Before I begin to talk on general matters of policy I would like to refer to the matter which was introduced here by Deputy McGilligan in a partisan and untruthful manner, the question of the buying of certain property by University College Dublin. I regret that this matter was treated by him in the way in which he treated it. It was in marked contrast with the way in which a colleague of his dealt with the matter when it came up in the Seanad, and also, I think, in contrast with the spirit of the remarks which the Leader of the Opposition made in regard to it. I hope that we will approach the consideration of this question, when it comes before the House for a final decision, from the point of view of the national interest and not in any party manner. University College, Dublin, was originally intended for about one third of the number of students who attend it at present. When the new university and the constituent colleges were set up they were but very meagrely endowed, and even at that time the provision made was such that only a fraction of the buildings which it was intended to set up could be erected. An effort has been made to fasten the present inadequate financial position ofthe college on the Government. The Government were not at fault in that matter.
Personally I have known of the position of the college from the very beginning. I happened to be a student at the time when the plans for the college, the existing building, were being drawn up. I happened to be in a class taught by the registrar of the college, and I remember he showed me the plans, some two or three different sets of plans, and, when I used to pass by Elmville on the way to the college I remember asking whether it was not a mistake to put the building in Earlsfort Terrace in a cramped position, allowing no opportunity for expansion.
I remember the reason given for it was that it was a matter of convenience for the students, and particularly for the medical school, who had to attend the hospitals as well as to attend lectures in the college. Attempts have been made at various times to increase the accommodation. These efforts to get sites in the neighbourhood of the buildings failed. When, as a result of the good offices of the late Earl of Granard, we were presented by Lord Iveagh with Iveagh House and the gardens attached to it, I took the opportunity of asking the Government to present to the college the greater part of the gardens. I had got Lord Iveagh's permission to do that when he was presenting the property to the State. I said that when the State got it we would be anxious to make most of the gardens over, under a lease, to University College, and the permission was readily granted. There was one thing, however, that was asked, and that was that no building would be erected on certain parts of the gardens.
The whole of Iveagh grounds attached to Iveagh House consisted of two properties. I was told that objection would not be raised to the erection of buildings on the portion of the property which adjoined Hatch Street. After a time the university authorities set up a committee and plans were made for adding to the present accommodation by buildings on that part of the property and in other parts whichwere also available. Personally, although I did not want to interfere with the discretion of the college authorities in the matter I thought it was a pity to start building in that area, because I felt that there, too, the room for expansion was limited, and if the college were to get an area that would be satisfactory for its purposes, it would have to extend not merely to Hatch Street on the one hand, and to Stephen's Green on the other, but it would have to extend at least to Har-court street and it might be a difficult question to acquire property in these particular areas. However, the plans proceeded to a certain point.
Then, new college authorities came along, new views were put forward and, certainly to my relief, I found that the idea was changed to that of acquiring a site, a virgin site, which would give opportunities for expansion according as the college developed and which would give opportunity for a continuing process of building over a period of years, starting with a complete plan and carrying it out in accordance with the most pressing needs. I remember seeing in University College the conditions under which students in the architectural faculty were working. It was certainly no credit to our country, and no credit to the university of the nation, that our students should have been compelled to work under these conditions. A property, Belfield, had been bought on the Stillorgan Road, probably two decades ago, or at least well over a decade ago. It was used as a sports field. The new authorities thought that it would be desirable, when any property in that neighbourhood came on sale, to acquire it. I may say for myself, although we were not in office at the time, and I had no official notice of any kind, I was pleased to see in the newspapers a report that a property, Montrose, on the Donnybrook road, on the other side of the road from Belfield and nearer the town, had been purchased by the college authorities. I expected it was done in full consultation and agreement with the Government of the day, because I do not think that anybody would say that any of the colleges ofthe university, properly jealous as they are of their autonomy, could hold the position that they could incur debt and simply present the bill to the Government for paying afterwards unless there had been some consultation with the Government beforehand. I think it is only right and proper that should be the case. On one occasion we had to meet a very substantial overdraft which was a heavy burden on the college. We had to pay a considerable sum of money, some tens of thousands of pounds, although the Government, which had to make the payment, had not been consulted in regard to some of the items at any rate in the overdraft, so I expected when I saw this purchase had taken place that the Government had been consulted about it.
Later I expected we would find on the Government records or certainly in the files of the Department of Finance, definite sanction for the incurring of the necessary expense. Later I was told—I think the actual signing took place some time about the time of the change of Government —that a new property had been acquired, Merville. This property is beyond Belfield further up in the Stillorgan direction adjoining Foster Avenue. Again I must say for my part I was delighted that had been done. I felt that the college authorities were quite right in acquiring that property. I thought long ago that Elmville might have been acquired but that property, on the Dublin road had been built on. My regret was that it was not the property on that side of the road that had been taken, so that, in the distance at any rate, there would be a sea front to any new buildings that might be erected there.
I found, when the Minister for Finance was approached to foot the bill for the properties purchased, that there were no records of prior consultation in connection with the matter. The point is that, when large sums of money have to be met by the State or the public authority, it is most unfair that the Minister for Finance should be presented with a large bill without having been given any opportunityfor considering the matter beforehand. I think it is largely a matter of getting the procedure right and I hope in future the procedure will be put right. As I say, the university is very jealous of its autonomy but again I repeat that that autonomy cannot extend to the point of incurring debt, which the public authority will have to meet, without some previous sanction for the incurring of the debt. There was a reluctance to go to the Department of Education because that would suggest that the Department of Education and the Minister had some sort of control over the college of the type which is exercised over primary schools.
I think that is a fear which is unfounded. Under the Minister and Secretaries Act of 1924, it is clearly set out that the Minister for Education is responsible for university matters in so far as they come to be dealt with here in this House. It makes for safe and proper procedure if payments to the university colleges come up for consideration by the Government in the usual way after proper examination by the Department of Finance, and if these matters come to the Dáil through the Department of Education. I think that is now fairly well accepted and I think that henceforward there will be no such question as the Dáil being asked to pay considerable sums of money without the Government having had an opportunity of properly considering them.
Having said that I want to say that I, for one, am completely satisfied that the University College authorities acted well and prudently in acquiring these properties. As the acting-Minister for Finance pointed out, we are not in any way committed to any programme of providing buildings by the fact that the University College owns these properties. I do hope, however, that the matter will be considered and that we will in fact deal with it on a non-Party basis in the national interest. I think that this further equipment in the way of buildings is essential for the University College. If another site can be suggested by any member of the Dáil, and it is decided that a more suitable site is available, I am certain thatthe properties which University College have acquired can be readily disposed of as they are well worth the money that is being paid for them. A certain amount of caution had to be exercised in the process of trying to secure these properties, because there was the danger that, if certain portions were acquired and it was known that certain other portions were about to be acquired to complete the area that seemed to be essential to give University College the necessary room for expansion, there would be a fantastic price demanded for these properties.
I think the work which has been done has been well done. I cannot say anything in defence of the procedure that was adopted up to the time when I was officially informed that this money was required in order to get possession of further properties. A letter came when I was in Utrecht and I got a copy of the letter and plans, and arrangements were made by which the Department of Education and some officers from the Department of Finance and the office of Public Works would keep in contact with the college planning committee to see exactly what was intended and to establish the necessary liaison between the Departments and the college.
We will have, I think, to take a decision very soon on this matter and to consider what is going to be done. The college authorities consider that it is desirable to get the University College established in the new area. The idea is that the transfer will take place over a number of years. The Departments that require accommodation most urgently will be transferred first of all in accordance with a plan properly drawn up and arranged beforehand, so that when all the buildings are finished there will be satisfactory accommodation for the college. I do not think it is necessary for me to go any further into the matter at this stage. As I said in the beginning, I think that the Party spirit introduced by Deputy McGilligan, if it has taken any possession, should be exorcised and that we on all sides of the House should approach this matter of national interest with the idea of doing what is best for UniversityCollege, and thereby doing the best for the nation.
I will leave that subject and come to the criticism of general Government policy. I have been criticised for not making an introductory statement, but I pointed out that in fact that would be the exception, not the rule. Looking back over the years, in many cases the motion for the Taoiseach's Estimate was moved by the Minister for Finance. It is true that when the Government which immediately preceded us was in office, the then Taoiseach gave a more or less detailed review of the situation when introducing his Estimate in 1949 and 1950; I have to admit that Deputy Norton was right when he said that I had commended that practice. This year, however, the Statistical Surveypublished by the Central Statistics Office has been available to Deputies for some months. At one time I thought that by proceeding along the lines of a general survey it would lead to a more compact debate than we have been accustomed to in the past.
In the past we tried to get the debate concentrated by asking the Opposition to furnish us with a few topics on which we could concentrate, so that, on the one hand, those who were on the side of the Government, or the Taoiseach when replying, would have an opportunity of looking up the statistics which might be referred to or otherwise getting the detailed information, which one could not be expected to carry in one's head, which was necessary in order that the Dáil might be informed of what the actual facts were. This year I was confident that, no matter what I said at the start, my speech in reply would practically cover the same ground and deal with the same matters; that whether I had introduced them or not, they would be dealt with by the Opposition in their speeches. I was not mistaken in that. The old myth has been introduced again, that we deliberately set out upon a policy of austerity, that we were dictated to by the British or by the banks, whether it was by the commercial banks or by the Central Bank, and that we meekly followed their policy. I have tried time after time toshow that there was no truth whatever in that.
The policy of austerity was a policy which was adopted in England at a certain time and which was referred to by the then Chancellor of the Exchequer. It was a policy which meant for the people restriction of food, rationed food, restriction of fuel, which they had to export although they were badly in need of it themselves. They were restricted with regard to motor cars, which they produced themselves, because they had to be exported in order to buy the raw materials and imports which they required. There was a mopping up of purchasing power through the Budget, which aimed at a surplus and, except in what was regarded as vital, there was a restriction on capital investment. These were the essentials of a policy of austerity. They had deliberately to tighten their belts and forgo the things they were producing in order to buy goods from outside.
Let us compare that with what has happened here. If we were following the policy that has been suggested, we would cease or drastically reduce capital investment. We would cease pouring out purchasing power through capital investment and capital development, and we would in our Budget have attempted to achieve a substantial surplus. By any test you can apply you will find that our policy has not been a policy of austerity. I have said it so many times that I am almost tired of saying it even though it has not dissipated the myth, because it is convenient for the Opposition to adopt that explanation for things for which there is a very good, sound explanation, but of quite a different character. They want to attribute things that happened to a policy of restriction deliberately adopted by the Government. They never try to explain why a democratic Government that has to depend for its existence on the votes of the people should deliberately adopt a policy of that kind.
We have not, of course, adopted that policy. We were confronted, when we got into office with two serious problems that had to be dealt with. One was the fact that when we cameto examine possible income and expenditure on our current Budget we found that expenditure exceeded income by several millions of pounds. When it came to the 1952 Budget, which is the Budget to which reference is always made when anyone wants to pretend that we adopted a policy of austerity, we found that there was a difference of some £15,000,000 between the expenditure that had to be incurred and the revenue that was forthcoming. That gap had to be filled.
I have challenged the Opposition time after time to say whether they would have gone on and budgeted for that deficit. I was told, of course: "Oh, no; you are not budgeting to balance at all—which was really our aim—you are not budgeting to balance but you are budgeting to get a £10,000,000 surplus." If we were indeed budgeting to get a £10,000,000 surplus, then we might be accused of a policy of trying to reduce purchasing power by taking from the people, for capital purposes, money which was needed for current needs. But we did not do anything of the kind. We repudiated that suggestion from the start. There was not a scintilla of real evidence produced by anybody at the time but absurd statements were made and figures were produced which were proved to be absurd almost the moment they were uttered or put forward. When the year was closed, and the accounts for the year became available instead of this mythical surplus of £10,000,000 we had a deficit of £2,000,000. Deficit budgets come badly indeed on the steps of an alleged policy of austerity. We had to face this problem in 1952—we either had to put on £15,000,000 of extra taxation or reduce expenditure so as to diminish the amount of taxation that had to be imposed or to try a combination of both.
There was £15,000,000 at that time being provided by the Exchequer in the way of food subsidies. As I said this evening to Deputy Norton, it is very interesting to see the Opposition reaction to our proposal to reduce these subsidies. Remember, that when we put on these subsidies originally to meet what was expected at that timeto be a passing transitory situation, we were attacked all over the country because, if we were going to subsidies, it was necessary to find the money, which could be found only by taxation, and if we did not reduce the subsidies in 1952 we would have been compelled to add the equivalent amount of taxation.
We did not get rid of the subsidies altogether. There is about £5? million still being paid by the general community, through the Exchequer, to subsidise bread and flour. If we did not have to provide that £5? million we could have reduced taxation by that amount, and had we taken the whole of the £15,000,000 away we would not have had to add on the taxation that was necessary in order to close the gap between anticipated revenue and expenditure. Not merely have we, this year, provided £5? million yearly for bread and flour subsidies, but we are giving about £3,750,000 in the way of compensatory allowances in order to lighten the burden on the shoulders of those whom Deputy Norton wants to pretend we have no regard for—those who could bear the pressure less easily.
The white collar workers and the middle sections of the community have been referred to. The effect of wars has been, in most cases, to lift the remuneration of the labouring classes and to reduce the gap that exists between them and some of the other sections of the community. The result of that process is that the difference between the various classes is less than it was before and the relative position of the middle classes in the community has been changed.
These things are almost inevitable because of the fact that we are not prepared in this country, and neither, I think, are most democratic countries prepared, to continue the old system in which there was such a big gap between those who were in certain employments and those who were in certain other employments. I, for one, am glad to see that heavy, disagreeable labour is getting a greater reward relatively than it used to get. Many of us, no doubt, can be in occupations which please us and which leave us atthe end of the day not completely exhausted. Others have to be in less agreeable occupations, and I think it is only just that those who are in the less agreeable occupations should get a relatively better reward. I know that there is a big way to be travelled before we reach a point like that. Considerable social changes would have to take place before we could come to the stage in which those who have the hard and disagreeable work would be better rewarded than those who have the less disagreeable work. However, a change is gradually taking place. When we were thinking of the compensations that were necessary to affect subsidy reductions, we were alive to that fact and that is why we increased the income-tax reliefs to such an extent that, even after the increase in the standard in the rate of tax, 170,000 out of 188,000 income-tax-payers were in a better position after the 1952 Budget than they were before it.
However, the main point is this: that so far as that Budget was concerned we had either to reduce the services or add to taxation. Of course, the Opposition can have it both ways. You listen to Deputy Mulcahy and he will talk all the time about increased taxation. He did not talk about the increasing trend in expenditure and in the amount of revenue which continued during the period when they were in office. I remember one Department alone in which the expenditure increased to about three times what it was when we left office. These changes are taking place. The value of money has been changing and these changes will continue to take place no matter what Government is in office unless the whole trend is changed, and instead of providing the social services and other things, which the majority of the people, in my opinion, are in favour of, you reverse the policy and go back to the old Cumann na nGaedheal policy. But, of course, Cumann na nGaedheal has changed its coat and we never know where the spots are going to appear. It is hard to know when you listen to a speaker from their side whether they are speaking with the old Cumann na nGaedheal views of long ago or whether they have now becomemore extreme than Deputy Norton. The unfortunate people of the country are left in doubt. They will hear two contradictory policies from election platforms: one for more social services, and on the same platform you will find one of the coalitionists talking about reduced taxation. Now those two things cannot go together to any substantial extent. You may talk about certain economies that can be made. I am not going to deny that it is possible, if we go with a fine comb through all the expenditure on the Civil Service—as we were at one time trying to do, many years ago now, before the war began—to obtain, to some extent, more efficient methods of organisation for the public services. But one of the troubles is that if you put in machinery, for instance, where you have human beings at work at present you can get efficiency but you will get it at the cost of disemploying a number of people who in the past had the idea that in coming into the State service they were coming into stable employment. If you are definitely prepared to face the position that is created by the sacking, if I may use the word, of people employed in the service, you may get a certain amount of reduction in expenditure.
I do not know how far it would go, but I do not think it would go very far. Recently, in the case of one Department in which temporary employees had been taken on for certain purposes, the question arose of whether we should continue to employ these people when the period for which they were temporarily employed had expired and the work for which they were engaged had finished. We did our best to see if there was any other part of the Service in which they could be employed? Should we put them out, or not? I am afraid we will have to face the very bitter unpleasant task of saying: "Well, this was temporary employment in which you were employed for a certain purpose for a certain time and we regret very much that the work on which you are engaged is ended and there are no other parts of the public services in which we can employ you."
That is what Governments have to do. They have to face these very unpleasant tasks, if they want to do their duty to the community as a whole. We had to face an unpleasant task in the 1952 Budget. It was an unpleasant task, but we did face it because it was our duty as a Government to do it. It is all very well to dream that you will get millions of pounds, but the Minister for Finance in a responsible Government cannot approach his task in that way. He may, perhaps, on occasions be somewhat over-conservative, and perhaps on some other occasions be somewhat too optimistic, but he ought, in general, to proceed on the line that he has to use his best judgment regarding the future trend of receipts and payments, and he ought to make it one of his primary duties in any case to balance current expenditure by current revenue.
That was our first task, and we performed it, and we challenged the Opposition as to whether they would do otherwise. Do they stand for unbalanced Budgets? Do they stand for deficit budgeting? It may be permissible and practicable to adopt that policy under very exceptional circumstances and for a very limited period. I am not going to deny that. There may be occasions in which it would be wise in the national interest to permit a deficit even in the current Budget, but it should be a rare and exceptional thing, and surely in the situation which obtained when we resumed office, there could be no justification that I can see for deliberately planning an unbalanced Budget. I challenged the Opposition to tell us if we did not take off the subsidies what other commodities we were going to tax.
When we first introduced the subsidies, the Labour Party, among others, went around the country denouncing us, because it was necessary at that time—again in order to balance the Budget—to put taxation on the pint of stout and on the ounce of tobacco. We cannot have it both ways. The Opposition can do that. Two members of the Opposition Front Bench can stand up and speak in different voices in regard to thismatter, one of them advocating a reduction of taxation and the other advocating in the very same breath social services which mean additional expenditure.
Our second task was even more serious and that again had to be faced. That was the deficit in the balance of international payments.
For a few years up to and including 1951 the deficits in our balance of international payments were such as to almost exhaust the addition to our net external assets that had been accumulated during the war years. In peacetime, as a rule, we have an unfavourable deficit; in other words, in peacetime we are normally reducing our net external assets and the only case in which we have added to those assets has been during a time of war when we were forced to, so to speak, because of the fact that all the foreign goods which we required were not available. We were not able to get the commodities, the raw materials or the consumer goods we would otherwise have brought in. There was, if you like, a certain austerity imposed upon us during that period because of war conditions and the result of that was that during the war we increased our net external assets by roughly £160,000,000.
Now, in the years following the end of the war, we brought in more in the way of imports, visible and invisible, than we exported, and we were in the position that, on the most accurate calculations available to us, the amount of our net external assets at the end of 1952 was about £120,000,000. Over the years these deficits have been rising. They went from £10,000,000 to £30,000,000 and then to £60,000,000 in three successive years. That rate of increase, if it continued, would in a very short time have exhausted our net external assets completely. As I have pointed out more than once, two such years of successive deficits as that in the year 1951, in which the deficit was close on £62,000,000, would have completely exhausted our net external assets and our position would have changed from that of a creditor nation to that of a debtor nation.
No Government in its senses could face a situation like that without feeling a certain amount of alarm. When the deficit was only half that amount the Government of the day expressed alarm at it and said that measures would have to be taken to safeguard the position. It is only when people are out of office that they can afford to treat cavalierly the question of a deficit in our external payments. When the responsibility rested on the shoulders of the Coalition Government they faced it in quite a different way. Now that they are in opposition they feel that they are at liberty to pretend that it was a matter that would automatically rectify itself. But we could not take that complacent view of the situation when we were in office. We had to regard it as one of the most serious general indicators of the position at the time and we had to do our best to take steps to remedy that position. Of course, Deputies on the opposite side now say the position would have remedied itself anyway: we can all be wise after the event, but we could not as the Government take any chances of that kind and we had to take such measures as were open to us and would not, in our opinion, fundamentally harm our economy. Certain immediate hardships might follow one way or the other.
