The shortness of the debate on local government has given this debate some of the characteristics of an ill-rehearsed French farce: we are rushing in and out of our places before our time. When this debate was adjourned I was referring to the problem of civil defence. I was saying it had become a problem for every country, and one which concerns every citizen in every country. It is particularly a problem, however, which is the special responsibility of the Government. It is a very heavy responsibility. It is a difficult one to discharge in time of peace because it is always difficult to get people to face up to the fact that peaceful conditions may not continue and it is a particularly difficult task to get them to agree to tax themselves in order to protect themselves. Nevertheless, I think that, despite the reluctance of people in general to face up to a situation of the kind, the Government should not estop themselves from fulfilling their obligations merely because the Attorney-General during the general election pledged himself to reduce expenditure by £20,000,000 and upwards. They should forget about the Attorney-General in that connection and face up to the dangers which are inherent in the world situation around us, dangers which may materialise for us all, for those who are at peace as well as for those who are at war.
There is one aspect of the Volume of Estimates which to my mind is of doubtful propriety, and that is the manner in which appropriations from the Grant Counterpart Fund have been dealt with. These have been brought in as Appropriations-in-Aid of several Votes, notably the Vote for the Department of Agriculture. Without wishing to reflect on the Minister personally, I should say that, apart from everything else, this manner of dealing with the Grant Counterpart Fund is a little grudging. I was going to say "churlish" but I do not want to use the word in that particular context. Apart altogether from the financial implications of it, the reason why I have doubts that this was the correct way to deal with the help which we shall get from the Grant Counterpart Fund in this coming year is that our Government is indebted to the generosity and benevolence of the United States for the fact that this year the costs of the ground limestone subsidy, the scheme for the eradication of bovine tuberculosis, the scheme for the pasteurisation of separated milk and for the technical assistance projects which relate to agriculture and industry are not to fall on the taxpayer. All of these various projects will cost the United States almost £1,000,000 in this year and I think that it ill-becomes us— and I am speaking now collectively— I wish to make that clear—and I am using the word in its collective sense as applying to us all—I think it ill-becomes us to appear to be so ungrate as to try to conceal the fact to which I have referred by bringing the moneys in the Grant Counterpart Fund in as Appropriations-in-Aid.
Last year and in the preceding years all the expenditure on such services had to be provided for in the Budget. In years to come, after the grant has been expended, they will have to be provided for in the same way again. I ask, therefore, why treat the American gift as though it were a normal Appropriation-in-Aid which is something which we collect from those who benefit by the services? When we see Appropriations-in-Aid used—quite legitimately used—to reduce the total amount which the Dáil is asked to provide for public services, we almost invariably find that these Appropriations-in-Aid consist almost mainly of fees which are charged for services rendered from the Votes to which these moneys are appropriated. That is not the case with the Grant Counterpart Fund. As I have said, the Marshall Aid Grant is a free gift from the American Government; I think it would be much better, much more appropriate therefore to bring it in the Budget statement as non-tax revenue and have the grace to acknowledge this non-tax revenue as a free gift to us from the American people.
I am afraid that the only reason why it has not been done in that way is that the Minister for Finance feels himself tied by his colleagues' wild statements. He has to appropriate the United States gift to reduce in appearance, but not in reality, the cost of the public services. I have said "to reduce in appearance the cost of the public services". I have said that deliberately because the reduction will be only an apparent reduction. The real expenditure on all the services to which the Appropriations-in-Aid are made will continue at its former level but the American money, as I have said, is being applied to reduce the figure on the front of the Volume of Estimates by almost £1,000,000. If taxation for the public services will be less this year by that amount than otherwise it might be, our gratitude under that head goes out, not to our own home Government but to the American Government and to the American people who have provided that £1,000,000.
But there is one reduction in the Estimates which, coming from the Government which the Labour Party claims to control, is noteworthy indeed. Among the few real economies which have been made in the requirements for the Supply Services is one to which the Taoiseach did not refer. In fact, when he was trying to excuse the fact that the Government had not fulfilled the pledges which, if he himself did not make them, were certainly made by the Attorney-General—among the excuses for not giving effect to these pledges was that the Government is not prepared to reduce expenditure upon the social services. The reluctance to secure reductions at the cost of the social services does not appear to be general and all-embracing because the provision for old age pensions has been reduced.
Those of us who recall that the Taoiseach some years ago derided old age pensions, widows' and orphans' pensions, children's allowances and the like as a row of medicine bottles will wonder if the bottles are now being emptied. The Minister for Social Welfare denied last night that this was so. On the contrary, he told us we would have bigger and bigger medicine bottles and more and more of them until every private purse in the country is purged of its earnings and savings. Bang again, I may say in that connection, goes the Attorney-General's pledge to reduce public expenditure by £20,000,000 and upwards. That, I may tell the Minister for Finance, is going to be our slogan at the next election: "£20,000,000 and upwards is what they promised you. What did they give you?" The Minister for Social Welfare has said that the Government is not cutting the old age pensions. He says, on the contrary, that they are merely cutting off the old age pensioners—there are fewer of them. That, remember, is the justification which the Minister for Social Welfare gave last night for this reduction. He told us that there were fewer old age pensioners this year than there were when he took office last year.
The question, naturally, will occur to us, how has the Minister made this saving? Why are there fewer old age pensioners and what has he done with them? Has he throttled or strangled or stifled them? Has he been practising euthanasia—mercy killing as it is called, murder as it is—or has he merely been tightening up the means test, making it more difficult for the aged poor to get the pension? This is a very interesting question and I think it ought to be probed further. Why are there fewer old age pensioners, as the Minister for Social Welfare tells us, to be provided for this year than there were last year?
Now I do not think that any person whose means do not warrant it should get the pension. I believe in a means test and in the fair enforcement of that test. But the Labour Party, when they were in opposition, pretended to be against a means test of any description in respect of any social service. Their grumble, for instance, about the Health Act of 1953, which they have tried to nullify, was that it included a means test albeit a very tenuous one. Yet now that they are in office and in control of the Department of Social Welfare we find them enforcing a means test with a severity and a rigorousness such as was never known before. In this way the number of old age pensioners who can surmount the barrier and secure a pension has been reduced. Because of this, the Government are able, by reason of a rigid enforcement of the means test, to boast of a paltry economy of £10,000 on a service which costs over £17,000,000. In this way, one can truthfully say that the Labour Party grinds the faces of the poor in order to save the face of the Attorney-General who promised to save £20,000,000 and upwards. A saving of £10,000 from the old age pensioners will not bring us any nearer to that objective—at least not significantly nearer to that objective.
Towards the end of his speech yesterday we had a very significant statement from the Minister for Finance—a statement to which the Taoiseach referred in his speech this afternoon. Yesterday, in introducing the Vote, the Minister said:
"Also in pursuance of this aim of stability I made representations on behalf of the Government last week to the banks so that if at all possible interest charges here would not increase—though, as I said last week, any question as to our economic position is one that must be watched."
Any person reading this statement must notice at once that the Minister begins to hedge towards the tail end of his statement when he says that "any question of our economic position is one that must be watched." From this reservation I gather that the arguments which the banks may have used in their discussions with him must have impressed themselves upon the Minister for Finance even though the pressure of his colleagues in the Cabinet may have compelled him to disregard these arguments.
The real point I want to get to is the significance of that statement—the significance of what has been done during the past week or so. I think the statement requires some further elucidation not merely on the part of the Minister but on the part of the directors of the banks whom he has found so amenable to his representations that he has, in fact, thanked them publicly. I, in my two terms of office as Minister for Finance, have had many interviews with the representatives of the Irish banks in regard to money matters, and I must say that I have never found them very pliant or pusillanimous. Nor do I think that they found me a very easy man to deal with on the other side. I have always found them concerned to safeguard their depositors, to maintain the widest possible basis of credit in this country and to deal fairly and reasonably with the Government when it required their co-operation. I have always found them concerned also to preserve the stability and security of the financial institutions with which they were associated and to further the development of our economy in every reasonable way. I have talked very frankly to the banks and they have talked with equal frankness to me. We have met around a table. We have not withheld anything from each other which we felt it was in the public interest to say to each other. In regard to the bank rate, however, they maintained a position which this year they have suddenly departed from. As I have said, I think that the fact that they have done so—after the representations which have been made to them by Ministers for Finance since the foundation of this State—requires not merely some statement from the Minister but also some statement from the Irish Banks Standing Committee.
The Minister mentioned he had made representations to the Banks. "Representations" is a word which has many shades of meaning. It may cover a multitude of sins. Did the representations take the form of telling the banks: "You had better do what the Government want, or else..."? That would be one form of representation which, in present circumstances, might be coereive. Or was it for the sake of the Minister's charming blue eyes that this unprecedented departure from the traditional practice was made? I for one do not think it was a tribute to the Minister's personality that the banks departed from the previous practice.
I think the potentially coercive approach of the Minister had a great deal to do with the new attitude. Were the banks, under irresistible pressure, to conform to the Government's "Diktat"? If the banks were coerced in this way will the same pressure be brought on insurance companies or on our large industrial enterprises to conform to the political exigencies of the Government of the day? One may well ask if the Government's interference in this matter is a step towards the nationalisation of the banks or perhaps the Sovietisation of the banks might be a better word. If so, how far off is the expropriation of all significant private enterprise?
The banks have to manage their business and administer their trust because it is in the position of a trustee that a bank stands in relation to its depositors. If the banks have to administer their trust under pressure from the Government, what is going to be the position of any other private enterprise in this country? Is the same pressure going to be brought to bear upon Guinness, upon Jacobs, on the Press to do and say what the Government want? Is it towards this general extension of Government interference with private enterprise and with the personal responsibility of individuals who control or direct these enterprises that the Fine Gael Party is now tending in order that it may keep in line with its allies and associates of the Irish Labour Party?
I do not think that the Irish people want to move in that direction. I think they want to be free in their business. They want the custodians of their savings to be free to fulfil their obligations to them.
In my view, it was very ill-advised on the part of the Minister to compel and coerce the banks to do something which he and his colleagues thought was to their political advantage, irrespective of whether it was or was not to the general advantage of the economy of this country. There has been drawn since last week a very sharp line between two classes of those who have entrusted their moneys to the Irish banks. Below that line are those whose deposits do not amount to £25,000 and upwards, and to whom a low deposit rate will be paid. Where the deposits are £25,000 and upwards, where the deposits are the property of wealthy people or of wealthy corporations, they are going to get quite a different treatment from the treatment that will be meted to the small businessman, the average farmer and, indeed, one might say the thrifty labourer or thrifty workman. I wonder what the farmers of West Cork, for whom Deputy M.P. Murphy speaks so often in this House, will think when they realise that Messrs. Guinness, Messrs. Jacob, C.I.E. or some of those others will get a higher rate on the money which they may have on deposit in the Irish banks than will be given to any farmer in this country who is putting his savings into the same institution to build up perhaps a dowry for his daughter or to accumulate something with which to educate his son.
It is all very well to talk about giving people loans at cheap rates of interest, lending at low rates to people who are in business, but the number of depositors in the Irish banks far exceeds the number of borrowers and in this case the many have been sacrificed for the few. Everybody who knows anything about business knows this— that so long as the rates of interest do not exceed the 5, 6 or 7 per cent. level what is paid in interest in any sound and well-managed business does not involve any substantial burden upon it. In fact, the high standard rate of income-tax has made such a mockery of rates of interest, as it has made a mockery of salaries and earnings, that when the rate of interest goes up, the Government has to contribute 7/6 towards every £ of interest paid.
