asked the Taoiseach if he will indicate the basis for his recent statement that inflation will be reduced to single percentage figures in 1978.

The basis was an official estimate of likely international price movements and of the course of the main cost elements, including wages and salaries, for which it was assumed that the guidelines given by the Government will be followed.

Perhaps the Taoiseach will elaborate on the point that the guidelines given by the Government will be followed? Will he refresh my memory? In a speech did he refer to the need for achieving agreement with the unions on wages at the end of the national agreement?

Yes. The element of wage increase which we have expressed will be achieved is a factor in the forecast.

Is that the 5 per cent?

Yes.

Is it the position that the estimate that inflation will be a single percentage figure next year depends on a 5 per cent agreement with the unions?

Not necessarily. In May of this year my predecessor said that the best advice available to his Government, of which the Deputy was a member, was that inflation would be down to a single figure next year.

Is it the position that the Taoiseach's forecast that inflation next year will be a single percentage figure is identical with that of the former Government?

No. On the contrary. The reference which I made to the speech by the former Taoiseach envisaged inflation down to 13 per cent by the end of this year. It is expected now that it will be better by 1 percentage point, that it will be down to 12 per cent.

From memory I think that the estimate of the previous Government for the next year was made on the trends then observable and they calculated the rate next year would be 9 per cent. If I remember from the manifesto, the undertaking was that in 1978 inflation would be down to 7 per cent. Is that still the position?

That is what we hope.

Depending on the 5 per cent?

Depending on many other things also, on the reduction in imported inflation, on the reduction in unit wage costs and on the implementation of other parts of the Government's manifesto, which is being done.

Perhaps the Taoiseach would clarify a point? An inflation rate of 8½ per cent has been mentioned for next year in connection with a 5 per cent rate of wage increase. Now the Taoiseach has referred to 7 per cent. Do these figures relate to different periods and will the Taoiseach indicate the relationship between them? I refer to the figures of 8½ per cent and 7 per cent.

Deputy O'Leary mentioned the figure of 7 per cent. I cannot recall any specific reference to 8½ per cent.

The figure of 8½ per cent is not the Government's figure?

Perhaps the Deputy would enlighten me where he got that figure?

I will reflect on that.

Has the Taoiseach any basis for thinking that a 5 per cent agreement with the trade unions will be possible?

I have no basis for any agreement because negotiations have not started yet. I hope it will be possible to limit the increase to the figures mentioned in our manifesto.

Will the Taoiseach inform the House if in the event of the 5 per cent limit not being achieved we will still be down to single figure inflation?

These are separate questions.

There are hypotheses to which it would not be possible for me to give a firm answer, an answer that I am sure would be hung round my neck if the hypotheses did not come true.

There is so much around the Taoiseach's neck already.