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We should have been counting our pennies ...

We have gotten along remarkably well without a functioning banking system. The bank branches have been closed for more than six months this year, because of the bank officials' strike. Yet the economy has come through reasonably well.

But at some point, the country is going to have to deal with its lamentable industrial relations record.

The intensely local nature of trade union organisation and bargaining is part of the problem. It leaves no mechanism for dealing with the needs of the national economy.

Of course, a more nationally organised system would require that the participants had a clear view of the national interest.

There would have to be sufficient common understanding between employers, unions and government to ensure the new system did not become merely a swollen version of the current damaging horse-trading.

The lesson to be drawn from the bank strike is the resilience of people when faced with unprecedented problems. Something akin to a parallel banking system grew up during those months.

The retail banks generally avoid mortgage lending, not liking to lend so long-term when they borrow so short, and the strike did not impact on the sharp increase in home loans from building societies. These were up 60% in the second quarter, and 30% in the third, as compared with 1969.

Consumer prices rose by more than 8% in the first nine months of 1970, compared with the same period in the previous year.

Some two percentage points of this was due to the doubling in turnover tax on the value of sales from 2.5% to 5%.

This is a damaging tax increase. It bears down most heavily on the poorer sections of society and encourages wage claims from organised labour.

It is to be hoped there will be no further increases beyond this punitive level; not even if we join the Common Market with its value added tax (VAT) system.

It is clear that rising prices have damaged the country's competitiveness. The rise in general prices, as distinct from consumer prices, is closer to 9%.

This compares with an average 5% increase in the group of the seven largest OECD countries.

This is all the more disappointing because it has eroded much of the gain from the 1967 devaluation of sterling and the Irish pound.

There must be considerable doubt about the merits of devaluing the currency when wages respond as rapidly to inflation as they do in Ireland. Perhaps there will come a time when workers, either willingly or from lack of bargaining power, will accept the reductions in real incomes which come from devaluations.

Until that day dawns, it may be just as useful — perhaps even more so — to deal with such problems directly through wage restraint and higher unemployment, so that the realities of sustainable income levels based on productivity can sink home.

There were healthy gains in the traditional food and drink industries, but the 11% jump in jobs in general manufacturing points to the impact of the foreign-owned companies whose presence increased during the 1960s.

The trade deficit of IR£200m, and the overall balance of payments deficit of IR£60m (3% of GNP) show that the country continues to live beyond its means.

Stronger growth and a fall in unemployment will have to come from improved exports.

The foreign companies will play a key role, but we must look to the native sector for a greater contribution, especially in what look like favourable international conditions in the coming decade of the 1970s.

Belfast Telegraph