I would like to raise a matter with the Minister. It concerns an anomaly which exists in our income-tax code which operates at the present moment to the detriment of some of our citizens. As the law now stands, a resident taxpayer, who has a business outside this State, is liable for income-tax on the whole of the profits made by a business outside the United Kingdom and not just on the profits drawn here. The effect of that is——
Finance Bill, 1952—Fourth and Fifth Stages.
Question proposed: "That the Bill be received for final consideration."
I do not like to interrupt the Deputy but surely a matter of this sort cannot be raised on the Report Stage?
It is not regular to raise the matter on the Report Stage. I understand that the Deputy tried to raise it on the Committee Stage but was late and I told him I would allow him to mention it on the Report Stage.
I am not expecting the Minister to answer but I would like to give him formal notice of it.
I told the Deputy I would allow him to mention the matter but that it could not be discussed.
It is just that that particular anomaly places some of our citizens in an invidious position. They are charged fully on profits of a business outside the United Kingdom, whereas if they lived in Great Britain they would only be charged on the profits which they actually drew. That means that certain people who have businesses and estates in the Colonies, and particularly in parts of the Far East, may tend, when they are considering whereabouts in these islands they would live, to settle across the other side, and so we lose their taxable capacity in this country. That is the point I would like to bring before the Minister formally in the hope that he could do something about it.
Question put and agreed to.
Question proposed: "That the Bill do now pass."
On this stage, perhaps I might refer to the point which has been raised by Deputy Dockrell and say how much I regret that he did not raise the matter on the Committee Stage when we might have been able to consider it much more fully than on this stage. I have a great deal of sympathy with those who are in the position described by Deputy Dockrell. I have discussed the matter with the Revenue Commissioners and they assure me that they can be dealt with adequately by administrative action and that, in fact, is the common practice so that no person is discouraged from returning to this country at least by their administration of the law. I can appreciate that these people might like to see their rights set out in black and white in the statute rather than have to depend on administrative practice which, although it cannot be changed from day to day, might, nevertheless, be subject to change without being actually prescribed by the Legislature.
I suppose it might not be out of place, on the Fifth Stage of the Bill, when we are expected to discuss what is in the Bill, to mention why it is necessary to bring in a Finance Bill at all. The only purpose of the Bill is to provide out of taxation for the raising of the moneys which are necessary in order to enable our current Budget to be balanced.
The House will recollect that, when I made the financial statement on the 2nd April, I pointed out that the expenditure on Central Fund and Supply Services came to £107,956,000. We deducted from that sum £9,277,000 for voted "capital" services —a description in regard to which I have a great deal of mental reservation but which I have allowed to pass in order that there should be no unnecessary controversy as to whether, for instance, day-old chicks were proper to be borrowed for under a system which permitted the cost of them to be levied over a period of 30 years, or say, about more questionable items—motor-cycle tubes and motor-car tubes and tyres— which were bought with borrowed money and called capital services. No specific provision was made for their repayment out of taxation. I want to make the point quite clear that I regard this as a questionable deduction.
On this matter, however, we are following the precedent which has been laid down by our predecessor. We are doing so because, in the circumstances, the enormity of the task which confronted us, when we had to consider the financial problems of the State, was such that I had no option except, as I have said, to adopt the very questionable procedure of our predecessors and to say that these particular items were proper to be met out of borrowed money.
Allowing for these questionable items, the Central Fund and Supply Services, on the basis of last year's volume of Estimates, and supplemented by the further provision which we had to make for improvements in old age and blind pensions, for meeting the deficit on the nationalised railway system—Córas Iompair Éireann—for meeting increases in the salaries and allowances of public servants arising out of the arbitrator's award of last year, amounted, as I have already stated, to £98,679,000. To that and also for the Children's Allowances Act we had to add a sum of £3,000,000, which is designed to cover the amount of expenditure upon the Social Welfare Insurance Act which has just been passed by this House and for other contingent expenditures which will almost inevitably arise before the end of the year. As I said in the financial statement, we have included for these latter purposes a sum of £3,000,000 in this year's Budget. That brings us to a total sum of £101,679,000. If we deduct from that the net savings arising out of the reduction in food subsidies we arrive at a total sum of £97,671,000 which has to be found, and against which we have, on the basis of the rates of taxation which prevailed last year, £86,581,000. Deducting the smaller sum from the larger sum, we are left with a deficit of £11,090,000 which we have to raise by means of the tax proposals which are included in the Finance Bill now before the House.
It might be useful if I were, for a moment, to dwell upon one of the items which is responsible for the deficit of £11,090,000 which we have to face. I refer to the provision which we have to make this year for the interest on the Marshall Aid loan. As the House is aware, the Marshall Aid loan was raised by our predecessors in the year 1948. I think the first instalment of the loan was credited to our predecessors in April, 1948. That is to say that it was credited in retrospect, because transactions which took place in April, 1948, were ultimately settled by money which was borrowed some time, I believe, in October, 1948. That is a rather interesting situation to contemplate. An allegedly responsible Government entered into international commitments in April, 1948, and did not come into the wherewithal with which to meet these commitments until some time in October, 1948.
On a point of order. Is it in order for the Minister for Finance, on the Fifth Stage of a Bill, to deliver a speech which is obviously portion of the Second Reading speech which he overlooked making on the Second Stage of the Bill? That seems to be what this speech is like.
I think the Minister is explaining the reason for the variation in the tax level.
Am I to understand that it is all right——
I think it would be desirable, and I feel that Deputy Norton might think it desirable, if we were to hear the Minister on this point; some presentations of the Minister's story have been made already, and this little presentation will not do any harm. It might throw a little more light on the situation.
Might I draw the attention of the Chair to the fact that there is not a House present to hear these interesting statements? I am sure those words from the book of revelations would be interesting.
Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,
I do not pretend that my words are inspired——
Thanks for that modesty.
——but was it not inapt for Deputy Norton to describe what I am about to say as a revelation?
It is a small "r".
Perhaps yes, but do not forget that "r" is the initial letter of the word "repayment" which is associated with this Marshall Aid loan transaction.
There are a few capital "I's"——
And c.o.d. still spells "cod".
I would refer Deputy Norton to Deputy Dillon to ask whether he knows or not. However, I was pointing out some peculiarities about this transaction; I was going from that to point out that we must, through the media of the taxes which will be imposed by the Finance Bill which is now before the House, provide the sum of £573,000 interest for one half year on that Marshall Aid loan next year.
How much will you provide this year?
£573,000, at the present rate of exchange. If by any mischance, which Providence forfend, sterling were to depreciate further the amount would be correspondingly heavier.
Is it not the same sterling we are asked to keep our sterling assets in?
The Deputy might bottle up his indignation for a while. I will try to carry on. I know this is embarrassing to him.
Is it not the same sterling we are asked to keep our sterling assets in?
We are going to deal with that in a little while because that is a very interesting point.
I should think it is.
A very interesting point but we will come to it in due course.
I am glad to be helpful.
The Deputy is very often unwittingly helpful. That is his great attraction in this House, that he, as deputy leader of the Opposition, is very often helpful to the Government, albeit unknown to him.
The Minister for Finance will want all the comfort I can give him.
If I may try to get back, this year we are providing a sum of £573,000 to meet one half-year's interest on the Marshall Aid loan. Next year we shall have to meet a full year's interest; that will be £1,146,000. But in 1956 the repayment of the principal of the loan will commence and our obligation under the bond will amount to £1,376,000. Even assuming that the position of sterling does not further deteriorate, in 1956 the burden which our people will have to shoulder from year to year in respect of that loan will increase until it becomes something like £3,346,000. That is what Marshall Aid will ultimately cost the taxpayers of this country.
Is the Minister saying it should never have been accepted?
I am not making a speech according to Deputy Morrissey. I propose to make my own speech and the Deputy might at least have the manners to listen to it.
Why did you spend £24,000,000?
The Minister might be allowed to make his statement without this continual barrage.
It would be very interesting to answer that question and all the queries which Deputy Mulcahy might wish to put to me but I am just dealing with that one point, that we are beginning this year to shoulder the burden of the Marshall Aid loan. The proceeds of that loan were all expended before this Government took over in June, 1951. Every penny of that Marshall Aid loan was spent and spent by our predecessors in this way. I am quoting, Sir, from a speech by Deputy Dillon, column 2215, Volume 129 of the Official Debates of 19th March, 1952:—
"How often has it been repeated for the edification of their blockhead colleagues that Marshall Aid was spent on maize, wheat and commodities of that kind?"
At column 2219 of the same volume he said:—
"We spent dollars on maize. I spent $5,000,000 on wheat in one afternoon. It is a long list but I will give it all and if Deputies opposite do not like listening to it they can lump it. I bought 300,000 cwt. of soft Pacific wheat with Marshall Aid dollars."
That, Sir, is how this Marshall Aid loan was spent. That is how this $128,000,000 was spent, mainly on the purchase of wheat, maize, tobacco, petrol and foreign sugar.
But no raisins.
It has been alleged by the Opposition that the Marshall Aid loan was spent on capital equipment. Now there are two large projects in this country not directly under the control of the Government but which are financed out of the Exchequer. There is the Electricity Supply Board and there is Bord na Móna. Over the whole period from 3rd April, 1948, the date at which payments out of Marshall Aid loan began to be made, the total amount of dollar expenditure incurred by Bord na Móna amounted to about $186,000, and from the 3rd April, 1948, to the middle of June, 1951, the total amount of dollar expenditure incurred by the Electricity Supply Board amounted to about $3,114,000. The total for the two undertakings, therefore, came to $3,300,000. Out of $128,000,000 borrowed ostensibly to provide capital equipment for our undertakings and for our industries, $3,300,000, less than 3 per cent., was, in fact, expended by those two undertakings, and they were the principal undertakings in this country which incurred dollar expenditure on capital equipment. Therefore one can say that for the $128,000,000 which our predecessors borrowed and spent we cannot show in this country at the present moment capital assets which would exceed $5,000,000 in value.
Nonsense.
This money, which we were told was borrowed for capital purposes, was in fact spent, as Deputy Dillon himself admitted, buying wheat, maize, tobacco, petrol and sugar.
But not raisins such as the Minister is spending dollars on now.
I am not going to be led off on that track.
No?
I am not going to be led off on that track. If we have allocated dollars to buy American raisins and dried fruits, we are doing so because it is much cheaper at the present moment to buy them from America than it is to buy them from any other hard currency country.
But you are spending dollars.
The alternative——
Is to do without them.
"To do without them." Therefore we take it now that the policy of the Opposition——
This is going to be good now. Listen to this.
——is to prohibit the importation of prunes, raisins and other dried fruits. That, I gather, is the policy.
Do you? You are gathering a lot as you go on.
The Deputy cannot get away from it.
The rowdy is breaking out now.
When I asked what was the alternative, the Deputy very promptly and very loudly proclaimed that the alternative was to prohibit the importation. There are lots of people who contend that these dried fruits are a dietetic necessity—that they are essential.
And wheat is not?
Wait now. Foreign wheat is not.
Where are you going to get it this year?
Therefore the Minister would prohibit the importation of foreign wheat?
I concede to Deputy Morrissey that we have a lot of leeway to make up. Of course, we cannot undo in a night the injury to Irish agriculture and to the Irish economy——
Done by the economic war.
——which was done by the Deputy and his colleagues in the Coalition Government.
By the economic war.
We cannot repair that overnight. I concede that there is, as Deputy Morrissey, said, quite a lot of leeway to make up.
There is nothing like having your alibi in advance.
Let us come back to Deputy Mulcahy. The policy of the Coalition now, apparently, is to prohibit the importation of dried fruits.
I hope you have swallowed that well.
That is very interesting because, after all, dried fruits are undoubtedly—unless we are going right back to the darkest days of austerity——
Hair shirts.
Who said austerity?
I said austerity.
Surely it is not the Minister for Finance.
I said austerity because I gather that that is what is now being urged upon us: that we should now prohibit the importation of dried fruits and of prunes and all these other comestibles with which the housewife likes to furnish the domestic table from time to time, and which the housewife's husband naturally expects to see there. However, we are now getting back to the stage at which we will not have raisins or other dried fruits in this country; they are going to be a luxury which can only be brought in surreptitiously——
On a point of order. I take it the policy of the Opposition is not open for discussion now and that the only reason why we are discussing raisins is that there is taxation imposed in this Bill for the purpose of repaying dollars which are being used to-day to buy raisins under the policy of the Minister for Finance. I take it that it is the Minister's policy for importing raisins that we are entitled to discuss and that the policy of the Opposition with regard to raisins is not open for discussion.
The Chair cannot make any ruling on policies. The Chair can only rule that what is open for discussion and falls relevantly for discussion is what is in the Bill.
In the Bill. And what is in the Bill is——
Marshall Aid, raisins, tobacco.
——taxation for the purpose of paying back dollars that have been used for buying raisins under the present régime, Sir.
I gather from that that Deputy Mulcahy is like a kitten on a hot plate. He is very anxious that we should get off this topic of the prohibition of imports of raisins.
I am like a kitten with a saucer of milk, lapping it up.
Of course, the Deputy, not for the first time, is quite unaware of what is happening. We are not in this Bill raising money in order to buy foreign raisins. We are in this Bill raising money to pay the interest——
Certainly, on the dollars that are being used—
——on $128,000,000 which were expended principally in the purchase of wheat, maize, tobacco, petrol and sugar. These are the commodities, eaten or consumed over the period from April 1948 until June 1951, for which we are beginning to pay now.
I think the Minister is labouring under a misapprehension. There will be other speakers when the Minister is finished and there will be plenty of time for the boys to come in.
Deputy Mulcahy appears to be very uneasy. He does not like this speech. He does not want this issue thrashed out here. It is all very well for Deputy Costello to go down and say what we are doing——
Notice taken that 20 Deputies were not present; House counted and 20 Deputies being present,
I was endeavouring, Sir, to try to convince Deputy Mulcahy that the £573,000 which has to be provided out of the taxation imposed by the Finance Bill has nothing to do with raisins, that it is not related to raisins at all, that it is merely related to one simple and hard fact: the fact that this £573,000 to be taken out of the taxpayers' pockets this year represents a half-year's interest on the Marshall Aid loan——
Part of which was spent by the Minister on importing raisins.
I think I have already informed the Deputy that next year that amount will be doubled—that whatever Government is sitting here will have to impose on the taxpayers of this country taxation to an amount which will bring them in £1,146,000 in order to repay a full year's interest on the Marshall Aid loan. That is very interesting because £1,146,000 is almost exactly what would be provided by an additional 4d. per gallon on petrol. It will have to go on; there is no way out of it. In the following year we shall have the same thing and then, ultimately, the total payments under the terms of the four promissory notes—a nice phrase, "promissory note"—promissory notes which the Minister for Finance in the Coalition Government had to sign in order that he and his colleagues in the three years from April, 1948, to June, 1951, might be able to borrow £128,000,000 and spend it here——
Pounds?
Dollars, I beg your pardon—and spend it abroad——
On raisins?
On wheat, maize, petrol, tobacco and sugar.
But no raisins?
This $128,000,000 will have to be repaid with interest and repaid again in the terms of the promissory note. I do not think any Government in this country prior to 1948 ever signed what is described as a promissory note in order to raise money abroad but these four promissory notes were given in order that our friends on the other side might have a slush fund—because that is what it was—amounting to £128,000,000.
Dollars.
Dollars, I beg the Deputy's pardon—which they might spend in order that they might reverse —because that is what is behind this transaction and make no mistake about it—Fianna Fáil policy in regard to agriculture and industrial development. Let nobody be fooled by the excuses which they made that they borrowed $128,000,000 in order to develop Irish industry. As I have already pointed out the total dollar expenditure incurred by the Electricity Supply Board—whose undertaking covers the whole country and represents a capital investment of some £90,000,000—and the total of the dollar expenditure incurred by Bord na Móna only come to 3.3 million dollars. Out of the total of $128,000,000 borrowed by our predecessors, only 3.3 million went to provide new plant and equipment for the Electricity Supply Board and Bord na Móna. Therefore it was not for the purpose of carrying through the programme of national development that these dollars were borrowed but to enable another programme and another policy to be made effective— the old policy of Fine Gael, the preCoalition policy of Fine Gael, the pre- 1939 policy of Fine Gael, the old agricultural policy of Cumann na nGaedheal and the old industrial policy of Cumann na nGaedheal. These $128,000,000——
May I draw your attention, Sir, so that there will be no misunderstanding about it after the Minister has concluded his speech, that the discussion has been so widened that it cannot be kept afterwards strictly to a Fifth Stage debate, because if the Minister is getting this liberty, as he is then every other member of the House will be entitled to at least the same liberty? I want to get that marked so that we cannot be told afterwards that the Minister only made a passing reference to certain matters.
The discussion on the Fifth Stage of the Finance Bill is limited to what is contained in the Bill and the Chair was about to point out to the Minister that in going back to 1932 and 1939 he was going a bit wide of the matter before the House.
The Minister having travelled in the last 25 minutes away entirely from the Bill and not having once referred, except for one item, to what is in the Bill, I submit with respect that other members of the House will be entitled to ramble down every boreen into which the Minister has rambled in the last 25 minutes.
The Chair does not agree that the Minister has been rambling for the last 25 minutes.
What the Minister said in the last minute was just a continuation and a repetition of what the Minister said in the 30 minutes that went before.
I am not objecting to the Minister rambling so long as we all get the same freedom.
The Minister.
I was dealing with the question which I think is very relevant to the Bill—the fact that some of these taxes have had to be imposed in order to meet our commitments under the Marshall Aid loan, a transaction in respect of which we have for the first time to meet our obligations in this current financial year. We were under no obligation, at least our predecessors were under no obligation, in the years 1948, 1949, 1950 or 1951 to make any provision for meeting interest on the Marshall Aid loan but we have that obligation which we inherited from them imposed on us by a document—a promissory note signed by their Minister for Finance on behalf of the whole Coalition Government.
And the country.
——binding us in this year——
You did not object to it in 1948.
——binding us in this year to impose taxation to the extent of £573,000 on the Irish people in order as I have said to pay the interest on that loan. I know of course that people have been trying to confuse the issue in regard to the loan. Deputy Mulcahy who is now fleeing the House——
I am going out to get a copy of the document which the Minister called a promissory note—a document signed between one nation and another for the purpose of carrying on properly the business of the country.
The Deputy will cease interrupting.
The Minister is calling a document which was signed between this country and the United States a promissory note. This is in keeping with some of the Party performances which have been going on with regard to the United States. The Minister declared I was running away but I am going out to get a copy of the document.
The Minister is in possession.
I am sorry that Deputy Mulcahy is so annoyed. After all, he should not be annoyed with me. I was not the first to describe this document as a promissory note. I was not the first to describe it in these terms. After all, that is how it is described on the face of the document. That is how Deputy Mulcahy's colleague, the Minister for Finance, described it. It was described as a promissory note. I do not see why Deputy Mulcahy should get so heated about it unless, of course, he is ashamed of the transaction. That is just a possibility. I am not prepared to concede that it is an easy possibility to conceive that Deputy Mulcahy should be ashamed of anything to which he put his hand or of any transaction in which he engaged.
Has the Minister ever been ashamed?
Certainly.
I am glad to hear it.
I am fallible and human. I am not the egomaniac that Deputy Mulcahy is. I have often been ashamed of things I have done and said. I have admitted that. I was saying that, after all, here again was the situation. Our predecessors borrowed and spent, between April, 1948, and June, 1951, a sum of $128,000,000 and we have now got to pay for those dollars. We have now got to start paying interest on that loan and we have nothing to show for those $128,000,000, which, as Deputy Dillon said, were spent on wheat and maize and all the other commodities. That sum is all gone now. But why did the Coalition do that? Why did they borrow the $128,000,000? There are two closely co-ordinated reasons. The first is—and I have said it already— that they wanted to reverse the agricultural and industrial development of Fianna Fáil. In order to do that—if they were going to slow down on tillage and to drive men off the land— something had to be provided to keep people from starvation.
The second reason was that they borrowed those $128,000,000 in order to help sterling—to pour, as I have already said elsewhere, the $128,000,000 into the sterling pool. I do not want to be taken for a moment as alleging that our interests are not closely identified with sterling but I do not think that the then Taoiseach or the members of the Government which did borrow those $128,000,000 in order to support sterling are justified in alleging that we are sacrificing Irish interests merely for the purpose of supporting sterling. It is very interesting, even in that connection, to consider what was done by our predecessors. Immediately before the change of Government took place in February, 1948, arrangements had been completed for the inauguration of a transatlantic air service. Planes had been purchased with dollars.
On a point of order. Once again I want to draw the attention of the Chair to the fact that this is the most unprecedented procedure on a Fifth Stage ever witnessed in this House since it was established. I do not care how far the Minister is allowed to roam on this Fifth Stage of a Bill—the most confined of any stage of a Bill—but I want to assert here and now that no other member of this House can be restricted in the line that he pursues in this discussion. I hope that neither myself nor any other member of this House will be told either by the Ceann Comhairle or by the Leas-Cheann Comhairle that he cannot cover that particular——
On a point of order.
The Deputy is wrong in stating that the Chair has allowed the Minister to roam. That is a reflection on the Chair.
No, Sir.
The Chair is not allowing the Minister to roam.
On a point of order. Did I understand Deputy Morrissey to issue instructions to the Chair as to what his procedure should be later in the evening?
The Deputy should not let his youthful enthusiasm run away with his discretion. I am not making any reflection whatever on the Chair. I am merely making the point, for the purpose of having it on the record, that the Minister is travelling over a very wide field—from the old Cumann na nGaedheal policy to Constellations, Marshall Aid, sterling and all the other——
Raisins, prunes and wheat.
I want to put it on record that other Deputies in the House should be allowed the same latitude as the Minister is now being allowed.
I am sorry, a Leas-Chinn Comhairle, but it is very difficult to keep to the straight and narrow path in a discussion such as this where every Deputy feels that he ought to be sitting in the Chair and that he is entitled to raise any particular point he wishes to raise and to discuss it at length, as Deputy Mulcahy discussed raisins. I did not mention the word raisins. Deputy Mulcahy dragged raisins into this discussion.
I am going to try to relate my remarks to the narrow issue before the House. I have already pointed out that one of the reasons why we have to impose additional rates of taxation is that we have to meet our obligations under the Marshall Aid loan. When I was touching upon that question some time ago, Deputy Mulcahy got very annoyed and became quite indignant. As the colloquialism has it, he almost went "off the handle" because I referred to something as a promissory note. I have here an official publication issued by the Government and published by the Stationery Office. It is headed:—
"Loan agreement between the Government of Ireland, acting through the Minister for Finance, and the Export-Import Bank of Washington, dated 22nd December, 1949, together with the texts of the promissory note issued by the Minister for Finance and of the Letter of Notification addressed by the Economic Co-operation Administrator to the Minister Plenipotentiary for Ireland at Washington."
On page 5 of that publication there is a document which is styled "promissory note". It begins:—
"For value received, the Minister for Finance, on behalf of the Government of Ireland, hereby promises to pay to the Export-Import Bank of Washington, an agency of the United States of America, its successors or assigns, the principal sum of eighty-six million, three hundred thousand dollars ($86,300,000) or so much thereof as may be advanced against this note...."
Notice taken that 20 Deputies were not present; House counted and 20 Deputies being present,
Start at the beginning again.
It is not necessary. The second paragraph of the promissory note goes on to recite this:
"The principal of and interest on this promissory note are payable at the office of the Export-Import Bank of Washington, Washington, D.C., in lawful money of the United States of America unless the parties hereto mutually agree otherwise."
It is because this promissory note and three other promissory notes were signed by my predecessor during the year 1948 that we have to increase certain rates of taxation by the Finance Bill. I want to make it quite clear that we are doing that because of an arrangement which was concluded by this delegation which went in June, I think, of 1948, to London—a delegation in which Deputy Dillon played such a prominent part and which participated in discussions as a result of which the Coalition Government, which had previously decided that they would not look for a loan, reversed that decision and decided that they would apply for a loan from the United States of America.
The only relevance about that is that we have heard a great deal in the course of the discussion about the alleged instructions which I received from the present Chancellor of the Exchequer. I wonder what the then Chancellor of the Exchequer, the late Sir Stafford Cripps, told Deputy Costello, Deputy Norton, Deputy MacBride, Deputy McGilligan, Deputy Morrissey and Deputy Dillon, because I knew they had a big team over there; I wonder what he told one-half of the then Coalition Cabinet which induced them to reverse on the 25th June the decision which they had taken, at the instance, let it be noted, of Deputy MacBride, on June 11th, a fortnight earlier?
In any event, one of the purposes for which this loan was applied for was to support sterling, and the Deputy who was the Taoiseach when that decision was come to is the Deputy who had the audacity last week-end to say at a meeting in the country that we were sacrificing the interests of the people of this country in order to support sterling.
We are supporting sterling because we must support sterling. One of the reasons why we must support sterling is because the agreement of June, 1948, copper-fastened us to sterling if ever a trade agreement could do so. That is the agreement which, with the acquiescence and the acceptance of Deputies who are now decrying sterling, with the acquiescence of Deputy Norton and Deputy MacBride, bound the Minister for Agriculture to undertake that in no circumstances would we export more than 10 per cent. of our live stock to any market except the British market. That agreement gave to the British a virtual monopoly of demand on our live-stock trade.
On a point of order. May I call attention to the fact that the Minister is now discussing the 1948 Trade Agreement with Great Britain and ask for your indulgence to reply to it when the Minister concludes?
The relevancy of what I am saying is that the agreement of 1948 linked us more closely with sterling than we had ever been linked before and that because of that it has become a very high interest of ours to support sterling as we have had to take sterling in exchange for our live stock of which the British were given a virtual monopoly of demand. The Coalition agreed that for our beef we should get Bank of England notes. Deputy Hickey agreed because he supported this agreement, that in exchange for our cattle we should take British sterling and as we get British sterling and nothing else in exchange for our cattle we have to support sterling because it happens to be the money in which we are paid, the money in which our predecessors agreed we should be paid, and not only that, but in order that the holders of sterling might be safeguarded against embarrassment, we agreed to saddle the people of this country with the $128,000,000 Marshall Aid loan, for the first half-year's interest on which we have to tax the people in order to pay this year.
Let us consider this other allegation —that we have been sacrificing things on the altar of sterling. One of our great difficulties in dealing with our present financial problems is that which arises from the balance of payments. I say hopefully that as a result of the fiscal measures which we have taken we may get that problem under control this year. There are already signs that we are getting it under control. It is too early yet to be too optimistic about it, but at least it looks as if it were going to become a manageable problem. It is no longer running away with us, no longer getting out of hand. In any event, it arises from the fact that of the things we need to buy in order to maintain our existing standard of living there are many things which cannot be bought with sterling, which can only be bought with currencies other than sterling, and among these currencies, dollars. One of the reasons for our present difficulties is our shortage of dollars. That is why I am relating this to the Finance Bill. Our position would be very much easier if it were not for the fact that we are not earning dollars in sufficiently large amounts to enable us to pay in dollars for the things we are buying from the dollar area.
This is a problem which has not taken us by surprise. It is a problem to which we had given a great deal of consideration when Fianna Fáil was in office prior to 1948. One of the things upon which we elected to bank as a dollar-earner was the transatlantic air services. If we had those transatlantic air services now in operation they would be earning dollars for us.
On a point of order. Are you ruling that this is in order and that a discussion on transatlatic air services is permissible, because if so I also want an opportunity of replying to that as well?
I am only mentioning transatlatic air services as a possible source of dollars, as a possible dollar-earner and as a service which, if it had been allowed to continue, would have certainly greatly eased the financial and economic situation in which we find ourselves now in regard to the balance of payments. That is the only point I want to make in relation to that.
There, in 1948, we had a prospective dollar-earner which would have shown a profit in the years 1950, 1951 and 1952, because it is a well-known fact that the air services which are showing profits at the moment are those which are flying the Atlantic. We had exceptional facilities for establishing that service. Associated with it there was going to be, down in Limerick, the great repair and maintenance shops of the Lockheed aircraft company. Those shops would have given employment to over 400 people and that employment would have been paid for mainly in dollars, so that directly from the air service itself, and from the subsidiary employment which would be given in the Lockheed repair and maintenance shops at Rineanna, we would have had a source of dollars which is now denied to us.
We had taken steps to equip this country with that dollar-earner. We had not borrowed dollars. We had procured dollars by reason of our claims upon other countries and with these dollars we had bought five Constellations for the sum of £1,425,000. What happened? Even though the service was scheduled to be inaugurated on 17th March, 1948, within one month of Deputy Costello taking over as Taoiseach and Deputy Norton, coming in as his Sancho Panza, as Tánaiste——
Now, General MacEntee, you missed the train at Mallow and only for that you very nearly became a trooper in the South Irish Horse.
These Constellations were sold. For what were they sold? They were sold for sterling. A sum of £1,425,000 had been changed into dollars and the planes had been bought. Those planes and the auxiliary equipment were sold for something over £2,000,000. On that transaction alone the Coalition Government in terms of sterling made a clear profit of £425,000. All that money poured into the sterling pool. The Constellations which were bought with Irish dollars were sold to the British Overseas Airways for English sterling and the Deputy who, as Taoiseach, led the Government which was responsible for that, is the Deputy who has the audacity now to go down and say throughout the country that this Government is sacrificing Irish industries and Irish industrial and economic development to the sacred cow of sterling.
I wonder would the Minister publish the memorandum prepared by the Department of Industry and Commerce showing the anticipated loss on the transatlantic services which, in my recollection, amounted to more than £500,000 a year.
Whatever the Deputy's recollection may be, the fact remains that events would have belied the gloomy prognostications of Deputy Morrissey as Minister for Industry and Commerce.
This memorandum was prepared by the Department before the Coalition Government took office. It was prepared for the Fianna Fáil Government in 1948.
If the Deputy wishes to say that the initial expenditure and development losses——
Operating losses.
——development losses would be at the rate of £500,000 a year, when Aer Lingus was started it operated at a loss. Pan America operated at a loss. Transatlantic Airways operated at a loss when they were first started. But they are all making a profit now and Aer Linte would have been making a profit to-day if it had not been strangled by the Deputy and his associates in 1948.
B.O.A.C. are losing about £750,000 each year at the moment.
The fact remains that every airway, including Aer Lingus, is making a profit.
Aer Lingus is not running a transatlantic service.
The Deputy is on a bent pin. He can wriggle as much as he likes. The fact remains that every transatlantic air service is making a profit.
That is not true.
Those that are properly managed are making a profit.
The Minister has given us some figures about transatlantic air services. Would he say whether these figures are as reliable as the figures he gave us in the Budget in relation to motor cars?
The Chair would point out that we are not discussing transatlantic air services. We are discussing the Finance Bill.
There is not much more that I have to say. I have merely dealt with one matter which has made it necessary for us to impose this additional taxation this year. I pointed out how the deficit on last year's Budget has arisen. We have to provide for increases in the remuneration of civil servants, the Gardaí, the Defence Forces, national, secondary and vocational teachers, increased rates of remuneration which have flown from the arbitrator's award last year. I pointed out how we have to provide this year for the loss upon the nationalised transport service. I have referred to the fact that we have to provide for the expenditure which will be incurred under the Social Welfare Act and also for the expenditure which has arisen and will have to be repaid this year because of the increase in old age and blind pensions which was granted last year.
Provision should have been made for all these items in last year's Budget. Because that provision was not made they have to be provided for in this year's Budget as they will have to be provided for in all subsequent Budgets because they are recurring items. In addition to that we have to provide in this year for the first half-yearly payment of interest upon the Marshall Aid loan. Next year the sum will be greater and after that it will be greater still until ultimately we shall be paying £3,300,000 to redeem a loan raised over the period 1948-1950, virtually all of which was spent upon importing things that we could have provided ourselves. There is no justification for having imported foreign wheat in the huge quantities in which it was imported over the period 1948 to 1951. We were able during the period of the war to provide ourselves with bread and we did not need during the whole period of the war, if my recollection is correct, to have recourse to bread rationing. Since the war, however, we have had bread rationed and we have not been able to provide ourselves with the bread ration out of our own wheat. There was no reason whatever for raising this Marshall Aid loan and spending it in that way.
People say that eaten bread is soon forgotten. Unfortunately, the bread made out of the foreign wheat paid for with Marshall Aid money will not be forgotten for many a long year. Our people will have to continue to pay for that bread for almost a generation. People are saying that no strings were attached to this loan but there is a string which my predecessor, Deputy McGilligan, attached to it: The bond signed by him which binds us to repay that loan with interest in the lawful money of the United States. I think that that will be in the future a very onerous burden indeed on this country.
The Minister's speech on the Fifth Stage of the Finance Bill is unparalleled in the history of this House over the last 30 years. Not only was the speech unique in this respect but it contained not a single reference to what is in the Bill; he talked of everything which is not in it. He went back to the Trade Agreement of 1948, to the fantastic transatlantic airline which he was going to provide for the millionaires and millionairesses of Europe and America and to the old Fine Gael industrial policy. All this was relevant on the Finance Bill in the Minister's speech a few moments ago. He spoke about things which are of no consequence whatever to the mass of the people. He talked all this mathematical nonsense to his heart's delight this evening without mentioning a single thing which affects the day to day lives of ordinary people.
Let us examine for a few moments some of the references made by the Minister. He bleated here for half an hour this evening that this Government had to pay interest charges on the Marshall loan. I offered the Minister an instantaneous remedy for any burden which he feels may rest upon him in that respect, that is, to get the Taoiseach to have another midnight ride to the Park to ask the President to dissolve the Dáil and then the country would be relieved within 21 days. If he did that the ministerial pants would get a kick.
Is the Deputy suggest-lionairesse ing that the people should repudiate their debts?
We will have Deputy Davern on the Bill later!
He wants the people to repudiate Deputy Davern, not their debts.
I heard Deputy McGilligan in 1948, when he said that he would not provide work for the unemployed. Everybody heard that.
Order!
The Minister has an easy salve for his financial soul—to go to the country on the Budget and on the Finance Bill. Every single member of the Fianna Fáil Party knows perfectly well that you will get the greatest political hiding you ever got and that you will get an instalment of it in the by-elections.
It is the Labour Party you are talking about?
When the by-elections are over that smile will be off the Deputy's face.
He is worried about the Labour Party.
Listening to the Minister for Finance one would think that to borrow Marshall Aid was a cardinal crime against the nation. Anybody who takes the trouble to read the Official Report will see that Deputies de Valera, Lemass and Aiken, as they then were, all approved of borrowing money under the Marshall Aid scheme and that the Fianna Fáil Party did not oppose it. As far as all Parties in this House are concerned, therefore, there was general and national agreement to borrow money under the Marshall Aid scheme. Quite clearly if it was borrowed, in all decency it would have to be paid back. What is the meaning of the Minister's lamentations, therefore, that the money will have to be repaid? It will have to be repaid and it can be repaid. We are no worse off than any Government in Europe but better off in the matter of repayment. It is a tribute to the Government who were in office in this country that the E.C.A. administrators admitted that we were putting Marshall Aid to better use than most other countries and they were the people who provided the money for us.
What about ground limestone?
You spoke on it too, sonny.
The Minister spoke of the transatlantic air service. My recollection of it is that the estimate of costs which we had from the Department showed that it would run at a loss of about £600,000 for a couple of years and when we probed those estimates we found that each was about 50 per cent. wrong on the optimistic side. The nation would have had to face running a transatlantic service, not for migrating labourers, not for emigrants to America, but for millionaires and millionairesses, wealthy people from Europe and America. They would have a transatlantic service at a cost of £1,000,000 to the Irish people who could scarcely afford to go to a hurling or a football final. They were to pay £1,000,000 to subsidise this brain child of Fianna Fáil. This service was going to lose £1,000,000 a year which the Irish people would have to meet. That is the transatlantic service they are still hankering after. When the people get that service—that is if they ever get it—it will raise a financial blister on their backs.
I take it that the £16,000,000 building for civil servants will be in order on this stage too?
It is a free-for-all.
The Chair will deal with these points as they arise.
The £16,000,000 building for civil servants was about the same date as the transatlantic air service.
That will not pay for the Marshall loan.
I am asking indulgence to raise it.
Listening to the Minister's speech one would think that a scheme of borrowing money to finance capital development was essentially wrong. It is no such thing and no economist of any kind much less an economist of any standing, would attempt to say that anything the inter-Party Government did in that respect was wrong on economic or fiscal grounds. We did what the ordinary wise craftsman does when he has to buy articles of a capital character for his household. The generality of citizens buy bicycles and pay for them every week. Does anybody suggest that a man who buys a bicycle should go without his breakfast, dinner and tea and pawn his clothes for a week?
Will the Deputy answer a question? Does he buy chickens and pay for them over 30 years?
Let me develop my point; I will come back to that later. Is there anything unreasonable in a person who wants to buy a bicycle or even a motor-cycle or a car deciding that he is in steady employment and likely to remain so, that his financial position is good and will remain so and that he will buy his bicycle, motor-cycle or car on the instalment plan and pay his instalments regularly which he can do in his stabilised financial position? That is done every day in the week, done even by members of this House in that and other fields. It is the most normal intelligent way of proceeding with the purchase of items such as capital goods for one's house or for one's personal benefit. There is nothing wrong in it.
What we did was to borrow money and utilise that borrowed money for the purpose of financing schemes of capital development, because we felt that, just like the man who buys a bicycle in a week and imposes considerable hardship on himself by doing so, if we were to try to raise money for capital projects, either by taxation or by compressing the repayment period into a short space of time, we would inevitably inflict grave hardship on the people of the country who would have to provide the money. We therefore decided to adopt this simple and clearly explanatory mode of procedure. We decided on certain capital schemes of development and, with borrowed money, we financed these schemes, making provision at the same time to repay the capital we borrowed and the interest due on it. In the Budget of each of the years we were in office provision was made—it is there in black and white for anybody to see or read—for the repayment of the capital sum and repayment of the appropriate interest, and that was to continue down through the years until the original sum was paid off, but in the meantime the nation would have had the benefit of the capital project.
There is nothing wrong with that. It is an intelligent mode of procedure, a mode of procedure which has been adopted by every other country in Europe, except perhaps to some extent by Britain. Every other country in Europe, and particularly the Scandinavian countries, have adopted that method of financing their capital development projects for the past 20 or 25 years. Nothing has been said by the Minister which in any way disturbs the essential soundness of that method of financing capital development schemes, but there is a smokescreen put up and a half-truth uttered by the Minister which suggest that the whole arrangement was a conspiracy against the people. I maintain that so long as Ireland is a solvent unit and so long as its Government is a stable Government, and its people are living in relative prosperity, it is within the competence of the nation to borrow money for the purpose of financing schemes of capital development so long as it does one thing, that is, repay in instalments the borrowed money and, if you like, interest charges as well. It is a perfectly sound procedure, and, while it is relatively new in this country, that does not disturb its essential soundness or the wisdom of the inter-Party Government in proceeding along these lines.
We were told by speakers for the Government, and notably by the Taoiseach in the past few days, that what this country has to do is to live within its means—whatever that means. There will be a pretty large number of people who will not be able to live within their means when they have to pay the higher prices for bread, tea, butter, sugar and flour next month, but let us pass over that for the moment. We can come back to it later. Let us examine this living-within-your-means mentality of the Taoiseach. I read in a paper recently a report about some poor wretch who was dragged out of a straw bed in a laneway in New York. He was examined by a police officer who felt that the man was on the point of death and was taken to the police station where he was found to be clad in filthy rags.
Mr. Brennan
Is this the same man you told us about before?
He was obviously suffering from malnutrition and he had the sores of hunger all over his body, although he had about £3,000 in his pocket. He lived within his means, of course, but he lived in rags, with sores and filth and vermin. This is the mentality which is now being commended to the people by the Taoiseach, because quite clearly this Government believes that the ideal objective to be aimed at by the people is a low standard of living. That is understandable and desirable, they think, so long as we have sterling assets to our credit in the Bank of England earning half of 1 per cent. I know well—its annual reports prove it—that the whole mentality of the Central Bank, which privately is the architect of this Budget, was that the Irish people were eating too much butter, that they should eat less and export it to Britain, and get sterling for it, allow these assets to be chalked up in the Bank of England and let the British use the money to grow peanuts and groundnuts in East Africa, giving us ½ per cent. on it.
I know that the Central Bank people believe that it was a mistake for our people to be eating bacon and rashers. I know that they believe that they were eating too much, that these were luxuries which the Irish people should be satisfied to do without, and that the ideal way to build up a prosperous and healthy Irish nation was to eat as little bacon, butter, rashers and eggs as you could so as to permit greater exports to Britain, because the Central Bank people believed that good prices were going there and it was desirable to sell as much of that stuff to Britain as possible, even though you deprived your own people of it, so long as you got sterling and had these sterling assets chalked up to your credit.
I do not believe in that method of running the nation, nor do I believe in that method of financing the nation. I think the standard of well-being and prosperity of this country will be determined, not by the amount of sterling assets in the Bank of England, to be used by the British Government in any part of its Colonial Empire it chooses, but by the standard of living in the simple homes and kitchens of the masses of the people. What does it matter to people in Connemara or in the City of Dublin that we have £300,000,000 or £400,000,000 sterling in the Bank of England and that we are the second largest creditor nation in the world, if the poor wretches have not got a decent suit of clothes and if they cannot go to Mass on Sunday because they have got only rags to wear? What do your sterling assets in Britain matter to them if they cannot get one square meal a day, much less three square meals? Would it not be a much more desirable objective that we should have no sterling assets, if necessary, in England, but that at home here own own people got regular work at decent wages producing goods and wealth for the nation and enjoying a civilised standard of living and enjoying, too, a share in the profits of the wealth made possible by the application of their brain and brawn to Irish enterprise?
This Government believes that the pattern of life for our people is to be the pattern of a low standard of living at home and sterling assets invested in the Bank of England. If you complain about that situation, you are told: "You live in a small country and you ought to be glad to be allowed to live in it. You live in a poor country and you cannot expect what other people enjoy." You try, then, to urge that other people have decent clothes and food and are told that you cannot get these things while you live in a country like this, that you ought to be proud to live in it and that it is a patriotic duty even to starve in it when you give the things you ought to have yourself away to another country, to get in return sterling assets which might disappear like the morning mists if Britain should happen to be involved in another war, as they deteriorated very rapidly by half their real value between 1939 and 1948 when Britain held them for us during the last war.
I do not believe in a philosophy of that kind as an approach to our national problems. I believe that what we need is to put every man and woman into employment on any and every scheme we can devise of a worthwhile character, and I believe that it is reasonable to borrow money for that purpose, so long as we repay, and we have been repaying, and reasonable to repatriate our sterling assets to put our people into employment here and give them a decent standard of living, instead of imagining that prosperity lies in having a low and wretched standard of living for our people but sterling assets in the Bank of England to be used as the British wish to use them any time they like.
The Minister said—he took pride in it—that the problem of the balance of payments is under control. I do not know what way it is under control.
When this Government took office in 1951 it was an affliction on the people of this country and has remained so for the past 12 months. In their anxiety to discredit their predecessors they proceeded to tell the country that it was on the verge of bankruptcy. I remember seeing one tearful picture in the Independent of the Minister for Finance surrounded by a group of motor traders, not just clad in rags, at a well-furnished table on which there was no gruel present. The Minister delivered himself that night, in these comfortable and comforting surroundings, of a speech in which he said we were “on the verge of bankruptcy to the point of desperation”. I can imagine the number of tears that, with difficulty, the Minister suppressed that night. I can imagine the number of gulps that must have come into his throat as he portrayed the sorrows of the nation on matters of finance from the well-stocked tables at the Gresham Hotel. That kind of speech was also made by the Tánaiste and by the Minister for Posts and Telegraphs. Other minor fry became infected with the simple belief that, by constant repetition from the master fry, this must be the position.
Consequently, for the last 12 months this Government has been bleating about impending ruin and disaster. It has created in the country a form of gloom and despair, and that situation has been brought about solely by the gross and deliberate misrepresentation of the position of the nation before our people. If they had had any sense they would, on assuming office in June of last year, have gone to the country and borrowed money. We could have utilised the Marshall Aid funds instead of taking one or two loans. We did not do that. We said that we would keep the American Counterpart Fund there as long as possible, that so long as we could get money by going to the open market we would do it, firstly, to enlist the savings of the people to do the capital things that we wanted to do, and, secondly, to encourage the people to follow the prudent road of thrift. We left an abundance of money in the American Counterpart Fund — £24,000,000 was left.
That has to be paid.
This Government could have gone to the people in June, July, August or September of last year. They could have borrowed money from the people and could have kept the American Counterpart Fund, in so far as we left it there, intact for any future emergency. But they were engaged in the despicable task of fouling their own nest; they were engaged in the task of maligning the nation and maligning the last Government, with the result that they created instability which undermined confidence in the nation and confidence in the Government itself.
We have only got to see the results. Look at the value of Government stocks on the stock exchange to-day! How could it be better, listening to the dreary speeches made at banquets by the Minister for Finance and other Ministers? How could you prevent the sag in Government stocks on the stock market, listening to speeches of that kind? Who wanted to buy Government stocks if the nation was in the parlous position indicated by the Minister for Finance? All these miserable, dreary speeches have now reached the stage that you have created a feeling of uncertainty, a feeling of instability, a feeling that nobody yet knows what is going to happen or at what stage we will be precipitated into, and well into, a recession movement in this country.
You have only got to look at the employment figures. There are 13,000 more people registered as unemployed to-day as compared with last year. Is not that a good achievement for one year of Fianna Fáil government, that you have 13,000 more people idle in Ireland to-day than there were in June of last year, thanks to the Fianna Fáil Government, and that notwithstanding the fact that, during the past four or five months, we recruited 4,000 young fellows into the Army? They were either taken out of jobs or off the employment exchange, but you still have got 13,000 more idle to-day than you had last year. If you look at the emigration figures you will find that the emigration figures for the last five months of 1951 under Fianna Fáil were 65 per cent. higher than the emigration figures for 1950.
80 per cent. higher than in February and March last.
Notwithstanding the increase in emigration, and notwithstanding the recruitment of 4,000 additional people for the Army, we still have 13,000 more unemployed than we had last year, and the number is increasing rapidly. These figures of unemployment take no cognisance of the fact that ten of thousands of workers are working short time. In my constituency dozens and dozens of people have been laid off, and others are working short time. That had not happened before over a long period of years. Take the building industry. When we were in office, we tried to encourage building trade workers, who were in short supply here, to come back and engage in house building. We got a few hundred of them back for that work. Not a single one of them was idle while we were in office. You never saw a building trade worker at that time looking for a job.
The trouble at that time was that any time a worker did not like a job he took his tools from one job to another because he realised that he was indispensable. You then never saw a building trade worker on the employment exchange. What is the position to-day? Every trade union catering for building trade workers has unemployed skilled craftsmen on its books to-day. The unemployed skilled craftsman in the building industry cannot find employment in it to-day, and for the first time for a long number of years the building trade worker is packing his tools again and is going off to Britain to get there the employment which he cannot get here under this Fianna Fáil Government.
Although the Minister for Finance spoke for about one and a half hours he took very good care not to tell us anything about what, in his view, would be the impact on the masses of the people of the increase in foodstuffs which will become operative on the 5th July. I notice that the Taoiseach, speaking the other day, made this revealing declaration: "that the policy of the Fianna Fáil Party was unchanged for the past 21 years". I do not want to weary the House with a recital of the number of smashed, fractured and frayed policies of Fianna Fáil. They constitute an unenviable heap of broken promises over that period. I think it will be sufficient if I quote one case.
Last year we had a declaration from the Fianna Fáil 17-point programme declaring that the policy of the Party was to maintain the food subsidies, to control the prices of essential foodstuffs and the operation of an efficient system of price regulation for all necessary and scarce commodities. That was one of the 17 points made 12 months ago, not 21 years ago. Everybody knows what has happened to prices during the past 12 months. According to the Government's own figures, the prices, apart from the increases which will now take place, have risen over 11 points. We are going to have a further very substantial rise when these increased prices come into operation for foodstuffs on the 5th of next month. What can you think of a Party which, in June, 1951, says that its policy is to maintain food subsidies and yet now gives us a Budget and a Finance Bill under which we are going to pay from 5/- to 6/6 instead of 2/8 for a lb. of tea? We are going to pay 9d. instead of 6½d. for the 2-lb. loaf, 3/10 instead of 3/- for a lb. of butter, 4/9½d. instead of 2/8 for a stone of flour and 6½d. instead of 4½d. for a lb. of sugar. The policy of Fianna Fáil may not have changed in the last 21 years but quite clearly there is going to be a very substantial change in the prices of these foodstuffs which, 12 months ago, the Fianna Fáil Party promised it would maintain by means of a continuance of the subsidies.
This Government has no mandate from the people to slash the food subsidies nor has any single Deputy who supports this Government. I looked at an election address issued by Deputy Dr. ffrench-O'Carroll. He gave the people of his constituency the benefit of his views on the food subsidies and said not only was he going to urge the maintenance of food subsidies but, in fact, he was going to urge that they should be increased so as to bring down prices. On that policy he was elected but he comes into the House and votes against the maintenance of the food subsidies in order that the price of food, which he promised to keep down, should go up and he apparently thinks he has got a mandate, as does the Government, to introduce a Budget which will have the effect of putting a crippling burden on the backs of the people. Will the Minister tell us, if he is going to make another long speech, what is his estimation of the effect of this burden on the people? Does he not know perfectly well that it can only have one significance so far as the masses of our people are concerned and that is to force down their standard of living? There will be less food consumed because there will be less money to buy the food at the higher prices. That will mean a lower standard of living. You have got a situation in which not only are unemployment and emigration rising but there is large-scale short-time work in operation to-day. There is a sag in the house-building programme throughout the country. You have got a feeling of gloom and despair from one end of the country to the other, so great, indeed, that this Government would not now dare go to the people for a loan, although if it had conducted itself there were millions waiting for it if it had launched a national loan for national purposes last year. We have reached a situation to-day, a situation of instability in which nobody knows what is going to happen, in which nobody can plan since he does not know what the future is or will be. It is a situation in which everybody feels uncertain and where, if people are so credulous as to believe Ministers, they feel that eternity must be just around the corner for them.
During the past 12 months this Government has been lazy and incompetent. It has no confidence in itself and has apparently no faith in the ability of the Irish nation to survive. If it had followed the policy left to it by its predecessors, it would have taken a further step along the high road to prosperity on which we left it in June, 1951. If this Government feels unable or unwilling to undertake the task of getting the country out of the difficulties into which its own intemperate and irresponsible speeches have landed the country, it ought to do one thing—it is, in fact, the only decent thing—go to their masters, the people, when they will get their answer to this Finance Bill and this Budget. The people will get a chance of expressing their views on the matter.
Deputy Norton commenced his speech by inviting the Taoiseach to dissolve the Dáil and go to the country. Obviously, that is a debating point. Deputy Norton clearly requires or desires no general election but this point of a general election is being made by many interests that are opposed, as I see it, to the nation. During the past few months we have had a campaign carried on from week to week by certain organs of the Press, particularly Independent newspapers, suggesting that a general election was essential, that it could not be long delayed and that no person in this country could have any sense of security until a general election was held.
Deputy Norton has referred to it as a condition of instability. There is a position of artificial instability sought to be created by the interests I have mentioned for their own purposes.
Surely, what the Independent newspaper or any other newspaper says does not arise on the Finance Bill?
It must be about the only thing that does not, Sir.
I am only relating it in a very brief way to the Budget comments of Deputy Norton.
Surely, that is in order. Surely, comments of a newspaper on the present crisis are in order?
The question of a general election does not arise on the Finance Bill.
It has been allowed to be mentioned by other speakers.
The last speaker mentioned it in passing.
Deputies are entitled to put submissions to the Chair.
If these efforts to create instability are insisted upon, the Taoiseach will have no option but to go to the country and get the decision of the country on this issue. I want to make it perfectly clear, as an Independent Deputy, that if the Taoiseach thinks that that should be done to-morrow, I feel it should be done.
Suppose you thought it should be done, would you try to get it done?
I do not think it is necessary.
I thought you would say that.
This artificial position of instability is sought to be created deliberately.
I think it is the Deputy who is creating the instability. The Deputy indicated that he was determined to keep this Government in power for at least 12 months. It is this threat that is creating instability.
I do not think so Deputy Mulcahy knows very well that there is no alignment of Parties in this House now or in the near future that will bring about the dissolution of the Dáil.
Lean leat, a mhic.
I am sure Deputy Mulcahy is satisfied, as a result of his visit to the country, that the situation will not alter as a result of the by-elections.
We will talk about that in a couple of weeks' time.
We will talk then with the full knowledge of what will have occurred.
We will surely.
Marshall Aid has been mentioned at considerable length by the Minister, and Deputy Norton devoted a considerable portion of his speech to a discussion of it. Naturally, I am very interested in this subject, being the Deputy who spoke against Marshall Aid when the motion dealing with it was before the Dáil, and against whom certain punitive measures were taken shortly afterwards by his own Party. At the time I opposed Marshall Aid, I declared that our nation was not then a beggar or a mendicant nation, and that that being so, there was no necessity for us to take Marshall Aid. However, it was taken.
It was not begged for. This was no begging or beggar nation.
Deputy Cowan should be allowed to make his speech without interruption.
It was neither a beggar nor a mendicant nation at the time, and we had no necessity for this Marshall Aid. There is nothing in this country to show for the expenditure of the millions we got by this means.
Yes, there is.
There is nothing which anybody can point out and say: "The country has benefited by that particular aid in this particular respect." I opposed Marshall Aid in this House, and I spoke against it. I foresaw at the time, as was clear from the agreement which we were then discussing, that it would involve us in substantial repayments in the near future. We are now in the position that, in a couple of years' time, we will have to pay £3,300,000 per year to America in liquidation of that Marshall Aid. We are obliged, under the terms of the agreement, to pay back the money not in sterling, but in dollars. Where are we going to get the dollars to pay back that loan? This country has been placed in a very parlous position by Marshall Aid, and the surprising thing about it is this: at that time I was a member of the executive of Clann na Poblachta, and Deputy MacBride was then the leader of that Party. On 8th June, 1948, when Deputy McGilligan urged the Government to seek this loan, Deputy MacBride opposed the idea. On 11th June, 1948, Deputy MacBride succeeded in the Cabinet in his opposition to the taking of Marshall Aid. I am now quoting from the facts as given by the Minister for Finance in Limerick last week-end.
They are not the facts.
They are.
They are a distortion of the facts.
I am going to deal with them. On 22nd June, 1948, the London negotiations opened.
They concluded.
On 17th June, 1948, the financial and other negotiations opened and on 22nd June, 1948, they concluded. On 25th June, 1948, the Government reversed their decision and decided to seek a Marshall Aid loan. That happened in the month of June, 1948. I was then an executive member of the Clann na Poblachta Party, and I was never informed, nor was any member of the executive of the Party, that such important negotiations, or discussions, were going on.
On a point of order. I take it that either Deputy Cowan is in order in discussing this matter or that he is not in order, and that if he is in order I will be given an opportunity of replying to him and of dealing with matters in relation to the Clann na Poblachta Party.
The Chair understands that Deputy Cowan is relating his remarks to the Finance Bill as far as the Marshall Aid loan is concerned.
At the moment, the Deputy is relating his remarks to the affairs of the Clann na Poblachta Party.
That does not arise on the Finance Bill.
Deputy MacBride wants to stop me, at all costs, saying what I have to say.
I want to know if I will be allowed to reply to you.
There is nobody stopping the Deputy. What the Deputy is trying to do is to stop me.
Deputy MacBride is very glad to hear Deputy Cowan making as many speeches as he likes; he is bound to ruin himself by making speeches.
I think Deputy MacBride has some experience of that, too.
That was the position on the 25th June, 1948. In July, the agreement was introduced into this House. It was debated one afternoon here and, as I have already said, I opposed it. It is my recollection that I opposed it on a Wednesday. On Saturday I was paraded by the executive of my Party, and on the insistence of Deputy MacBride, I was expelled from the Party because I opposed Marshall Aid.
That was probably a good day for the Clann na Poblachta Party.
It was one of their glorious days and as a result they fell in number from ten to two. What a glorious fall!
The price of flour is going up, anyhow.
That was not the worst of it; within 14 days Deputy MacBride had a circular sent around the country suggesting that my opposition to Marshall Aid was based on the fact that I was associated with Communists.
Surely that has no relevancy to the Finance Bill?
You are an indulgent Chairman.
This was the man who opposed Marshall Aid in the Cabinet, and these were the sort of slanders that he circulated through the country about a person who opposed it openly in this House.
The Deputy should get back to the Finance Bill.
With pleasure, having said that which I wanted to say and which many who were then members of the Clann na Poblachta Party will be surprised to know.
Now we will go to the price of bread, flour, tea and tobacco.
Yes, defender of Deputy MacBride.
And defender of people who have to pay higher prices for food.
Defender of Deputy MacBride.
Defend yourself.
Who is defending whom? Is Deputy Mulcahy defending Deputy MacBride or Deputy MacBride defending General Mulcahy?
Deputy Cowan on the Finance Bill.
Defend the Finance Bill.
We had Deputy Norton saying that the American officials were perfectly satisfied that the Marshall Aid funds were put to the best use. To what use were they put? They were for the purpose of putting this country in debt, and perhaps American officials could safely say that, in so far as they tied us to America or put us in debt to America, they were put, from their point of view, to the best use.
The transatlantic service has been mentioned. We were originally informed that the transatlantic service was simply suspended pending an investigation into it. Deputy McGilligan announced to the Dáil that the transatlantic service was suspended, the matter would be inquired into and that the Dáil could take a decision in regard to it subsequently. It is, I think, one of the great regrets of this country in the past that we did not take steps to establish a mercantile marine. In the old Sinn Féin days that was one of the policies generally advocated, the establishment of a mercantile marine. Now in modern times the air service is taking the place of the mercantile marine and it is a matter for regret that we did not have an opportunity in this island country, situated as it is at a sort of world crossroads, of giving a trial to a transatlantic air service. The Minister for Finance has referred to Aer Lingus and the fact that Aer Lingus is making a profit. Only recently did I become aware that in the transport of perishable goods Aer Lingus is rendering a great national service.
Will the Deputy relate that to some section of the Finance Bill?
That is always my great difficulty. The Minister for Finance talks about it for an hour. Deputy Norton speaks for half an hour on it. When I refer to it there is a change of Chair and it is out of order.
I do not think the change of Chair makes any difference to its relevancy. The Deputy is talking about expenditure. As far as I can see it would be relevant on another occasion.
May I submit to you that in your absence the Leas-Cheann Comhairle allowed quite a lengthy discussion on the transatlantic air service? I understood Deputy Captain Cowan was going to reply and going to slide over into Aer Lingus which was also referred to by the Minister for Finance.
I did not say very much. I thought I was following the line of debate.
I do not understand in regard to its relevance.
The Leas-Cheann Comhairle allowed it to be spoken of.
Only in this connection, as a dollar earner which was strangled by the Coalition.
Aer Lingus was mentioned by the Minister for Finance.
It is a profitable air line.
It is not a dollar earner.
I was simply repeating the point that Aer Lingus is a successful money earner and that it is a tragedy that the transatlantic air line was not enabled to develop. I shall just finish the point that many of our perishable goods are being sent out of this country every day by Aer Lingus to Britain where there is already a market for the excellent fresh food products of this country.
Deputy Norton had some criticism of the policy of living within one's means. He pictured this extraordinary character that was picked up by the police in New York, dressed in rags and covered with sores, dying of starvation with the equivalent of £3,000 in dollars in his pockets, and he said what use is it to the person in this country who is hungry to know that we have important assets available. I feel that Deputy Norton was making a very poor point in regard to that. Obviously, a nation must live within its means the same as an individual must live within his means. Deputy Norton has very close association with an organisation that might be likened to a nation in this respect. Deputy Norton is secretary of a trade union which has considerable funds, but those considerable funds are very little use to the individual in his union who contributes to them and who may be hungry.
The Deputy cannot discuss organisations in that manner.
You are an amazing man altogether.
Deputy Hickey, of course, considers that it is amazing.
You are not the Deputy Cowan that I knew.
Perhaps I am getting sense. I certainly would not like to be considered on any other basis than on a basis of common sense. The analogy is a perfect analogy. A country must live within its means just as a trade union must live within its means and just as an individual must live within his means.
Who are not living within their means in this country?
Deputy Hickey knows very well, being associated with a trade union, that it must live within its means, just as this nation must live within its means.
What percentage of the people are not living within their means?
I think most of the people in this country are living within their means. I have always agreed that there is a very large proportion of the people who have not sufficient means to live within.
Only what they stand up in.
When it is all boiled down it will be a grave reflection on every one of us, particularly on organisations whose duty it is to see that the standard of living is improved. This Bill provides for taxation. It provides for taxation to ensure increases in the old age pension. It provides for taxation to give an increase in allowances for the unemployed. The unemployed man who will get 50/- per week as a result of the taxation in this Finance Bill will be in a better position to live than he was a couple of weeks ago or than he is at the present moment. I think Deputy Hickey would agree on that.
I would do no such thing. He does not get 50/-. He gets 50/- if he has a wife and two dependent children. You can divide the 50/- between the four of them and then tell me what standard of living he has.
When it comes into operation in a couple of weeks, it will be better than it was a week ago, than it is to-day.
The Budget table is a bit wrong then.
Deputy McGilligan knows that within this Finance Bill there is provision for an increase of £6,000,000 a year for social services.
Not here.
Within the Finance Bill.
£3,000,000 is what is here.
£6,000,000.
£6,000,000 is the increase in social services. I do not care how Deputy Hickey argues about that or interrupts about it. The fact is that there is £6,000,000 more to be distributed amongst the old age pensioners, the widows and orphans, the children, in social services.
There is not.
And there are increases to be provided for, as Deputy McGilligan knows, in wages for civil servants, for soldiers, for members of the Garda and for public officials generally.
Not a bit of it. Not at all.
And there are increased provisions for pensioners.
Not a bit.
If there is one thing that I was very pleased to hear the Minister saying on the Committee Stage it was that the Old I.R.A. will not be forgotten by this Government. That was a very welcome declaration from the Minister.
If they were dance-hall proprietors they would have already got it.
Deputy McGilligan ought not to get aggrieved or annoyed.
If they were dance-hall proprietors they would already have got it.
No.
Would they not?
I do not want to go back on the dance-hall debate, but Deputy McGilligan knows that no dance-hall proprietor will benefit by one shilling by the remission in this Bill.
Indeed they will, and it is intended that they will.
What did they pay for?
They told me last year that they would.
Deputy Cowan should be allowed to make his statement without interruption. Deputies can speak afterwards and repudiate his statements if they wish.
These are important factors. If these salaries and wages have to be provided, if these increased social services amounting to £6,000,000 have to be provided——
They are not here.
——there must be taxation. I am not going to suggest that Deputy McGilligan should get up and give us an alternative suggestion— I do not think he is bound to do it— as to where that taxation should be found. No matter what Government is in power from now on, that money must be found, and any Government, whether it is a Fine Gael Government or a combination of Fine Gael and other Parties, dare not reduce by one penny the social services that this Finance Bill provides. Deputy Mulcahy would have to agree that not one penny piece of these social services would be reduced.
I hope the Deputy has seen the statement I have made contradicting the Parliamentary Secretary, Deputy Lynch.
I regret to say that I have not.
It is worth looking at.
It has not been published very extensively. I have not seen it. As far as this year is concerned, as far as this Finance Bill is concerned, very valuable benefits have been conferred on the ordinary people. Nobody dare take those benefits away from them and I am glad that I am in a position to be able, by the simple action of voting in this House, to guarantee those increased social services and those increased benefits to the ordinary people.
Deputy Norton has talked about unemployment. It is regrettable that there should be unemployment in this country. It is unfortunate, as I have often said, that we could not have a proper register of unemployed, a register of people who are willing and able to work and who are unable to find work. Every Deputy knows that the figures in respect of unemployment are not reliable because they include persons who are incapacitated and unfit to work. It is to be hoped that in the near future we will be able to have a correct record of the people who are unemployed and who are fit to work.
There is unemployment in the building industry in Dublin in so far as the building of houses for the local authority is concerned. That unemployment has been brought about by the failure of the members of the Dublin Corporation to have sites for building available. I am glad to say that, through pressure which has been exercised within the corporation itself, sites for more than 1,000 additional houses are now ready and the contracts for those houses will be given out during the three months commencing July. The building of these additional 1,000 houses in Dublin will put an end to any unemployment that there is in the building industry in Dublin. It is only right— I think Labour Deputies should appreciate this—that the blame for the present position in Dublin should rest not on the Government but on the Dublin Corporation. Steps have been taken to correct the position and there will be no unemployment in the building industry in Dublin in the next couple of months.
The regrettable thing, of course, is that there has to be unemployment now. Nobody wants unemployment. I think some of the unemployment that is to be found here, there and elsewhere in the country can be attributed directly to the campaign that has been started and to which I referred when I started those few remarks. This campaign to bring about a state of instability—a deliberate and dishonest campaign that has been carried out to create this position of instability—is responsible for unemployment here, there and elsewhere. Deputy Hickey and other Deputies of his Party must take——
I do not want to take your advice.
I am saying that you must take responsibility.
I will.
And, whether you take it or not, you cannot escape censure.
I will not take advice from you, Deputy.
I say that Deputy Hickey and those Deputies with him are contributing to this position of artificial instability that is causing unemployment.
Change this cant and humbug, for mercy sake.
There is no cant or humbug in that.
It is absolute cant and humbug to make that statement in this House.
No wonder Deputy Hickey is ashamed.
No wonder, listening to you.
Deputy Hickey must restrain himself.
No one could restrain himself and listen to this sort of thing.
The Deputy will restrain himself if he wishes to listen. If he does not wish to listen, well——
Is Deputy Cowan even fooling himself now?
The truth is often very bitter.
It is the only thing that is sacrificed in this House.
This instability, this unemployment is being caused by the nonsensical attitude that has been taken up by Deputy Hickey and his colleagues in this House. They do not give two hoots if there were 10,000 extra unemployed every morning so long as they can bring about a change of Government.
That is typical of the Deputy.
That is all Deputy Hickey is concerned about and that is why he is so annoyed, because he is being exposed. I am glad to see an improvement in the conditions of the ordinary people and I am glad, by my vote, to have helped in bringing that about. I have not walked into the Division Lobby to vote against anything that would benefit the ordinary people. On every issue on which Deputy Hickey helped to create a feeling of instability in this country, he has given his vote——
You have a terrible cheek.
He has walked into the Division Lobby on the Opposition side for no other purpose than to continue and perpetuate the condition of instability that is being deliberately created for their own purposes by interests hostile to the Irish nation.
Do you believe that?
I do believe it and a great number of people who follow Deputy Dunne know and believe it.
You have only to listen to him to know how much he believes it—and that is not at all.
I do believe it. I am sorry if I have appeared to have got into some heat with Deputy Hickey but Deputy Hickey always adopts the line: "Oh, this is all humbug; this is all nonsense." Everything is humbug and nonsense if it comes from this quarter of the House, but there is no humbug or nonsense from the other side.
Make your own speech.
Deputy Hickey set himself up as——
I suggest that you make your own speech and never mind Deputy Hickey.
I am asking Deputy Hickey, and the Chair has asked him, to restrain himself and be quiet.
The Deputy is not in the Bill.
I know he is not in the Bill but he is in the Dáil and he is voting against a Bill which provides £6,000,000 for extra social welfare benefits for the class of people he purports to represent.
And £20,000,000 additional taxation.
That is where Deputy Hickey stands. I am sorry Deputy Morrissey was not in the House when I was speaking earlier. I might have asked Deputy Morrissey, and have given him a chance of saying, where he would find the money that would pay for these additional benefits. Deputy Morrissey might be able to answer that. However, this Budget, as I said when I was speaking on the Budget itself, was necessary for many reasons and this Bill, which imposes the taxation outlined in the Budget, is also necessary. What we have to consider is what is the paramount interest, and the paramount interest is the welfare and the well-being of the country. If we do not make provision whereby as a nation we can live on our own resources and live within our means, then we shall be gobbled up by some of the more wealthy nations that can afford to purchase us and that can purchase us very easily if we have an Administration that will be reckless in regard to important matters such as finance. On every issue connected with this Budget, the one paramount principle deciding the line I should take has been: what would be best in the interests of the nation? In years to come, when this present phase is being considered, Irish patriots will pay tribute, I am perfectly sure, to the people who had the courage to face unpleasant facts and to do their duty by the Irish people.
There are three figures which Deputy Cowan, with no amount of humbug, can get over. These figures are given in the small table explanatory of the Budget. There is first of all: "Provision for proposals in Social Welfare (Insurance) Bill and for other current services, £3,000,000." That figure was challenged, and we were told that £2,000,000 was in respect of social services and £1,000,000 in respect of something else that has yet to come. In addition, we have £2,750,000 provided for what are called compensatory social welfare benefits. That is a total of £4,750,000 which it is agreed the people are going to get, but how much is being paid by the people for these services? "Deduct saving on food subsidies, £6,668,000." That is, we take almost £6,750,000 from the people by imposing additions to the price of their food, and we give them back £2,000,000 in the provisions for proposals under the Social Welfare Bill and £2,750,000 on compensatory social welfare benefits. Deputy Cowan thinks that that is conferring a great benefit on the people he represents. I understand that the second last meeting of the Fianna Fáil Party bore some resemblance to a hara-kiri party. I think that if they would only bring in Deputy Cowan he would be the life and soul of the suicide group. According to what he himself says, the plank is out, the waters are running swiftly underneath, and he is ready for the plunge. May I remind him of a speech which he made on the 1st July, 1948, as reported in Volume 111, on the Convention for European Economic Co-operation? That speech was described as "a very remarkable and a deliberately mischievous speech". I am quoting Deputy Cogan.
I thought you were quoting me.
I am quoting the comment of a person now living in enforced fellowship with Deputy Cowan. That was the way he described the Deputy's speech on that occasion—"a very remarkable speech and, I think, a deliberately mischievous speech". I do not think it is necessary to improve on that comment in regard to the Deputy's attitude to-day. In this Budget and in this Bill which follows upon it a sum of £97,761,000 is being provided by way of expenditure. The Minister for Finance, for the greater part of his speech this evening, has been speaking of the additions to the national expenditure necessitated by interest payments on the Marshall Aid loan which amount this year to about £600,000. The remainder of the expenditure of £97,000,000 was left alone. It is not good policy at this time to talk about the removal of food subsidies. It is very unpopular to talk about the increase in the tax on beer, tobacco and spirits. The Minister for Finance devoted a lot of time to-day to Marshall Aid and to the warning which Deputy Cowan said he gave at the time when Marshall Aid was first discussed. It is notable that the Minister did not call attention to that at the time Deputy Cowan spoke in this House. There was no support then given to him in his "mischievous speech".
I was the only person to oppose it.
His present colleagues and Deputy Cogan, in particular, did not support him in that mischievous speech. We heard a lot to-day about Marshall Aid and how it came about. Deputy MacBride will no doubt deal with the matter in which he has been impugned. There was another meeting earlier than the one which dealt with Marshall Aid. The then Tánaiste and the then Taoiseach were in Paris, and there heard all the arrangements about Marshall Aid explained. There has been a good deal of comment about a meeting which Deputy MacBride attended, but there has been very little reference to another meeting that took place on the 3rd November, 1947, at No. 10 Downing Street.
There is a good deal of talk at the moment about whether or not strings were attached to Marshall Aid. This was before Marshall Aid was thought of. The suggestion made by the British representatives who met the Irish representatives on that occasion was that our dollar requirements should be cut. There should be a substantial reduction in dollar requirements. It was suggested that a limit of $8,000,000 should be put on our requirements, other than what we earned ourselves. It was suggested that this country should suspend the purchases of tobacco and should restrict the purchase of petrol. It was suggested that there should be a stricter control of home consumption of textiles and that this country should join the International Monetary Fund and the Bank for International Settlements. These were the suggestions which were made across the table at 10 Downing Street, London, on the 3rd November, 1947. According to the minutes of that meeting, the then Minister for Finance, Deputy Aiken, agreed that this country would economise in petrol and foreign travel, that it would stop the expenditure of dollars on coal and tobacco and that it would join the International Monetary Fund and the Bank for International Settlements. In the final agreement it is recorded that our dollar requirements would be scaled down to £14,000,000 worth of dollars, to be reduced still further to £12,000,000 worth of dollars if the Australian wheat bargain, which was then in progress of negotiation, came off. If the country did get into the International Monetary Fund, drawings from that fund would be used to diminish drawing on sterling area reserves. The then Government thought fit to enter into an agreement that any loans from the International Bank would be used for capital equipment.
There are a fair number of strings from that agreement: restrict our purchases of petrol and our foreign travel and stop any dollar expenditure on coal and tobacco. Maybe the present Minister for Finance will tell us what was the motive that urged our Government in those days to come to that agreement in November of the year 1947.
On the 14th September, 1947, the then Tánaiste, Deputy Lemass, made a speech at Letterkenny, County Donegal. He spoke about a dollar crisis. He explained it and said that there is what the Press calls a dollar crisis. I quote the following extract from his speech which appeared in the Irish Press of the 15th September, 1947:—
"It means, simply, that the U.S.A. is exporting goods—goods which the world urgently needs—at the rate of one billion dollars a month more than she is importing. These goods must be paid for in dollars. As a result, all the dollars, gold and free exchange in the world are being sucked into the U.S.A., and very soon there will be none left and the purchase of goods from the U.S.A. will have to stop—unless the U.S.A. sells on credit, or by loans, gifts or investments puts more dollars into circulation."
Then he told his audience:—
"We got our dollars in the past mainly by exchanging British pounds for them in London—pounds which we got from the sale of cattle to Britain, or for the tourist trade or similarly. Now the London dollar pool is running dry, and what is left is insufficient to meet the needs of countries like ourselves who have claims on it, except for a very short time. The net result is that we will have to curtail our purchases in the U.S.. and at some stage they may even have to stop."
That is the picture of September, 1947. The Tánaiste continued:—
"We have an interest in preserving the exchange value of British money. Various official funds, banks, insurance companies and private firms here own about £400,000,000 sterling. If the exchange value of these assets should be reduced then our ability to pay our way abroad while preserving our present standard of living will be reduced also. We are, therefore, very ready to cooperate in any measures to protect sterling.
The obvious method is to develop the resources of the sterling area, to expand its exports and reduce its imports. A plan must, however, be designed to benefit all countries in the area, to develop all their production resources equally, and not merely for the benefit of Britain.
The resources of the sterling area are immense, and if properly utilised will be adequate to meet the needs of the people in it, and ultimately to restore the position so that freedom of international trade can be reestablished. Until that is achieved, however, we cannot end shortages here because in present circumstances there are many goods which we need which, if we cannot get from the U.S.A., we cannot get at all."
That was the picture of the blank despair of the Tánaiste in September, 1947. No doubt, that was the mood in which he was when, in the following month, he visited London and agreed, for the sake of sterling, that we would economise in petrol and foreign travel and stop dollar expenditure on coal and tobacco. I wonder where he thought the revenue that was derived in this country from tobacco would come from in substitution for it. At any rate, that was the mood which prevailed at that time. The present Minister for Finance, Deputy MacEntee, was not with that delegation. Presumably he was left at home because of his attitude to sterling.
There was a meeting of British architects in this country in 1947. I think the present Minister for Finance was the guest of honour. He spoke of the ties of blood and common interest that bind the people of this country and the people of Great Britain. I quote from an extract of his speech as reported in the Irish Independent of the 13th June, 1947:—
"The British and Irish peoples have a great deal in common with each other. Both peoples have sent their sons and daughters to found and to build up the great democratic States of the world. We may claim to be jointly the progenitors of the great nations which now people the greater part of the North American continent, the whole continent of Australia, and the whole of New Zealand."
It was a good banquet, of course. The Minister continued:—
"There is hardly a leader of public opinion in those countries that is not proud to trace his ancestry back to those islands. We Irish and British are associated with each other and with them by ties of blood, of trade, of political tradition, and of common interest in great issues that touch the peace, the prosperity and the security of our countries and of the Christian world."
That was endorsing 1916.
When he missed the train.
A debate took place in this House on the 6th July, 1945, on the Estimate for the Department of the Taoiseach. It starts at about column 2033 of the Official Report and goes on for many columns. I do not intend to quote them all. I had, at that time, said—and Deputy Hickey was a most enthusiastic supporter at the time— that it was very foolish for this country to rely so much on sterling assets. I thought it was a bad policy and that there should be some diversification of them so that if we had a lot of money to invest abroad we should extend the investment and not invest it all in Britain. I quoted from many statements and notably from a speech made by the late Ernest Bevin, who said: "Frankly, as far as this country is concerned, we must recognise the fact that we are bust." That statement was made by a man who was later to become Britain's Foreign Secretary. There he was announcing to the world that Britain was bust and, despite that, we were piling money into the bust exchequer. I said that we would come to our senses later on and find that our resources, as they were, had depreciated very much in value. I was asked for a figure and I said about 50 per cent. That excited the wrath of the Minister for Finance. At column 2035 of the Official Report of the 7th July, 1945, he is reported as follows:—
"Whatever dangers may have been inherent in the fact that, for good or ill, over generations, our economy has been closely linked with that of our neighbour, whatever dangers there may have been inherent in that position when Great Britain's own independence was insecure and was in danger, that danger has definitely passed since Great Britain emerged as one of the victors in the war. Naturally, of course, she has suffered greatly. She has lost a great part of her easily realisable assets—her liquid assets—but she emerged as still the strongest commercial power in Western Europe and still fit, by reason of her colonial possessions and the real assets which these represent, to hold her place in the commercial developments of the future."
Deputy Dillon then broke in with the remark: "Will somebody strike up `Rule Britannia' now and we will all bow?" Then the present Minister for Finance continued:—
"Naturally, emerging as she has done, with certain of her resources depleted, with a position, perhaps, vis-á-vis some of the other Great Powers, not as assured as it was, we may be certain that Britain is going to strain every nerve, and is going to utilise all the capacities of her people to recover the position in the world which she had prior to the outbreak of the war in 1939. One of the great sources of British power and influence in world affairs was London's unique position as a banking and financial centre. It was a place of international exchange, where everything and anything could be bought or sold in terms of sterling, the place in which sterling was freely exchangeable for all classes and quantities of commodities brought from the far ends of the earth. It was upon this and upon her maritime position that Britain's political and commercial predominance was based prior to 1939.”
Then there was a long wandering question, in which he asked was Britain going to lose that position. He said that I had said she had already lost it. Then he continued:—
"But Mr. Churchill, in one of his broadcasts during the general election campaign, promised the British people that, if they gave him a majority, one of the first aims of his Government would be to enhance considerably the purchasing power of the £ sterling. Poor Mr. Churchill! It was very wrong of him, indeed, to make that statement without consulting the great Deputy McGilligan, the Deputy who, I think, once read Mr. Geoffrey Crowther's work, entitled An Outline of Money, without understanding it, and who has been posing since as Fine Gael's leading authority on banking, commercial, social and industrial matters.”
I take that as a record. I had read only one book on money and I had come to the conclusion that the British financial situation was seriously imperilled and that sterling assets were going to be written down by at least 50 per cent. I put that in the balance against the comments of the present Minister for Finance that Britain had resumed her proud position as the leader of international banking in the world. As between the Minister and myself I ask to be judged on that record.
The present Minister for Finance then went on to say:—
"Whether Mr. Churchill succeeds in his undertaking to the British people or not, however, there is one thing certain and one thing of which we may be assured, and that is that he cannot permit sterling or sterling assets to be depreciated by 50 per cent in value."
Later on, as reported in column 2039, he spoke of freedom of exchange and said that freedom of exchange must be universal and would be made universal again. As reported in column 2042, he continued:—
"We used to hear a great deal about the soundness of British credit. Who stated that Britain is going to default on creditors, who stated that she is in fact going to be a fraudulent bankrupt? Deputy McGilligan last night. Whatever else may be true of Britain as she stands to-day, she has no justification whatever for writing down any one of her financial obligations."
He went on to say that Ireland's future was as bright to-day and as sound to-day as it was in 1939. That was in 1945. The Minister went on to talk about the ties of blood and friendship which bound us to Great Britain. We know how our sterling assets have depreciated in value. We know that over a week-end there was notice of devaluation and a 50 per cent. depreciation of currency. We know that there is talk now of sterling being weak and that it may be allowed to find its feet at whatever level of equilibrium will come about. Anybody who knows anything about finance must be shuddering at the possibility that there should be another devaluation of the £, so that all the hardship imposed by the Budget is in the end for maintaining certain reserves in an already depreciated and fast depreciating currency.
The present Taoiseach was reported in the papers of January 13th, 1948, as having described the Marshall Plan as an act of unparalleled generosity and he signed the documents in Paris. The Minister for Posts and Telegraphs told us in February of this year that Irish aid was required in the fight for the £ and that we must add our bit to the solution of the £'s difficulties. These are the people who tell us that it was wrong for us to enter into the Marshall Aid arrangement and that there were strings to it. They have all the documents. If any solitary string was attached to the arrangement in 1948 apropos of Marshall Aid, then they will be able to parade whatever is produced against the picture of our people over at Downing Street on the 3rd November, 1947, agreeing that the dollar requirements should be sharply cut, accepting the suggestion that we should suspend the purchase of tobacco, restrict the purchase of petrol, have strict control over the consumption of American textiles, and people agreeing, when that suggestion was made, that we would economise in petrol and foreign travel, which had not been mentioned, that we stop dollar expenditure on tobacco and, at the end, because Marshall Aid was not in sight, that we would join the International Monetary Fund and the Bank for International Settlements and, if we did, there was an agreement in the minutes of that meeting that any money we got from the Monetary Fund would be used only for purposes of capital development. That was the agreement which was to be made with the Chancellor of the Exchequer who would have the right to say whether the expenditure was a correct one and came within the terms of capital development.
With regard to the Budget proper, we are asked what suggestions we have to make with regard to this extra taxation. We have none. We say it is not required. Our view is that there is £10,000,000 of over-taxation in the Budget and I have shown that by alluding to the suggestion made to me last year, that I should look for a surplus on the ordinary current account for the year and that I should look for that in order to get money really for capital development. These phrases of mine have been distorted through the country. The Minister for Finance says that I admitted in the Dáil that I was advised that I required several millions more to balance the Budget of last year and that I refused to take the advice offered to me. I never said that. It is not merely a falsehood to assert that I said that. It is the opposite of the truth. There is not one word of truth, or anything like the truth, in it. I quoted at length from a memorandum. The Minister has that memorandum. It is dated 12th April, 1951. The memorandum can be produced.
"The Budget is not simply an exposition of how we propose to make ends meet. In modern times, it is recognised as the most effective instrument a Government has for shaping economic policy. That is why we have in the Budget statement an analysis of current and prospective economic conditions. This survey would be the merest padding unless the budgetary proposals were consistent with the conclusion about economic policy to which the analysis led. In Britain, the U.S.A. and elsewhere the proposals are devised to correct whatever is shown to be amiss in the economy."
The memorandum continues:—
"The British Chancellor yesterday introduced proposals directed towards achieving a surplus over current expenditure of £39,000,000, and this because his interpretation of conditions forces him to the conclusion that if resources were to be directed to the proper uses without inflation, the public must be made yield up more purchasing power than is required to cover all Government outlay."
Does anybody misunderstand that? Does anybody feel that in the memorandum which was sent to me on 12th April—I made my Budget speech on 2nd May, so near to the Budget was it as that—I was asked there to get extra money to balance a budget, in the phrase that is used "to achieve a surplus", followed by the exhortation that "the public must be made yield up more purchasing power than is required to cover all current Government outlay?
I quoted this before. I shall quote it again now. If a certain situation is disclosed which has nothing to do with Budget deficits:—
"What is the remedy? It is either to curtail spending—by both the public and the Government—or to induce or force the public to yield up more purchasing power to provide what the Government needs to maintain its spending on capital and current account."
The last excerpt that I read is:—
"The 1951-52 capital programme will be at least as big as last year; the Estimates point to its being bigger. Can we hope to get much more money in savings even with a vigorous campaign?"
The only correct way to meet the difference is in taxation, and the difference there is between current expenditure and capital expenditure. Is it not clear that I was being asked to tax the people in the Budget of that year to provide the money that I required for capital development? The last phrase sums it all up:—
"In the light of the interpretation which must be placed on current economic conditions taxation to produce a surplus on current account towards financing the capital Budget is a necessary gesture towards orthodoxy."
That memorandum gathered another minute on its way to me. The official comment made in that minute was:—
"I regard the production of a surplus on current account not as a necessary gesture to orthodoxy but as essential if the Government's programme of capital expenditure is to be carried through in its entirety. We cannot hope to meet our full requirements otherwise."
The whole idea was to tax in order to raise the £9,000,000 or £10,000,000 that was shown in the Book of Estimates as required for capital purposes.
The situation with regard to the balance of payments was not as bad when that memorandum was presented to me as it was 12 months later. If the situation, whatever it was, inspired certain people to suggest that I should get my Government to tax to the extent of £9,000,000 or £10,000,000 extra in order to get the money required for capital development, is it not a certainty that the same suggestion was made to the present Minister for Finance? Is not the difference between us that he accepted those proposals and I did not? He accepted those proposals and built a Budget in which he underestimated the yield from revenue and overestimated the expenditure and then produced a table showing he required a further £15,000,000 in order to balance that Budget.
Deputy J.A. Costello has analysed the proposals in the Budget and shown how at every point the yield of revenue is so much underestimated as compared with what the calculations used to be. There is no provision made for the buoyancy of revenue. Deputy Costello made a very meagre estimation in relation to economies. He said that there have been economies year after year, and that the economies were substantial. The higher the bill goes the more natural it is to expect that there will be economies because of overestimation.
This morning Deputies received the report of the Committee on Public Accounts. I looked at that report to see what was said with regard to Appropriation Accounts for the year 1949-50. I found a comment made by the official of the Department of Finance who was giving evidence before that committee to the effect that the economy in the year 1949-50 was only £1,294,000 odd. The departmental head giving evidence in this respect said that was an unusually low percentage, and only amounted to a saving of 1.7 per cent. on the Book of Estimates. It was unusually low. There has been nothing so low in the way of saving for 15 years. The nearest approach to it was in 1937-38, when the economy shown was £1,631,000. That drove me to look at the way in which the economies were made in the year before that. In 1948-49 the moneys to be surrendered— that is, moneys not spent—amounted to £7,074,000. In 1949-50 there was the unusually low sum of £1,294,000, and in the last Appropriation Accounts for the year 1950-51 savings reached the very high figure of £4,611,000. My calculation is—this is only an estimate since I have not got the full material —that the Budget for the current financial year will show a surrender of at least £2.7 million. I take then the average for the years 1948-49 and 1950-51, with the very bad year in between, and I find that the average economy made is in the region of £4? million. Yet, no allowance is made for anything this year.
I want now to stress one other matter. In the year 1948-49 there was a surrender by Departments of £7,000,000 on the sums voted for them in the Estimates and as a result of some small additions by way of Appropriations-in-Aid. That was the year in which I budgeted to spread the expenditure that had been imposed on this country by the present Tánaiste, Deputy Lemass, when as Minister for Industry and Commerce in 1948 he put through the Argentinian wheat deal. I proposed to spread the cost of that transaction over four years. Out of the buoyant revenue of that year I was able to pay £2,750,000 which I had not intended to pay in that year and there was £7,000,000 of an economy on the other side. The two things are not to be confused.
The revenue has been extraordi-Aid narily buoyant. It has been remarked by persons dealing with the finances of this country over the last five years that there is unparalleled and unprecedented buoyancy and that is accepted as one of the signs of the times and of an expansionist programme. We are told that the Revenue Commissioners allow for an expansion of £2,500,000 this year. We say there will be far more.
When I am asked what taxes I would suggest as alternatives, my answer is "None". I will suggest no alternatives until I see a proper account presented. Not until I again find somebody who does not accept these suggestions that one should budget for a surplus on the ordinary current account and apply the proceeds to capital development, will I expect a change. When I see somebody with a mind not to do that, that table will completely change, that table explanatory of the Budget will not require the gathering in of an extra £15,000,000 in this or any other year.
I do not know if any Deputy had the temerity—I think that there are opportunities for Deputies to do this—to go honestly to the public and explain what they did there, how they fooled them with regard to the social welfare proposals. These figures were given very concisely by Deputy Cowan knowing he was leaving the House and wanting to get them spoken before he did leave. It is blatantly put here that the provision for proposals for social welfare and other such services is £3,000,000. That figure was criticised and the answer given is that it is only £2,000,000 for the proposals now before the Dáil and that £1,000,000 is to come for something else. £2,000,000 has to be provided for extra social welfare benefits, and in addition compensatory social welfare benefits granted to old age pensioners and people who are unemployed amount according to this table to £2,750,000. That is £4,750,000 representing increased payments to be made this year. Then you have this staring you in the face—deduct a saving on food subsidies of £6,638,000.
Will these people go to their constituents and tell them what has happened? This has nothing to do with beer or tobacco. What this Government is saving on bread, flour, butter, tea and sugar is nearly £6,750,000, and they are then paying to some of these people £4,750,000 and they are making a profit on this transaction of the difference. Supposing that an extra £1,000,000 does come and that before the end of the year we have £3,000,000 extra disbursed to the people by way of social welfare benefits and £1,250,000 on compensatory benefits the Government will make a profit on the transaction of almost £1,000,000.
Did any Deputy tell his constituents that that is what is intended? Did any Deputy ever intend that? Did any Deputy remember to go to his constituents and say: "We will give you social welfare benefits by way of unemployment assistance and other things which you will find in the Social Welfare Bill, but we are going to rook you of £6,750,000 on your food?" That was a great cheat. It was a public cheat to make proposals and to carry proposals of that type. Yet that is what we are doing.
That is all being done because, in the phrase of the Minister for Finance used by him in the financial statement on the 2nd April and reported at column 1138 of the Official Debates of that date:—
"The Government have given careful thought to this problem over recent months. They are satisfied that, as incomes generally have already advanced more than the cost of living and as essential foodstuffs are no longer scarce, there is now no economic or social justification for a policy of subsidising food for everybody."
That is a new principle in this Budget: people's earnings have advanced too much and have actually gone beyond the cost of living; they have increased more than the cost-of-living figure has; that is rather a scandal and the Government, having given careful consideration to this matter, are satisfied on that point; that being the case, therefore we can easily ask the people through their food bills to pay for the social welfare benefits and give the State a present of £1,000,000 over and above. I ask Deputies, I beg any Deputy to tell me if he told his constituents that that is what he meant by social welfare: that they were going to make food dearer and to give during the year certain other benefits of the social welfare type. That is what is happening.
The worse principle is the other principle. These two principles stand as the two chief foundations on which the Budget is built. This is the other principle:—
"We cannot afford the present scale of spending abroad in excess of our current external earnings."
That comes at the beginning of the Budget speech which is divided into three parts: a survey of the international position, a look at last year and then the savagery of this year and, at the conclusion of the preamble, the survey of the international situation, we get that pregnant phrase:—
"We cannot afford the present scale of spending abroad in excess of our current external earnings."
These are the 50 per cent. depreciated assets, the assets which have already been devalued, the assets about which there are rumours of a further devaluation, but we decide through this House to do harm to the whole people in the community because we cannot afford the present scale of spending abroad in excess of our current external earnings. Once that principle is admitted it is only a matter of machinery, of tactics, how the Budget will be drawn up. The Government presumably gave careful thought to that. It is not merely the Minister's phrase. I am quite sure that the Government accepted that. If that is an accepted principle the next thing is: how are you going to stop it?
One way is to close down the ports. Of course that would be frightful and would lead to further difficulties because if you do not let goods in and the people have money in their hands those people will spend it on whatever goods are in the country already and prices will soar. Therefore, there must be some other proposal and the details worked out. Who is responsible for this excess spending? You can trace it to certain establishments such as wholesalers and big drapery places. If you can stop them from ordering then you are all right.
If you look at the table with the black edges you will see all the domestic appliances which were brought in, the brushes, the curtains, the carpets, all the things required as furnishings. If we could stop the wholesale houses from buying these things we would be all right. How are we going to stop them? First of all do not let the banks give them credit. That will stop their gallop to some extent. Do not let them get as much cash as they require. How are you going to stop that? If you take the money out of the customer's hands he will not be able to pay it across the counter to the retailer and the retailer will not be able to pay it to the wholesaler. If, at the same time, their credit in the bank is stopped the situation will be perfectly easy to handle. You start out to have a diminished purchasing power.
At that point there is another lucky circumstance. Beer and whiskey are both brewed or distilled in this country in sufficient quantities to satisfy the national appetite for these things. We have an export. There is no harm therefore in taxing those things. A tax on those things will have no inflationary effect. We can tax tobacco because, notwithstanding what was agreed in Downing Street in 1947, the situation is that for a relatively small expenditure in dollars—I think it is $10,000,000—we get in all the Virginian tobacco we require and that eventually emerges as £15,000,000 in revenue. There was also the lucky position that when we left the Government there was two years' supply of Virginian leaf in the country.
That is a great situation. Tax beer, whiskey and tobacco. There will be no inflation regarding these taxes. Not at all, those taxes are deflationary because the Government expect —certainly their hope is—that people will continue to drink as before or very nearly as before and smoke as before. Then you get to this very happy position from the financial point of view that the tobacco tax will yield this year £5,500,000, the beer tax, £2? million and spirits, £1,000,000. These three total £8,880,000, and, if we add the £3.9 million which we are getting from the saving in food subsidies, there is a sum of £13,000,000 to be extracted from the people. How? The housewife will have to find it. According to this table, the man is going to smoke and to drink as much as before and somewhere or other £13,000,000 must be found to pay these taxes. The argument with regard to it was: "We can stop the wholesalers and big retailers to some extent by stopping bankers' credit, but if there is a sum of £13,000,000 to be paid in respect of beer, tobacco, whiskey and dearer food, then there is a sum of £13,000,000 which possibly might have found its way across the counter for domestic appliances." That will not be there to spend and so the situation will be rectified. The imports will not come in to as great an extent as before and the Government's principle that "We cannot afford the present scale of spending abroad in excess of our current earnings" will have been recognised and remedies taken to prevent that excess spending.
I have said several times that that is the Budget plan, but the aim of the Budget is, first, to stop the spending abroad by diminishing the value of the purchasing power left in people's hands and, secondly, to reduce incomes because the money they have will have less purchasing power, and in that way we are back again to the position we were in in 1947, when we were told in speeches throughout the country that earnings had to be collapsed. Do Deputies remember when the Budget of 1947 was introduced and subsidies given and taxes imposed—some of these taxes here—to get money for the subsidies, and the trade unions were solemnly warned that there were to be no increased wages looked for? That would not be permitted. In a speech on 15th October, 1947, the Tánaiste gave that warning, that wages were not to be increased. That warning was repeated on 20th October at Tipperary, when the Taoiseach said that "the Government wanted to control wages so that we could have a level set of prices"—such as they had, remember, from November, 1943, to February, 1947, the period of the Standstill Order. He then said:—
"We have a scarcity on one hand and increased prices on the other, and no Government can settle that. These are things that are determined outside this country."
On October 15th in the Dáil he had said:—
"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, then the Government will produce proposals for legislation to the same effect."
The Tánaiste said in the debate on October 16th, 1947:—
"I want to make it clear that the Government regards it as an essential safeguard to the interests of the general community at the present time that some check upon the upward movement of wages should operate."
Previously, the Tánaiste had spoken in one of those terrorising speeches of his at Letterkenny—the speech from which I have already quoted—of the future. He said:—
"If there is any idea that we are facing an easy time in which we can have more pay and less work, it is very desirable to kill that idea. We are entering on four years of the most acute difficulty, in which economic disaster will threaten us on every side."
The wage policy was there at the time. Taxes for subsidies was the 1947 programme—subsidies to keep down the cost of living and no increases in wages, even if the cost of living increased. This year we are having taxes to take away the subsidies. The subsidies are now being removed, although not entirely, because there is a bit to come next year, if the Minister survives. The greater part of them, however, are to be taken away this year and the taxes are going on, and it is all based on the statement that "the Government have given very serious thought to this matter and are satisfied that incomes generally have already advanced more than the cost of living." Then people in this House, like Deputy Cowan, humbug themselves into the belief that the Budget means more wages for people.
Wages are not in the Budget philosophy. If the industrial classes are able to enforce a demand for more wages, the Budget proposals to that extent are defeated, because that will increase purchasing power, the demand for goods will go on and imports will possibly flow in from England and across the Border. It is the same policy with regard to wages, only this time there is not the direct approach. The direct approach was in 1947—no wage increases will be permitted. We were to regard that as vitally necessary and if the trade unions will not agree, the Taoiseach said: "The Government will produce proposals for legislation to the same effect."
We know—I gave the details when I occupied a seat on the opposite benches —that there was a piece of legislation in preparation. The two groups of Labour representatives were called in and the Trade Union Congress refused to accept the proposals put before them by the then Tánaiste, and the proposals for legislation were there ready. The only thing that stopped that particular scheme was the fact that there were three by-elections towards the end of 1947, leading up to a general election in 1948, leading, in turn, to the dismissal of the Government. History is likely to repeat itself over the same type of proposals and the same number of by-elections and the same general election to follow.
Deputies may complain that I am delving into past history, but do not forget that this was a running sore with the members of the Government of 1947, who have resumed office. The Minister for Justice, Deputy Boland, complained of it down the country: "The increase in Civil Service salaries is to cost about £700,000 in a full year. The Army, Gardaí, and teachers are also entitled to increases, but the total cost is not yet disclosed. Local Government officials will naturally expect increases also, as will workers all over the country." That is a desperate series of proposals. It is like something back in the Napoleonic times. Imagine teachers, civil servants, Gardaí and Army men getting increases, small increases, but that is going to lead to disquiet amongst local government officials, who will naturally expect their increases, and of course the circle will have to be completed, and workers all over the country were naturally going to look for such increases, too. That was the terrorising thought of Deputy Boland, now and then Minister for Justice. He added:—
"This was a situation which Fianna Fáil were determined to prevent and would have prevented, if three of the lost six Dublin seats had been held, for that would have given Mr. de Valera a majority on February 18th last."
He has got his majority through some of the Dublin seats—Deputy ffrench-O'Carroll, Deputy Browne and Deputy Cowan—and now they would like to prevent any further upsurge in wages in respect of all these people.
I am not going to deal with the matter of imports. The thing that is held up for objection is the import of wheat. Let the Deputies on the other side get their statistics ready. Let them look at the programme that they put to the E.C.A. people as their forecast of the increased productivity in this country after three or four years of the American money that was going to aid them. Let them take the best forecast they made of the yield of wheat in this country, and they will find that last year we got more wheat than their idealistic proposals contemplated at the end of four years. More wheat was produced here. We outstripped what were regarded as the fantastic proposals of Fianna Fáil in 1947. If we spent money on wheat we spent it to very good purpose. If we spent money on fertilisers we spent it to better purpose. This country, when we got it, was starved land. Outcropping had done its worst. The yield of different crops was going down year by year from a depleted soil. Is not the country now humming with fertility, and is not that the best resource that you could have in this country in the event of another war breaking out? Was not that fertility built up by the purchases we made with part of the American money?
We can straddle the years. This year, there is $1,000,000 being given for prunes and some sort of dried fruits, and there is the great defence made that, if we did not give dollars for these, we would have to pay gold. Why, I do not know. We can go back to 1947 when the then Minister for Industry and Commerce saw fit to throw open the ports of this country to the import of sweets, chocolates and confectionery mainly from Holland. In the year 1947, that same Minister allowed in 13,000,000 lb. of sweets, chocolates and confectionery, costing £1,250,000, and before we could stop the flow in 1948, another 7,750,000 lb. of sweets, chocolates and confectionery came in mainly from Holland, costing £663,000.
That is to say, 21,000,000 lb. of sweets and sugar confectionery were allowed in. That is what the Minister then thought was good spending— £1,850,000 being given for chocolates and sweets over the years. Add to that, the cost of the prunes this year which we have been told had to be purchased with dollars. Give me any example during the three or four years that we had control of these purchases of such a fatuous approach as there was to chocolates and sweets in 1947 and 1948, and to prunes in the present year, and I confess myself defeated.
The people who try to avoid a discussion on this Budget speak of the debts that we left. Poor Deputy Dr. Maguire was one of the people deluded into that belief. He spoke here one day about it, and immediately at the end of his speech I asked him to name one single debt which had come over from our time to the present Government that had not been provided for. He could not mention one. We had the same story being told in the country, but the people there had not the figures to check it. I take the Budget speech of the 2nd April as saying the worst that could be said with regard to last year's Budget. In that speech, the Minister for Finance said there was a deficit on the previous year of £6.7 million. In that figure, there was the £3,000,000 and a bit for the losses on the mouldering stuff that we found in the Park which passed by the name of turf, and some of it that passed by the name of coal. That £3,000,000 is not on the accounts this year, so the deficit is £3.7 million. The buoyancy of the revenue, as shown in the estimate of receipts and expenditure, is of the order of £2.6 million. That is the position without taxes being put on. As to the taxes that we left, because of the expansion in the country these taxes yielded an additional £2.6 million.
Suppose we take the figure of £6.7 million, which I do not agree with. There is £3,000,000 of that gone because there are no fuel losses in it this year. That brings the figure down to £3.7 million. We left the revenue so buoyant that, without any additional taxes, it yielded an extra £2.6 million. That leaves the position £1,000,000 down. Of course, the present Government, which gave an increased price for wheat, an increased price for milk, and rolled in everything—Córas Iompair Éireann losses and all were piled in—into last year's accounts, cannot balance that £1,000,000. Say there is that £1,000,000, the Minister was left with more than £2,000,000 of a carry over. I had decided that £1.9 million was far too big a sum to carry over—that there was no necessity for it. My plan was to reduce it over a number of years by £600,000 per year until I had got it down to what I regard as a reasonable figure. I never had actually to reduce it because the revenue was so buoyant.
As regards this £6.7 million, the £3,000,000 in turf losses is no longer there. There is the £2.6 million due to the buoyancy of the revenue. Taking these figures, you are £1,000,000 short, and to meet that you are charging the people £15,000,000 by way of taxation, as the present Budget shows, and all that is to be expressed as being the debts of the Minister's predecessor. There is no honesty, of course, in such statements. They are not even believed by those who make them. There is nothing for which revenue was not provided. We also have dishonest comments made, not here, but they are not worth talking about.
With regard to the Civil Service award, questions had to be put from this side to get the actual date of it. People spoke quite untruthfully, and said that the award had been made before I made my Budget speech on the 2nd May last year. It is now known that the award was not signed until the 24th. In view of that, would anyone ask me to put some provision into the Budget and explain it as provision for the Civil Service? Would not that be taken as a starting-off ground again to look for more? I knew, of course, that there were bundles of money for the Civil Service. As it turned out, the revenue had been more buoyant than the forecasts made, and, in addition, there were the economies that we had made. Between these two there was money to pay the Army, the Civil Service, the teachers and the rest twice over. There was no failing. There was no bad budgeting. This year there is bad budgeting. There is bad budgeting for the reason that it is quite impossible to carry through that programme of expenditure and imposition on the people. Add to it a capital programme that is said to be on foot. Clearly, from that table there, the fact emerges that some of the people have got to find between them £15,000,000 more to pay to the tax-gatherers than last year and £13,000,000 has got to be found by the housewife out of the money she gets from her husband to provide against family expenditure. When that is gathered in, the Minister proposes to look for a loan from the people of this country after lifting £15,000,000 more from them in direct taxation.
In addition to that, he has caused a business depression. Trade is by no means as good as it was. There is great and increasing unemployment. There are people signing on at the employment exchanges at this moment who never had that experience up to six months ago. They are newcomers to the unemployment exchange. There are 13,000 extra unemployed in the 12 months. That is to say, 13,000 people who had to substitute unemployment moneys of different types instead of the wages they were getting.
Other Deputies, Deputy Norton in particular, have spoken of the folk who are on short time and who are getting part-time wages instead of full-time wages. Emigration has increased. There are people who have not the money to spend who had it last year and businesses are finding it hard to make their wages. Business drifted on in the hope that Christmas would see an upturn. When that did not come they thought the sales period after Christmas would bring business to them. When that did not come they thought the Easter and Whitsuntide holidays might bring some holiday expenditure. That did not come. Their last despair and hope was that perhaps the tourist season would result in an upturn in business. That has not come.
The banks are apparently happy over a slump. They are so insistent about their sterling assets, they are apparently not concerned about the trading conditions in the country. It is an amazing thing to find bankers gleeful over a recession, but that is the condition brought about in this country through the whinings and moanings of the Minister and carried on for the last seven, eight or nine months.
It all fits into the plan. If you are going to have the purchasing power diminished in most instances it outcrops in very many ways. There must be machinery for building up the desired conditions that would produce the desired results, unemployment, people on short time, getting people to emigrate and business bad.
A phrase has been used with regard to the British Budget which is not half so severe as that which has been expressed here, that the Government in England are relying on deflation, bankruptcy and unemployment to carry out what one of the members of the Government there called "the purging of the economy." That phrase is more appropriate to this Budget. The Minister for Finance here is relying upon deflation, bankruptcy, unemployment, and you can add emigration to purge out this economy.
When all that hardship has been imposed by the Budget, the Minister calls on the workers to produce more. What is the incentive to produce more? Is there not rather a disincentive? Is a man who sees people on short time and people being paid off going to work harder to produce more in order to produce the result that he will be paid off on Thursday instead of Friday?
Having regard to all these circumstances, the Minister for Finance is going to the country to look for £38,000,000. He has warned us that, so far as he cannot get that, the capital programme is in danger. The approach to getting people in the mood to get them to part with £18,000,000, £20,000,000 or £30,000,000 is to savage them all in their lives and to ask them to pay £15,000,000 by direct taxation. In the last few days the newspapers have carried the news that the adverse balance is steadily going down. On the 12th of this month we were told of the adverse trade balance for April. This morning's paper carries the news with regard to the adverse balance arising out of trade in the month of May.
We had a programme that we were going to increase the exporting capacity of this country. We poured money into this country for that purpose. It was a good investment but there was not time for the full benefits to accrue in the short period we had, but we left behind us work that cannot be destroyed.
This?
Is that the export list?
The four promissory notes.
I want to go back, as the Minister is here, to the 3rd November, 1947, when the Minister was not in Downing Street. These are the promissory notes that were signed then. The Minister has arrived in time.
In 1947, exports and re-exports from this country were under £40,000,000. Last year they were £81,000,000. In the first three months of that year they were £16,000,000, and in the first three months of this year they were £23,000,000. If they go at the rate of last year and in the same proportion as in the first three months of last year, exports should be over the £100,000,000 mark, and they will go over the £110,000,000 mark. In that event you can forget about your balance of payments. We always felt that there were two or three years in which there was likely to be an excess of imports. People were spending their own money and realising their own savings. That is what is being characterised here as living beyond our means. People who had means were using what they had in banks to buy things they required. Why should they not?
We got that analysed by the Central Statistics Office, and it was proved that it was more or less an accompaniment of the housing development programme. People who lived in one or two rooms were being put into new houses, and people are not going to go into new houses with the bits of furniture they had in the two rooms. They would buy the furniture and fittings, and that would not be repeated over the years. What they needed would have been met by one or two years' purchase, as is now shown in the import returns.
All the savagery by way of taxation is a matter of making the people eat less. All that happened because the Minister got frightened and came to the conclusion that the people had too much money. A simple test was: "Have they gone beyond what is warranted by the increase in the cost of living?" The Minister said they had. The worker is to get nothing more than that which equates with the cost of living as it stood in 1939. That point having been surpassed, the Minister sets out to get these millions from those very people. The root principle of this is to stop excess spending abroad. Excess spending abroad is being utilised by other means. The balance of trade is rectifying itself, and will be quite a good one at the end of this year. It is certainly no longer one to cause terror in anybody's heart.
It is with thoughts like these that I look back on the record of the meeting held at Downing Street in 1947. Did the three years in Opposition not teach the present Government anything? They were not able to put the results of that meeting into effect because a general election intervened and they were put in opposition, where they could do no harm. The Minister for Finance knows that the following were the terms and the chains that were put upon the delegates who went to Downing Street in 1947, including the Taoiseach, the Tánaiste and the then Minister for Finance: It was suggested that dollar requirements should be limited to an expenditure of £8,000,000 worth. The British delegates dared to suggest that this country should suspend purchases of tobacco and restrain purchases of petrol. Across the table, they had the nerve to speak thus to delegates from a sovereign and independent State. They had the nerve to tell them that they should impose stricter control on the home consumption of textiles; they suggested that it would be nice if we joined the International Monetary Fund and the International Bank; that this country should economise on the consumption of petrol and on foreign travel—which the then Minister for Finance, Deputy Aiken, threw in out of the blue; they suggested that we should stop dollar purchases of coal and tobacco; that we should curtail our drawings to £14,000,000 in a period; that if we did join the International Monetary Fund and the International Bank, the loans from these concerns were to be used for purposes of capital development. That was the agreement which was accepted by the delegates. They then came home and faced the country, but they were put in Opposition where they could do no harm to the community.
The very people who entered into that bargain speak of the commitments we entered into in 1948. This agreement expires some time this month and it can be denounced at once and a new agreement entered into. If the present Government decide to abandon the 1948 Agreement, they may do so. The time is ripe for them to do so, but, if they are about to do so, would they let us know what their proposals are by way of substitution? Getting public opinion on this matter is the only thing that will do any good.
It is very hard to have public opinion, when we are not told what we are to do.
If anything I have stated in these two documents is not true, it can be contradicted. If anything I have said has verged even a hair's breadth from the literal truth, the documents can be produced and my statements refuted. I bet you will not see any documents produced.
It is difficult for us to know what is happening in the country.
I am quite satisfied that what I have stated is true, and I am glad that it is recorded in the memoranda.
Would it be possible to have these memoranda produced?
If the Minister for Finance will only be good enough to refer even to a point made in the House, he will be bound to produce them. However, I am sure he will keep far away from it.
I have called this Budget a banker's Budget, and that is what it is. The phrases about excessive spending are the bankers' phrases. That is the bankers' trouble. How did the bankers treat this country? I have given these figures over and over again. We met a group of bankers in 1948, and we asked them to justify the position as we then found it, that is that out of £184,000,000 of investments, they had less than £14,000,000 invested in this country; that of the money they had available for investments only £1 in £10 was invested at home. These are the gentlemen who say that these types of hardships should be imposed on the common people. The Government say that they must stop this excessive spending because it is the bankers' horror. Even though the matter may rectify itself by normal and easy means, they want some harsh means so that they will present a better picture wherever bankers gather. When the Government have done all this; when they have savaged the people and brought the standard of living to a very low point indeed, presumably the bankers will still continue their policy and presumably the Central Bank will continue their policy of not even investing 10/- in every £100 in this country. They prefer to have their money locked in British Government securities and, more particularly, in short-dated securities.
That is the kind of control we have in this country.
You did not make much of a change during the three years which you were the Government.
It would be extremely difficult to change the situation. The chance was given of changing it when the Currency Act was put through. Then three, four, or five years of ordinary conditions could have been utilised. Now the whole thing has become so inextricably mixed up that it would take five years to disentangle it. There would be no way of making a sudden change except one which would cause a complete disruption of the country's economy. The harm has been done. As I said before, if a change has to be made, it should be done in such a way that there will be no confusion and in such a way that the people will not be scared because of comments made around the country to the effect that the value of currency was about to be destroyed. When I suggested in the Seanad that the conclusions of the Banking Commission might be reviewed, the Minister for Finance went around the country and spoke about our currency being destroyed. It would now take a long time to rectify the position. There were, however, three years of peace, during which it could have been done, before the situation was so inextricably confused. It will be difficult to do it in the future. Presumably, we must continue the situation in which the Central Bank lodges every penny piece of its moneys, except a couple of millions of gold, in British Government securities. They bring forward the excuse that one day the nation will demand sterling securities instead of currency notes. The people who are running the Central Bank still labour under an anxiety that the people of the country will descend en masse upon them and force them to realise the securities which they hold. Under the sway of this anxiety, they, apparently, feel that they must have such securities as can be realised in a three or a six-months' period.
Such a fatuous programme is unexampled in the history of currency in any other country in the world except as I have indicated in regard to the other performance of the joint stock bankers allocating only £1 in £10 of their investments here.
To conclude, let me say a brief word on dancing. In the speech of the Minister for Finance on the Budget he tried to gloss over a bit of corruption that was on. He spoke of this tax as having been put on in 1932 and having been left for 14 years. He did not, of course, stress that. At column 1147, Volume 130, of the Official Debates of 2nd April, he said:—
"Dancing has been the victim of varying fortune in this regard. The duty on entertainments was first imposed in 1916 but payments for the right to take part in dances did not come within its scope until 1932."
That is, of course, people who went to dances were not regarded as spectators but participants. But the Minister for Finance changed all that, and in 1932 when he saw there was going to be no difficulty about it he deemed it desirable to regard people who went to a dance to be more in the position of spectators. "In 1946 the tax, as applied to these payments, was abolished, but was restored by my predecessor in 1949." Was the Minister forced to lie under this from 1932 to 1946, 14 years? This was the close: "Dancing is the only amusement which is discriminated against by levying a tax on active participants as distinct from spectators." Then this rather slimy phrase: "I have never been quite convinced that the discrimination was justified by any social purpose and I propose to abolish it altogether as from the 1st August next."
It was never a discrimination that the Minister's conscience had thought justified so he proposed to abolish it. When he was speaking on the 2nd April he did not know we had a letter from the Irish Ballroom Proprietors' Association. Deputies should remember the changes that have been rung on this since. I know Deputies are thoroughly ashamed of this corruption which has been perpretated. I looked at the various arguments that were used. Deputy Kennedy was put up to say it was a hard tax to collect. Apart from being hard to collect it was unremunerative because it was costly. The point was made that the profits did not inure for the benefit of the dance-hall proprietors at all; it was the clubs that were really being handicapped by this.
That went on until finally Deputy Cowan said: "Was is not quite right when people gave you subscriptions to do something for them," and Fianna Fáil, delighted that somebody had been honest enough to extol corruption, fell over each other applauding Deputy Peadar Cowan. They said: "Of course it is all right." I presume if the Budget speech were being made again we would have this bit of hypocrisy omitted. We might have the lead-up that the tax had been imposed in 1916 but that payments for the right to take part in dances did not come within its scope until 1932. Instead of referring to the alleged social discrimination he would say: "We got a subscription from the Ballroom Proprietors' Association"—it was said to be worth £250; possibly it was ten times that—"and we are therefore giving something to these people". That is the situation now.
The Deputy is a past master at misrepresentation.
Deputy Cowan said that in my hearing. There were laughing faces all around.
You are a past master at misrepresentation.
You are master of nothing.
That was the truth.
The Deputy has changed a lot since he said he was not concerned with the unemployment problem.
(Interruptions).
Let me deal with Grangegorman. The Deputy has made use of that falsehood several times. We have asked for the quotation. The remark has always been withdrawn and the quotation has been promised. Will the Deputy get it?
Yes, I will.
And then talk to me.
With reference to Grangegorman, I am looking after your friends very well.
That repartee has got to a high point. In regard to the Irish Ballroom Proprietors' Association I suppose the Deputy does know that the subscription was received. That is the third excuse that I forgot. The Minister for Finance had attempted the excuse that he did not know that the subscription had been received. He did not know, in fact, that there was any such subscription. I suppose he has abandoned that particular line of defence now. I met these dance-hall proprietors on the 22nd February last year. They argued this case. They did not make any real bones about the profits not inuring to themselves. They said they were poor men, and they could not afford to pay this tax. They said the tax was failing, and that the Revenue Commissioners might as well cease collecting it. They produced no returns, but luckily we had the returns from the Revenue Commissioners, and the returns were put before them. In fact, they have been given in answer to questions here. The first year the returns were put at £100,000. They then went up to £110,000, to £120,000, and up to £140,000. It was on the increase each year. Incidentally, a query that was put to the Minister got this information, that at the time when it was running at £140,000 the greatest single contribution came from Dublin City. More than £52,000 of the £140,000 came from Dublin City. Therefore, in so far as this contribution to the dance-hall proprietors is concerned it is not going in the main to the rural areas; it is going to the owners of the big dance halls in Dublin, as to £52,000 at least of the £140,000. Comments were made then about the resources of these people, but statistics were produced that were in the hands of the Revenue Commissioners—they must be there still—showing that there was no falling-off and no likelihood of a falling-off in the amount collected; and the tax was easily collected.
Will you tell us how much did Fine Gael get from the publicans?
The unfortunate thing for Deputies opposite is that I have a letter here——
There are other letters, too.
——I would like to have them read because this is most appropriate. However, I do not want my point to be missed. In the Budget statement there was a slimy little phrase about social discrimination. The tax was a bad thing. The Minister for Finance said he realised that it was a bad tax, that he had never been in favour of it. There was this sorrow in his soul for 14 years. It was an error, it was a pity and for 14 years this was gnawing at his vitals. Then a subscription was offered and there was the solving of the whole question. It was a great thing. It removed a worry that had harassed the Minister for 14 years and it gave money to the fund. The details of this are worth repeating. The lady who was secretary of that Irish Ballroom Proprietors' Association, writing from the Olympic Ballroom, spoke of the special meeting that had been held and said it had been decided to communicate with the Fianna Fáil Party, with "the Party responsible for the abolition of the dance tax in 1946". She might also have said, the Party responsible for the imposition of the tax in 1932:—
"I am to inform all members of the association that I have received what the executive consider to be a favourable reply from Mr. Lemass on behalf of Fianna Fáil, a copy of which you will find enclosed.
Following the receipt of this reply from Mr. Lemass, a further executive meeting was held to-day, the 15th instant, when the meeting confirmed their pledge of support to Fianna Fáil.
It will be appreciated that the association is entirely non-political, and that, having failed utterly to impress the previous Government or Minister for Finance, though it pointed out the hardships caused to the ballroom business, to clubs hiring the ballrooms, musicians, staffs, etc., the association has no alternative but to support the Party who has indicated that they are prepared to repeal this tax as soon as it is practicable.
The association has decided that the support to Fianna Fáil should take the form of substantial financial help and also that all members, both city and country, should lend a hand in every possible direction to secure the return to power of the one Party who has given the association an indication that they, as a Party, are opposed to this undesirable entertainment tax on dances."
Then the really good paragraph was this:—
"It will be appreciated that, in order to have the desired effect, our financial aid must, of necessity, be generous. I may mention that one leading commercial ballroom in Dublin has headed the list of subscribers to this fund, with the generous sum of £250, and other members of the executive have also indicated their willingness to subscribe very generously.
Whilst the association does not specify any particular amount to be subscribed, they request you, in your own interest, to give as much as possible.
I shall deem it a great favour if you will reply promptly, as time is getting short before the general election, and, if we are to help, it must be done immediately."
The Minister knew that. The Minister had that letter.
Will you read us the letter you wrote to the publicans?
I have not got it. I never had any such.
You have.
Deputy Burke is a master of English and he is very fond of all these shades of meaning. I am calling attention to the nauseating manner of the Minister's speech. He knew Fianna Fáil had pledged themselves to take off the tax. They got money for it. It was a bargain signed, sealed and about to be delivered. Instead of coming in here and saying that the entertainments tax would go with the rest; that we put it on in 1946, that it was going off again, imagine this: "Dancing is the only amusement which is discriminated against by levying a tax on active participants as distinct from spectators." Then, looking back over his 14 years: "I have never been quite convinced that the discrimination was justified by any social purpose."
Deputy Burke knows that the social purpose that was working in his mind was the 250 good quids that had been received from the Ballroom Proprietors' Association and whatever else was added to it. But, then, that was hidden by the "social discrimination".
Then we came later to the excuse that it was a hard tax to collect, that it was not yielding much. The answer came from the Minister: "I do not know that any such subscription was received." At any rate, there are many Deputies who are observers of this, that Deputy Cowan sat on the top bench and while Deputy Dillon was commenting on this, asked, was not it right to give them a return for the subscription, and you all fell over yourselves querying the rectitude of that. It was more honest to say that than to talk nonsense about social discrimination.
This tax was not a hard one to collect. At that very meeting the Revenue Commissioners gave the figure that I have given here in public—2 per cent. That compared well with the expenditure in collecting many other taxes. I think they instanced incometax as one matter. As far as difficulty was concerned, it was gone since the rural areas became exempt.
When, finally, the last card was played by this group of people and they talked about their resources, the figures were produced to show that the yield of the tax was rising year after year. It was pointed out that one of the men in the room, who had started three years before with two dance halls, had a chain of seven of them when he was in my room in February of last year. A man does not generally extend a business from two halls to seven unless it is a profitable one. The last card of all was played when, as I say, the individual resources and incomes of these people were brought forward. At that point, the challenge came, if you like: "With your permission, I can ask the Revenue Commissioners to tell me, after investigating a group of accounts, not the individual accounts, whether you are, so to speak, a poor section of the community or not." At that point, after a little bit of a huddle with one another, they said they would prefer that that matter would not be investigated. At that point I thought they had no case. I decided to make two small modifications in the Finance Bill that I introduced last year but, of course, the radical change that is taking place is expressed to be on grounds of social discrimination but is really due to the fact that this crowd subscribed to Fianna Fáil and they are now getting their reward.
I suppose I could well illustrate the contradictions and misrepresentations that have been made by Deputy McGilligan in connection with various matters concerning finance by dealing first of all with this question of expenditure of dollars on raisins and fruit. Deputy McGilligan asked for a single example in his period of office equal in what he describes as fatuity to the imports of chocolates and sweets in 1947 and the imports of prunes in 1952. He said: "If such can be given, I will admit defeat." We can give these examples of, in Deputy McGilligan's words, fatuous imports, during his period of office.
In connection with the import of fruit, the House is well aware of the reasons which led to our providing dollars for an amount which was a considerable reduction on that allowed by the inter-Party Government in 1948-49, when they provided a sum of $1,350,000 for these commodities. We allowed recently a sum of $900,000 and, as has already been indicated to the House, we were in fact avoiding having to incur gold payments. But, in the year 1949-50, dollars were allocated for such things as mouth-organs, fishing rods, popcorn machines, to mention only a few items. Dollars were also allocated to permanent wave pads, fake jewellery and knick-knacks of various descriptions. These things cost dollars. The purchase of them did not avoid the expenditure of gold. They were entirely unnecessary. They did not relate to commodities some of which were exported, such as was the case with cake, or to commodities widely used by housewives at different times of the year.
It is a typical example of the kind of way in which Deputy McGilligan seeks to confuse the mind of the people, to distort facts and to paint a picture of an entirely false kind about the motives underlying our action in connection with the Budget and other matters.
Deputy McGilligan has been attacking the Central Bank for investing money in sterling securities but, in connection with the Central Fund Act, 1949, which provided for formal establishment of an American Loan Counterpart Fund, the arrangements were definitely made that the moneys would be invested in the Central Bank and that the Central Bank would invest those moneys in British securities. There was a time when the inter-Party Government were investing money at the rate of £33,000,000 in British securities.
They made no effort to change the system and when Deputy McGilligan says that it would take five years to alter the financial system in this country, we can show up the complete hypocrisy of the Opposition Parties in regard to this whole matter by saying, why did not they start in 1948 part of the five-year programme? Why did not they start investigating it? Why did not they appoint one of their commissions, like the Emigration Commission, which had not reported by the time they left office? Why did not they begin the elaborate researches that would be required to make a change in the banking system, to stop investing surplus assets in Great Britain, to alter the character of the currency, to alter the level of the currency, to abolish the Central Bank in its present form, to get rid of the branches of the British commercial banks in this country? They could at least have started all these researches.
They had a man, Deputy MacBride, as one of their Ministers, who has been a past master at advocating every known kind of financial change without ever saying exactly what he means or how he is going to do it, or without facing all the implications involved by any one of the vague suggestions made by him in the last ten years. With Deputy MacBride to advise Deputy McGilligan and with the two of them to press upon the more conservative members of the inter-Party Government, one might well suggest that they could have at least established a commission or they could have begun the work of investigation themselves and then, at the end of three years of office they could have said, as Deputy McGilligan has said here to-day: "Of course, we needed five years to make these changes. We have only had three of the five years. If we were allowed to stay in office for another two years, no doubt, our plans would have matured."
Of course, as we know, the whole of this matter is simply done for the sake of creating political confusion in the minds of the people and we know perfectly well that the last Government had no intention of making any substantial changes of this kind. All they did was to create an inflationary effect and to mishandle the finances of the country. They did that without any particular principle in view, beyond that of spending money as fast as they could in order to retain popularity and to retain office. I do not believe that the sensible people of this country will listen to that kind of talk or will derive any useful guidance from it.
Deputy McGilligan, in the course of his speech, also referred to the question of the tax on dancing. I should like to remind the House again that in the 1948 election the publicans of this country published manifestos stating that they intended to support the Fine Gael Party. Everybody knew that practically the whole of the licensed trade of this country supported the Fine Gael Party with a view to their winning the election and offered them every help they could in order that the tax on stout and other alcoholic liquors would be reduced if they were returned to office. One might as well say that when the Minister for Finance in 1946 remitted the tax on dancing, he did so because some other association that wished to see the money spent on some forms of entertainment other than dancing, offered him money. The whole argument is perfectly ludicrous. As many people in this House know well, in the larger towns in the country where the tax was being collected there were, unfor-fortunately, evasions. The whole of the tax on racing, cinemas and dancing collected last year came to only about £2,000,000. Because of the fact that people spend about ten times as much on smoking and drinking as they do on other forms of entertainment, the Budget could not be altered substantially by any notable increase in the tax on any of these three forms of entertainment.
An increase of about 25 per cent. on these forms of entertainment would have yielded only about £500,000, and even if such a tax were imposed it would have no marked effect on the financial situation. Still you have people going around at meetings in connection with the by-elections saying: "They have increased the price of butter and they took the tax off dancing", as though the millions spent on subsidising butter could be equated in some way to the sum which is being remitted this year in the taxation on dancing, amounting to about £100,000. There are so many statements of the same kind that it would take a great deal of time to refute them.
I think I should now pass to Deputy McGilligan's speech. He has tried to establish that the Fianna Fáil Government and the Fianna Fáil Party were the Party of misers and of Shylocks, but he is never going to persuade the people of this country that our Government possesses either of these characteristics. He is never going to persuade the people that we desire that people should pay excessive taxation, that we desire to reduce the happiness of people's lives, that we desire to deprive people of a large part of their earnings, on the promise of some nebulous concession, because it is a Fianna Fáil Government that has been responsible for the great majority of national developments in this country. With the single exception of the first part of the Shannon development, I think we can say that everything of importance in the line of development was dreamed of, planned and put into operation by the Fianna Fáil Government. There was very great criticism by the Fine Gael Party to the effect that we were guilty of extravagance when we started Aer Lingus, Irish Shipping and Bord na Móna, when we established over 900 new factories and entered on a great housing campaign.
In these days the disappearance of a mere £11,000,000 from the sterling assets and the raising of interest on the national debt by £120,000 were looked upon as national disasters. As late as 1948 Deputy Costello referred to the "huge adverse trade balance", largely caused by the necessity for restocking, as a source of economic danger to the country.
As I have said, no one who has any sense of justice whatever could accuse this Government of being a party of misers or Shylocks. Our desire is to secure the prosperity and advancement of the Irish people. This is a Government which has passed all social security measures since 1932 with a view to redistributing incomes in the country so that some of the surplus wealth of the better-off might be distributed amongst the less privileged. A Government which has raised a sum of £121,000,000 for social services can hardly be accused of miserliness or of trying to deprive the mass of the people of happiness; yet all through Deputy McGilligan's speech we had a suggestion of narrowness of outlook on our part.
The only reason the last Government remained in office so long as they did was that they had so many of our development schemes to operate during that period, in particular housing, much of which they neglected and much of which they mishandled. They remained in office for that length of time because, as I have said, they had our schemes to carry into effect and they had all the benefits of our belief in a liberal economy. In an economy involving a certain amount of State direction and planning, an economy involving the taking of reasonable risks in certain forms of mercantile activity, which private enterprise was unwilling to take, we had to stimulate such activity by companies promoted under State auspices.
We have heard much outrageous nonsense again in regard to the question of finance. The other day I heard someone speak on the Finance Bill who said that there should be no extra taxation because we were left £30,000,000 to spend and, that apart from taxes, there was so much money available to the Minister for Finance that there was no need for taxation of any kind. Of course this particular person was contradicting other people in this Party who did not commit themselves to eliminating all this new taxation but merely to saying that they would have to examine the position. According to this Deputy there was a sum of £32,000,000 left to the Minister for Finance by the previous Administration. He was referring to the remainder of the Loan Counterpart Fund, which we have had to use for the payment of the Coalition debts. Every device to use Government funds—huge increases in ways and means advances —had been taken advantage of to discharge the capital obligations entered into by the previous Government. The only way to deal with the matter at the time was to spend the remainder of the Loan Counterpart Fund. I need hardly say if we had such a large sum at our disposal, it would have been a heaven-sent gift for us. No Government of sane men would tax a community such as ours if such a sum of money had been made available.
The next kind of nonsense we hear is a suggestion made by a member of the Labour Party speaking somewhere in the country in connection with the Finance Bill. He said that we had lent the Bank of England the proceeds of the beer tax at 1 per cent., and that the Bank of England were lending it back to the Irish banks, who were told to lend it to the Irish people at 6 per cent. What kind of impression that statement was intended to create, I do not know. A tradition of honest comment about financial matters that, I am willing to admit, was typical of quite a large portion of the Opposition at one time has now vanished completely. They say anything they like in an effort to deceive people who have no knowledge of economics and no interest in economics and to whom an explanation in refutation of a statement such as the one I have just referred to, to be given fairly, would take a considerable time.
Similarly, unfounded statements have been made in regard to our external assets. Last week-end, one prominent Fine Gael speaker said that the Irish Government had invested £400,000,000 in British securities, that we had £400,000,000 to spend, and that we did not need to worry about spending it because the value of British securities had gone down so much. No attempt was made to tell people who do not study economics what the £400,000,000 consisted of. No attempt was made to consider whether debts had been incurred in Ireland to reduce the net assets in our possession by a considerable amount. All we were told was that we spent £60,000,000 more on imports last year and, therefore, why not blow the rest of it? It is shocking to have to refute statements of that kind. As I have said, there was a period when there was a great deal more scrupulousness in dealing with financial matters on the part of those who opposed us than is the case now.
I do not know whether we should repeat for the nth time that we have to measure the known assets held in this country by foreigners against the known assets held by us in Great Britain, and that the balance in our favour is about £130,000,000. It is hard to measure exactly the amount invested privately, but if you take £50,000,000 on either side perhaps being wrongly calculated so far as private assets are concerned, the position still is that the net assets of people in this country have gone down very much, and that care must be exercised in future in regard to their further reduction. We have not stated that they should not be reduced further, if they can be reduced usefully. We have said that care must be exercised.
If Deputies do not wish to consider the position by comparing what we owe to countries and what they owe to us, they can simply consider the known amount of assets in Great Britain over which we have some control. On the 31st March, 1952, they amounted, I think, to £197,000,000 divided between £108,000,000 held by the commercial banks, some £50,000,000 by the Central Bank, and the rest by the Post Office Savings Bank. Those are the assets over whose total amount we have some control. It does not matter whether you consider that figure by itself or whether you consider the net total figure. All we know is that if we go on adding adverse trade balances at £60,000,000, whether the effect is to increase our indebtedness to other nations or to reduce our assets abroad, or a combination of both, a time will come not far from now when we shall be in a dangerous position.
Deputies also said in the course of this debate that we want to go on investing assets in Great Britain and to go on building up these assets. They said that it is our desire to assist Great Britain and to follow the example entirely of British economic policy. That statement is not true either. Over and over again we have stated from this side of the House that if we can increase production by using up our assets abroad, that if we can import machinery which will enable us to reduce imports, or if we can import fertilisers and machinery to enable us to increase our exports, we are perfectly willing to reduce our foreign assets. I should not mind if they were reduced to merely nothing provided we were in a stable position, provided our imports balanced our exports and that we were never likely to reach a position where our imports would exceed our exports by a dangerous amount. It is easy to use cheap talk about financial matters and to confuse ignorant people. What has been the position? We have seen all the assets which were saved during the war disappear. Whether or not that is good, the fact remains, as I have said, that the assets are decreasing and that during the whole of the period of office of the Coalition Government, that Govment never succeeded in raising the volume of agricultural production above that at which it stood after four or five years of grilling economic war and world depression. In fact, they did not even succeed in raising it above the figure at which it stood at the end of the war, after years when the fertility of the land had been reduced. For two years before they took office in 1948, we had continuously bad weather which caused production to deteriorate rather considerably. The agricultural statistics in respect of the years 1946 and 1947, during which we had continuously bad weather, enabled Deputy Dillon, when he became Minister for Agriculture, to boast of his successes by using the agricultural statistics in respect of those two bad years and comparing them with the statistics in respect of the years during which he was Minister for Agriculture. It will be noted that Deputy Dillon always likes to take for purposes of comparison, the figures for agricultural production in a year of unexampled bad weather and to compare them with the figures for the years 1948 to 1951 so as to help him to make the point that he was instrumental in bringing about some increase of agricultural production in the period 1948 to 1951 during which he was Minister for Agriculture.
If there had been the same increase of production in the period 1948-1951 that there was in Northern Ireland, Denmark, Holland and Belgium we should have to be more deliberate in the statements we make about how external assets are used. We should have to be careful in our statements and to speak with more reservation about the matter. The fact is that there was no noticeable increase in agricultural production. Deputy McGilligan himself was well aware of the position. In his Budget speech of 1951, he said that, making allowance for the exceptional conditions now obtaining, it was to be feared that we were not producing and earning enough to pay our way. In all the speeches which Deputy McGilligan has made since that Budget statement in 1951 he has never thought it proper to repeat the sentiments he expressed in that Budget statement, or to explain why he does not now believe them. He has not thought fit to explain the circumstances under which in that Budget statement of 1951, he gave the most definite warnings to the people there would have to be a change of policy and that we were coming to the end of our financial tether at that time. In that statement he said that there would have to be some curtailment or restriction. He never explained what had caused him to change his mind in regard to all these matters unless it be political expediency. As far back as 1949 he foresaw that something was wrong. In the course of his Budget speech in 1949, Deputy McGilligan who was then Minister for Finance, said:
"...agricultural output and exports as a whole are still at dangerously low levels, capital expenditure—some of doubtful productivity—is outstripping current savings, rates and taxes are excessive, dead-weight debt is rapidly expanding and production costs are unduly high. The primary needs of the moment are increased output at lower unit costs from farm and factory and more saving by the community generally."
In 1951, he reported that agricultural production had fallen slightly in 1950 from 1949. He reported that the community was not saving enough. We are aware of the fact that there had to be some slight change in financial policy if only for the fact that the people were saving less than they were saving under a Fianna Fáil Government in 1938.
It is essential to keep on relating the truth as we see it and to try to refute all the statements which have been designed to confuse the people. I suppose one of the best illustrations of the profligacy of attitude of the Coalition Government would be to compare the position with regard to our imports and exports with the 14 leading European countries who present statistics to O.E.E.C. By 1950 we had the third highest imports in Europe of these 14 countries compared with 1938 and we had the twelfth lowest exports compared with 1938. Only two countries exceeded us in imports and only two countries were below us in exports. I am not suggesting that we should be low in the list of imports or, in the circumstances which obtain here, that we will have necessarily to be at the top in regard to our progress in exports. I am simply suggesting that there is a situation which requires correcting. We have done our best to change the policy with a view to stimulating production and getting back to a proper programme and a consistent economic policy and we hope it will have favourable results in the future.
Of course members of the Opposition are completely inconsistent in the way they talk about buoyancy. They dangle before the unfortunate electors the prospect that there is an element of buoyancy which we have ignored, that the yield of the taxes on tobacco and drink will be £4,000,000 or £5,000,000 above what we have anticipated. The only implication behind that is that the depression which they say exists will be non-existent and that the people's purchasing power will be greater than we anticipate. They cannot have it both ways. What they ought to say is that the amount of buoyancy to be allowed for, which is something about £2,000,000, is exaggerated, that we will never get that money, that the taxes should be higher because there could not be any buoyancy so long as the Fianna Fáil Government is in office. All we hear is this contradictory nonsense about emigration, unemployment and depression, and at the same time we are supposed to be collecting millions more in taxation on consumable commodities and deliberately underestimating the amount.
We have had observations this evening that we deprecated the fact that the increase in industrial earnings has exceeded the increase in the cost of living, that we do not regard that as good for the people and that we would like to kill it as soon as possible. It is well to remind the House of the fact that, all through our first period of office, wages went up and earnings went up steadily in this country. The number of persons earning wages steadily increased. The number of persons able to earn wages in industries where skilled labour was required steadily increased by tens of thousands during these 16 years.
It is well to remind the House that, in actual fact, earnings went up more from 1946 to 1948 than from 1948 to 1950. If Deputies look up the statistics prepared in the time of the former Government they will find that we have never prevented wages in normal circumstances going up. The fact is that the nation itself, in Deputy McGilligan's words, has not been earning, as a whole, enough to pay its way, that our exports have not been sufficient. What we want is to get production going, to promote more industries, to import less and to export more.
If we can go on with the policy of which we had good experience during our first term of office and if we can solve the one great problem of expanding the quantities of agricultural produce produced in this country, we hope that earnings will be regarded as satisfactory by the whole community, that there will be no complaint about them. There will be no complaint about the effect of the Budget, which is a burden on the community now, solely because the Coalition Government failed to expand production sufficiently; particularly failed to expand agricultural production.
One should always strike an optimistic note where it is deserved, and one of the agreeable things is that in the first ten months of our office, partly because of good weather and partly of a consistent agricultural policy, there has been the beginning of at least some expansion in agricultural productivity. The fall which took place in 1951 as compared with 1950 is being stayed in connection with a number of commodities. It is a good thing to report on such a matter. The number of cattle exported has gone up as well as going up in value. The one thing we have always been seeking is an expansion in number as well as in prices. That is essential to this country.
There is also on its way some evidence of resumption in the prosperity of the poultry industry. After poultry declined by 2,000,000 from 1950-51, we now know that between 500,000 and 1,000,000 more day-old chicks were being sent around the country during the first period of this year, thus indicating some expansion. We are also glad to report that there has been an increase recently in the number of pigs going to the curers, which is evidence of some expansion in production, whereas in 1951 there were 86,000 fewer pigs in June than in 1950. There has also been some expansion in the production of agricultural products such as cheese, chocolate crumb, etc. Some of that of course may be due to good weather and early grass, but I believe that the farmers will have more confidence in a consistent policy and quiet arrangements made advisedly rather than blatherskite about drowning the British in eggs and smothering them in bacon.
If this progress continues, it may be possible to relieve the burden of the Budget at a later date. Of course my own belief is that the expansion of agricultural production will be a very slow process. There may even be temporary increases followed by some reverses. It will take a number of years to put the whole matter right.
So far as the workers are concerned, I think they are well aware of the immense increases in their wages which have taken place in our period of office, in conditions of employment, and in the opportunities of employment made available to them entirely through our policy.
Deputy McGilligan suggested that this country is humming with fertility at the moment owing to the action of the inter-Party Government. That rather reminds me of Deputy Dillon, who in the summer of 1948 claimed full credit for an increase in the yield of crops, or an increase in the production of certain crops, which was solely the result of the fertilisers which were coming in, which up to then had been unprocurable, and of better weather. Of coure, Deputy Dillon, during his period of office, would never inform the public of the fact that, for example, agricultural production in 1950 was no greater than it was at the end of 1945 after the years of war and before the period of the bad weather.
The Opposition is trying to confuse the public in regard to the whole question of Marshall Aid. I do not want to go into that matter in detail, but I should like to remind the House that every country has been suffering difficulties about the adverse trade balance with the dollar area and the effect of Marshall Aid. Europe was £2 billions more in deficit to the dollar area in 1950 than she was in 1949. That is a colossal sum of money. Every country has had to face that position. Prices went up. The cost of dollar commodities went up more than the cost of European exports, and we here have now to face the problem that, as soon as Marshall Aid in one form or another came to an end, there were bound to be repercussions. In our case, the position is more serious, because, in the case of European countries, much of their armament programme and dollar deficit is defrayed to some extent by the new mutual aid security funds made available to those countries by the American Government.
Those funds are not available to us, and the first thing the community should get into its head is the fact that you cannot stop borrowing money at the rate of £45,000,000—it was originally £40,000,000—in three years and not have some financial repercussions. It is conceivable in a country such as this, where ordinary personal consumption in 1949 amounted to £347,000,000, that if one borrows £40,000,000 over a very short space of time from another country and spends it unwisely—or even if one spends it wisely—the ending of it is bound to produce some financial repercussions. Any person will understand that, in a position of that kind, there are bound to be some adverse results.
I think I dealt with the fact that the last Government undertook no fundamental changes in the banking or financial structure of the country. The last Government did not even begin to prepare to make changes and the Opposition is now trying to confuse the people by suggesting that we have adopted some kind of special economic policy, whereas the fact is that we recognise the difficulty of making changes, together with the fact that, in every change one might consider making, while there may be some advantages, there will usually be offsetting disadvantages.
We have heard more talk about the balance of payments. One would think that we were entirely responsible for the position that has been created in connection with the balance of payments. The fact is that in the last year of the Coalition Government, 1951, a period for which we could hardly be saddled with responsibility, this country was made more dependent upon British good-will than it ever was in the past in relation to our balance of payments. I do not know whether people as a whole realise the position. We always hoped to pay for some of our imports from countries other than Great Britain by selling to the British far more than we bought from them. When the tourists left their money here and when the British had invested whatever money they wished to invest here and drawn income from it and the balance was worked out we hoped we would be in the position of having sold more than we had imported and that we could say to the British: "Here is a surplus. You will spend this surplus for us in other countries to which we sell practically nothing." That was the pattern of trade in 1947 and 1948. We sold the British more than we bought and they spent for us the money we could not spend because we did not sell to other countries.
The position was reached in 1951 that we actually balanced our imports and exports with Great Britain and virtually the whole of the imports from other countries, with the exception of those to which we sent very, very limited exports, had to be financed by the liquidation of external assets placing us in the position, without there being any particular financial reason for it, where the British in order to finance our trade would dilute sterling by pouring this money into circulation. When the Opposition accuses us of following Mr. Butler and his financial principles it is as well to remember the fact that we had nothing to play with in 1951. We had not one single penny piece of surplus sterling trade, and the whole amount had to be financed by the liquidation of assets in one form or another, by the British lending us money or by our reducing our commitments in Great Britain.
We had not a single argument with which to face them. Everyone knows the position in which sterling is. I have not seen the exact figure in relation to the amount by which the sterling world went into debt in 1951 but I know it is in the order of £400,000,000 or £500,000,000. Our contribution was £62,000,000, quite a large amount for a country with a population of 3,000,000. We do not have to be pro-British or pro-Butler to realise that in prevailing circumstances we might have to have some modest restriction in regard to an adverse trade balance of that dimension. Without creating financial chaos or making it impossible for employment to continue, we must take some moderate action to put the position right.
Nobody has suggested anything else.
The Deputy knows we have been accused. But as the Taoiseach said, if we stand under the same umbrella we are accused of being completely dependent on British financial policy. We have also been accused of copying the British in regard to the partial abolition of subsidies. Norway, which is dominated by a Socialist Government, is now reducing subsidies. Denmark, with a Liberal Government, is reducing subsidies. The Dutch Government is reducing subsidies. There is nothing in the nature of copying the British in our deciding to reduce subsidies.
I would like to say a few words about the effect of the subsidies in relation to children's allowances. I think most people have very little idea of how this affects families in general. I have not got the up-to-date figure but there are about 443,000 families and of those 308,000 will get increased children's allowances to offset the reduction in food subsidies. If one takes 100 families, there will be 15 with two children, in receipt of a total of £6 12s. a year in total children's allowances; there will be 23 with three or four children in receipt of sums varying from £17 2s. to £27 12s. a year in total children's allowances; there will be 15 with five or six children in receipt of £38 2s. to £48 12s. in total children's allowances, and there will be 16 with seven children, or over, in receipt of £59 upwards to £90 a year in total children's allowances.
The whole idea behind the modification in the amount of subsidies granted for essential food is misunderstood by many people and is certainly misrepresented by the Opposition. It is quite obvious that when subsidies take £15,000,000 out of a Budget of £100,000,000 it is rather as if the people took out of their own pockets £15,000,000 and put it back in again. It is perfectly obvious that, looking at the general expenditure of the community on various kinds of commodities, there were and are many people who should be able to afford the extra cost of food —the 1/6 extra—and equally there are others with large families who would not be able to afford that extra cost. By increasing children's allowances, therefore, we have done the best thing we possibly could under present circumstances. One is aware that it would be much better if the whole wage structure of the country was based on the number in family since that would be more in accordance with our code of ethics. That is done in certain continental countries.
Or based on human needs.
Deputy Hickey knows as well as I do that to alter the entire structure of trade union negotiations and wages in order to relate that to the size of the family would be utterly impossible.
So we consider that the children's allowances bring a gift from people with no family, unmarried people or people with one child, to others with large families. We say that it is a better way to spend the £15,000,000, which is a large proportion of the Budget, than to give subsidies to people many of whom can definitely afford to pay the cost of the food themselves. I intend to be frank. I do not think the public understand the relation between the consumption of other commodities and food. In 1949, the people of the country, exclusive of tourists, spent £108,000,000 on food and £40,000,000 on drink and tobacco. Any Deputy can work out how much that is per head per week and he will see that the man with a small family should on an average be able to pay the extra cost of the food now involved in the reduction of the subsidies. A much better way of spending money is to spend it on children's allowances rather than to pay 2/- per head on food subsidies to people a vast number of whom spend from 5/6 to 11/- per week per head on drink and tobacco. That is absolute common sense, to my mind.
When the subsidies were small and were given for a specific purpose there was some reason for retaining them in their present form, but now that the whole position has altered I feel that a change has become necessary. I might add that members of the Fine Gael Party expressed disbelief in the value of the subsidies when they were first introduced in the middle of the war. They said that to spend £2,000,000 this way was ridiculous. Deputy Norton said in 1947 that to spend on temporary subsidies 7½d. per week per head was ridiculous and would serve no purpose. You cannot have it both ways. Some condemned the introduction of the subsidies at the time and some condemned the increase in the subsidies in 1947. I think that we have done the sane and intelligent thing under the circumstances.
I have tried my best to contradict many of the false statements made by members of the Opposition regarding the whole matter. I want to say once more in conclusion that we in Fianna Fáil are not adopting an over-restrictive attitude. We have as many plans as we had in 1948 for the development of the country, plans for new industries, and plans for the extension of industries. New projects are coming in at a far greater rate than they did during the period of the inter-Party Government. Plans of every kind are being investigated to step up production. We have already made changes in agricultural policy designed to induce farmers to produce more, and other changes are being considered at the present time. I do not suppose that a month goes by that the Government does not consider in one form or another proposed changes in agricultural policy all designed to stimulate production. We are going on with a forward policy of national development at a rate we can afford, and in a manner which will enable us to retain economic independence. It is very much better to have good plans well executed, although they might take two or three years longer to develop than to have badly botched, badly executed, extravagantly executed plans from which no good result follows. That is the whole philosophy of Fianna Fáil: to assist the development of the nation at a rate and a pace we can afford, and to make quite sure that we earn our way as we go. We will borrow when we have to, when it is necessary in order to increase production. We will borrow certain amounts for social improvement, but at the same time our aim is to make quite sure that we maintain our independence and retain sufficient reserves of funds in Great Britain, so that we may never go into debt, so that we will not have to make violent changes in the future and, so that we do not suddenly find ourselves up against sudden difficulties which we should have predicted but were not able to predict, and which might cause serious repercussions on employment and trade. That is the serious purpose behind Fianna Fáil.
No one is going to tell the people of the country that we are over-restrictive, Shylocks, misers, that we wish to make things difficult for the people of the country. We propose this Budget only because we find it necessary. The Taoiseach has said publicly on several occasions that we do not intend to seek an election so long as we retain a majority in the House. There is no cheap idea underlying the Budget, namely, to have a big surplus next year, so that we can go to the country and secure an overall majority. We intend to go on for five years to develop the country, and to do it honestly without the noxious kind of criticism which makes it difficult to induce people to invest money in the country. We intend to go on with that work. We have no intention of making use of the Budget proposals in order to gain votes. That suggestion has been made, but it is an indication of the bankruptcy of Fine Gael policy. They say that our idea is to tax the people heavily this year, to let them off next year and then go to the country. I am proud to say that we, in Fianna Fáil, never had an election based on a bumper Budget. We have gone to the country on general issues or on particular issues on which we felt we needed the support of the people. We are not the kind of Party which goes in for bumper Budgets and, please God, we never will be. We intend to go on with our work and to do that work in a manner the nation can afford.
I thought at one stage while the Minister for Posts and Telegraphs was speaking that he had undergone some change in his viewpoint since recent utterances of his that it was unreasonable to suggest that the sterling assets should be repatriated, that they constituted an army of occupation should be depleted. effect high treason to suggest that that army of occupation should be depleted. I thought during a portion of the Minister's speech to-night that he intended to modify or retract that statement, but it became apparent after a while that he was merely putting forward the same propositions in a somewhat milder way.
Let me say straightaway that the Minister's speech compares favourably with the speeches of the Minister for Finance dealing with this question because it was related to the issues under discussion. The speech he has made, however, does indicate clearly that the real purpose of the Budget is to reduce the purchasing power of the people so that consumption should be reduced and so that in that way the adverse balance of payments could be rectified. I think that anybody who has studied the economic policy of the Government, anybody who has even a cursory knowledge of economics, will appreciate that that is the real purpose of the Budget whatever words may be used to cloak it. That policy may satisfy the requirements of a bookkeeper, of an accountant with a money-lender's outlook, but it is a policy which is completely short-sighted and which can only retard the increase of production.
Obviously, if you reduce the purchasing power of the population so that they will consume less, they will buy less. Obviously, then, the shopkeepers will sell less and will buy less from the manufacturers and producers and you will have mounting unemployment, mounting emigration and falling production. But one might give a fool's pardon to the Minister for Finance and the Government for pursuing this policy, if it were not that the consequences of that policy were clearly outlined to the Government by the Central Bank in its report, because the Central Bank did not put a tooth in it. The Central Bank advised the removal of the subsidies; they advised the imposition of additional taxation so that consumption could be reduced; and they advised that other steps be taken so that a remedy could be found for the unusually favourable condition of employment that had prevailed in the country. That was their way of advocating the creation of an unemployment pool, and it is not the first time that remedies of that kind have been put forward by the conservative school of economists, not merely in this but in other countries, the school of economists who probably have created conditions that led to the rise of Communism in Europe.
I am not going to repeat many of the things that have been said in the course of this discussion, or indeed to repeat many of the views I put forward in earlier debates on these issues, but I should like to draw the attention of the House to a reply I received to-day to a question concerning new industries established here in the course of the past few years. A table giving particulars of the new industries set up here since 1945 has been laid on the Table of the House and I suggest that Deputies would do well to look through it. It contains a list of some 408 new industries, or extensions of new industries, set up in this State since July, 1945.
Before we start indulging in the usual game of discussing who was responsible for the creation of these new industries, whether it was the inter-Party Government or the Fianna Fáil Government or whether it was the result of policy initiated in the year dot or some other year, I should like the House to consider the effect of the creation of these industries and the causes which, broadly speaking, led to their creation. Each one of these factories or extensions was built largely from material which had to be imported and largely equipped with machinery which had to be imported. They were, I hope, financed, in the main, with Irish money. These 408 new industries or factories represent a tremendous amount of capital. They represent a tremendous amount of goods which have been imported for their creation and erection. A great many of them are secondary industries which consume raw materials which had to be imported. That was bound to have an effect on the balance of trade in recent years.
I have not had an opportunity of going through this list very thoroughly. In a number of cases, it is impossible to ascertain the exact year in which the undertakings were started, but, in 327 cases, the new industries set out in the list were started in the years 1948, 1949, 1950, 1951 and the beginning of this year. Surely the House must take into account the capital absorbed by these new industries and must take into account the machinery and equipment which had to be used in their creation. I think the result of the creation of these new industries is clearly reflected in the increase, first, in the number of persons in industrial employment, a number which has increased very steeply in the course of the past three or four years, and, secondly, in the extremely high increase in the national income which has taken place in the past three or four years. These factories and new undertakings could not have been started, if we had pursued a restrictive policy. If the sole aim of the economic policy of the Government was the conservation or building up of large sterling balances in Britain, obviously these new factories could not have been built or started here. When Deputies are inclined to ask how this country has benefited in the past three or four years as a result of the policy pursued by the previous Government, or as a result of Marshall Aid, one answer that can be given is the answer contained in this list of 327 factories.
I wonder do Deputies on the other side ever stop to consider what the British Government do with the several hundred million pounds we lent them? The Minister for Posts and Telegraphs gave some figures as to our sterling assets. I do not think these figures are correct. I think that our total holdings of sterling in Britain amount to something between £400,000,000 and £500,000,000, and of that amount at a rough guess, I should say that the British Government have between £150,000,000 and £200,000,000. This is money we have lent to the British Government. What do the British Government do with that money? They have £150,000,000 lent to them by the Government, by the Central Bank and by commercial banks. They borrowed this money. What do they do with it? They use it for housing, for afforestation, for promoting industry, for rearmament, for ground nuts schemes in Africa. They even use it to the finance the Six Counties. They use it for the housing and social welfare schemes in the Six Counties and to pay for the British Army of Occupation there. I am not raising this as an anti-British slogan or cry, but I should like Deputies opposite to ask themselves why the British Government borrowed this money and what they use it for? Can we not use the money for the same purpose here? Could we not utilise that money for our own purposes here to finance for ourselves the various schemes which the British Government are financing with it for themselves? Is that not common sense? When the Minister for Posts and Telegraphs makes a speech and says that it is reasonable to advocate the repatriation of sterling assets I feel inclined to say that it is reasonable to suggest that we should lend the earnings and savings of this nation to the British Government to be used by them for purposes for which we should use them in Ireland.
A number of matters were raised in the course of the discussion to-day. We have heard a lot about Marshall Aid from the Minister for Finance and from his ally and helper-out, Deputy Cowan. I would like to remind the House of this. When I became Minister for External Affairs in 1948 I found that, a few months before, the present Taoiseach had chartered a special plane and had brought with him several officials from the Department of External Affairs, the Director of the Information Bureau, I think the Secretary of the Government, a private secretary, and I think a couple of detectives and had flown to Paris to attend the first conference in regard to Marshall Aid and to sign the agreement there. I found that, a short time afterwards, the present Tánaiste, Deputy Lemass, had gone to Paris and had been accompanied there by the present Minister for Local Government, who was then Minister for Agriculture, Deputy Smith, and that these two members of the present Government had also taken part in a conference in regard to Marshall Aid and had made speeches in regard to Marshall Aid.
I found in my Department draft agreements. I found in my Department a list of all the goods that we required to import and to obtain under Marshall Aid. It had been compiled largely, I think, with the help of the Department of Industry and Commerce. My first task was to cut down that list of goods and to eliminate from it certain commodities and goods that I considered we did not require. That list was published in the form of a White Paper. It was discussed in this House. I indicated then that, in my view, the list contained certain commodities which were not required. In the course of a debate here on 1st July, 1948—I would like the House to listen to this—the Tánaiste, Deputy Lemass, said at column 2019, Volume 111:—
"With the possible exception of coal and some items of transport equipment which are referred to, there is nothing in that list that the country does not require."
I had criticised that list. It contained provisions for the import of large quantities of American coal which I did not think we required. It contained provisions, I think, for the import of some wagons that could be made in Limerick. The present Tánaiste was prepared to concede, then, that those two items could be taken off the list, but that there was nothing else in that list that was not required and that we did not want to import from America. This was a list of commodities prepared, not by the inter-Party Government but prepared by the Fianna Fáil Government, for Marshall Aid purchases which had been transmitted to the American authorities as an indication of our requirements.
This matter was debated in the House. The convention for the O.E.E.C. was debated at length. With the exception of Deputy Cowan, every Deputy in this House supported it. Every single step taken in connection with Marshall Aid was brought before this House in the form of a White Paper. Every statement of account was published in the form of a White Paper. I think there are at least 12 White Papers in the Library. When I was Minister for External Affairs I was constantly sending out lists of transactions in regard to Marshall Aid. I am extremely glad that we imported those goods. I am extremely glad that we imported the goods that were necessary to develop the economy of the country. If we had those imported goods now we would be at least 20 per cent. more prosperous.
We would have to pay 20 per cent. more for the dollars.
Not yet. You may, as a result of the kind of policy you were pursuing, find yourself in that position.
There has been the devaluation of the £.
You are not paying 20 per cent. more for the money. The devaluation took place on a certain date.
After the date of the Marshall Aid loan?
Of course not.
Do you remember the date the £ was devalued?
I do. I remember the Minister's answer to questions at the time.
I hope you remember it correctly.
The Marshall Aid accrued from day to day and not at the date of the signing.
Did you read the answers to my questions last week?
I read the answers to the questions which you put at the instance of the Minister.
I object to that misstatement. It is not true. I drew these questions myself without inspiration from anybody.
Mr. Coburn
Who cares whether you did or not?
Deputy MacBride accepts that.
I accept it.
(Interruptions).
We will hear Deputy MacBride without interruption.
Deputy Cowan made a long speech here to-day. It was, as usual, merely a eulogy of himself in regard to his attitude to Marshall Aid. He opposed Marshall Aid. Quite right. He did, of course. He opposed it not, I think, for the reasons he sought to convey to the House to-day. He opposed it on many different grounds. He said it might lead to the occupation of this country. Is there any evidence that Marshall Aid has led to the occupation of this country or might lead to the occupation of this country? I doubt if even his friends and supporters on the other side of the House would put forward that argument. He told us in regard to the E.C.A. mission at column 2040:—
"No one has any idea as to what size this special mission dealing with economic co-operation is going to be, or whether it is to have a representative in every town or village or in the cities but, whatever special mission America may send over, we are to consider its members as having the status of diplomatic representatives and enjoying all the privileges and immunities accorded to diplomatic representatives."
According to him, we were to be invaded by missions that were to be in every town and village in the country. I would be slow to rely on Deputy Cowan's views on this matter but I might quote one or two passages from a speech made by Deputy Cogan on that occasion in regard to his newfound friend. He told us—I am reading from column 2042:—
"Deputy Cowan has delivered a very remarkable speech and I think a deliberately mischievous speech."
He then goes on:—
"He talks about the U.S.A. `flooding this country with a mission', about their having certain rights as to how we balance our Budget or conduct our affairs here, but he did not tell us what would happen if the enemies of the U.S.A. were to take control of the country and of all Western Europe."
There were a number of interruptions by Deputy Cowan, and Deputy Cogan then went on:—
"I am not a lawyer. I have not the glib mind of the members of the legal profession. There are many ways of facing a question of this kind, many ways of advancing arguments in favour of proposals without saying definitely, clearly and in a forthright way what you mean, but we all know what Deputy Cowan wants. He wants to spike this agreement, and if other nations were to follow the line which Deputy Cowan suggests this nation should follow we know what would happen."
I am afraid that if I read a couple of columns further on some words of eulogy from the lips of Deputy Cogan concerning myself they might make him blush now.
Reference has been made by the Minister and by some other speakers to the 1948 Trade Agreement. Might I suggest to the Government that if they do not like the 1948 Trade Agreement there is no reason in the world why they should not terminate it now? The 1948 Trade Agreement has just come to an end. It is just this month it terminates. If I am not mistaken, I read an interview given a couple of months ago by the Tánaiste when he came back from London, saying that he had no intention of terminating the 1948 agreement. If there has been a change of view, and if the Government think they can negotiate a better agreement, by all means let them do so. As far as I am concerned, I will welcome any improved agreement which the present Government can make with the British Government in regard to trade.
When referring to the 1948 agreement, I might mention that I think it is somewhat childish for members of the Fianna Fáil Party at election meetings to claim that the increases in the price of cattle are due to some agreement made by them. The recent increases in the prices of cattle arise from the 1948 Trade Agreement.
I think that the inevitable consequences of this Budget will be, firstly, an increase in unemployment and emigration and, secondly, a retarding of the development of our resources and a fall in existing production standards. I think these are the inevitable results.
When Deputy MacBride mentions cattle agreements we do not claim any particular right——
I would like to bring to the notice of the House that we have not got a quorum, and I know Deputy Corry is well worth hearing at any time.
Always. I cannot help it if Deputy MacBride drove them out of the House.
Notice taken that 20 Deputies were not present; House counted and 20 Deputies being present,
Deputy MacBride accused us of endeavouring to claim something in regard to the prices of cattle at the present time. We are not, but what we are claiming is that the Party opposite are responsible for the disappearance from this country of 104,000 milch cows, and that the last Dáil was dissolved because they would not pay the increased price for the milk to the farmer. That is why the last Government was dissolved according to Deputy J.A. Costello. It was dissolved because he was not prepared to pay the farmer the increased price for the milk any more than his Minister for Agriculture, Deputy Dillon, who offered to the farmer a shilling a gallon for five years. That resulted in the disappearance from this country, during the past two years, of 50,000 milch cows each year. That means about 100,000 less calves each year.
Mr. Coburn
What about the calves you slaughtered?
There is a calf bawling over there and it would be no harm if he were slaughtered. We also heard about all the new industries that were started at certain periods. What I want to know is why if those claiming to be the Government of this country for 3½ years who borrowed £94,000,000 during that period had any interest in industry and in giving employment to our people, some of the £94,000,000 was not provided to purchase the machinery necessary for a sheet mill in Cobh? Why was not some of that £94,000,000 put into the cement industry in Limerick? Those were the questions I would like Deputies opposite to consider.
Do not touch on the cement factory.
That is the trouble with the Deputies opposite. I suppose it would be out of order to call Deputy Hickey a calf. These are the issues I would like to see considered. We hear about new industries being started, but I would like to know who was responsible for the dumping of millions of yards of foreign cloth into this country from Great Britain, resulting in our textile industries working on half time? I would like to know who was responsible for the problems that arose as a result of the dumping of the foreigner's goods in this country. £94,000,000 was spent. Deputy MacBride quoted a sheet of articles purchased. I wonder has he got on that list the rotten barley bought by the previous Minister for Agriculture, Deputy Dillon, and dumped here and which had the result of depriving our farmers of their market. How much of that £94,000,000 went into capital goods and went into the provision of machinery for any industry in this country? Where did the money go?
The result of the borrowing is that each year, for the next 35 years, interest by way of £6,000,000 must be paid. This amount must be paid as a result of the spree which the Coalition Government enjoyed for three and a half years and as a result of Deputy Mac-Bride's flights of fancy and flights by air. The slogan of the Coalition Government was: "Borrow, borrow, borrow." It did not matter what they bought, they continued to borrow. I wonder what is the aggregate amount that any banker would lend on a hen? The Coalition Government borrowed on a day-old chick, the amount borrowed to be repaid over the next 35 years. I wonder how many eggs that chicks will have laid when she is 35 years old, the Lord between us and all harm? The Coalition Government borrowed money to subsidise day-old chicks, and this money will have to be repaid by the children of this country in 35 year's time.
I do not want to hold up this House now, though I could speak for hours. The difference between the Deputies on this side of the House and the Deputies opposite lies in the fact that we believe in paying our debts. I have heard the Deputies over there saying down the country for the last fortnight: "If you do not vote Fine Gael, vote Labour; if you do not vote Labour vote Clann na Poblachta; if you do not vote Clann na Poblachta, vote Clann na Talmhan." Might I suggest that the whole lot of them be put under the one flag—the three balls hanging outside the pawnbroker's shop? It is the most suitable flag I know of for them. There would then be no need for them to be advising each other for whom to vote.
Mr. Coburn
What section of the Finance Bill is that?
You will find it in the particular section which you will be hanging on your lorry at your next public meeting.
Mr. Coburn
That is not any section of the Finance Bill.
The difference between this Party and the Deputy opposite is this: the Deputies opposite want to borrow and to pay the interest on what they already owe. The people are now paying for the foolishness that the Deputies opposite indulged in for the three and a half years during which they inflicted themselves on the country. They must pay £6,000,000 interest on the borrowed money each year for the next 35 years.
Mr. Coburn
The luxury of the civil war.
Order!
Fancy the people of this country having to pay interest for the next 35 years on the cheap cigarette and on the cheap pint which they smoked and drank in 1948. Is that justice? The Deputies opposite were well aware of what was happening. They knew they were not balancing their Budget. They borrowed £5,400,500 so that the people could have a cheap pint and cheap cigarettes for three months in 1948; £9,000,000 was borrowed the following year, £20,000,000 was borrowed the year after; £21,000,000 was borrowed the year after that, and £38,500,000 was borrowed last year by that Government. I will end by saying that only one symbol would suit all the Parties opposite—the three balls outside the pawnbroker's shop.
We have just listened to a very intelligent contribution from Deputy Corry on the present financial situation. The bankers of this country must be very happy as a result of the talk that is taking place here for the past three or four weeks. The case of the bankers is not lessened in any way by this Budget. It would be much better if we dealt with the problems which face us instead of having to listen, for the past three weeks, to the twisted truth.
Mr. Coburn
Up, Dev, all the time.
During the discussion on the Budget and on the Finance Bill great emphasis has been placed on the need for hard work. It is very difficult to take the statements made by Ministers inside and outside this House, including the Taoiseach, seriously, while there are over 60,000 unemployed registering at the labour exchanges and being paid a miserable pittance because the State will not allow them to produce. The Minister stated in his Budget speech that the volume of Irish merchandise exported in 1951 was only 3 per cent. above that exported in 1938. He said that this was one of the root causes of our balance of payments problem. If that is the case, will the Minister explain why our unemployed are standing idle instead of producing goods? Is it because we are poor that we have over 60,000 unemployed? I believe that if we were to be guided by common sense the Minister would say we were poor because we have thousands unemployed. If the Minister had better knowledge, he would say: "We are rich, but we would be much richer if our unemployed were paid to work and to produce goods." That is the matter on which I would like to see the members of this House who have spoken time after time concentrating.
How can we, when you blocked the market?
I would like the Minister to tell us, when he is replying, why there are thousands of men, women and children ill-clad, ill-nourished and wanting houses, while all their requirements might be produced in abundance by those who are prevented from working. I would also like to ask the Minister why is it he is asking our people who are working 47 and 48 hours a week in factories and shops and working 54 hours and over on the land to work harder? I want to say to every member of the House that the time has come when we must consider, from the ground up, the social organisation and the financial system under which we live so that it might be altered and expanded to meet the changing times to come. I would like to know does the Minister believe that. What is the estimated loss of wealth due to the 60,000 odd unemployed? Does anybody ever estimate what the social cost is?
I was rather interested in listening to one Deputy on the opposite side, Deputy Hillery, but unfortunately he went off too quickly from the subject. He was speaking about emigration and unemployment as it affected his constituency. He said they were suffering from the same cause down there, but unfortunately he went off to tell us what the Fianna Fáil Government did, and are doing, to relieve the unemployed. I want to tell Deputy Corry and everybody else in this House that no Party can claim a monopoly of patriotism here. Members of every side of this House, without distinction, have given service to this country, and the time has come when we should get down to face the problems confronting us.
Reading yesterday what the Financial Secretary of the British Treasury had to say I came across this statement: "Our reserves are low. They only amount now to the cost of our imports for about eight weeks. Before the war they amounted to the cost of our imports for about eight months." Does anybody suggest that we should be here talking politics and scoring political points across the House while that position is facing our country? Do we believe that our money is safe by being linked with sterling? I listened very patiently to the Minister for Posts and Telegraphs when he was telling that we should do nothing drastic, as if somebody in this House were going to organise a revolution to-morrow morning. If this House decided calmly and responsibly that on and from a given date we would treat the English £ in the same way as we treat other currencies, what upset and disorganisation would it cause in our economy? I would like to pose that question to the Minister.
There is nothing but fear being put into the minds of our people at the present time and for many years past. Many people elected to this House are elected through fear; people are told of this danger and that danger. I was listening to the Minister for Finance in Limerick City last Saturday night, and I think the mildest thing I could say is that I was absolutely shocked at the wrong statements, and at the fear which he endeavoured to create in the minds of the audience listening to him. He says that our £ would be worth only 1/- in a short time, and that if the people did not do what he wanted them to do we would return to the famine days. He said that if the people listening did not do what the Fianna Fáil Government required them to do they would soon be eating the carrion crow as they were in England. I say "shame" to anyone who would say that over the graves of our heroic dead. He quoted Mr. Churchill and wound up by telling us he stood with James Connolly——
That is more than you did.
It would be small wonder that James Connolly and the other heroic dead would turn in their graves if they heard you on last Saturday night.
That is more than you did.
I have never boasted what I did. That is what we have heard and that is what our people are being told, to face the grave problems which now confront us. Does anybody believe, even Deputy Corry, that we are safe in being linked up with the country that is bankrupt at the moment? Do we not know that in the 30's England defaulted on £840,000,000 sterling to the United States? Including £600,000,000 which she received from the United States by way of Lend-Lease, she has received upwards of £10,000,000,000 sterling and has paid back about sixpence in the pound. That is the currency that our people are asked to stand by and defend.
I heard a Deputy on last Saturday night make a statement which I did not expect to hear from any Irishman. The time has come when we should stop frightening our people and telling them things that we are not justified in telling them. We talk about the Treaty of Limerick. Men and women did not desert Sarsfield when it came to the crisis point. We have here fertile land which could produce an abundance of food for our people. Yet, Deputies can stand up in public and declare that we will soon be eating the carrion crow, as they have been in England.
The Deputy is not advocating that we should follow England and not pay our debts?
I made no such suggestion and the Deputy should not insinuate that. We are able to pay our debts and will always do so. Here is another matter on which I should like to have some information. The Taoiseach was in the House during the Budget debate and he made the following statement at column 246, Volume 131, of the Official Debates of 23rd April, 1952:—
"As a result of these deficits we have cut down our sterling reserves by approximately £100,000,000. We have lost the annual proceeds of that £100,000,000.... I gave to the House already the position in regard to our external assets. I showed that they have been reduced from £225,000,000, which was the calculation of the net reserves which was made around 1949. They have been reduced in the last three years down to £125,000,000, which is now the amount of our net external reserves. Two years more of a deficit of that sort and we will have wiped them out."
Does Deputy MacCarthy suggest for a moment that we, as a creditor nation, in fact, the only creditor nation outside the U.S.A., will look to England to pay our debts and to pay our way? The British employer has no better customer to-day than this country.
Last Saturday week the Minister for Posts and Telegraphs spoke at University College, Dublin, in the following strain. Talking about external assets he said that there are about £210,000,000 of visible, touchable, controllable external assets, and about £80,000,000 to £100,000,000 on reserve for trading. He said that Fianna Fáil had about three or four years to reduce the sale of foreign assets at a rate that would neither paralyse industry nor prevent production permanently increasing. He went on to say that if all the people of Ireland started talking about an increased yield per acre of stock density, and ceased discussing the Budget, the Budget would not worry any of us.
I have not heard from the Minister for Finance nor even from the Minister for Posts and Telegraphs what steps they are taking to increase agricultural or even industrial production. Does he suggest for a moment that we will have increased trade while we have over 63,000 workers registering at the labour exchange? Does he think there will be purchasing power there for a long time? I would tell the Minister that the position in Cork City is serious from the point of view of increasing unemployment. That is a grave problem.
When I listen to the speeches that are made throughout the country I often wonder if we have forgotten the past. I think it was Deputy Seán Flanagan who said in his speech on the Budget that Labour would have to be more moderate in their demands. In what way has Labour ever been immoderate in their demands? I want to tell Deputy Flanagan or any other Deputy that Labour and the labour movement on the whole have a sense of responsibility to the country equal to that of anybody in this House or outside it.
Why should we frighten the people with talk about poverty, hunger or misery? God did not fill this earth with plenty to mock the sufferings of thousands of men, women and children. I want to convey that to every Deputy. God did not by a special dispensation of His Providence give the right to any number of men to rob our people of food, clothing, houses, happiness or the beautiful things of life.
What are we to think of a system in which a decent honest man can labour and toil all his life at work socially essential for a wage that he and his wife cannot live on while a worthless speculator can make a fortune in a few years?
Let us examine the position. Take an industry in which there are 100 persons, two rich, eight comfortable, 60 poor and 30 very, very poor, the leisured ten owning as much as the working 90. That is how wealth is distributed in this country to-day and, of course, the leisured ten, owning and controlling the Press, explain ceaselessly that any disturbance of their position would be disastrous for the country. The Minister for Finance cynically replied to me when I advocated that the 5,300 persons in this State who have an annual income of £17,000,000 between them should consatio tribute more to the maintenance of this country, that he was better pleased to have their tax than the income tax that I am paying. I am not sorry that I have not any great wealth. As long as I have enough to eat and to wear and a house, I ask for no more. The Minister should not treat cynically those who are anxious to see this country run as it should be run.
My object is to show that because of the cruel economic system nothing will be done to end poverty and misery in this country. The individual or group of individuals will not deal with the means of production until they see their way to make a profit out of it. Any system that puts the profit of the individual or group of individuals before the public wellbeing is doomed to ultimate failure. It would be well for Deputy Burke or any other Deputy to realise that. There is no difference between us as to how this country should be run but we have not the courage to face the problem.
Sometimes, in my quiet moments, I look back on the 30 years of native government. They appear to me to be years of gross and glaring injustice in our social order. Men, women and children are denied the right to a decent living or sufficiency of food and the rights of labour are often disregarded. Money power is dominant, and no effort is being made worth mentioning to end these social wrongs.
As a member of this House, I would ask the Minister can he name the social wrong that now blights and blasts the lives of thousands of our men, women and children that cannot be eradicated? Man has made this tangle, and man will have to straighten it out. He will do it yet.
Why are we not applying the doctrines of our Church to our economic problems? No. We make sure that there will be no interference with trade or as to how workers are treated in industry. Take the legislation passed in this House. When the Social Welfare Bill was passing through the House I made an appeal to the Minister for Social Welfare that the widow of a man who had been unemployed for a couple of years before his death would receive the same allowances for herself and her children as the widow of a man who was in employment before his death. He told me he could not do it, either from a financial point of view or an administrative point of view. I ask any member of the House is it fair that we should pass on the punishment for the fact that a man was unemployed and was denied the right to provide for himself and his family to his widow and orphans? Yet we do that by legislation in this House.
I have often wondered why we as a Christian people have never yet faced up to the important question, what is an economic system for? When Deputies get up to speak one would imagine that they belong to the one Party which was responsible for this factory or the other factory being established. What is an economic system for? Do we ever ask ourselves that question?
We boast about being a Christian people. We should draw a poverty line and say that anybody below that line has too little and, equally, we could draw a rich line and say that anyone above that line has too much. What we need is to establish a national minimum based on human needs and let that be done as soon as possible. Then, anyone who is willing to work should be entitled to that minimum without any taint of dole or charity. Why should we have unemployment or slums or poverty? Why should we be listening week after week to the rattle of collection boxes? We have a fertile country with land of the best order that could produce anything that it is required to produce. Yet we have hungry men, women and children, who are not properly housed.
I come now to the question of the Minister allowing banks to increase the bank rate because it was done in England. I am not saying this in a spirit of political rivalry or anything else. The British Chancellor of the Exchequer in introducing his Budget said that the only way to make sterling strong is to make it scarce. We have done that in our Budget. Hence we have unemployment. Hence we have that beautiful modern phrase: "A recession in trade."
How are we to get back to the normal trading which we had for the past three or four years? Is there anything we can do about it? Is it because the people who control the money will not provide capital to allow other people to work and produce goods that we have this recession in trade? And to think that we have a Minister for Finance who allowed the banks to increase their rates of interest while the ten banks we have in this country in the past 26 years have drawn over £36,000,000 of money in net profits on a paid-up capital of less than £9,000,000! In other words, they have drawn more than four times the amount of their capital in net profits. Does any Deputy on the Fianna Fáil Benches or on any other bench agree that we should allow the banking institutions of this country to increase their interest charges by 1 per cent. or 1½ per cent. on money advanced to our people? Deputy MacCarthy is sitting very close to me and he has a good knowledge, I think, of housing conditions in Cork, how people have to pay rents of up to £2 on a £1,600 house. The interest charges alone amount to 25/- or 26/- a week.
I think Deputy Hickey will have to revise his figures.
I shall give you an illustration. Take a house costing £1,600 that is rented.
The Deputy may not discuss housing policy on the Finance Bill.
I bow to your ruling, but there are so many implications attached to this Budget that I could not agree to the passing of the Finance Bill as it stands. I would appeal to the Minister to reconsider the whole matter. I say that the time has arrived when the implications of our financial system as a whole, the fact of our being tied up with sterling and the depreciation which has taken place in our currency, should be considered by some body, drawn from the best elements in this country. There are men in this country who are capable of giving expert advice on these matters. I am old enough to remember when the State was established the little opportunity given to members of this House to consider whether it was advisable or not to be linked with sterling. The time has arrived now when the matter should be considered. I have been reading statements from responsible Ministers in England regarding the situation there. Churchill himself said the other night that little they know where they stand or where they are. England is on the edge of a precipice, on the rocks; yet we continue to be linked with sterling. The Minister for Lands made a statement in Cavan quite recently that the basis of our national prosperity was British sterling. Just imagine that. England will have no more qualms in closing down on our millions invested there, if necessary, than she had when sending in her Black and Tans here.
Everybody knows that Deputy Hickey has a big heart. Everybody knows of his big heart because he always wears it on his sleeve.
That is typical. Why do we not deal with the Bill?
But would anybody who listened to the beats of his over-amplified heart-throbs, the heart-throbs of this Deputy who is for ever talking about the widow and orphan, think that that Deputy was as mute as a mouse when Deputy Norton was planting a dagger in the back of a colleague who was trying to do something for the mother and the child? I do not want to deal with Deputy Hickey further than to say that his account of what I said in Limerick was just a travesty. I happen to have a note which I supplied to the Press of what I intended to say in Limerick, and it might be no harm. in view of the turn which the debate has taken, if I again went over the ground a little.
I was referring to circumstances which I have already mentioned here in opening the debate, the fact that the then Minister for Finance, Deputy McGilligan, had given a promissory note to the Export-Import Bank in America and that this note provided that the interest payable on the Marshall Aid loan and the principal of the loan itself, were to be repaid in the lawful currency of the U.S.A. I mentioned, as I do again to-night, that in this year by means of this Finance Bill we have to raise a sum of £573,000 as one half-year's interest upon that loan. I pointed out that next year we should have to raise £1,146,000 to meet interest for the full year on the Marshall Aid Loan and that that would have to come out of the pockets of the Irish people and particularly out of the pockets of the Irish worker. I went on further to say that in 1956, when we start to repay the principal, the amount would have reached £1,376,000 and that ultimately, year after year, the amount to be paid in respect of interest and principal was going to increase until at last it would reach the figure of over £3,300,000. That is what I said in Limerick and that is what I said to-day.
I went on to point out the consequences of the condition that these moneys would have to be paid over to the U.S.A. in money which is for the time being the lawful currency of the U.S.A. That is a matter of paramount importance to us because it makes it imperative for us—that is, for the Government and for the people of this country—to maintain, and if possible to enhance, the purchasing power of our Irish currency. I pointed out that if the Irish £—and it is our Irish £— were to depreciate in terms of the dollar, that is to say, if we get fewer dollars for our £ in the future than we are getting at the moment, then the burden of the loan will become heavier and the Government of the day will have to take every year correspondingly more Irish pounds from the people in order to meet their obligations under the Marshall Aid loan. We have had that experience. When this loan was first contracted, the Irish £ was standing at $4 to the Irish £. The Irish £ to-day is worth only $2.80. Ultimately unless we win this fight, it will be worth less. Because the Irish £ is worth only $2.80 cents, instead of the $4 which it was worth when this obligation was first imposed by the Coalition on the backs of the Irish people, we shall have to pay more in interest this year and more in interest each year than we should have to pay in 1948 when the loan was first raised.
What we are fighting for, both in this Budget and in the measures we are taking and have taken to try to restrict our purchases from abroad, is to prevent the Irish £ from depreciating in value in terms of American dollars. That is why, as I said in Limerick, the deficit in our balance of payments is so alarming and so important. It is an indication that we are overspending our £s on imports from abroad which we are not paying for by an equivalent value of exports of our own produce. This balance of payments deficit, I went on to say, is a warning that if we continued to do this our money would decline in value so that it would buy nothing except what we could procure from the sterling area. Then I went on to say—and this is the passage which Deputy Hickey, as I said, travestied when he purported to quote it to-night to the House—"This country could not live, if we were reduced to the position in which we would have to live on what we could procure from the sterling area, above the famine standard." I then went on to say that this country was not the only country that was in that plight. I said that many other countries were in a similar position but that they are taking drastic steps to remedy the situation—steps in comparison to which the measures we are taking are very mild. Other countries, I pointed out then, had been compelled to cut still further the meagre food rations which their people are still permitted to buy. They have been compelled to curtail capital expenditure drastically. I pointed out that they had continued to maintain their rates of taxation at levels which are far above ours.
I said that the Governments that had done these things had done them because they realised that the economic and political independence of their States was at stake. I come now to the passage which I quoted from Mr. Churchill. I went on to say that in Great Britain, for instance, the leader of the Government had told his people:—
"We fight not for vain glory or imperial pomp, but for our survival as an independent, self-supporting and, consequently, self-respecting nation."
On that I pointed out that in France, Holland, New Zealand, Australia and the world over nations are facing the same problem and are fighting for survival as independent, self-supporting, self-respecting nations. That is what is at stake in this Budget. We are fighting to ensure that our country and our people will be able to continue to maintain the standard of living which we are now enjoying. We are fighting so that we shall preserve the value of our currency. We are fighting so that we shall be able to buy the raw materials which our industries require. We are fighting to give the people who are unemployed or may be seeking employment the opportunities which it has always been the aim of the Fianna Fáil Party to provide for them. I want, however, to leave that and just to come back to one little point.
Does the Minister allege that I misrepresented him?
I am not answering Deputy Hickey. Remember, Deputy Hickey never once when Deputy Norton, as Tánaiste, was evading the issue of bringing in the Social Welfare Bill, got up and attacked him or put down a question to him. I regard the Deputy, quite frankly, as a humbug.
What about the carrion crow?
On a point of order. Is it in order for a Minister to refer to a Deputy as "a humbug"?
I said that I regard him as a humbug, and I do.
Before the Minister replies I want him to know that I treat his remark with contempt. I am much better pleased.
The word "humbug" should not be used.
Then, Deputy, you have elevated yourself.
On a point of order.
I am not misrepresenting what the Minister said on Saturday night last.
On a point of order. The Chair has ruled that the word "humbug" should not have been used in relation to a member of this House. The Chair asked the Minister to withdraw. Has it been withdrawn?
The Deputy has put his point of order. He should now sit down.
Deputy Hickey voted for an increase in the interest to local authorities from 2½ per cent. to 3¼ per cent.
That is not so.
I understand that the use of the word "humbug" is not permitted in that connection. I accordingly withdraw it. I want to come to Deputy McGilligan because Deputy McGilligan, as an ex-Minister, has been guilty of what I would describe as a grave breach of public trust and an abuse of public office. Deputy McGilligan purported to quote in this House from the confidential minutes of a meeting. In one of the picture houses in this city last week a film entitled, I think, Five Fingers, was running. We have not only a five-fingered gentleman, apparently, but also a lightfingered gentleman in Dáil Éireann. Five Fingers was the title of the cinema film.
On a point of order. The Minister, as I understood him, has suggested that a member of this House is light-fingered——
What is the meaning of that?
——thereby indicating that he is prepared to steal. Is that in order?
The Minister did not indicate any such thing. The Chair does not understand.
The Chair does not understand.
Will the Minister for Finance be allowed to proceed?
If he behaves.
Deputy MacBride is trying to cover up. We had an extraordinary position here to-night. We saw a former Minister for Finance getting up in this House and purporting to quote from a document—a document which must have been abstracted from the official file.
Will the Minister read it?
Order! order!
So, as I say, here we have Deputy McGilligan, in the role of secret agent purloining State documents—purloining them undoubtedly for a political advantage—purporting, as I have said, to quote from a document. I do not know how it came into his possession. He is not entitled to have it. That is well established. Nevertheless, he purported to quote from it.
Will the Minister read it?
I am going to deal with that. Deputy McGilligan said that the document in question represented minutes of certain discussions. I do not know how the document came into his possession. I am not prepared to take Deputy McGilligan's word that what he was reading was an extract from the document, but, in any event, he held himself out in this House as a person who must have taken a document from an official file. As I have said, that was a grave breach of public trust and one which, I hope, will not be permitted to develop further.
Here, Sir, is a document which is not a confidential State document. It is Volume 108 of the Official Dáil Debate. Here, in the Official Report, is fully set out in a statement by the Taoiseach (Deputy de Valera) on the 13th November, 1947, a full account to the House of the proceedings which took place at the discussions in question.
There is a great difference because one person purported to quote from the minutes of a meeting and the other person stated very fully what had transpired at the meeting, but not from the minutes. It was a public statement made here by the Taoiseach, Deputy de Valera, and here is how he starts off:—
"On the 20th August last we received a communication from the British Government pointing out that they were limiting the convertibility of sterling. They indicated that the drawings on the available dollar resources had been increasing at an accelerated pace and that it was vital that what was left should be conserved to the utmost extent."
I can only give the significant passages from this statement. He went on to say:—
"We realised that it was a matter of concern to us that confidence should be preserved in sterling and that it was desirable that the remaining dollar resources should be utilised to the best possible advantage."
I am dealing with the allegations that something took place at this conference in November, 1947, which was not disclosed to Dáil Éireann and the public.
Will you publish the minutes?
Deputy MacBride is quite capable I understand from things which have happened of publishing confidential documents.
Will you publish the minutes?
There is a full and detailed account here of the discussions over a period of months, when the Taoiseach stated: "The results of the discussions can be given to you in a summarised form." The statement deals with fertilisers, seeds, Irish industrial exports to Britain, prices for agricultural products, and so on, throughout the whole list until it comes down to this, as reported in column 1829:—
"Ireland's Dollar Requirements: It was agreed that the Irish Government, with a view to conserving the dollar resources of the sterling area, would effect substantial reductions in their drawings of dollars from the dollar pool for the period 1st October, 1947, to 30th June, 1948, bringing the net requirements to £14,000,000 plus Irish dollar earnings. This sum would be further reduced in the event of non-dollar wheat being procurable instead of dollar wheat. Expenditure in other currencies will also be kept to a minimum during the period."
That is the full story exposed.
That is not the full story which Deputy McGilligan gave.
Every bit of it. What is more interesting is that the Taoiseach, in winding up, said this:—
"I have indicated the amount of dollars we think necessary in order to get the essentials. We believe that the amount allocated will enable us to get these essentials. In a time of scarcity we must make up our minds that, if there is to be a choice between what is essential and what is less essential or, perhaps, not essential at all, our first aim must be to secure the absolute essentials. These dollars will be used in the main to secure for us those things which we consider essential."
These dollars were not borrowed; they were taken out of the sterling pool because they belonged to us and we were entitled to get them and we got them. We did not borrow from the U.S.A. in order to get these dollars. They were dollars which were to be used solely for the purchase of essential needs.
How were the dollars which were borrowed under Marshall Aid allocated? I told you about the purchases of maize, wheat, tobacco, petrol and other things, but I did not tell you that some of these borrowed dollars on which we have to pay the interest and shall begin to repay the principal in 1956 were used under Deputy MacBride's direction to buy— what do you think?—not absolute essentials, but mouth-organs, pop-corn machines and permanent wave pads. I am not suggesting that Deputy MacBride had to use these permanent wave pads. In the middle of 1950, the then Minister for Finance began to have some glimmer of responsibility and got the Government to agree that, having regard to the fact that the dollars were borrowed, they would only be allocated for essential purposes, got the Coalition Government, in fact, to adopt the Fianna Fáil policy that we would only use dollars to buy absolute essentials.
When the Government took that decision, what happened? The evil genius in financial matters of the Coalition got busy. He got hold of the then Taoiseach, Deputy Costello, and compelled him to reverse that decision in the teeth of Deputy McGilligan's opposition. At once they broadcast a circular to every person who had previously applied for an allocation of dollars to buy goods that were not essential and which were regarded as not being essential and whose applications had been turned down, telling them to apply again for the dollars to buy the mouth-organs, the pop-corn machines and the permanent wave pads and they would be given to them in full measure and overflowing.
It is because of that decision taken at the instance, let me repeat, of the then Minister for External Affairs, Deputy MacBride, that we are struggling to raise this £573,000 to pay the interest and that we have to depend now upon our allocation of dollars from the dollar pool. These dollars have been, as I said, spent on maize, wheat, tobacco, petrol, mouth organs, pop-corn machines and the rest of the knick-knacks and gimcracks to which I have referred. Because of that the burden on our people will become heavier every year. This is what is at stake in this Finance Bill—whether we shall try to preserve our self-respect, to keep ourselves self-supporting and self-reliant and to preserve the economic and political independence which we fought so hard to attain.
Question put.
The Dáil divided: Tá, 67; Níl, 51.
Tá
- Aiken, Frank.
- Allen, Denis.
- Bartley, Gerald.
- Beegan, Patrick.
- Blaney, Neil T.
- Boland, Gerald.
- Brady, Philip A.
- Brady, Seán.
- Breathnach, Cormac.
- Breen, Dan.
- Brennan, Joseph.
- Brennan, Thomas.
- Breslin, Cormac.
- Briscoe, Robert.
- Browne, Ncel C.
- Buckley, Seán.
- Burke, Patrick.
- Butler, Bernard.
- Carter, Frank.
- Childers, Erskine.
- Cogan, Patrick.
- Colley, Harry.
- Collins, James J.
- Corry, Martin J.
- Cowan, Peadar.
- Crowley, Honor Mary.
- Crowley, Tadhg.
- Cunningham, Liam.
- Davern, Michael J.
- Derrig, Thomas.
- de Valera, Eamon.
- de Valera, Vivion.
- Duignan, Peadar.
- Fanning, John.
- ffrench-O'Carroll, Michael.
- Flanagan, Seán.
- Flynn, John.
- Flynn, Stephen.
- Gallagher, Colm.
- Gilbride, Eugene.
- Harris, Thomas.
- Hillery, Patrick J.
- Hilliard, Michael.
- Humphreys, Francis.
- Kennedy, Michael J.
- Killilea, Mark.
- Lemass, Seán.
- Little, Patrick J.
- Lynch, Jack (Cork Borough).
- MacCarthy, Seán.
- McEllistrim, Thomas.
- MacEntee, Seán.
- McGrath, Patrick.
- Maguire, Patrick J.
- Maher, Peadar.
- Moran, Michael.
- Ó Briain, Donnchadh.
- O'Reilly, Matthew.
- Ormonde, John.
- O'Sullivan, Ted.
- Ryan, James.
- Ryan, Mary B.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
- Walsh, Laurence J.
- Walsh, Thomas.
Níl
- Belton, John.
- Byrne, Alfred.
- Cawley, Patrick.
- Coburn, James.
- Collins, Seán.
- Corish, Brendan.
- Cosgrave, Liam.
- Costello, Declan.
- Costello, John A.
- Crotty, Patrick J.
- Crowe, Patrick.
- Davin, William.
- Desmond, Daniel.
- Dockrell, Henry P.
- Dockrell, Maurice E.
- Doyle, Peadar S.
- Dunne, Seán.
- Esmonde, Anthony C.
- Fagan, Charles.
- Giles, Patrick.
- Hession, James M.
- Hickey, James.
- Hughes, Joseph.
- Keyes, Michael.
- Kyne, Thomas A.
- Larkin, James.
- Lynch, John (North Kerry).
- MacBride, Seán.
- MacEoin, Seán.
- McGilligan, Patrick.
- McMenamin, Daniel.
- Madden, David J.
- Mannion, John.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, Michael P.
- Murphy, William.
- Norton, William.
- O'Donnell, Patrick.
- O'Gorman, Patrick J.
- O'Higgins, Thomas F.
- O'Higgins, Thomas F. (Jun.).
- O'Reilly, Patrick.
- Palmer, Patrick W.
- Reidy, James.
- Reynolds, Mary.
- Roddy, Joseph.
- Rogers, Patrick J.
- Rooney, Eamon.
- Spring, Dan.
- Sweetman, Gerard.
Tellers:—Tá: Deputies Ó Briain and Killilea; Níl: Deputies P.S. Doyle and Breanndán Mac Fheórais.
Question declared carried.
This is a Money Bill within the meaning of Article 22 of the Constitution. The Seanad will be notified accordingly.