I intervene in this debate only for the purpose of trying to set the debate in a correct perspective, so as to enable the House to discuss this whole matter against the background of the wage and price policy of the Fianna Fáil Party. In 1939 we were told in this House on behalf of the Fianna Fáil Government that it was the policy of that Government to peg wages and to peg prices. We had a declaration then on behalf of the Fianna Fáil Government that nobody would be allowed to make unreasonable profits out of the war, and that nobody would be allowed to get away with profits which were unjustified. The general intention then, as expressed by those who spoke for the Fianna Fáil Party, was that prices would be rigidly controlled on the one hand, and the justification for that was stated to be the freezing of wages on the other hand.
Everybody who has been familiar with the circumstances from 1939 to 1946 knows perfectly well that, whatever that policy may have been in conception, it was a dismal and a ghastly failure so far as the workers of this country were concerned. As one surveyed the operation of that policy during the seven years from 1939 to 1946, one got one clear picture before his eyes, that those who were producing and marketing goods were being allowed to get away with inordinate and extortionate profits on the one hand, that they accumulated wealth that they never previously dreamt of, while on the other hand, the mass of the working people, the small men of no power and no property were held vice-like to a standard of living which is a reproach to any civilized Government.
What was the position at the end of 1946? Is there any worker or any apologist for the Fianna Fáil Party who will dare to contend that, taking the period from 1939 to 1946, any worker was better off in 1946 than he was in 1939? Is not it as plain as a pikestaff that during that period, so far as the workers were concerned, they endured economic crucifixion at the hands of the Fianna Fáil Government because their wages were kept low while, on the other hand, we had created a new hierarchy of wealthy people, arrogant in their wealth, arrogant in their opulence, challenging anybody who dared to question their right to make extortionate profits, yes, and threatening with a cheque book at election times because one dared to question the profits that these people were allowed to make under the Fianna Fáil Government.
Will Deputy Kissane or anybody else in the Fianna Fáil Party tell me, in 1950, that it was for keeping prices low that a bunch of industrialists in this city issued an appeal for funds on behalf of the Fianna Fáil Party at the last election in order to keep that Party in power? Was that done in appreciation of the Government controlling prices or is it not more likely that that was done in appreciation of the way in which the workers' standard of living was depressed while the wealthy elements of the community were allowed to get away with a bundle of swag that astonished even themselves? Yet, in the face of these facts, which are incontrovertible, we get Deputies on the Fianna Fáil Benches upbraiding this Government because it is not controlling prices.
I have before me a trade union publication which declares that the operation of the Fianna Fáil wage fixing policy was such that living standards were depressed so much that by the beginning of 1947 real wages were more than one-fifth below pre-war level and that was the result brought about by the wage and price fixing policy of the Fianna Fáil Party.
We have further evidence. Here is a chart prepared by the Central Office of Statistics. This chart shows the rise in the cost of living; it shows the wages of workers in transport and the wages of workers in industrial undertakings. Deputies can see here on this chart the effects. Here is the rise in prices described by this curve; here is a curve showing the wages of the industrial workers. That gap, that balloon, represents the Fianna Fáil policy of keeping wages down, on the one hand, whilst allowing prices to rise in that balloon-like manner, on the other hand. Every portion of that balloon represents hardship so far as the wage-earning classes of the community are concerned. That chart is available for anyone who wants to inspect it. It ought to bring a blush of shame to the face of anyone who attempts to defend the wage fixing policy of the Fianna Fáil Party.
I say here and now that the declaration which was made in 1939, that we were going to have controlled wages, on the one hand, and controlled prices, on the other hand, represents the biggest political swindle ever put over on the workers. The effect was to depress their standard of living, whilst those already well endowed with this world's goods were allowed to line their pockets and to amass wealth they never thought they would own.
What was the position when we took office? We found the workers, as this trade union document says, with their real wages lower by one-fifth than they were in 1939. They had just come out of the evil effects of a wage-freezing policy, a policy which stripped their wardrobes and their very houses and left them no reservoir of accumulated goods.
That was the position in 1948. On taking office we realised that this vicious policy of wage freezing should not be countenanced in any circumstances. One of our first acts was to recognise the fact that the standard of living of the workers had been reduced, that in 1948 that standard was less than it was in 1939. We sought to make amends and provide compensation by a generous approach to the whole problem of wages, an approach which resulted in our giving, so far as we were employers, increases to a variety of public servants, sanctioning increases for road workers, approving increases for agricultural workers, and generally showing that our line of policy in the economic field was in the direction of enabling workers to get compensation for the increased cost of living and for the sacrifices which they had made during the war period.
Would that have been the policy if the cheques of the industrialists had secured the return of the Fianna Fáil Party in 1948? Will anybody dare to say that that would have been the policy? We have here in the Dáil Report of the 15th October, 1947, a declaration from the then Taoiseach, Mr. de Valera. After referring to the situation which was developing the then Taoiseach indicated, on behalf of the Fianna Fáil Government, that that Government, not satisfied with the hardships they had inflicted on the workers from 1939 to 1946, were again beginning to sharpen their swords to give battle for a new wage freeze. He then announced, in column 389 on the 15th October, speaking of the Fianna Fáil Government:
"The Government regards this temporary limitation of wage increases as vitally necessary in present circumstances, and if the trade unions cannot undertake such an agreement as I have outlined, either because there is not unanimity amongst them or because their rules prevent the union executive entering into firm commitments of this nature, then the Government will produce proposals for legislation to the same effect."
In other words, in October, 1947, the Taoiseach in the Fianna Fáil Government was declaring that if the workers would not voluntarily agree to continue to bear the unreasonable sacrifices which Fianna Fáil had imposed upon them from 1939 to 1946, then the Fianna Fáil Government was going to reimpose by legislation another wage freezing policy.
One can imagine what the effect of that would be if it had been in operation for the past two years and nine months. That was to be the economic policy of the Fianna Fáil Party in 1947. Happily, an outraged electorate made sure they would never implement it. Not even the cheques of the industrialists, who got rich under Fianna Fáil, could save the Fianna Fáil Party from the anger of the electorate at that time. So far as the ordinary workers are concerned, so far as the men who depend on wages and salaries are concerned, the choice for them in 1948 was a continuance of Fianna Fáil wage freezing and that would have been in operation and they can measure the plight to which they would have been reduced, with wages frozen and prices permitted to rise.
It is against that background that the House has to consider this matter. I can understand Deputies who may want this Government to go further in this or that direction; I can understand and appreciate that point of view, but let nobody be so politically foolish as to imagine that the remedy is to put that Government back, to freeze by legislation the wages of the workers, and yet, with an hypocrisy that is probably without parallel, plead at the same time, as that Party does plead, that it is concerned with the welfare of the workers.
Let us take the situation as it developed from 1948. As Deputy Keane has said, when we came into office we found the butter ration as low as two ozs. of butter, and tea was a smaller ration than it is to-day. After a short time in office we increased these rations and they are higher to-day than ever they were during the Fianna Fáil period from the point of rationing onwards.
In addition to that, we repealed the penal taxes which the Fianna Fáil Party imposed on tobacco, on cigarettes, on cinema seats and on the beverages which the ordinary workers consume, and we did that at a cost of £6,000,000. I can tell Deputy Kissane for the Fianna Fáil Party that many Fianna Fáil supporters around the country were extremely pleased that there was in office a Government which gave them these simple luxuries at a lesser price than their Fianna Fáil friends would do.
There has been in this debate criticism of the index figure. The Parliamentary Secretary's speech in connection with this Bill has been grossly misrepresented, if not deliberately twisted to give the impression that he said something other than what he did in fact say. Now, let us look at this cost-of-living index figure. At best, it purports to be nothing more than a rough and ready means of measuring price movements. It does not purport in any way, and it never did, to be a scientific method of measuring the cost of living of any family, of even an average family. Its purpose was to indicate, in a broad way, without measuring the extent of family expenditure, the movement of retail prices. Someone has already suggested that it should never, in fact, be described as a cost-of-living index figure because it does not measure, and never purported to measure, the cost of living. It was the British who originally called it a cost-of-living index figure. We inherited the figure and the machinery from the British. They have since described it as an index of retail prices. We continue, however, to call it what it really is not, namely, a cost-of-living index figure.
Now, it has been suggested and, of all persons by Deputy Lemass, that he has no faith in a cost-of-living index figure. What he did not tell the House was that in 1947 his Government was responsible for introducing the present method of compiling the cost-of-living index figure. They selected the commodities to be priced; they selected the method of ascertaining the prices of these commodities; they selected the method of weighting these commodities, and they devised the machinery to give us the final index figure. All that was done by Fianna Fáil and under Fianna Fáil. It is being done to-day by the very same people whom they appointed to do it, and, whatever imperfections it has to-day, were imperfections which were breathed into that whole method by the Party opposite that was responsible for creating the mechanism. Yet, they pretend now to have no use for their own brain child, the 1947 method of ascertaining the cost-of-living index figure.
I say that is dishonest politics. I say that it is sheer hypocrisy to pretend now that we have done something with the index figure when they know, if they spoke the truth, that the index figure operating to-day is the index figure produced by the mechanism created by the Fianna Fáil Government. I say it is fraudulent to pretend to believe that the index figure has in any way been altered by this Government. The Government does not touch the index figure; it is not concerned with it; it is a pure mathematical calculation made in accordance with the formula designed by the Fianna Fáil Government.
What the Parliamentary Secretary said in this debate, and what cannot be challenged by reference to the Fianna Fáil price index mechanism, is that between August, 1947, and August, 1950, that index figure remained stationary. Some figures moved up, and others moved down, but over that period it remained stationary. It gave in 1947 the same result as in 1950, and vice versa, and it gave it by employing exactly the same type of operation as that designed by the Fianna Fáil Party.
When the Parliamentary Secretary said that, he told the merest and the barest truth, and when the trade unions, which raised this matter at the Labour Court and had the benefit of a consultation with the Director of Statistics, examined this whole question of the index figure, they did not attempt to make any case that the index figure was other than what we said it was, a rough and ready method of measuring price movements. The figure which it produced in August, 1950, therefore, is as accurate as whatever the figure was in August, 1947.
Since August, 1950 there has been a change. We are fools if we do not recognise the changes which have been brought about. The first change was devaluation in September, 1949. It was then believed that devaluation would have immediate and serious consequences for those countries in the sterling area which were compelled to buy either manufactured goods or raw materials from the dollar area. Happily, so far as we were concerned, the worst prognostications did not materialise for a long time. We were able to buy at the old prices, or to rely on supplies which had been bought before devaluation. In other words, we in this country had delayed action effect so far as devaluation was concerned. It was only in recent months that evidence was forthcoming of the increased prices which will have to be paid for commodities in which there is a dollar content, either in the manufactured article or in raw material. The effect of that devaluation, however, was this. It meant that for every £1 for which we used to buy goods, either manufactured goods or raw materials in the dollar area, instead of it buying us 20/- worth of goods it only bought us approximately 13/6 worth of goods, and inevitably, in circumstances such as these, the cost of imported manufactured goods, or the cost of raw materials from the dollar area, was correspondingly dearer. Even where we did not buy in the dollar area, but in the sterling area, goods or raw materials which had a dollar content, we were compelled, because of the experience of that country with the dollar area, to pay even in the sterling area a higher price for goods with a dollar content.
Will anybody pretend to believe that that did not make a profound change in our whole approach to the problem of getting raw materials for our industries from the dollar area, or a profound change in the importation of other commodities which we had necessarily to get from the dollar area? Has anybody here any remedies to suggest as to what we should have done in view of devaluation in our circumstances, and particularly those who linked us indissolubly to sterling? In the circumstances presented to us in September, 1949, there was no alternative that we could adopt to avoid devaluation of the £ and that fact has been admitted in public speeches by members of the Party opposite. But devaluation had necessarily a significant effect on our whole economy and devaluation was not alone.
In recent months we have had to face the situation which has arisen as a result of the Korean war. Does anybody suggest that we could have forseen that and stock-piled against it? Everybody who has studied the matter realises that even a great nation like the United States was, if you like, caught on the wrong foot by the outbreak of the Korean war. Having regard to the ever-changing circumstances in Korea and what has boiled up as a result of that conflict during the last couple of months, will anybody attempt to say that we could have insulated ourselves against the world consequences of the outbreak of war in Korea? Is it not clear that that whole conflict has compelled even the most powerful nations of the world to revise their whole economy? Countries which were giving over their entire industrial potential to the production of more goods for export in order to bridge their balance of payments have been compelled to devote a substantial portion of their internal economy to the production of arms and munitions of war, with the inevitable result that the economy of these countries has been partially dislocated. Many commodities which were freely available six or 12 months ago are no longer available at the old price because they are now regarded as essential war material.
We can, of course, if we wish, make up our minds that we are going to import nothing from the dollar area. We can make up our minds that we are not going to look in the world markets for those commodities which are becoming scarce as a result of the Korean conflict and dear as a result of that conflict and of devaluation. What does it mean? It means a complete convulsion in the whole pattern of our life. It means that we shall have to do without things which we do not produce ourselves. It means a complete reorientation in the life of our people. The scarcer these commodities become the more the tendency will be towards still greater increases in the price of raw materials which we must import, and still dearer manufactured commodities, if we feel it necessary in the interest of our national life to continue to import these commodities. It is sheer lunacy to suggest that we can possibly insulate ourselves against the effect of the Korean war or out-croppings of that war, together with the effects of devaluation.
World prices are rising. Prices are rising to-day in every country in the world, and it is dishonest not to recognise that fact. Butter is 7/6 a lb. in Italy; the cheapest meat is 3/2 a lb., and you have to stew it in order to eat it. Similarly, in France, butter is 6/9 a lb., and coal is £13 a ton. Figures have been quoted in this debate to show what the prices of certain commodities are in certain countries. In the United States, the 2-lb. loaf is 2/-; here it is 6¼d. If you take other commodities, such as eggs, you will find they are 5/- per dozen in the United States and, when this figure was ascertained, they were 3/3 here. You will find that in Canada butter is 4/1 per lb.; it is 2/8 here. You will find that sugar, in Canada, is 8½d. a lb. and 4d. here. That is not the full measurement of the increased cost of living because, even in Europe, price ranges are still higher than they have been in the countries which I have quoted.
If all this is happening throughout the world, does anybody seriously imagine that we can escape? I do not think we can, because our economy is very largely interdependent with the economies of the world. We have to buy raw materials from these other countries to sustain life here and to keep the wheels of industry moving. So long as we have to do that, we will never be able by our own efforts to cushion ourselves against the influences and the factors which make for high prices in these other countries. In the situation with which we are faced to-day, and with the danger of increased prices, it behoves us to be more vigilant than ever in dealing with this problem of prices. Scarcities must not and will not be allowed as an excuse for indiscriminate increases in prices against our own people. In the circumstances which have superimposed themselves on our economy in recent months, price control machinery must not only be maintained but, in the Government view, price control machinery must and will be improved, and that will be done immediately.
Deputy Beegan took a pathetic delight in believing that the present machinery was adequate. Other members of the Fianna Fáil Party, when in office, paid tribute to the price-control machinery. I want to say here and now on behalf of myself, and with a full sense of responsibility for what I am saying, that the public of this country have no confidence in the present price-fixing machinery. They have no confidence because they are not allowed to see how it works and they do not know what is going on. So far as the ordinary man in the street is concerned, he buys a commodity one day at a particular price and he sees an Order in the papers the next day, perhaps, saying that the price of that commodity is increased. He has seen no public examination of the question. He has seen no microscopic examination of the basis upon which the increase is sought to be justified. So far as he is concerned, he only knows that the price has jumped since he last bought the commodity and he darkly suspects that it is being done by somebody going into a Government Department and persuading some simple-minded person there that he should have an increase and that the increase takes place automatically.
That does not in fact happen, but a false impression is given of the examination which is applied to applications for price increases. Nobody can blame the public for having no confidence in a price mechanism which they are not allowed to examine, which they are not allowed to see in operation, and where they are denied an opportunity of analysing the elements which make for, and the factors which operate against claims for price increases. In other words, you cannot sell the public confidence in a price-fixing machine which operates in the dark so far as the community is concerned. That method of dealing with prices has got to end. This Bill is designed to end it, and it will end it quickly. We propose in this Bill to set up not an inconsequential advisory committee which can ponder over a problem sent to it for a period of months, but a price tribunal, a virile, vibrant, representative body of three or five citizens, selected on the basis of their competence and on the basis that they are citizens of standing. The function of that tribunal will be to examine every application for an increase in prices.
I would like to make it clear here and now on behalf of the Government that that price tribunal will not be an automatic machine for registering price increases. That tribunal will be expected to undertake the most critical and the most microscopic examination of every claim for an increase made to it, and there must be no increase given by that tribunal unless the case for such an increase is proved beyond all possibility of doubt. If there is to be a doubt, it is the public and not the applicant who will get the benefit of that doubt.
We do not want these applications for increases examined in the confines of a Civil Service office by two or three civil servants, on the one hand, trying to hold the scales for the community and, on the other hand, the alert producer trying to get his pound of flesh. We want this examination carried out in the full light of day, and we want to make sure that the public Press will be available to report the applications for increases and to read the examination of the witnesses before that tribunal.
In addition, we shall ensure that so far as this tribunal is concerned there will be adequate representation on it for consumers. The Minister for Industry and Commerce will be responsible in the last resort for price fixation. There will be no evasion of ministerial or governmental responsibility in that regard. Every application for an increase in price must go before the tribunal, and must be sifted by it, and that body will ultimately report to the Minister, and the responsibility will be on the Minister to decide on the facts as presented to him. This House will still be a watch-dog for the community in examining the day-to-day actions of the Minister in relation to price control.
This tribunal will do something more. Not only is it new, not only is it something that Fianna Fáil never contemplated or, having contemplated it, would never permit to operate, but we propose to throw this tribunal into the full light of day by giving it an opportunity of examining in public, applications for increases in price, and the Government will assist that tribunal in its operations by making available to it, at its request, the group profits of the manufacturers, or the individual manufacturer, who goes before the tribunal looking for an increase in price: in other words, the tribunal will not deal with these matters in a vacuum. When an application for an increase in price comes before it the Government will, if requested by the tribunal, say: "Here is the list of profits which have been and are being made by that particular industry; now that is the background against which you should weigh that application and come to a decision in the light of the full knowledge that you now have." That is something that has never happened before. That is something that does not happen to-day. There is no public examination of applications for increases with that information in the background. But that information will be in the background in the future, and the group profits will be available for the most meticulous examination in respect of any application which comes before the tribunal. I think you will all agree that by giving the public this type of tribunal, a public tribunal with all that information at its disposal and one on which the community, as represented by consumers, will have adequate representation, we are doing in respect of price control something that has never been attempted here before. I hope that what we are doing in this respect will inspire public confidence in the Government's new method of dealing with price fixing.
Every aspect of profit-making will likewise be brought within the control of this tribunal. It will have the power not merely to review group profits but also the power to review some of the rather unusual practices which have operated in industries from time to time in the past. It will have an opportunity of reviewing everything that contributes to the making of profits, including the writing up of assets and the subsequent distribution of bonus shares, sometimes by industries not very long in existence.
The tribunal, too, will be empowered to deal with the question of profit margins. The present method of price control ensures profits to all the handlers of a commodity and the price to the consumer of these goods is based upon ensuring such a profit to everyone who handles the goods; if a particular commodity costs 1/- to produce and if the wholesaler gets 2d., the subwholesaler 1½d. and the retailer 3d., if that commodity goes up in price, they all continue to get the same percentages even though their costs of handling have not increased and, in some instances, they get these wholesale and sub-wholesale profits although the goods do not move from the place where they were manufactured. That type of delicate mechanism, operated as it is to-day, will be brought under review. The rates of discount and the margins of profit will be subject to examination.
We must ask ourselves frankly how many people will we keep on the basis of paying them profits between the time the article is manufactured and the point at which it ultimately reaches the hands of the consumer. We could, if we liked, put in half a dozen more classes and let them all get a little and let the consumer pay in the long run. But prudent people may think that we have now reached the stage and the consumer has reached the stage where he no longer thinks he ought to be asked to carry so many at such an expensive price as he is paying to-day. However, that is a matter which will be subject to examination by this tribunal. So far as the Government is concerned every scrap of evidence relating to profits will be made available to the tribunal in order to assist it in its deliberations.
I have told the House that we propose to set up this tribunal primarily for the purpose of examining applications. We propose to do more than that. We propose to introduce without delay a price freeze. There may be a case for a profit freeze though there are difficulties in the administration of any such freeze; but at least there will be a price freeze, the most extensive and practical price freeze that we can devise.