I mentioned three of the Government's promises—to keep the cost of living down, to reduce taxation and to expand agricultural production. Another promise was to improve the conditions for private enterprise in this country. Deputy Lemass dealt with that at some length and I propose to come back to it later on in some detail. At the moment, I would just say that Deputy Lemass's concern for private enterprise in the previous Government did not prevent that Government from hogging the whole of the capital market in this country during the period for which they were in office from 1951 to 1954. One can pay lip-service, if one likes, to the idea of private enterprise and of making adequate facilities available for it; but it is a different matter to provide the conditions in which the facilities will be available, and that is what the present Government have done.
I think it is unlikely now that a national loan will be required this year and I would hope that in these circumstances, in the autumn of this year and the beginning of next year, many of the private enterprise firms who have been depending on bank accommodation for their working capital will have an opportunity of going to the market and getting permanent capital, so that they will no longer be in the position of depending on what is really short term accommodation.
The sixth point was to increase employment and reduce emigration. Whether the Government were responsible or not, the fact is that employment has increased and that there are not and could not be, despite Deputy Lemass's opinion, as many people emigrating now as were emigrating during the years 1951 to 1954. I shall come back to that point again.
"Social welfare benefits will be increased"—the Government have already increased old age pensions by 2/6 per week. To my mind, it is a modest enough increase when one considers that, in purchasing power, it brings the old age pension just back to the level at which it was before the war in 1938. Having regard to the fact that the national income has increased since that time by 20 per cent., I think, as I have mentioned, it is a moderate enough level, but at least it is a far better level than it was on the two occasions when Fianna Fáil left office. The standard rate of old age pension when they left office in 1948 had been increased by nothing like the increase in the cost of living. Last year the standard rate of old age pension at 21/6 was well below the increase in the cost of living as compared with 1938.
"To secure the building of more houses by private and public effort and in particular by improving the credit facilities and easing loan charges"— that has been done, that is item No. 8.
Item No. 9 involved the removal of the health services from the field of acrimonious political discussion. By the efforts of the Minister for Health that has been done.
I come now to two items in that programme which have not been attended to yet in the way which the Government hopes to deal with them. No. 10— to establish a Ministry specially concerned to deal with the cultural and economic problems of the Gaeltacht; no one would deny the seriousness of those problems. That is a specific promise of the Government. No. 11, as has been indicated by the Minister for Education, has already been put in hands—"to examine the whole field of education in the light of experience gained since the establishment of native Government and with special regard to the position of the national language".
No. 12 has in fact been carried out— it related to the restoration of democratic rights in respect of local government by the amendment of the County Management Acts. I come back now to the only one of them which I omitted, "to restore the unity of Ireland and to safeguard the Irish cultural tradition". The position the Government has taken in that matter was dealt with yesterday by the Minister for External Affairs.
This is the printed document which was issued before the formation of the present Government. Could any reasonable person say that an honest effort has not been made to implement that document as it was issued at that time?
I come back now to Deputy Lemass's speech. He claimed that any development in agriculture which occurred all through the year 1954 was due to the Fianna Fáil Party, to the Government which was in office until June of last year, and that all the credit for the position which has existed, the relatively satisfactory position which has existed in agriculture, must go to the Fianna Fáil Party. All right; I grant that, for the purposes of discussion. Why then did Deputy Lemass say that the increase in the cost of living of three points is the responsibility of the Government, when two of those three points occurred between May and August of last year? In other words, part of it had occurred before the Fianna Fáil Government had left office and in actual fact it was a marginal matter whether the third point did not occur previous to last February. It is the inconsistency and the illogical position taken up in these two parts of his speech that I am putting into comparison with one another. The cost of living did go up three points in the last 12 months and two of those points occurred in the first three of those 12 months.
For all the talk and generalisations we heard from Deputy Lemass during his speech, with a single exception of the reference to tea, he did not quote a single example of a mistake made by the Government in an economic decision which they took, in any decision in relation to economic policy. He made continuous references to the future. It is very easy to deal with the future in that particular way, to act the part of the gentleman who says: "the bogey man will get you if you don't watch out". I am inclined to think that the prices position in the world may not be as easy as it was for the last Government. They were very fond of saying that the difficulties which met them were due to external conditions. That is not so. World wholesale prices reached their highest in March and April of 1951 and they dropped 10 per cent. in the following two years.
When Deputy Lemass came into office he signed price increase Orders for a multitude of industrial products, based on these high prices of raw materials—which are roughly half the cost of our industrial products. There was a drop of 10 per cent. in the price of these new materials and, therefore, in this half of the cost of industrial products, yet I am not aware of any instance of any significance in which Deputy Lemass signed a prices Order reducing the price of any industrial product during the succeeding three years when he was in office up to June of last year. Why did the people not get the benefit of this reduction during that period?
Deputy Childers is very fond of referring to the year 1953 as a great year of recovery. I have two points I want to make in relation to that matter. The first of these points is that the year 1953 was bound to be a year in which there would be recovery, because of the slough into which the economy had descended at the end of 1952 and the beginning of 1953. Such recovery as happened was due, in the main, to a policy of borrowing on a vast scale. Nobody would object to that borrowing if it had been put to good purpose, but the purpose to which it had to be put was the recovery of the country following the damage which had been done by the mistaken policy in the 1952 Budget.
According to the Statistical Survey for 1954, page 50, the domestic physical capital formation was nearly £78,000,000 in the year 1953, far the highest figure of any of the recent years, more than £4,000,000 higher than the year 1951. How was that brought about? It was brought about by borrowings by the Minister for Finance and the Dublin and Cork Corporations, new capital borrowings, that is, actual issues on the market. Of course, there were other assets available to the Government like the savings in the Post Office Savings Bank and so on, but the actual capital issues amounted to just under £30,000,000.
In the year 1950, Deputy McGilligan, then Minister for Finance, was supposed to be "borrowing us into insolvency" and the total amount of new capital raised in that year was £19.4 millions. It is for that reason that I have some doubts, from a strictly economic point of view, about some of the figures which appeared in the Taoiseach's statement:—
"Percentage savings, as computed by the Central Statistics Office, amounted to 13 per cent. in 1953 but fell back to 10.7 per cent. in 1954."
This question of savings is bound up with the other matter of capital formation because, as computed by the Central Statistics Office, capital formation is equal to savings, plus depreciation, plus external disinvestment. There would be no reason at all to disagree with depreciation and external disinvestment. They are easily computed but if you compute capital formation by adding up all the bricks, mortar machines and so on which are produced or imported into a community in a year and then say that, after taking into account provision for depreciation and external disinvestment, the remainder is savings you are bound to get, or almost bound to get, a figure which is higher in a year when there are large-scale issues of public borrowings than in a year when there are no such issues.
It is my submission that this borrowing in 1953 by the Government and the local authorities was largely the creation of new money and that it was, therefore, responsible for the increase in capital formation and that it did not represent savings. Therefore, I am inclined to think that one should be very careful about making year to year comparisons of savings. It is a very difficult matter. You can know at certain times. For example, after the outbreak of the war in Korea it is quite evident that from a monetary point of view there were no savings, thinking in terms of money, because everybody was stocking up with goods in case there was a major war. Subsequently, these goods were gradually used up and while they were being used up there tended to be monetary savings.
Might I say that in entering this caveat about these figures I am in a minority? The particular method of approach to computing these savings used by the Central Statistics Office here is that used in most modern countries and our efforts in relation to the matter are remarkably good, that is, from the calculation point of view. In other words, the statistics office here sins in a very numerous company. But from a personal point of view, even if I were alone in my opinion, it would not worry me to say that the results of these calculations are at times quite inaccurate—but I am not alone in the matter.
For example, it has been said recently in Britain in The Economist— I cannot give the exact date but it was towards the end of last year—by one of the statisticians who have engaged in the study of this matter that in Britain there was a missing £500,000,000 in relation to a recent year. If there is a missing £500,000,000, you can put any name you like on it. You can call it a balance or you can call it savings if you feel like it. If it is one way it is savings and if it is another way it is disinvestment. When you have figures of this sort, balancing a figure added to another figure against a third figure, it is the very same as a balance sheet. This national income accountancy is exactly the same as the old company balance sheet. A great deal of hard work goes into it just as a great deal of hard work sometimes goes into balance sheets. It follows that if there is this defect over short periods in this method of calculation any explanation of a fall in personal savings from 10.3 in 1953, say, to 8.6 in 1954 is open to doubt.
Items like stocks and work in progress which come into it relate to moments in time and it is difficult to bring such items which relate to moments in time into comparison with the process which occurs through time —that is the process of saving. As I say, I have no doubt that savings did increase in 1953 compared with 1952 and 1951. I grant that. It is a reasonable proposition but whether, in fact, they were greater in 1953 than in 1954 is a matter which is open to doubt.
Let us come back to the speech made by Deputy Lemass for a moment. He suggested in the opening sentences of that speech that the Government had decided to adjourn the Dáil for more than three months to escape questions. The Government have decided, with the agreement of the Opposition, to adjourn the Dáil because the work which was put in hands has been completed and for no other reason. If some of the questions which we heard yesterday, two of them in particular, are to be regarded as the embarrassing questions, I think it is just as well for the Opposition that the House is going to adjourn for more than three months.
He suggested that the Government were afraid of the upward movement of prices and quite blandly suggested that there was no reference to the problem in the Taoiseach's speech. There was, in fact, a detailed reference to it—a reference of some length. Deputy Lemass also stated that the Taoiseach was the head of a Government not all of whom were agreed on principles of practical policy. He gave no example, no instance of that. He mentioned no single instance. He threw out that general statement and again he gave us no single instance of it. He suggested that the Government was carrying on administration on a day-to-day basis. I have shown, I think, that the Government has covered in its first year in office a considerable part of the programme which it set before the people as its programme.
Deputy Lemass suggested that there was an excessive concern with the maintenance of a political front. Deputy Lemass made a statement and wrote to the newspapers about the system of voting in the local elections. I do not think that anybody would defend a system of voting in which a person gets a ballot paper with 20, 30, 40 and even 50 names on it but that is a matter of administration of elections. It should be quite easy to deal with that particular matter so as to reduce the number of candidates in any area to some number like ten or 12. It has been suggested by many people that quite a modest deposit by candidates in the local elections would result in a considerable reduction in the number of such candidates.
In the considerable portion of his speech which Deputy Lemass devoted to prices, past, present and to come, his general line might be put in the question which he asked at one stage: Has the Government any policy at all about prices? I will answer that question. It is a general question and I shall answer it in the only way in which you could answer such a question. In present circumstances, in the position which the Government finds itself in recent months, the Government's policy is to keep down prices anywhere and everywhere it can. That is the Government's policy and it is quite obvious that I am speaking the truth when I say that. There is not one title or jot of evidence that can be produced which indicates that statement is not correct.
He also asked the general question about the cost-of-living index going up —"does the Government think they can do anything about it?"—and at that point he made what was really a very foolish suggestion. I do not think he quite meant it. It must have been his irritation over the local elections. I do not really believe he meant it. He said that because, in some stencilled document or other that we all get, there was a blank for the cost-of-living index for the month of May, it had been held up in Merrion Street, and when put to the point he said, "in the Taoiseach's Department". It certainly was not to my knowledge held up in the Taoiseach's Department. That is the only answer one can give to that. The Taoiseach said it was dealt with in the usual way. I do not really believe—to be fair to him—that Deputy Lemass meant that. He may have looked for the figure and may have been irritated when it was not there where he would normally expect to find it. That may perhaps account for it. He dealt at some length with the industrialisation of the West and on that I would like to make the following observation. An Foras Tionscal when first set up by Deputy Lemass put in hands some projects and did in its first year or so achieve some good. I am not going to go into figures for it now. I have not got them with me, but there is no denying that it practically ceased to operate during the year 1953 and the first half of 1954. It was resurrected by the present Government and one of the reasons it ceased to operate was that the people who were operating it were the same people as were developing industries here and were concerned with matters like the Industrial Credit Company and were concerned with industries in the eastern part of the country. If I were in earnest about setting up a body to develop industry in the West, I certainly would not have the same personnel on it as we have on the committees concerned with the development of industry in the eastern part of the country.
Deputy Lemass also said that you could not invest in the West if you were going to turn down every proposition which conflicted with private enterprise in the eastern part of the country. To the best of my belief, when Deputy Lemass was Minister for Industry and Commerce his instructions to the people who were operating An Foras Tionscal were that industries were not to be set up west of the Shannon by An Foras Tionscal if they competed with private enterprise in the eastern part of the country. I am not necessarily quarrelling with the principle behind that decision; I am quarrelling with the nature of the speech that Deputy Lemass made here this evening on the subject, he having given that decision. I think it is reasonable to quarrel with it.
Deputy Lemass suggested—quite rightly in my opinion—that the level of investment in private enterprise has been inadequate in recent years. Of course it has. That is borne out by the figures on page 12 of the current report of the Central Bank. What was the best year for new capital issues for private enterprise in the last five years? The best year by streets was the year 1951 when there were issues for industry and commerce— that is for private enterprise—of £4,500,000. The issues in 1950 were £1.4 million; in 1951, as I have said £4,500,000; in 1952, £1.4 million; in 1953, £.9 million; in 1954, £.7 million. In 1953, in the year when the State and Dublin and Cork Corporations borrowed £29.9 million, you had private enterprise issues amounting to £.9 million. Take the first two years of the period, when the previous inter-Party Government were in office in 1950 and 1951—taking them together—the State and Dublin and Cork Corporations floated loans amounting to about £25,000,000, while new capital for industry and commerce amounted to a modest enough total of £5.9 million. Compare this with the years 1953 and 1954 when the State and local loans amounted to £54,000,000 and the private enterprise capital raised amounted to £1.4 million.
On this subject I think there is a good augury that we are on the verge of a change; it now seems unlikely that there will be a national loan this year, and I would, therefore, hope that the many issues of new capital which private enterprise has been unable to make since the year 1951 will at long last be made, and that these companies who have been depending for so long on bank credit will be able to put their affairs on a more satisfactory basis from the capital point of view.
Deputy Lemass referred to the grassmeal project. I thought the grassmeal project had been threshed out at some length in this House and I understand from the local election results in that particular part of Mayo that the people of that particular part of Mayo are satisfied with the arrangements the Government has made for the development of those particular bogs.
