A cost-of-living index figure operated in those days and it was the boast of the then Minister for Finance in the Seanad, Deputy Aiken, that it was a much more realistic figure than the British one. Somebody in the Seanad called attention to the fact that our figure seemed to be out of proportion altogether with the British one. The answer was that our figure was much more realistic and included such things as spirits and tobacco, whereas the British had these cut out. The first step, therefore, had to be a new index figure—it was provisional but it was in process of being made in October, 1947—that was going to leave out such commodities as beer, spirits and tobacco. If the price of these commodities rose, the cost-of-living index figure would not rise and no claim upon the cost-of-living index figure could be substantiated. Then the Government came into this House with their proposals. They said that, in order to prevent the cost of living from rising—I think it was to reduce it by about 13 points—they had certain proposals. They were going to give additional subsidies for food and fertilisers. I quote now from columns 393-4 of the Official Report of the 15th October, 1947:—
"The total extra cost of the subsidies on flour, bread, tea, sugar and fertilisers over and above the £4.636 million estimated in May last——"
—that is the Budget proposals of that year——
"will be £5.765 million..."
Deputy Aiken, who was then the Minister for Finance, said that his Budget was showing a likely increase of £1,000,000 but if he was going to give subsidies amounting to £5.5 million in the remnant of that year we had to find £4,750,000. He imposed a surtax and he put a tax on spirits, wine, beer and tobacco, furs and cosmetics, entertainment, cinemas, dogs and boxing. He increased the road tax and there was a stamp duty tax. All these taxes got him in £4.8 million in the period of the year that was still left. I want that figure thought of and that date thought of as against Deputy Lemass's contention that the Fianna Fáil Budget showed a surplus of £6,000,000. It was then mid-October and the taxes were to start as soon as possible—immediately, if it could be so arranged. There were five and a half months to go and there were increased taxes in order to bring in, in the last five and a half months of that year, something short of £5,000,000.
I have multiplied all this out and it shows that the Fianna Fáil Government were imposing extra taxation at the rate of £10,750,000 in the year. If I had been as alert in October, 1947, when I criticised these taxes as I am now I could have said what I said in May, 1952, namely, that a new Minister for Finance coming in could, in a seven minute speech, wipe out £7,000,000. If I took Deputy Lemass's figure, I could say that, in six minutes, £6,000,000 could be wiped out. If I had said that at that time there would have been an attempt—as there is an attempt now—to hold me up to the odium of public scorn.
On Deputy Lemass's figures, the facts prove that in October, 1947—five and a half months from the end of the financial year—the then Government, who are now in opposition, increased the taxes on the goods I have mentioned so as to bring in nearly £5,000,000. That was done at a time when, according to themselves, their Budget was going to run out with a surplus. It simply establishes again that they were taxing for the sake of taxation. Looking back, with my memory revived, and being more alert now on certain points, I have no doubt that the same things were operating in 1947 as were operating in 1952. I looked back to see what was the view of the Central Bank Report of that year. It was produced for the year ended 31st March, 1947, and was published in July, 1947. There was a most serious warning. Paragraph 19 of that report states:—
"The general impression created by the available information is that the tendency towards an unhealthy inflation, against which the board has given warning in previous reports, has in recent times shown marked evidence of becoming worse and consequently now demands vigorous measures to check it."
Amongst the various items picked out for comment was the strong upward movement in wage rates as between the civil servants, agricultural workers and those engaged in industry. If one —with the background of the Central Bank Report for 1947 in mind—looks through what the then Taoiseach, Deputy de Valera, and the then Minister for Finance, Deputy Aiken, said he will find the same mentality bred in these people as was bred in the Central Bank Report for 1951, which produced the 1952 Budget.
There is no necessity to go through all the matters spoken of here but I should just like to quote this extract from what the then Minister for Finance, Deputy Aiken, said on the 15th October, 1947. I am quoting now from columns 399 and 400 of the Official Report for that day.
"Some other factors regarding our economy which must be noted are: (1) Our imports in the first six months of this year were £52.7 million and our exports £15.9 million, showing what used to be called an unfavourable visible trade balance of £36.8 million but representing to our people, who suffered severely from shortages of all sorts of goods and equipment for nearly eight years, a very welcome supply of the things they were eager to buy...
(2) During the period from September, 1946, to March, 1947, industrial wages increased....
(3) Between July, 1946, and July, 1947, internal bank deposits increased by £15.2 and internal advances and investments increased by £22.8....
(4) During the past year savings as a whole were probably much below previous levels....
(5) Since September, 1946, State debt increased by almost £7,000,000 but this increase is offset as to £4,000,000 by the increase in unspent balances in State funds such as the Transitional Development Fund...
(6) The value of land and houses increased greatly in the last year, in some cases by as much as 70 per cent. or 80 per cent."
There is no doubt that the present Opposition may certainly not look back with any favour or complacency on those who wrote the Central Bank Report for the various years and misled them into the wrong policies which they adopted. They adopted a wrong policy in 1947. The outcome of events showed that they could have given all the subsidies in 1947 without putting on a penny piece extra taxation. If Deputy Lemass was speaking accurately and truthfully when he said the Fianna Fáil Budget showed a surplus, then there was not the slightest necessity to impose these taxes of 1947.
The picture was fairly gloomy on the 15th October when the Taoiseach and the Minister for Finance spoke. Deputy Lemass was thrown in on the following day. As reported at column 558 of the Official Report of the 16th October, he gave this warning to trade unions:—
"I want, however, 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."
There are columns of that and, later, at page 578 he says:—
"We have at present a difficult situation which will persist in an acute form for at least a year and in some form for at least four years."
Can anybody trust either the economic sense or the ability to forecast events that is shown by the two examples we have had, in 1947 when we were told by three members of the Government that these taxes were necessary to give certain subsidies for the aid of the people. Incidentally, I should remark that the aid that was being given to the consumers was this: at column 396 on the 15th October we are told that:—
"The cost-of-living index which stood at 288 points in August, 1946, rose to 305 points in May, 1947, and in August last"——
that is 1947
——"to 319 points—an increase of 10.8 per cent. over the year. Without subsidies the index would now stand at 344 points."
And the effect of these subsidies was to reduce the cost of living by 13 points, that is, by bringing it down to 330 points. It did rise between August, 1946, and, say, September, 1947, from 288 to 330 points, that is, 32 points.
That was all the relief that could be given. That relief was given by those subsidies and those subsidies were financed by the taxes I have mentioned. The event shows those taxes were completely and entirely unnecessary. When they were being put on we were told we were in the midst of unparalleled difficulties and I can give the quotation which I have here, if anybody wants it. Deputy Lemass told us we were in the middle of unparalleled troubles and that economic collapse threatened on every side. He said here in Dáil Éireann that that situation was going to persist in an acute form for at least a year and in some form for at least four years. Now in one of his attacks to-day he mentioned that what was wrong was that we were conservative and we did not understand and take into account the development in trade that happened. But we must remember that development happened from October, 1947, to the end of the financial year on the 31st March, 1948, and that is given as the background to the 1952 Budget. One would have imagined that unless there was some deliberate policy—and when I was criticising those matters in opposition I did say that unless there was some deliberate policy—one could not imagine the Government failing in the same way twice with that lesson behind them. They had apparently discovered that then.
That Government in 1948 had a surplus of £6,000,000 from the taxes they imposed in 1947 which showed that these taxes were unnecessary. I think it would be right to say that these taxes cost them the position of Government. One would have thought that would have brought some sense of economics to the politicians. The people, at any rate, in the year 1952 realised that they must make a discrimination in respect of these prices. I believe they have made it and that they know when prices rise by operation of outside forces and they may accept that complacently, but they know and resent it when prices are raised unnecessarily and raised as a matter of policy deliberately formed. They can appreciate the situation— and to our benefit at the moment— when action is taken to prevent prices rising through economic forces elsewhere being cushioned to their aid even at the expense of the general taxpayers here. They have definitely understood over the years the results that are given by the particular policy which was adopted in 1952.
This policy of 1952 which, I think, has put the then Government where it now is, in opposition, proved for the second time that it was not brought into this House as something necessary. There could be no such plea. It was an economic problem which they said they would solve in a particular way. What were the aspects of that economic problem as the then Government saw them? First, there were subsidies and subsidies were costing the taxpayers a lot of money. Secondly, those subsidies—I take it this is the implication of the statements made—might be a necessary evil if wages and salaries were kept at a low point and if they could be compared only adversely with the increased cost of living. That argument was not accepted. The argument as used was that over the years those who get remuneration for services to the community, the people with wages and salaries, had got those wages and salaries increased beyond the point, so to speak, that would be recognised as just by adverting simply to the cost-of-living index figure.
That was the argument that was used. We phrased that—I have often asked does anybody object to it—that the people were told that they were too well off. If one took the standard of pre-war years, say, 1938, and accepted it would be the standard for ever and compared it by measuring that standard by the cost-of-living index figure—and it is not a true measure, but measuring it that way and only in that way could a Government come to the conclusion that wages and salaries were too high and for that reason decide there was no social and economic justification for the continuance of the subsidies. Therefore the subsidies were reduced and in addition to that taxes were put on. Again it is worth while reviving memories of those days. On the expenditure side of this Budget statement, in the table explanatory to the Budget of 1952, there was one provision for the Social Welfare Bill, 1951, and other current services of £3,000,000. The expenditure on the Social Welfare Insurance Bill did not take £2,000,000 of that £3,000,000, but they took £3,000,000 here for that, that is to say that there was £1,000,000 in hands for something else, possibly expanded health services. Deducting savings on food subsidies—the figure is a shock even to this day—of £6,668,000, and from this there had to be deducted compensatory social welfare benefits of £2,700,000, leaving a saving on the food subsidies— even if those compensatory benefits did compensate those to whom they were applied—of £3,918,000, almost £4,000,000.
The services they were going to finance out of that in fact cost £2,000,000 so that there was a sum of £2,000,000 to finance other services as well as the £1,000,000 kept in reserve. In addition we had taxes on tobacco, beer and spirits, petrol and oils, etc., making a grand total of £11,290,000. Part of that was because people were too well off and we took away from them some of the benefits they had got over the previous years. Then they were going to finance social services. I do not know that that particular lesson has been learnt but it is the second useful one that arises from the Budget of 1952—social services are not free to anybody. When people talk of free for all services everybody recognises that somebody has got to pay for them but it is not so often recognised that it is the very people who are supposed to be the beneficiaries of those social services who pay to a large extent for what they are getting. Proposals were put forward to increase or better the health of the people or to preserve whatever health the people had by giving them some sort of health service and then they were asked to pay more for bread, butter, flour, sugar and tea. I would not have thought that the taking away from people of the amount of foodstuffs they could buy was exactly the proper approach to setting up a community with a good standard of life in the country. That aspect of the proposals of the 1952 Budget were mainly hidden in the conflict that arose over the complete taking away of the subsidies and these shockingly heavy taxes that were put on.
I have already read to the House what I said with regard to the £10,000,000, that is, that there could be a reduction of £10,000,000 made by a person who became Minister for Finance in July, 1952. I would not tie myself to that period. I think if anybody getting in before the new trend towards greater expenditure had been decided upon by the then Government, could stop the trend which was then setting in about May—and of course it was later to progress through the year —the £10,000,000 could easily have been saved.
Further in regard to the Budget of 1952, I do not know where the Government of the day got their idea that people were better off than they should be. I do not think it is right to take the cost-of-living figure as a complete measure of the standard of life that people should expect to enjoy in this country. We all agree that the index figure does not measure everything. It does not at all mean that even if everything was brought up to the new cost-of-living figure, the people would find themselves as well off as they were in a previous period in which the figures were lower.
There was no foundation for the argument that wages and salaries had advanced beyond the increase in the cost of living. Apart altogether from that, unless this House is going to accept as a standard that nobody is to be allowed to increase his standard beyond what it was at the measuring date, 1938, or whatever other standard is taken, then the arguments are completely fallacious. Of course that was only thrown in by the Minister for Finance; it was one way of excusing to himself his brutality in the hacking off of the subsidies; but running through the whole of the Budget speech of 1952 there was the Central Bank Report, as there had been, as I now realise looking back on it, running through the Budget proposals of 1947. I have no doubt that the people who are now in opposition must often revile those who produced these reports and must still more strongly revile themselves for paying the slightest attention to these reports.
These reports are written, and it should have been accepted that they were written, purely and entirely from the bankers' and financiers' standpoint. They were handed over to the politicians whose duty it was, if politicians have any duty in a community, to mould a certain situation as well as they could, so that people will not suffer if suffering can be to any degree prevented or diminished. But the Government of the day did accept apparently in 1947 and they certainly did in 1952, the bank report. These reports are written from the materialistic angle of the banker, the man who is looking after his own particular duties, his own particular type of work, and who will explain to you he does not expect the politicians will take completely literally all that is written. They merely give, as they say, warnings about certain things and the politicians can then take over the responsibility and mould the situation as best they can.
It is the politician's duty to do that. He takes those facts, has regard to the dangers referred to, considers what efforts can be made to prevent those dangers and whether the results would be as catastrophic as the bankers make them out to be. He cannot pass the responsibility back to those who wrote the reports. It is not their duty to do this moulding. It has always been accepted up to 1952 but the 1952 Budget was based entirely on the mood of the bankers but more particularly of the Central Bank. I say that because I think in these recent weeks we have got to a definite point of grips with the banks and, as Deputy Lemass said, if that grip is not sustained we will find ourselves, after these tentative efforts, even in a worse position than if it had not been made.
The 1952 Budget had its course. The people appreciate what was done. They were shocked by the brutality of the proposals. As the months went on they began to feel these proposals were unnecessary, and when 1953 and 1954 came along that feeling must have deepened. The suffering that was caused by the 1952 Budget was unnecessary, and unless every item of expenditure which increased since 1952 could be justified the people were entitled to say that this was a bankers' Budget and that it was definitely aimed at taking purchasing power out of the hands of the people. That was done without any appreciation of the suffering that was caused and the resultant economic conditions which touched off the new round of wages including increases to civil servants. In this connection I am happy to say that we met the Civil Service bonus award. It must be said there was very little saving in spite of the suffering that was inflicted upon the people. In the wider field of industry it also became necessary to meet wage demands to cope with the new increase in the cost of living. The Budget of 1952 must be condemned as a greater fallacy than Deputy Lemass admits the proposals of 1947 were.
The public, I think, have confidence in what we are saying, that we believe that economies could be made, and that we would search to find them, that we would if necessary change the form of Government financing to do that, that we would if necessary look into administrative costs and while guarding against any hardship to people, where redundancy might be found we would see if there was really redundancy and see that in future there would not be so much in the way of occupation in the ranks of the personnel of the State. The people, I think, trust us in that, and I do not think they will have to bring against us that same criticism in regard to honesty and integrity of public representatives, as they can and did during the last election bring against people who promised to maintain subsidies and control the price of essential foodstuffs and gave specific pledges that the taxes on beer and tobacco would not be introduced. In fact, the suggestion that they were going to reintroduce the tax on drink was described as a rumour.
Last night, I understand, Deputy MacEntee said that I had promised a £20,000,000 reduction in Government taxation, and that that was a promise for this year's Budget. I understand he said the promise of a reduction made by me in a broadcast was tied to this year's Budget. I have got a copy of that broadcast. I want to read part of it. But let me first explain that very rarely do I write these things, but I had to write this down for Radio Éireann. They said here to-day that it was probably done in consultation with my colleagues. I did not see any colleagues of mine before I had written it, because I was occupied in the morning in getting the broadcast right. I experience great difficulty in writing these things. I do not think anybody repudiates what I said. I spoke as representing one element of the Government, and I believe what was said would be accepted by most people. If it were not, I would not understand why anybody would object to it.
I opened my broadcast by talking of the war, of the national emergency, and how Government control was then necessary. I said:—
"It still remains and the habit of mind acquired under emergency conditions—the desire to control and boss and regiment people—still persists...."
I talked of the Government attitude towards wages and salaries, and I intended to make this the pivot point in my broadcast. I talked of standstill orders. Deputy MacEntee just could not break down wages and salaries which was so easy to do when the standstill orders were in fashion. We can almost hear him speak aloud: "People must buy food; if the prices of foodstuffs were raised the effect would be the same as if wages were cut. People will still buy beer and tobacco; if heavy taxes are put on these it is the same in the end as if wages were further reduced." I said:—
"Against his policy and its results the people are now in revolt. There is everywhere a feeling of oppression and the community are in no mood to regard their suffering as inescapable. They feel that improved conditions are possible and, anyway, they demand relief. One party alone, the authors of the community's misfortunes denies that relief is possible. All other Parties agree to the contrary and agree that relief must be given."
I spoke of how Deputy Lemass in the winter of 1947 told us that there stretched ahead four years of the most acute difficulty and wailed that "economic disasters threatened on every side." Deputy Lemass raged through the country proclaiming: "If you remove the Fianna Fáil taxes you cannot maintain the subsidies," or, putting it the other way: "If you want to maintain the subsidies you must keep Fianna Fáil taxes." Now he confesses that is all wrong.
Then I come to this part which has been so much commented upon. Here, I think, I will read at some length:—
"In these days, despite the assurance of Mr. Lemass to the contrary, even Mr. MacEntee finds it possible to promise economies though he raises doubts as to his sincerity in many minds when he joins his programme of economies with proposals to save money and to get money from C.I.E. When State expenditure has risen to its present heights there must be economies ready to hand for a Minister who is serious in his quest of them and knows how to go after them, but when Mr. MacEntee, in emphasising his attitude towards such economies proclaims that every Government Department has been instructed to `review its personnel to this end' he not only shows that he has the wrong approach to this matter but he must arouse in the minds of civil servants the fear that they, with C.I.E. employees, are marked out as brands for the economies bonfire."
Every Department had been instructed to review its personnel with a view to bringing down Government expenditure. It possibly meant nothing else than that civil servants were going to be sacked. I take up my broadcast again:—
"While, however, there can be little doubt that savings in the cost of Government amounting to several millions a year can be secured without much effort for the relief of the community a distinct change of policy is required and a new outlook on the part of Ministers demanded if the reduction in Government expenditure of £20,000,000 and upwards, desirable in everybody's interest, is to be achieved. Mr. Lemass has an easy going view that `if extra Government services are to be provided we have got to persuade people that instead of giving 5/4 to the Government out of every £ they should give 6/- or 6/6 or 7/-, persuade them that it is better for themselves that they should spend less at their own discretion and let the Government do the spending for them'. This is, of course, a completely wrong approach. It becomes all the more unsound as a view when it is remembered that the only attempt at persuasion made by him in respect of the extra shillings in the £ taken by his Government from the people's earnings was whatever secret persuasion he worked on four Independent Deputies who were elected to Dáil Éireann on proposals for bigger and better subsidies and reliefs instead of greater taxes. We are entitled to take the philosophy of Fianna Fáil from Mr. Childers who put a halo round bureaucracy and has as yet not been repudiated by his superiors in Government. Mr. Childers explained his attitude to a Cork audience in these words: `The paternalistic care of a community by a Civil Service acting on instructions from a Government elected by the people can alone preserve the fundamental freedoms and the sanctity of human existence.' Mr. Lemass's view that it is proper under any circumstances to take 7/- for the Government from every £ earned by the community and Mr. Childers's scheme of Civil Service foster parents selected for the community by a political Party involves the establishment and maintenance of the Government Departments we now have, interfering without necessity and without invitation and in an inefficient and extravagantly costly way with the business activities and even the lives of citizens. In any event apart altogether from a matter of cost it is the responsibility and duty of each citizen as a free man developing his free personality, to attend to most of these matters by himself or through some small and subsidiary group in which he will be a controlling influence and not a mere payer of bills. It is said that the present Government have in some way accepted the idea of decentralisation. When their only proposals towards this end are examined it emerges that their idea of decentralisation is a mere matter of scattering some sections of central Government Departments through the country.
The decentralisation of Government which is urgently required is an entirely different thing, it is a scheme to break up and distribute the powers of central Government and to encourage and develop instead local and individual responsibility and initiative. It must be accepted that the State should see that no citizen lacks the necessities for a decent human life through the adversity of circumstances outside his control. But there is a wide gap between that and the conception of the paternalistic care of the community by the Civil Service acting on Government instructions. Extensive and extravagant powers were of necessity taken over by Government during the war years, but it is the right of citizens to demand that these powers should be abandoned now that wartime necessity has gone. Even if Government must find the money for many services it is not essential that there should be retained expensive Government machinery for the distribution of these aids. It is no longer right for the Government to do the spending for the people; the proper objective is to enable citizens to earn more for the service they give to the community and to leave the spending of these earnings to themselves."
That is a typescript of my broadcast. It may be said that it contains more than I said in the actual broadcast because the time at my disposal was shorter than would allow me to get through that script. But I have not been able to get a corrected copy of the typescript. Does anybody who heard me reading that, and using that £20,000,000 phrase, believe that it is possible to make the deduction that I promised then there would be a £20,000,000 reduction in this year's Budget? That £20,000,000 was promised on a completely new policy. Does it not appear from that that I thought Government Departments had too great powers and that they were interfering unnecessarily and extravagantly with decisions of the citizens, and that this state of affairs should be stopped? Would anybody hearing me speak in that broadcast believe that I thought Government Departments could be broken up in nine months and that any significant powers could be abstracted from the Government Departments in nine months?
I believe the Minister for Local Government has taken a step towards handing back to the local authorities certain of their powers which had been taken from them. I have taken that Department as an example because I want to refer to the Estimate for that Department which is for the sum of something like £4,500,000. Whatever it is all but £500,000 are grants. There are 400 civil servants employed by the Department of Local Government to distribute £4,000,000 worth of grants to the local authorities. The latest return for local taxation—up to the 31st March, 1950—on page 5 gives a statement in regard to local authorities. It is not easy to get a proper calculation made because you have got 27 county councils, four county boroughs, 51 urban district councils, town commissioners for 26 towns and so forth. Altogether there are 125 groups or units of elected representatives, and I have made a calculation that in the elections about to take place in a short time there will be over 1,700 elected to the different county councils, borough councils, and so on. I said 1,700. The Dáil here is about one-tenth of that. The Local Government Department has a vote which looks like £4,500,000, but £4,000,000 of that is almost entirely grants, and there is £500,000 left over for the administration of the Department which employs 400 civil servants to deal with these grants which are payable to councils representing a personnel of 1,700 people. I believe that employees of local authorities number over 5,000 if one leaves out the people who work on the road who would add a further 22,000.
Does anybody believe it is essential that a community of less than 3,000,000 people who have 1,700 people elected to local authorities to represent them, who have under them 5,000 employees, leaving out this 22,000 road men, should be administered by a Department with less than 400 civil servants? I have quite a considerable experience of travelling through the country, mainly during holiday periods and very often I have got into contact with local officials, with administrative officers and engineers and other such people employed by local authorities, and the one sense I find stronger than any other in all of these people is one of frustration and disappointment at the delays and holds-up in schemes which they have sent to the Custom House for approval. Of course, people who want to parade their worries are always inclined to exaggerate, but even after considering that, one must realise that there is a good lot of ground for their worries. Quite frequently, schemes which have come up from local authorities for sanction have gone back after very long delays with very few alterations. Schemes have gone back almost in the same form as they were sent up.
I do not suppose that anyone would agree with me that this Department staffed by 400 civil servants could be dwindled down. I have made proposals in the House over and over again in which I said that I believed the present system could be changed. I must point out that this is only a belief, but I did subject it to a considerable amount of investigation when in the administrative side of the Government as Minister for Finance. I believe there are considerable redundancies in the Civil Service. I believe these redundancies have existed over the years but I also believe that a considerable change could be made and a considerable number of the redundancies removed without imposing a very great hardship on civil servants who have been working in their particular spheres over a number of years.
Neither do I consider that the present system of accounting for public moneys is the best that could be devised or that it is the best or the most proper one for this country. I do not believe that it gives the safeguards to the people that it should give. I believe a change could be made in regard to co-operation between the Comptroller and Auditor-General and the various Departments and I believe that change should be made in the interests of the community because I do not think this country can afford to bear the expenditure it has to shoulder at the moment.
When I speak of economies in the Civil Service I do not mean that any immediate cuts should be made in the personnel. There is an easier way for doing it, because each year there is a wastage—people go out on pensions, people die, people go to other occupations, people get vocations and people just leave. But as I have said there is a considerable wastage over the years and that could be used to relieve redundancies without imposing the hardship of immediate curtailment of staff. There is no doubt that if redundancies could be got rid of it would be most beneficial to the State. I would impress on the House that my point is that any redundancies should be eliminated over the years—over a considerable time. I think the present Government ought to set about that task of finding out where these redundancies occur and securing a change in that position for the benefit of the community in general.
I think, too, that the present Government would probably get a better response from the personnel of the Civil Service than would any previous Government; I cannot prophesy about any future Government. I say that for the reason that the two inter-Party Governments played fair, and very fair, with Civil Service personnel. We were responsible for setting up a type of arbitration that had been denied to them by the previous Fianna Fáil Government. We gave that to them, and we abided by the findings of such arbitration; and, even more recently, when the Government that the present Government succeeded decided to pay, but without paying the arrears, the increases recommended on arbitration findings, we said then that if we got the chance to handle the finances of the State once more we would pay the arrears, and we did pay the arrears.
I think State personnel ought to be very well disposed towards the present Government, the successor of the first inter-Party Government, and I say that one would get better results now, I think, from an approach to the civil servants, always making them realise and appreciate that, no matter what redundancy is discovered, there will be no question of dismissals or no question of imposing hardship on people who have come to get their livelihood in posts that were thrown open to them and to which they succeeded in the ordinary way.
I still believe in what I said in my broadcast. I think Government Departments are far too large. I think there is unnecessary interference with people's businesses and people's lives. If that mood could be generated in the minds of Deputies, and more particularly in those who, becoming members of Government from time to time, control Departments we would have a more satisfactory position here. If policy was moulded in such manner as to give more and more responsibility to local groups, or even to the individual himself, we could over a period of years dislodge these mammoth Departments and get to a better type of living. I think that policy is capable of implementation but I think, too, that it will have to be done easily and slowly over a period of years because if one were to rush at this there would be hardships. That is not necessary.
Now, if anyone takes from that speech of mine that there is a promised reduction of £20,000,000, which was the phrase used by Deputy MacEntee last night, then that person is clearly incapable of understanding the full and clear implications of my statement, or else he is wilfully ignoring them in a decision to make that statement a mere debating point here. Even if we are in the position, as I have said earlier, in which one person says: "You cannot make economies; we do not believe you can make economies and you are not going to make economies," I think we have given the people at least some hope. We have given an indication in four different ways of what a particular attitude of mind can bring about.
An editorial in the papers the other day about disappointment was referred to. Now Fianna Fáil have suffered four major disappointments in the last eight months. They have been disappointed in relation to the reduction in the price of butter; they have been grievously disappointed in relation to our cushioning the people against an increase in the price of tea—an increase we did not think would last and in relation to which we thought it better politics for the economy of the country to cushion the people against for the time being.
The third disappointment was the Book of Estimates and the figure on the cover of it, although one must remember—I say this in the absence of the Minister for Finance, but he will give his own explanation subsequently —producing the Book of Estimates is only one part of the account. One knows that that book has to be examined still further to see what can be regarded as proper to be met out of taxation in a particular year. One has to find out, as Deputy Lemass said, if there is constant overestimation of expenditure by Departments and, if so, what does it amount to and what can be deducted. It is a matter, also, to be examined before the Budget is presented; this is only one side of the account and it is taken without any advertence at all to the new view, so to speak, that may be taken of that as forecasting expenditure along certain lines.
The fourth great disappointment is this matter of the bank rate, about which Fianna Fáil have not yet made up their minds. I think these things are significant. Further, I think it is quite clear to the public who either listen in or read the debates that if Fianna Fáil were still in Government there would have been no reduction in the price of butter. Tea would be selling at 3/- per lb. more than it is at the moment. The Book of Estimates would certainly not show even a reduction of £2,750,000 on its cover. If we are to judge them not merely by their past performance but by their peculiar arguments here in the last couple of days the bank rate here would have moved in accordance with the bank rate in England. These four things are clear and mark the great distinction between the people who are opposite to me now and the people who sit beside me on these benches.
Coming to the butter subsidy, I do not recollect now if there was any consistency in the argument used against that except possibly that the Fianna Fáil Government must have expected that, since 1952, subsidies would never be attempted again. They must remember that we agreed with our colleagues in Government on a programme and in that programme it was the aim in particular to keep the price of foodstuffs down. We certainly did not disavow the possible or probable use of subsidies. I want now to put a point to anyone who may feel inclined to argue about that: Supposing it was possible to get the cost of Government down by £5,000,000 or £6,000,000, is there any better use to which that money could be put than in subsidising the price of essential foodstuffs? I do not know in what other way one could benefit the general income of the community at large. A reduction in taxation may only apply to certain sections. One can think of meeting the industrialists, for instance, in relation to depreciation at the moment. I do not want to be taken as agreeing to that, but I want to point out that that would benefit only a limited group. If one has £5,000,000 or £6,000,000 to spend, what better way is there in present circumstances of making that beneficial to the whole community other than by some process of subsidisation?
I come now to tea. We are told now that this is more than subsidisation: it is borrowing. I do not think it is. Certainly we have not come to that point yet. It may be that, looking back on it a year hence, something will have to be found to meet the overdraft, and that will have to be taken out of borrowed moneys. But we have not come to that yet. I cannot understand the mistake in its application to tea. Possibly it was a mistake also in its application to turf. One of the complaints made against me in 1951 was that I had made no provision with regard to the overdraft of Fuel Importers. That is tucked into the Book of Estimates as a Supplementary Estimate brought in in that year; it amounted to £3,079,000. It is possible apparently, therefore, without hurting the economic sensitivity of certain people in Fianna Fáil to borrow for turf, but at no time apparently is it possible or economically sound to borrow in order to cushion the price of tea, even under present circumstances, in which it is quite clear that the increase with which we were faced, had the ordinary price been allowed to have its play, was a completely artificial one. Since then tea has been reduced twice in England.
In regard to the third matter, namely this Book of Estimates, we are told: "Oh, you may have got £2,750,000, but look at what it is; first of all, part of it is in capital services and on the Supply Services in the year there are certain windfalls." One must offset in the Estimates of any year the things that are windfalls and the things that are extraordinary expenditure that have to come in increased payment during another year. This is supposed to come from American money. It is quite proper to take advantage of that. If that is not so, for instance, Fianna Fáil would have in some way applied that to the reduction of the national debt, to be regarded as not to be part of the year's costs. They would be showing a Book of Estimates far increased on last year instead of being at least this healthy reversal of the old trend that was observable.
Last of all these matters is the banks. Here, of course, it is quite impossible to find out what Fianna Fáil mean about the bank matter. I heard Deputy Lemass speak to-day and, of course, he was ready to go on one road until he was held up by quotations and then, adept as he is in changing his feet, he did not get very much round towards a new point of view.
Deputy MacEntee made a speech which can and must be taken as a speech entirely in favour of the banks, a speech whose tendency would be, and I think it was intended, to cause a certain amount of panic amongst people who are depositors. He gets back to that shocking advertisement that was issued during the election. Deputies talk here about promises. They have not been identified as such.
That appalling advertisement was published by the Irish Times and the Irish Press but I do not think the Irish Independent published it. Does the Deputy remember the “Bill Sikes” advertisement, in which Deputy Norton was shown? There was a second person depicted, by some identified as myself and by others as another colleague of the then Government, Deputy MacBride, but either he or I with Deputy Norton and some third person. We were there in the coloured jerseys and all the gross appearance of the safe-crackers and with the jemmy in our hands and the line underneath was “It is your money they are after”. That was arising out of a complete misquotation of a statement I made asking here that something should be done earlier which is now being done in England, brought in by a Liberal Government and kept on by a Conservative Government, to drive out money secretly hidden in the banks, without being taxed, so that the tax would be levied. I think the same mischievous attempt was made here last night to stampede depositors. Following the lines of an editorial, the man who was talking last night found fault with the Minister for Finance's approach to the banks. Whether he wagged the big stick at them at all, if he made representations to them, if he argued with them, the fact that he got a result is what pains Fianna Fáil. According to Deputy MacEntee last night, that was getting near towards the socialisation, the nationalisation and the Sovietisation of the banking system and then, of course, his imagination went wild and he asked would this be applied to Jacobs and Guinness's—the usual sort of mess that Deputy MacEntee is so experienced in creating.
Deputy MacEntee was quoted by the present Minister for Health, Mr. O'Higgins, when he was a Deputy of Dáil Éireann. I have both the quotation and the original from which it was taken. I think the quotation puts it very well. At column 341 of the Dáil debates of the 12th March, 1953, Deputy O'Higgins, as he then was, referred to Mr. MacEntee, speaking about credit facilities and quoted what he had said in 1927, as follows:
"You have seen what France did, as this British observer says, by her own resources. She had not to borrow abroad. The money, credit and capital, as well as the labour to do this was provided by France. How has that been accomplished? The Government controlled the credit and retained control of that credit, notwithstanding the inducements made to it by foreign financiers to surrender it. The Government was not under the control of the credit manufacturer, as the present Government in Ireland has been since the day the Provisional Government accepted their first loan from the Bank of Ireland early in 1922."
He is criticising Mr. Cosgrave, then President of the Executive Council.
"Controlling that credit power, the Government of France compelled it to the service of the State. It never allowed it to restrict itself so as to cripple industry, but forced it to expand, when such expansion was necessary to carry through the great schemes of national reconstruction that the State had framed. Compare the blessings that the policy of that enlightened and patriotic Government brought to its people with the misery and suffering we have endured under Mr. Cosgrave, who has kept us all the time tied up in a strait-waistcoat of Threadneedle Street."
Deputy O'Higgins went on, in column 342 of the same debate, 12th March, to give a quotation from the 23rd September, 1931, when the then Fianna Fáil Minister for Finance said:—
"Even before the Fianna Fáil Party went into the Dáil, its members had directed public attention to the dangers to which our people were exposed by reason not only of our attachment to sterling but of the shortsighted policy of the Anglo-Irish bankers in investing their depositors' funds in British securities. The Free State Government, under President Cosgrave, has been on the side of Britain. The Anglo-Irish banks have been on the side of Britain. The Currency Commission has been on the side of Britain."
That is the speech of a man who wanted credit control and credit control by a Government. I suggest that is the only interpretation to be taken from that and the condemnation is, surely, that people here were in a strait-waistcoat with Threadneedle Street and that the Free State Government and the banks—the Anglo-Irish banks—he was not so friendly disposed to them—and the Currency Commission were all on the side of Britain. What has happened in the last two or three days to annoy Fianna Fáil is that a step was taken which they would not have taken, of course. Therefore, they have to deride it and try to cause panic and disorder.
What do Fianna Fáil want us to do? It is quite clear that what called for this particular movement in Britain did not operate here. There are many articles on this subject. I have one here from the Sunday Times of February 27th. A paragraph that occurs in it is this:
"The main signal of trouble was the trade returns. The terms of international trade have been moving against us for some months; the excess of imports over exports has been growing; sterling has been weak—a sterling-area matter. At the same time the volume of money in circulation has been rising, with accompanying pressure towards higher prices. The classical instrument for correcting both those sets of symptoms is a rise in bank rate."
The two sets of symptoms are that the excess of imports over exports has been growing—with us it is the reverse; there is still an excess but it has been lessening—secondly, the volume of money in circulation, whatever it is, has caused pressure towards higher prices. There has been no such pressure here. These are the two matters for which the classical remedy is a rise in the bank rate. Would the Minister for Finance here have been doing his duty if he had heard that bankers here, although the reasons for this classical remedy were not present, were going to apply the remedy—would he have been doing his duty if he failed to point out that it was the economic position in England that called for what happened there and that there was no economic reason here calling for what had happened in England? For that, the fuss has now been made, that this is Sovietisation of the banks; the big stick has been wielded, representation has been made. Deputy Lemass says he does not know what happened; he wants to know.
