like to know who is responsible for various aspects of government in this Cabinet.
Admittedly, oil prices are responsible for some of our economic problems. From what has been said one would think that this factor was totally responsible for everything that is befalling our economy. In this regard I shall quote two sets of figures to indicate the comparison between the impact of oil prices in 1973 and 1974 and in 1979 and 1980. These are figures that were quoted by the Central Bank in their review. In 1973  oil accounted for 5.9 per cent of our total imports bill. In 1974 that figure more than doubled, increasing to 12.8 per cent while in 1979 it was 10.8 per cent and in 1980, according to predictions based on the past five months, the figure is likely to be in the region of 13.6 to 14 per cent. Anybody having regard to this situation must realise that in 1973 and in 1974 the impact of oil prices was much greater than is the case today.
Fianna Fáil rode back to power on foot of an assurance to curb prices. They assured a gullible electorate in 1977 that they would at least restructure the National Prices Commission. They told us there was no need for escalating prices and that the National Coalition were responsible for the then increasing prices to the extent that they had not exercised control in this area and that they had put a junior Minister in charge of prices. Fianna Fáil told us also that they would appoint a senior Minister to oversee the workings of the NPC. They went so far as to tell us that they would amend the accounting system of the ESB with a view to reducing their increased costs. However, we find that so far as the ESB are concerned price increases between 1977 and June of this year have amounted to 46.9 per cent. Every housewife finds that each day when she goes shopping the situation in regard to prices is a far cry from the Fianna Fáil manifesto basket that was peddled around the country in every supermarket during the election campaign of 1977.
The Government have failed dismally in this area of prices. They have failed also to live up to their responsibility both to farmers and to fishermen and they have failed to realise the importance of industry, a sector that is pleading today for some recognition of their difficulties. Yet the Government are asking for co-operation, for moderation and for a recognition of international trading conditions and so on. There is no initiative forthcoming from the very one source that might produce some solution that would alleviate some of the pressures on parts of our economy that are experiencing very difficult times and which will  not survive in this situation indefinitely without some help from the Government.
The agricultural and industrial sectors will suffer irreparable damage that will take years to rectify unless there is what most people regard as a reasonable attempt to rectify the situation. I appreciate that there are difficulties internationally but if there was any recognition by the Government of the difficulties being experienced by people and if there were some back-up initiative to ease the pressure, I should be very happy. That is not forthcoming, and as soon as the electorate get a chance I hope they will give their answer. The sooner the electorate are given that chance the better for us here and for the people of the country.
Tánaiste and Minister for Energy (Mr. Colley): The rapid escalation in energy prices during the past year is pushing the world economy deeper into recession. Uncertainties about the security of future oil supplies, which are underlined by unsettled political conditions in the Middle East, have affected business confidence worldwide so that the investment decisions which might have mitigated the effects of the recession are not being taken. This is a serious situation. Not only does it affect our competitiveness and the market outlets for existing Irish industry but obviously it will be that much more difficult to maintain an adequate level of job creation through the attraction of new business enterprise.
These are problems which have to be grappled with now and they present a major challenge to our self-discipline as a nation. Beyond the present difficulties, the deteriorating world energy situation casts a very long shadow. In the years ahead difficulties are likely to occur which call for current planning if our economic posture is to be adapted to these fundamental changes.
As I have said, the current economic difficulties worldwide call for a disciplined reaction from us. Indeed, in the short to medium term, self-discipline and self-reliance must be the major weapons  in the defence of our economic viability. One of the major factors aggravating the climate between the oil-producing nations and the consumers is that the latter are making a very poor job of convincing the producers that their oil is overpriced.
We have on the one hand a group of nations, many of which until recently have been seriously underdeveloped, who possess a non-renewable resource for which the world is clamouring. They see the opportunity to exploit their present good fortune but they also see a large proportion of their apparent increased income being swallowed up by the effects of inflation on the goods and services which they wish to obtain to develop their economies. It is true that the increased oil prices are themselves adding impetus to the inflationary spiral, but the producing countries will say, with some justice, that the main difficulty is the reluctance of consuming countries to accept that standards of living based on abundant, cheap energy must be reappraised.
There have been numerous international efforts to develop a uniform policy among the consuming nations which might convince the producers that a point of genuine consumer resistance to increasing prices has been reached. The fact that this evidence of consumer resistance is with us in the form of an involuntary contraction in world economic activity is a measure of the lack of success in developing more positive ways of dealing with the crisis by international means. I believe it is not realistic to look for nice, tidy solutions at international level. It is clearly a waste of time to bemoan the fact that one bloc of countries has created the difficulties and that another bloc has failed to solve them. We would be far better advised—and indeed there is no practical alternative—if we looked to ourselves to see what we can do to counter these difficulties.
Very recently I had an opportunity to outline to the House, in the course of presenting a Supplementary Estimate for my Department, my analysis of the major  elements which should form our response to the new energy situation. I indicated a number of areas where plans were being developed to bring about major, long-term changes in our energy posture. It is clear that major adaptations require considerable time to bear fruit.
For instance, construction has already commenced on a coal burning electricity generating station which reflects an important change of emphasis in energy policy but this plant will not be delivering electricity to the grid until about 1985. Similarly, even if in the near future we can secure compliance with the technical and economic pre-conditions for a major extension of the natural gas grid, the practical effects of this largescale diversification project would not be felt until about mid-decade also. The new programmes on which we have embarked to expand turf production, to assess and make use of low-grade coal reserves and to exploit new alternative energy systems all have extended lead times before benefits in terms of new energy supplies can be experienced.
The areas in which we can make an immediate response to the economic difficulties represented by higher energy costs may be more limited, but they are not by any means insignificant. Recently, when I was emphasising that production of turf by individuals or groups for use next winter could be a worthwhile contribution, I was asked whether it was not a short-sighted reaction to the present situation to encourage the more rapid depletion of an important indigenous fuel. My response was that we are faced with immediate difficulties which are having a serious impact on our balance of payments and on living costs for everybody. Increased energy costs are going to be a permanent feature and we must make permanent adaptations to meet them. In that period of adjustment it makes good economic sense to expand production of indigenous—admittedly non-renewable— fuels to help us absorb the sudden pressures with which the economy is faced.
 We might ask ourselves what would be the solution if we could conjure up the ideal answer to the present energy problems. The ideal solution would be the availability of an energy source which was indigenous, immediately available and of minimal cost. There is, in fact, such a solution to hand. The conventional way of describing it is conservation. It is indigenous. If we can generate the same amount of economic activity with nine tonnes of imported oil as we have formerly achieved with ten tonnes then this has about the same effact in terms of economic activity achieved on our balance of payments as if we produced the additional tonne of oil here.
Much of the enhanced energy value which we can obtain from conservation is immediately available. Some schemes which involve significant investment or adaptation of plant and so on may take time but there is a great deal we can do to save energy today, this coming weekend or next week. We can do this by exercising a little care and thought; by looking to energy-saving possibilities in our homes, at our workplaces and by being a bit more selective in our use of transport.
Conservation is the equivalent of energy available at minimal cost. In many cases it costs nothing at all—it is simply a question of switching off, turning down a thermostat a degree or two or foregoing the use of a car for some trivial purpose. Even where money must be invested in energy conservation the cost can in most instances be fully justified even on the more stringent economic grounds. For instance, the insulation of homes or other buildings can result in the costs being recovered in as short a period as a couple of years arising from the savings on fuel bills. Attention to the fuel efficiency of boilers and other industrial plant will normally repay any additional costs involved even more quickly.
These are obvious areas where self-discipline and self-reliance can help to cushion the effects of rising energy costs. They may indeed be obvious but we are  all to blame for not giving these possibilities the attention which they deserve. I am at present in the process of establishing a campaign to increase awareness of the importance of energy conservation and I plan to maintain this effort for most of the present year. There can be considerable scope for debate about what the potential for energy savings might be. A 10 per cent overall saving as compared with the quantity of energy we might otherwise have used would be a highly satisfactory result and I would regard something less than that as being very acceptable. But, in fact, there can be no absolute guarantee at all about the results. I say this because it is important to realise that success or failure in any energy conservation depends on a conscious decision by individuals, families, firms and other groups of people to do something about the unnecessary use of fuels, which brings us back to the concepts of awareness and of self-discipline to which I referred at the outset.
This concept of a disciplined reaction has as much relevance at national level as it has for the individual if we relate the position to the national economy as a whole. The great bulk of the factors which have increased the cost of energy have not arisen within our own economy. They have been imposed from outside. If we are to live with these increased costs we must redouble our determination not to add any additional self-imposed burden to our own backs by insisting on measures which will further increase costs and reduce the competitiveness of the goods and services which we export. No one can deny that energy is costly at present. But the most expensive energy is the energy which one has not got and we must continue to import the oil and bear the consequential costs necessary to maintain essential economic activities.
This brings me to the question of domestic prices for fuel and energy. The control of prices is not within my Ministerial responsibility but the cost of energy supplies and the inter-relationship between supply and prices are matters  which are of very considerable concern to me. There is no doubt that increased energy costs are bearing heavily on everybody in the community whether in their private capacity or in business. It is a very natural and human reaction to say “not again” when the price of some essential fuel responds to another rise in external energy markets.
The first point we must bear in mind is that, since we import about 80 per cent of our energy needs, there is an inescapable and close link between the movement of prices on international markets and the price we pay to our local fuel supplier. Even if we were very much less dependent on imported fuels our home prices would still have to follow international markets. We can see this clearly in Britain where the price of North Sea oil continues to occupy a high position in the international price tables and where domestic natural gas, which is distributed by a national utility on the basis of long-standing, favourable contracts with offshore operators, is being adjusted up towards general energy cost levels. The boost to an economy which can come from an abundance of indigenous energy supplies is, of course, very significant in present circumstances but, at the level of the individual consumer of energy, the international market price is what finally determines the amount he or she must pay.
I recognise the basis, but do not accept the philosophy, of the argument that conservation of fuels should be achieved predominantly by a price mechanism. This may be orthodox economic logic but an indiscriminate pursuit of such a policy would carry a special penalty for the people who can least afford to pay. Nevertheless it has to be accepted that energy must be realistically priced so that the costs to the individual or firm reflect the enhanced international value of the commodity concerned. This applies to domestically produced fuels—such wholly indigenous fuels as peat and natural gas—as well as to largely import-based fuels like electricity. If prices are not realistic then there are certain undesirable side effects. The incentive towards economy in the  use of fuels will be weakened and, particularly in the case of native fuels such as turf, a run will develop on relatively cheap fuels resulting in shortages and supply problems.
There is therefore no practical alternative to an acceptance of realistically priced energy as a continuing factor in private and business life. But excessive pricing of essential fuels is a totally different matter. In this regard a very close scrutiny is maintained over the pricing policy of the fuel supply boards under my control. Indeed, many people in these organisations and some independent commentators will say that pricing policy is too restrictive and that these bodies should have greater freedom to follow the general trend of energy markets. This view has a certain validity and here we must adopt a medium line. Pricing policy for State fuel supply companies should certainly not be so restrictive as to result in the continuous accumulation of deficits and an overdependence on borrowing to fund essential development.
I make these comments on fuel prices mainly to state the argument for a balanced approach. We would all be naive in the extreme to think that domestic Irish prices can by some mechanism be insulated from international market trends over which we have no control.
There has been considerable coverage by the news media within the past few days of a report on our offshore prospects. There is always a tendency for euphoria to creep in when optimistic comments are made on this subject and the reaction to the recent report was no exception.
Of course the prospect that we may become an oil-producing country is an exciting one and of course such a development would have quite fundamental implications for us in economic and energy terms. There are, however, a few points I should like to emphasise and, to be fair, these would appear to have been brought out in the report in question. The most basic point  is that the conclusions drawn so far have been based on one exploration well. There is no doubt that people who have expertise and experience in the oil exploration business can draw certain inferences from quite limited exploration results. However, the practical position is that further drilling must be completed and the results evaluated before definite conclusions can be drawn.
Furthermore, even if the deposit dealt with in this report was confirmed to be of commercial proportions, it would probably be of moderate size and the period for which production from the deposit could be maintained would be fairly limited. I would not, at this stage, regard this point as being a major constraint on further planning. If we have commercial development of oil then I believe that this would provide a new impetus for exploration which could well give rise to further discoveries which would come on stream in the coming decades. The point I make, though, is that taking the possibilities of this particular prospect on its own, as presented in the report, the production would in a time sense be quite limited.
Emphasis was also placed in the report on the need for production technology to catch up with the kind of conditions which exist in the Porcupine Basin. I have never had any doubt about the ability of technology to solve the production problems involved. A great deal of research has been in progress in recent years and as a result there are a number of possible production systems which could be developed to the practical stage provided an appropriate deposit of potentially economic importance is confirmed. It must be borne in mind that new systems tend to be costly to develop to full potential. Teething troubles are inevitable and it would be only prudent to take a fairly conservative view about the period of time which could elapse between confirmation of a commercial discovery in deep waters and the date on which the first oil would be landed.
I would emphasise that I have made these comments not because I believe we  should be pessimistic about our offshore prospects. My main concern is the danger that understandable enthusiasm about future prospects would distract our attention from the immediate problems which we have to face in the energy sector. If we are fortunate enough to confirm that commercially exploitable oil exists in our offshore we will be faced with a new economic challenge. Experience elsewhere has shown that success or failure will largely depend on the extent to which we can plan effectively and maintain a sense of responsibility and proportion in pursuing these plans. An essential pre-condition to success would be that we had maintained our industrial and commercial competitiveness reasonably intact by adjusting in a disciplined way to the changed international energy situation which is not simply a prospect but a reality here and now.
Now at the time when drilling is beginning again this year out on the Porcupine and with surveys being carried out on the Goban Spur, it is inevitable that there will be speculation about the extent of our deposits. As Minister for Energy and as a member of the Government I cannot indulge in speculation. I can only go on hard established facts. I would be failing in my duty if I did not sound a warning that euphoria about oil arising from this kind of speculation could be dangerous. It could generate expectations which as yet, at any rate, we are not entitled to entertain.
Let me say that I would dearly like to have the privilege of announcing a major oil find and there is not a Deputy in this House, irrespective of party, who would not like to hear that announcement. But it would be monumental foolishness for us to base our plans and our hopes on an oil bonanza until the extent of the deposits is thoroughly established. If we were to take any other attitude we would be exposing ourselves to the risk of a cruel joke of fate.
We must therefore press ahead with the policies which I outlined in detail in the course of my introduction to the Supplementary Estimate for my Department  recently. If it is confirmed that we will have commercial production of oil in a few years' time then the long-term outlook for the development of our economy and for a period of sustained national development will have improved dramatically. In the meantime we must cope with high energy costs and the risks inherent in our present vulnerable supply situation. We must concentrate our immediate attention on these problems and everyone will agree that this task is formidable.
I have listened in this and earlier debates to references from the other side of the House to our election manifesto and criticisms of various aspects of it. The theme and substance of that criticism could be put together in one short phrase, although it is not the way it was put but this is what it amounts to: the manifesto was too ambitious. That is an easy criticism to make but it is a superficial one. I am confident it will not be the verdict of the historians when the time comes to pass judgment on it. The people who in July 1977 gave a mandate to implement that manifesto did so because they wanted to see a determined effort to solve the chronic economic and social problems that were holding us back. The manifesto showed how these problems could and should be dealt with. That was in stark contrast to the attitude of the National Coalition Government of that time. They had a hopeless and fatalistic attitude towards solving those problems.
I am proud to have been associated with that manifesto and I am proud especially of the manner in which the manifesto identified one of the central problems, that of unemployment, and then set out to show how we should tackle it. We put more people to work than any Government in the history of the State. I am very proud of that and I have every right to be. Those who oppose the manifesto promises have tried to suggest that the jobs we created were all in the public sector and were simply a burden on what they would call the productive taxpayer. Of course we created many jobs in the public sector,  all of them necessary jobs like the extra teachers and the additional gardai, but we generated many more jobs and the great majority of them were in the private sector. The only regret I have about the manifesto is that one of the expressed conditions in it for full success in achieving the targets set out therein was the call clearly spelt out in the manifesto but not accepted, for moderation in income increases. If there had been a wiser and wider response to that call we would have done even better in regard to job creation.
Of course we have had to deal with the oil crisis which followed the upheaval in Iran. That was bound to have very severe effects, but I can fairly claim that our approach has been quite different from that of the National Coalition when they were faced with the oil crisis of the early seventies. It will be remembered that in Government they used to tell us, as the former Minister for Finance did, of the Irish economy in such circumstances being like a cork on the ocean being tossed around and that there was nothing we could do about it. That was not our attitude in Opposition. It is not our attitude in Government when faced with a very serious international situation. The Government are not throwing up their hands when in power or saying that we cannot do anything about it. We are realistically pointing to the things we cannot do anything about but we subscribe to the doctrine that the more difficult things which are outside our control are, the greater the obligation on us to take steps on what is within our control.
That is in sharp contrast to those on the benches opposite who are at present engaged in such sharp criticism of the Government and of the manifesto. I heard Deputy FitzGerald this morning saying once more what he and his colleagues have frequently said and what they would like people to believe: that in implementing the manifesto we squandered the nation's resources and that there are no resources to deal with the present problem. I deny that and I ask:  did we squander resources in putting young people to work and creating all the jobs we did? If that is not what they are talking about, what do they suggest we should have done? Should we not have taken the rates off houses? Do they feel we should put those rates back on again? What are they suggesting? We got the economy moving to the extent that we can face, with difficulty but with confidence, the very serious problems now lying ahead for us and for all the world economies.
That we can face them with confidence is due to the fact that the Fianna Fáil manifesto was accepted by the people and was implemented to the extent that it was possible for us to implement it. That was conditioned by nonacceptance of some of the conditions but, to the extent that it was implemented, it has vastly strengthened our economy and given us a base and a strength to resist and deal with the serious problems now facing us and, in due course, to go ahead.
Mr. Bermingham: I will, within the time allotted to me, try to make the points I have to make. I have no intention of replying to the Minister but I am amazed at the confidence he has expressed in tackling our problems. I listened this morning to the Taoiseach and now I have been listening to the Minister for Energy and I have not found, in either of their contributions, any explanation of how they are going to tackle our problems because they are very serious indeed.
As regards the agricultural scene, it is apparent to neutral observers that the incomes of farmers are in serious decline. This is something that the Government should tackle by providing correctives even outside the EEC. We may say that we are tied to what we can do within the EEC but other governments have done certain things to improve the conditions of their farmers when they felt that it was necessary. I want to refer to a paper by Professor Sheehy of Dublin University, a well known agricultural expert, in which he says that the extent of the fall in income  comes of the farming community is not yet fully realised and that, having regard to inflation running at over 20 per cent this year and probably at 15 per cent next year, farmers will be taking a cut in real incomes of up to 1 per cent per month which was more than they suffered in any period since the second world war. Professor Sheehy also warned in his paper that the demonstrations of farmers would make the demonstrations of the sixties look like a Sunday afternoon walk.
I want to say a word about the promises given to the farmers by Fianna Fáil in areas where they have full control. One of those areas is in land structure. Up to 1,000 small farmers are marching outside this gate today in protest against the land structure because the promise made by Fianna Fáil has not been fulfilled. In my constituency and all over this country there are land speculators buying up agricultural land while these people have uneconomic holdings and are unable to make a decent living. The former Fianna Fáil Minister for Agriculture gave a promise about land structure. He promised legislation before the end of last year. Now the present Minister has brought out a new White Paper to throw the whole thing back into the melting pot of discussion. If that is not reneging on the promise I do not know what is and I challenge the Minister for Agriculture to deny that. It is just an effort to get out of delivering on this promise.
Another promise made in the manifesto was that we would process all our own food. One of the biggest disgraces here is that we, in a country whose biggest asset is the three or four feet of soil on the surface of the earth, are importing nearly all our vegetables. We are importing potatoes from Cyprus, vegetables from Holland and other countries all over Europe. I challenge the Minister for Agriculture to show us any area where we have increased the processing of our food. The Minister for Agriculture should be ashamed to stand up and say he is responsible for that section. I could talk all night about Fianna  Fáil's failure in the agricultural sector but I want to say a few words in other areas.
I want to talk about prices. Fianna Fáil gave specific promises that the rate of inflation this year would be 5 per cent. But housewives and others are staggering under the daily increase in prices in shops throughout the country. During the last election campaign the then leader of Fianna Fáil, Deputy Lynch, came to my constituency and, on being asked by a certain lady what he thought of the price of an article she had picked up in a super-market which he visited, he said that if he were put in government he would do something about it. He certainly did. He took off part of the food subsidies almost immediately after going in and added 10p to the price of the article in question. Fianna Fáil are over on that side of the House because they carried out a complete con job on the electorate. Anybody who can think will agree that that kind of con business went on throughout the country. They went out to our farming community and told them quietly at their doors: “You will have to pay no income tax. We will settle that one. Fine Gael have let you down”. That did not affect my party so much, but that is what people have been saying to the farmers in my constituency. We know what happened and I do not need to waste time on that subject.
To return to prices, everyone— whether they be housewives or anyone else—knows that the way prices have been increasing over the last three years under a Fianna Fáil Government borders on the ridiculous. What amazes me is that unfortunate people paying mortgages on houses were told in this House by the present Minister for Foreign Affairs that one of the reasons why we were going into the EMS was to reduce interest rates, that we would then be able to get money at the same interest rate as Germany—8 or 9 per cent. We know what happened. The interest rate went through the roof. That is how we can rely on the words of Ministers here in this House.
 I turn to county council finances. Fair play to Fianna Fáil, they did remove the rates from private houses, but it is common knowledge that one cannot take taxation away without replacing it by something else. I am not saying that it was not right to take rates away—they were an unfair system of taxation—but they were taken away irresponsibly, without any effort to replace them. Anyone on a local authority, whether Fianna Fáil, Fine Gael or Labour knows the state of local authority finances. The roads have fallen into deterioration, particularly in the country areas. Any fairminded man on any county council, of whatever party, knows that the reason for that is lack of Government finance. There is no finance to be got from the Government practically anywhere.
In the vast majority of local authority areas, there have been no new housing starts in this year of 1980. I am speaking of local authority housing. The local authorities are still waiting for a Government allocation to build new houses. In my local authority in Kildare, and in nearly every local authority, no money has been provided for new housing starts this year. There is no money to maintain the houses that are built and repairs are not being done. No materials are being purchased to repair these houses and safeguard our housing stock.
Despite the promises in the manifesto that it would be maintained and improved we know what happened to the house improvements grant, how it was completely withdrawn. That is how much we can rely on Fianna Fáil. The people must know that very well. With all the talk about tax improvements and tax concessions, disappointment is now raging about the new tax certificates, some of which have been arriving. The workers are disappointed at what has happened there.
Whether it is a deliberate action by the Government or not, unfortunate people who because of illness have to be on social welfare wait up to 12 weeks, on average, before they get any return from that Department, which appears to be  dead and buried. When people approach us we, as public representatives, cannot get through by telephone. We are suspicious that the telephone has been taken off the hook. We know that six to 12 weeks is the period that people must wait before they get their first payment from that Department. Our telephone system has broken down as anyone who tries to use it will realise.
These were the areas where Fianna Fáil were going to set us marching. I remember what we had to listen to during the election campaign three years ago. It is fair to say that three years is the average life of an Irish Government and whatever a Government is going to do they had better do it in this period. We are now in one of the greatest economic crises that this country has seen. Factories and other places of employment are in a redundancy situation all over the country, and some in receivership. This is because of the high rate of interest, even if these people can borrow money, because of the credit squeeze. Industries are producing machinery for the agricultural sector and none is being sold because farmers have no money. They cannot receive credit from banks and if they do receive it, the rate of interest is ridiculous. We were promised when we joined the EMS that the first effect would be to reduce the rate of interest. I am afraid that the ordinary person here does not seriously realise our dreadful economic mess at the moment. They will realise it before long.
I turn now to the area of employment. We were told, prior to the 1977 election, that there would be full employment in 1982. Deputy O'Donoghue is now a redundant Minister himself. He is one of these fellows who lost out in this whole economic mess. Be that as it may, he repeated in this House that he would stand judged if we had not progressed to full employment by 1982. We know that we are going the other way now, backwards. All the experts say—and I do not hear anyone in the Government denying it—that by the end of the year we will have 100,000 unemployed,  almost 10 per cent of our working population. If that is what he meant by full employment. I do not wonder that he is redundant.
Anyone connected in any way with a health board or a health authority knows that the services being provided by these authorities are on the verge of collapse. There is no money to look after the poorest people in the most needy areas under the health boards. We know that they are deliberately holding up the giving of those rights to people because of financial strain. I can give an individual case where an old age pensioner's medical card came up for review. It has still not been replaced after three months of wrangling with local health officers. I was told privately that the reason for this is that the health boards have been ordered to work within a budget within which it is not possible to work. That is the kind of service, and yet the Taoiseach says we are doing well. We are doing well but the standard of living is reducing daily. Yet we are asked not to look for wage increases. The people being encouraged with tax concessions to export and the people being encouraged to set up industries here, which eventually go to the receiver and not a penny of that money goes into the economy, are not being asked to tighten their belts; only the industrial workers are being asked to reduce their standard of living, because this is the only way this country can survive. It is about time the workers “copped on” to these sectional appeals where one section is being asked to tighten their belts and there is no reference to the huge profits of land speculators and so on.
In a Bill here last week we were told that it would be totally unjust and unconstitutional to control the price of building land. If that philosophy is brought to its final conclusion it would be wrong to control the price of anything. Land speculators are buying and selling land with every change in relation to the designation of land, but nobody thinks of the unfortunate person who is trying to buy a house. The price of a house during the reign of Fianna  Fáil has more than doubled and this is mainly due to the increasing price of land. Yet we are told that it would be wrong to control the price of land. If that is a Government with a social conscience I would not like to be associated with that type of social conscience. It would be right to control the price of land and keep it at its use value except where it is designated for housing where there could be a small increase for compensation. This would ensure that people will be able to provide the basic necessity of a house over their heads.
The record of this Government does not stand up to scrutiny. I find it hard to understand how the Taoiseach, with all the information available to him, can be so out of touch with reality as to say that we are doing well. I invite the Taoiseach to try his hand in the country and he will get his answer. Our people need employment and a decent standard of living and they ask only that goods and services be available to them at a reasonable cost. Fianna Fáil have reneged on what they promised in their manifesto. The Tánaiste told us a few moments ago that the manifesto outlined the proper way to do things and that it faced up to a problem which was not faced up to by the previous Government.
The effect of the oil crisis has been completely exaggerated. There have been cut-backs in relation to teachers, schools, hospitals and so on. Today I received a letter from a parish priest who is chairman of a school board asking me to use my influence to persuade the Minister to introduce a Supplementary Estimate for the Department of Education so that they could maintain schools. This priest indicated that they got an increase of 24 per cent this year but that teachers' incomes took up 23 per cent of that. That only left 1 per cent to run the whole show with an inflation rate of over 20 per cent. Fianna Fáil said that this was not a bad budget. It is easy to bring in a good budget if one is not providing the services. Fianna Fáil have not provided services in local authorities, health, social welfare, agriculture, the environment or anywhere else. They are  not giving the services that people enjoyed even last year. The services have been cut back. Every civil servant and every county manager involved in these services knows that that is true.
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