The remarks made by Deputy Ahern in the latter part of the speech are a sad reflection on himself and they are not in keeping with the public image he likes to portray of a serious politician who has something to contribute. To try to introduce bipartisanship into the affairs of Northern Ireland is contemptible.

The Deputy attends with me at meetings of the British-Irish Parliamentary Body where he makes extremely good and helpful contributions. The Deputy has let himself down very badly by introducing this tone in this House.

It is not in keeping with the spirit which has prevailed in this House regarding the North of Ireland during the past 20 years. I very much regret that the Deputy made those remarks. In doing so he has let himself down badly.
The reason for this debate is that this Government have lost control of the economy. They have also lost the confidence of this House. Certainly they have lost the confidence of some members of the Fianna Fil Party and members of the Progressive Democrats as well. Whether they will be able to bring themselves to vote as their conscience dictates they should or whether their feet will declare otherwise I do not know. The Irish economy is in a difficult and potentially dangerous position at a time when it faces enormous challenges both at home and abroad.

Last January this Government indulged in an orgy of self-congratulation when the Programme for Economic and Social Progress was agreed. The principle of national wage agreements is sound but in this instance the Government wanted agreement at almost any cost. The exact scale of that cost is now becoming evident and some of the social partners are expressing lack of confidence in the Government. They are naturally dismayed at the way the Government are reneging on agreed pay awards. It was clear from the outset that the Government could not honour the agreed pay rises for the public sector. There were too many variables in the equation. The Government set out to hold Exchequer borrowing at 1.9 per cent of GNP in 1991; it has in fact increased to 2.5 per cent. The much heralded growth has not taken place and will be at best 1.5 per cent this year. This figure has been forecast by almost every economist at the beginning of the year but it was ignored by the Government.
The Taoiseach has stated that the Government Exchequer borrowing requirement for 1992 will be held at 1.9 per cent, or less than 500 million. This means they will be seeking savings of 350 million to 500 million next year. Because the public sector accounts for 52 per cent of current spending on services, savings in this area are crucial to meet the target of 1.9 per cent. This is a matter to which the Government have not referred at all. The strain will either be taken by public sector pay or, as has happened so frequently under this Government, by the health and education services. The position is already critical, hence we are seeking signs of industrial unrest for the first time for many years. The position is exacerbated by other factors including the fact that over 260,000 people or 20 per cent of our workforce cannot get work.
Another factor is that inflation is tending to creep up. Although economic activity has slowed down considerably the rate of consumer price inflation has increased to 3.5 per cent, the first upward movement for ten years. We are entering [634] a new phase of competitiveness as we approach the completion of the Internal Market. The Government do not appear to be worried about the fact that the British rate of inflation has reduced considerably and the probability is that it will be down to our rate of inflation next year. Whatever advantage we had due to our low inflation rate in the British market, which still takes 35 per cent of our exports, will have vanished by the end of next year.
This Government's policies have all the hallmarks of ad hoc planning and lack of a clear national strategy. The lack of a national strategy has been evident in the Government's handling of two issues crucial to the Irish economy, the GATT talks and the reform of the Common Agricultural Policy. They have also failed to assess future developments such as European Monetary Union. Last January I suggested that it was not too late for the Government to produce a White Paper on the question of European Monetary Union in order to examine in a systematic way the likely impact on the Irish economy. This has not been done. There is still no paper setting out the Government's attitude.
In reply to a question this morning, the Taoiseach stated that the Whips could consider having a debate before the December meeting in Maastricht. That is totally unsatisfactory and it increases uncertainty abroad about the ability of this Government to stabilise the conditions under which business can operate. It is suggested from recent meetings in Brussels that there will be pressure to move beyond the transitional phase of European Monetary Union and that some member states want to move now. In order to proceed, the Government will have to meet strict monetary and economic targets and maintain a low rate of inflation and a stable currency, with a sustainable budget deficit. These are impossible targets this year because of the gross mismanagement of the Government. They have not planned structures in an orderly manner.
The Taoiseach said yesterday:
[635] Recently we successfully opposed attempts to create a two-tier approach with regard to the move to the final stage of European Monetary Union. This is a matter of fundamental importance for the Community and for Ireland. The strength of the Community lies in its ideals of unity and coherence.
The Government react to events by opposing things. We do not know what they are proposing. They have not told this House or the public generally precisely what the position is in regard to the two intergovernmental conferences. We have not had a debate on these matters. This adds to the lack of confidence and the uncertainty as to what will happen in the future.
The question of confidence is central to this debate. The Taoiseach has stated again and again that business flourishes in a climate of confidence. It appears, however, that the business community have lost confidence in the Government. A poll conducted in the Sunday Business Post with Arthur Andersen, an objective accountancy firm, showed satisfaction with the Government among business people had fallen from 71 per cent last June to 37 per cent last month. In a period of four months, confidence had more than halved. The report in that paper last Sunday suggested that the recent controversies and scandals are not the cause of the collapse but rather the handling of public finances.
The Irish economy is facing its greatest challenge since we joined the EC and the Government are doing nothing to restore confidence and to assist the business community to gear up for the completion of the Internal Market. Of course the current controversies, as they are euphemistically called, are adding to the concern and unease being felt in all sections of our community. The inquiries and investigations must proceed and reports and results of these inquiries must be available for public scrutiny. The Government must not use the fact that [636] these inquiries are taking place as an excuse for doing nothing about internal matters in semi-State companies. It is because they are being negligent and inactive that the situation has got out of hand. It is the duty of Government to set the parameters within which business and indeed the whole community should operate, and part of their task is to monitor the activities and ensure that proper standards are adhered to in all aspects of economic life.
The notion of democratic accountability is central to our political system. If the people see sums of money being misused or squandered they are rightly concerned and outraged. The so-called controversies are increasing the cynicism that is now the hallmark of the Irish electorate. We cannot afford this cynicism. The democratic process itself will begin to suffer if people become disillusioned and feel powerless to affect the system. What motivation is there for young and not so young idealistic people to enter politics if they perceive the system is ineffective, unrepresentative and unresponsive to their needs and demands?
In this regard I want to say something about the Progressive Democrats who have been strangely absent either as participants or as listeners in this debate for the last two days.
It is not that they are more or less culpable than their coalition partners in Fianna Fil. It is because they formed a new political party in order to establish the notion of high standards in public office. They have at times verged on the self righteous. They set themselves up as mould breakers and political reformers. From the smiles on faces this morning we will certainly be forgiven if we think later on today that they are not represented at the Cabinet table at all. They have attempted on a number of occasions to distance themselves from the well established principle of collective responsibility.
[637] There was the farcical position a month ago in Cork when Deputy Mairn Quill said they were trying to distance themselves from the job creation policies of Fianna Fil in Government despite the fact that the leader of her own party is the Minister for Industry and Commerce who many people would consider would have the primary responsibility for creating jobs. Deputy Quill says they should distance themselves from Fianna Fil. Are they in or out of Government? Really Deputy Walsh, here representing the Government, should find out, because if the Progressive Democrats do not get the Government this time they will get them after Christmas on the budget. The Government need to watch themselves. The Government, as a unit, are collectively culpable for the disastrous state of the public finances. The Progressive Democrats cannot shrug off their responsibility in that regard. If, as the Progressive Democrats suggest, there are aspects of the conduct of Government that they find unacceptable, why have they continued to participate? The obvious thing would be to pull out or to vote against the Government tomorrow night.
It also seems that the current negotiations between the Government parties are nothing short of extraordinary. In the middle of a five year period they sit down and spend four months renegotiating their position. This is not democratic. They do not even show any urgency in the renegotiations but leave them until the very last minute. As I stand here today there is still, as far as we know, no agreement. However I suspect there is and that the battle between the Progressive Democrats and their conscience has resulted in their poor conscience getting another hammering and being put aside.
If these negotiations include fundamental questions such as changing the electoral system, then the situation is very serious indeed, These are matters which should have been all [638] thrashed out before coming into Government, not in the middle of a term of office. To be arguing about the disastrous public spending and taxation at this time of the year shows quite clearly that the budget of last January was cobbled together for political reasons and had nothing to do with the state of the economy at that time. A point that Deputy Bruton also made yesterday is that it reinforces our claim that the Government have no plan at all but are flying by the seat of their pants. It is clear that there is no real commitment to any kind of long term planning necessary to reduce the national debt and create jobs for the 260,000 people who are currently unemployed. This Coalition Government seem to be based on expedience and power-seeking both within each of the parties and between the two parties rather than on any sense of the national interest. The main characteristics of this Government are that they are operating by reacting to issues and events rather than initiating or planning strategies and policies. They are long on aspiration but short on action.
This lack of action is perhaps best and most dramatically in evidence with regard to our participation in the European Community. With just seven weeks to go of the intergovernmental conferences in Maastricht we have no clear indication of our contribution to these conferences. The Government have given no indication of the position on a number of key issues. These issues include the future of decision-making structures within the European Community, the role of the European Parliament, the role of the Commission, the role of the Council of Ministers. The Government have not addressed themselves to any of these issues and what the President of the Commission himself terms as the democratic deficit which should be of concern to every parliamentarian in this country.
Does anybody know what the Government's position is with regard to more powers for the European Parliament. What are their views on the expansion of the European Parliament? Are we in favour of more countries coming in? Do [639] we agree with the Germans that Poland, Czechoslovakia and Hungary should be allowed in next year? Have the Government any views on that? The pace as well as the scale of change requires careful analysis and study and as I have already pointed out we are unsure and unclear as to the aspect of European economic monetary union. There has been no White Paper and no serious debate on this issue, a point that has been brought up time and time again by members of the Opposition in this House over the last two years. This Government are not serious about Europe. Nobody knows what they are doing. They are waiting for something to emerge and then they make up their minds whether they are for or against it. If they are for it they shut up and if they are against it the Taoiseach comes back in here and says we are opposed to something happening in Europe.
The crucial question that has been studiously dodged by the Government is the question of Ireland's role in the common foreign and defence policy. There is no doubt that such a policy will emerge in the next two years and perhaps much sooner if we are to judge from what the German Foreign Minister has been saying over the last few days. The Government must not be allowed to involve us by stealth in a defence agreement. I personally would view a defence agreement within the European Community as an obligation we should undertake. However it should not be done by stealth. It should be done by open debate in this House and not the way the Minister for Foreign Affairs attended the WUE conference three weeks ago when he appeared to agree - though it is not clear whether he did or not - that at some stage the Western European Union forces could be put at the disposal of the European Community. This is not something we could agree to without a debate in this House. The Minister was there like a man going into a pub for a drink who did not want to be seen having it. All these issues must come before this House and this Parliament must decide [640] in favour if that is what we want to do, but it must not be done by default, because a Minister at the Council decides to keep his mouth shut and that is taken as assent. No decision on these issues can be taken without full consultation with this House.
Last year the Government agreed to the setting up of an Oireachtas committee on foreign affairs. Again he reiterated that this was the policy of the Government. Nothing happened in 12 months except one thing; he was criticised by his friend of 30 years standing who had been evidently given a promise that he would be chairman of this foreign affairs committee. However when he criticised the Taoiseach that was immediately dropped. Is that Cabinet responsibility? This is Government by pique: a Taoiseach is annoyed because somebody criticised him and he will not therefore set up a committee on foreign affairs which is essential so that this House can understand what is going on in foreign policy at the European Community in the future.


