The Minister's speech yesterday was noteworthy. It appeared from the account which he gave of last year's activities in the Department of Industry and Commerce that the year that has just passed marked the end, for a time at any rate, of industrial expansion. That being so, it is important that a survey should be made of future prospects of further industrial development. That survey should be undertaken by the Industrial Development Authority on a comprehensive basis, taking into account the possibilities of establishing new industries or of expanding existing industries. Such a survey would be possible only through some Government agency. It is obvious that individuals or groups could not undertake it and would not have available to them the information that would enable them to assess the situation accurately.
It is foolish to imagine that there is unlimited scope for industrial expansion based on the home market. The experience of the past year and, in fact, of some years since the end of the war, shows clearly the difficulties in the way of certain industries. The home market is dependent on 3,000,000 people. Even if the 3,000,000 people were a great deal more wealthy than they are, their power to absorb the output of certain industries would be limited. The experience which has been gathered in recent years, especially in particular industries, points to the need for a careful assessment of the market situation and a realistic approach to the prospects for particular industries.
There is no great need to give examples. I do not want to elaborate at length the cases I have in mind. There is certainly evidence based on the experience in recent years that in particular directions we have developed to the maximum extent the possibilities of the home market and that future development depends on export trade.
I need only mention the situation which has developed and which has continued for some time in the boot and shoe industry. That industry has had the maximum possible protection for a number of years, and the results show that, unless an export trade is possible, there are too many boot and shoe factories in the country for the supply of the home market. It may be that, if these factories vary the type of goods produced, they will capture part of the market that is not already available to them, but the quality of Irish-manufactured shoes leaves nothing to be desired. They are of a very high quality. The experience of recent years shows that these industries must get and maintain a hold on the export market if they are to survive and to continue in full production and to avoid having to go into part-time production at different times.
The same is true to an extent in other directions. There has been quite a substantial development in the dressed meat trade. The possibilities and the usefulness of such a trade require little elaboration. Recent price fluctuations in the United States indicate that the possibilities of a permanent trade with the United States may not be as hopeful as seemed to be indicated some time ago.
I believe that a work which the Industrial Development Authority, in collaboration with the foreign trade section of the Department of Industry and Commerce and the Department of External Affairs, could usefully undertake would be to survey accurately, as far as it is possible, from published statistics and from contacts with markets abroad, the present position, and thus enable industrialists and manufacturers in this country to have a picture of conditions and a picture of the prospects of permanent markets for particular goods.
Any haphazard approach to industrial development, in the belief that if industries are started half the battle is won, is likely to cause great hardship and great dislocation. Industries should be based on the prospects of a sure market or on as certain a market as it is possible for the experts who are available to Government Departments to decide. The benefit of surveys and experience should be given to the persons who are prepared to establish new industries or to expand existing industries.
I do not think there is any need for alarm because there was no industrial expansion in the last year. Deputies are familiar with the speeches and the announcements that have caused this temporary setback. It is true that there is a world-wide trade recession and that that recession has had its reactions on this country. It is equally true that, since this time last year, ministerial speeches, Government pronouncements, all the gloomy prophecies, the pessimism and the lack of confidence have had serious reactions on trade and on business. It is not unreasonable to expect that this would be so. I notice that, in a recent speech, the Minister urged people to buy, and to buy now. Maybe he has given belated recognition to the effect which all the gloomy speeches have had on the national economy. However, it is unreasonable to expect people to buy now on the advice of one Minister considering that the Taoiseach, the Minister for Finance and the members of the Government as a whole have, since their election last year, repeatedly told the people that they were spending too much, that they were living beyond their means, that they would have to restrict their expenditure and that they would have to curtail their outlay and outgoings. These gloomy speeches have aggravated the situation and it has culminated in the serious trade slump which has been experienced in this country during the last six or eight months. The situation has become more serious in some industries and trades than in others.
The Government did not rest at gloomy speeches and announcements. It went further. The Budget which was introduced this year contained proposals for increasing the price of foodstuffs. This inevitably pointed to a reduction in the volume of money which would be available for nonessentials or for expenditure in other directions. If people are obliged to pay more for food and for essentials, they will have less to spend in other directions unless there is a substantial rise in incomes. Due to the withdrawal in some cases of the food subsidies and to the partial abolition of the bread subsidy, the cost-of-living index has risen by 15 points since this time last year. The latest figures available show that the cost of living has increased by five points. It is reasonable to assume that it will have shown a further increase when the May figures are published.
I inquired some time ago, by way of parliamentary question, what effect the withdrawal of the food subsidies would have on the cost of living. The reply given to me stated that the increase would amount to ten points. Adding this to the rise that had occurred up to last February, we find the cost-of-living index number has increased by 15 points during the last 12 months. I do not suggest that the food subsidies have any inherent virtue, nor do I believe that anybody favours subsidies per se, but the sudden withdrawal of these subsidies will cause reactions that it is impossible to assess fully. The worst thing for any economy is a drastic change in any direction. The modification of the food subsidies and the consequential rise in the cost of essential foodstuffs will inevitably mean widespread demands for wage increases. Nobody can seriously suggest that the increases which have taken place in the social welfare benefits will offset the cost of essential foodstuffs, except, of course, for the classes to which these benefits are applicable. These benefits will not offset the rise that has occurred in the cost of essential foods, taking the community as a whole.
As I said already, the partial withdrawal of the food subsidies will mean widespread demands for wage increases. Can anyone imagine what will be the effect of these widespread demands for wage increases on an economy that shows no expansion, on an industry that has been working either part-time or short-time, and on a business that has felt the effects of credit restriction? I do not want to be misunderstood on this matter. Anyone can say that bank advances are up, but does anyone suggest that the bank advances given three, four, five or ten years ago are adequate to finance business to-day? Is it not quite obvious that, if credit is restricted, if traders are obliged to reduce overdrafts, if the bank accommodation afforded to them is limited in time or in extent, the effect will extend far beyond the particular trade concerned? Traders in every type of business in the country have felt the impact of credit restriction. This restriction has been reflected in a reduction in demand, and this, in turn, has been reflected in the number of persons unemployed.
A few moments ago Deputy McGrath said that the employment position had improved somewhat in recent months. Of course, that is only a seasonable improvement. The fact is that there are already 6,000 or 8,000 more persons on the unemployment register than this time last year, and but for the seasonal improvement which takes place at this time of the year the figure would be substantially higher. Up to recent weeks there were 13,000 more persons unemployed than this time last year. Any reduction in the unemployment figures, even a temporary reduction, is to be welcomed. If the present credit restriction continues a number of businesses, a number of industries and a number of manufacturing concerns that were keeping workers on in the hope of improved conditions will be obliged to terminate their services permanently. It is quite illogical for one Minister to hope that there will be an increase in the purchasing of particular goods, if at the same time Government policy, Government direction and the whole tenor of Government speeches informs the people that they are spending too much and living too well.
I believe that that situation has been greatly worsened by the campaign initiated this time last year by the Minister for Finance and continued right up to the present week. It is significant that the only Minister who has suggested that people should buy now is the Minister for Industry and Commerce. It may be that the results which have affected industry, the unemployment, the short time and the part-time which have characterised so many industries in the past six or eight months, have not yet caused other Ministers to recognise the serious situation that has arisen.
Reference has been made to the fact that our trade deficit has improved in recent months. We always said it would improve. We recognised that the trade deficit, which assumed serious proportions towards the end of 1950 and continued throughout the greater part of 1951, would not be a permanent feature of our economy. That situation was, in the main, caused by the influence of the Korean war. When the Korean war broke out, great numbers of industrial concerns, of individuals and Governments sought to buy wherever and whenever they could, and prices increased as stocks were accumulated. These anticipatory measures to protect countries' economies in different parts of the world would have been sound, if a world war had occurred or if the conflict had extended, but the situation that arose was not foreseen.
The war did not extend and prices proceeded to fall. Goods could be purchased more cheaply in the past six or eight months than in the previous 12 or 18 months, and the result has been that the prudent anticipation of a number of individuals, of Governments, including the Government here, caused temporary dislocation, but that temporary dislocation was elevated into a national hue and cry. The Party opposite were out for scalps, and they proceeded to make a concentrated assault on their predecessors, never thinking for a moment it could have a boomerang effect. The results in recent months indicate clearly that responsibility to a great extent for the present situation in this country must be laid on the Government. They could not shield the country, and nobody expects them to shield the country, from outside influences, to save the country from the impact of a slump which has extensive ramifications, but if, added to that slump and the difficulties which it creates, we have in speeches by the Taoiseach and right through every ministerial announcement, crisis, gloom and pessimism, suggestions that we are near disaster, that our situation is critical, that we are living beyond our means, spending too much and spending recklessly, and exhortations to reduce expenditure and curtail consumption, the situation is greatly aggravated.
It is quite significant that these speeches are in line with the recommendations made in the Central Bank Report published towards the end of last year. That report suggested that the Governors of the Central Bank advocated a reduction or withdrawal of food subsidies in order to reduce consumption, and a reduction in consumption is very likely because of the substantial rise in the cost of bread, butter, tea and sugar. Deputies forget the outcry there was when butter increased in price by 2d. per lb. in April of last year. It increased somewhere about this time last year by a further 2d. per lb.
It is now 10d. per lb. more than it was after the second increase and 1/-more than it was in April, 1951. Bread has increased and tea and sugar have increased. If people's incomes remain as they were, if the income of families remains static, they will be obliged to spend more on essential foodstuffs, and it is obvious that they will then have less to spend in other directions. Either the approach to this matter will have to be reconsidered, or the Government appear to be at variance in the directions being given and the speeches being made.
I think it is significant that the proposed national loan has again been postponed. I understood from the speech made earlier this week by the Minister that the Government would shortly be floating that loan. When I inquired from the Minister for Finance to-day I was told that the by-elections and the fact that this was the holiday period meant that the Government were postponing it again until the autumn. I asked further, whether the Government had had discussions with the associated banks with a view to inviting subscriptions by the banks to that loan. I have no doubt, although the Minister did not answer that part of the question, that discussions have taken place, and I have equally no doubt that the indications given prompted the Government to postpone the loan until the prospect appears more hopeful.
I agree with Deputy Morrissey, who said yesterday that the public should subscribe to the loan. It is a national loan, required for essential national undertakings, but unless the Government gets a much better reception than ordinary traders, industry, business and every type of enterprise that has sought bank accommodation or assistance in the past 12 months, it is impossible for this loan, if it is of any size, to be adequately subscribed. There will have to be a loosening up in the approach to the need for credit facilities for industry and commerce generally. If the present situation continues, to a large extent development in this country in the immediate future will depend on the extent to which State investment can be undertaken in particular directions.
The fact that such investment is necessary is in itself clear evidence that serious economic conditions had been reached in the country. Anyone who is familiar with the experience after the first world war, and, in fact, any war, and the experience during the 1929-30 slump, recognises that it is at times of economic crisis like these two periods that Government investment must be undertaken to the maximum extent.
It is a strange transformation in the short space of the past 12 months that the industrial expansion, the expansion in trade, the increase in employment, the general economic development which took place, to a considerable extent, by private enterprise, has been retarded and reversed. I find it difficult to believe that our economic fortunes can have undergone such a transformation in the short space of 12 months, but the fact that industrial expansion has, temporarily, at any rate, been retarded is in itself a warning to the Government. Whether employment is to be maintained and our economy sustained in the immediate future will depend on the extent to which the Government can invest through State organisations such as the Electricity Supply Board, Bord na Móna or Irish Shipping and undertake drainage, land rehabilitation, etc. It is to some extent a confession of failure that State investment is necessary on that scale. Deputies are familiar with the scheme which the late President Roosevelt initiated in 1932 to overcome the slump in the United States. His proposals recognised the need in the then existing circumstances for large-scale State investment.
I believe that there is and will be a substantial area in which State investment can be undertaken in this country for electrical development, drainage and so on, but the fact that it is, in some cases, at any rate, necessary points to the inability of private enterprise either to get the funds or to give the goodwill. I do not think that private enterprise in this country is lacking in initiative or ability. I think that there are many people willing and anxious, if given the facilities, to put money into industrial development, but the statistics in recent months give a serious warning. They show defects which will take more than one Minister to correct, and which, unless we want serious repercussions, must be corrected by Government action. However this Government secured office, it is the Government and the people expect from it leadership, initiative, drive and enthusiasm. In the last 12 months they have got none of these things. They have got pessimism, gloom, confusion and to some extent politics. If the situation is such as has been portrayed by Deputies on this and other Estimates, then it is essential that there should be a radical change in Government policy.
I was surprised that the Minister did not dwell at length on the situation from the point of view of employment. I am surprised also that he did not dwell on the general lack of confidence and the air of uncertainty which pervade trade and industry generally. It may be that he himself is overwhelmed by the gloom foretold by so many of his colleagues during the last 12 months. Action is required to remedy the dislocation which has been caused and the serious problem which exists in a number of industries to maintain employment. It is significant that in recent months emigration has increased and has shown no sign of abating although one of the present Government's foremost planks was the reduction of emigration. I do not think that the policy which has been operated has helped in any way to improve the situation and provide increased employment. The fact that in recent years it was possible each year to put an additional 1,000 persons into employment in industry, building houses, draining land or on the other development schemes discussed here shows what could be done and what should be done if the country had the leadership, initiative and guidance it requires.
The Minister said that he was considering the possibility of abandoning price control. Deputy Morrissey said that in any case in which the control had been removed there was an increase of price and I think that, in the main, that is so. I remember that the present Minister always said that when the price was about to go up we removed the control and when the price was about to fall we maintained the control. If that was true then it has continued since the Minister assumed office last year. When an article was decontrolled there was an increase in price. I do not think that there is a single commodity which did not show a rise. That is true with very few exceptions. While it may be true that in particular trades control is not effective at present, there are few indications that decontrol will mean a reduction in price. If that is so there does not appear to me to be any great case for withdrawing the control. If goods were sold at less than the controlled price the public got the benefit. If, on the other hand, the control is removed and there is an increase the public have no remedy. In present circumstances there is no great advantage from the point of view of the public in decontrolling prices.
Some six months ago I inquired here into the proposed increase in motor insurance premiums. As a result of that inquiry or coinciding with it, the Prices Advisory Body initiated an investigation. That investigation has now taken six months. When it was at a certain stage some figures were found to be unavailable. When they were subsequently received, they required further investigation. I think it is unreasonable, where all the facts, if not available, should have been available, that that body should take six months before making a recommendation. The public are entitled to more consideration, not so much from the Prices Advisory Body or the Department, but from the insurance companies concerned, who should provide these figures so that an inquiry of that nature could be conducted with the maximum speed. The results of that inquiry and whatever recommendation is made should be announced in the near future, so that people may be in a position to know what their commitments will be.
The Minister said that far-reaching and important decisions must be made in the near future regarding Córas Iompair Éireann. It is difficult to say much about Córas Iompair Eireann, because the matter has been discussed at length on a number of occasions in recent years. One aspect of the problem, however, which was referred to yesterday by Deputy Morrissey, I think, requires consideration. It is impossible to expect a national transport undertaking to continue to be run on an economic basis if, at the same time, competition by private hauliers continues to the extent to which it has developed since supplies of petrol became available at the end of the war. I do not think that anyone could contemplate a change which would revert to the previous conditions where competition existed between these private hauliers and the public transport concern. But it certainly appears to me at the moment that Córas Iompair Éireann is having the worst of both worlds and, possibly, the public as well. We should either make a drastic alteration such as has been done in Britain and revert to private hauliers on a large scale, and even consider the possibility of Córas Iompair Éireann entering into that or, on the other hand, see that the national transport concern is enabled to get a volume of the carriage of goods commensurate with its importance to the community.
It is certainly impossible for Córas Iompair Éireann to continue to employ the numbers employed in that concern if it is not provided either with an increased State subsidy or enabled to get a greater share of the transport of goods in the country. There is only a limited pool of goods to be carried and unless that pool is divided up between the various carriers in the country in a way in which these carriers can get sufficient to pay their way, then it is impossible for Córas Iompair Éireann or, in particular cases, for private hauliers to survive. The fact that Córas Iompair Éireann has been compelled to bear substantial increases of different kinds has in itself added immensely to its burden. Whatever decision is arrived at, it is time to take a definite decision one way or the other and arrive at a permanent policy, if it is possible to arrive at a permanent policy in the near future.
Deputy McGrath referred to the fact that if the transport of goods now carried by Córas Iompair Éireann was transferred to the roads it would mean a greatly increased burden on county councils. That is so and it will be a difficult problem for the county councils if any alteration is made in that direction. But whatever decision is taken, it should be a final decision and a decision which will enable the problem of transport to be taken out of the arena of politics and left to those concerned to deal with according to whatever situation may develop.
The Minister also referred to the fact that it was hoped to introduce legislation within the next few months to deal with the acquisition of the Great Northern Railway. I appreciate that that is a complicated matter but a number of people are, to say the least of it, inconvenienced by the delay in enacting that legislation and any efforts which are possible to expedite the introduction of that legislation should be made.
The Minister also dealt with the establishment of Córas Tráchtála. I welcome that decision. I think it is right to say that the board chosen for the purpose is a board in which anyone in the country could have the maximum amount of confidence. The persons concerned had in different ways unique experience of the problems to be dealt with and I hope that the results of that decision will enable the country to earn dollars, which are now needed more than ever.
It is, I think, significant that although our need for earning dollars is now greater than ever, there has been less attention paid to it in recent months, certainly in public pronouncements, than was the case some time previously. The decision to establish Córas Tráchtála was based on the report of a commission which was established almost two years ago and which made a very exhaustive examination of the situation and reported in record time. I understand from the Minister's pronouncement yesterday that he expects to have a full report in the near future on some investigations. I hope that that report, if it is possible, will be published so that business men and traders generally may understand the need for an export market and be given an indication of the problems to be dealt with.
There are one or two other matters to which I wish to refer. The recent alteration in the price of sugar has affected some exporting concerns. When sugar was rationed and when there were shortages, it was probably reasonable to limit the exports under licence, but in present conditions and when so many industries are encountering difficulties, we should push our exports to the maximum extent in any direction. While I appreciate that there may be peculiar difficulties in regard to the export trade between this country and Britain, I think that any industries manufacturing commodities from sugar, such as sweetened fat, syrups, or commodities involving a sugar extract, should be facilitated to the maximum extent.
I know that this matter has been under consideration between ourselves and the Board of Trade in England for some time. There is, however, one concern of which I have knowledge which has stocks available. I understand that our quota up to September, at any rate, is substantially greater than would be covered by the licences which have been given up to the present. I think that two things should be done in that regard: (1) A definite effort should be made to ascertain what are the future prospects and what imports the Board of Trade will allow; and (2) that until the quota already granted is absorbed licences should be freely given. If further restrictions are imposed after September, then the sooner these restrictions are notified to the exporters concerned the better, but if our quota is not being fully absorbed, then I would suggest that consideration should be given to the problems of some of these concerns that have accumulated stocks or are manufacturing on the basis that the full quota would be made available.