I must say at the outset that to hear Deputy Tully, a Labour Deputy, speak as though time was wasted in this House discussing the increase in the cost of living and that we were taking unnecessarily two days of the time of the House in order to raise this matter arouses cynicism beyond belief. The House was adjourned for many, many weeks. The House has returned with an Order Paper which is packed with Bills, most of which are not ready for consideration, showing that the Government either find it difficult to make up their minds on these measures or find it difficult to get the work done. Yet we hear Deputy Tully, whose Party confused the public's mind over the cost-of-living issue ever since 1948, regretting that we have chosen just two days of the time of the House in order to discuss this matter. Before I deal with the general question of the cost of living, I should like to refer to a number of Labour Deputies who have had the effrontery in this House to gloss over the tremendous tide of emigration that has been taking place, that is a running sore in our midst, that has been a problem in this country for many, many years, which no Government has been able to solve, which has reached such heights in the course of the last few years that for anybody to talk about reductions of a few thousand in the number of unemployed is giving a totally false picture of the position.
Members of the Labour Party and, indeed, of the Fine Gael Party, should read the Population Commission Report, should read therein the melancholy news that of the young boys and the young girls aged 14 who are now with us, 25 per cent. of the young boys and 40 per cent. of the girls will emigrate if the pattern of emigration continues as it has been during the past few years.
The whole question of the unemployment figures becomes completely irrelevant unless the tide of emigration is considered at the same time. From 1946 until 1951 over 100,000 people left this country. They left it during that whole period of Government. We will never get any of our economic problems solved if Labour Ministers come here and give us minute reductions of a few thousands in the unemployed in this sector or in that sector when the whole of it has to be related to emigration.
Everyone knows that in the western districts for the last few years the people have been leaving more rapidly and even leaving earlier. Young lads and girls are leaving at the ages of 16, 17 and 18 and going to Britain. Whole families are leaving. It is the most serious problem that we have to face and there is no solution for it but higher production.
The time of this House has been wasted ever since 1948 on a futile wrangle over the cost of living, largely started by the Labour Party, and they have failed to deal with the far more complex and the far more fundamental problem of how to increase production and how to overcome a stagnancy which, however it may change in a marginal way, is still the major problem we all have to face.
I would like to hope that some day or other the members of the Labour Party will cease to show that sort of Fine Gael gloss which makes them capable of discussing unemployment figures without at the same time, as I have said, dealing with the problem of emigration.
In regard to this whole debate on price levels, the Government is gradually coming back full-circle and is gradually in every step it takes paying tribute to Fianna Fáil, apologising for its past statements, admitting that we were right in all the major aspects of our policy. I, having with other Deputies faced the hustings for a number of these elections when the cost of living was flung at the people as the major issue, was delighted to hear the Minister for Industry and Commerce say that they could not afford the £3,500,000 in order to maintain the price of tea at its present level.
It was interesting to hear a Coalition Minister at last admitting that some subsidies can be over-costly. But, when the same Government left us a Budget unbalanced to the tune of £6,000,000 when they left us facing a situation where food rationing was rapidly ending, when the consumption of food was rapidly increasing and when we found that we could not levy the taxation to pay for the full rate of subsidies that would have been required in order to meet other increases in Government expenses, of course, then, when we said that we could not afford the necessary money for the subsidy on tea, we were regarded as fleecing the people, as deliberately causing discomfort and misery among the people. But when, to-day, the Minister for Industry and Commerce, at last cured of this paralysis of economic thought, now comes before us and tells us that they cannot afford the £3,500,000, that is all right, that is desirable policy, that is not hurting the people.
It has been a very long story and Deputy de Valera earlier this evening gave to the House a full description of what happened in the year 1947 when there was a temporarily sharp increase in the cost of living. I only want to refer to this, that in the election of 1948 we had the first of the campaigns dealing with the cost-of-living issue and it was then that members of the Coalition diverted the people of this country, apparently almost permanently, from discussing the major issue of the post-war world, which was the increase of production, by accusing us of being responsible for all the increase in the cost of living and levying the most serious charges, charges that we were corrupt in the administration of price control policy, charges that the Fianna Fáil war chest was being filled with corrupt gifts from profiteers who were going unpunished. One of the major issues in that election and from then onwards was this question of the cost of living. When they got into office they found that there were no profiteers. No one was prosecuted. They found the price control mechanism was being adequately worked and that there was no evidence whatever that the manufacturers were fleecing the people of this country through either the corruption or the ineptitude of the then Minister for Industry and Commerce.
As I have said, this whole type of discussion which has diverted the attention of the people of this country from the major issues which concern them continued from then onwards. Many of the questions that we have asked of the Coalition Parties in regard to the inflation of prices that took place during that period were never answered.
Many times we asked this very simple question. If you take the period when prices started rising all over the world —the period from the devaluation of the £, followed by the Korean war—and trace the increase in the cost of living that took place from the year 1948 until the end of the inflation in 1953, how is it that the cost of living increased either a little more or exactly the same in every Western European country with our kind of economy, with our kind of set-up, affected in the same way as ourselves by the value of sterling, affected in the same way by the effects of the war and the effects of rearmament? How was it you could have this increase taking place in every country in the world at different levels during different years and that we were to be made responsible for all the increases that took place in this country?
We asked how it was that countries with Labour Socialist Governments, far wealthier than ours, were themselves unable to afford the full panoply of subsidies on food and had themselves to abandon all or part of those subsidies during exactly the same period as we were doing. We asked how it was accepted that, using the £ of the same value—as in the case of Britain or any other country in the sterling area—we were supposed to be able to keep the cost of living down to the 1948 or 1949 level and that we were supposed to be able to carry out a miracle in this country when no other country was able to do it. Of course, we never got any full or proper answer.
Many times we challenged the members of the Labour Party to read the reports of an organisation for which they should have the greatest respect —the International Labour Organisation, whose conventions we have many times authenticated and put into operation in this country—to read all the facts and figures given by that organisation for the benefit of trade unions all over the world to help them to obtain a better standard of living for their workers. We challenged them to assert that, during the period of the inflation in 1953, the people of this country were any less well off, relatively, than they were in 1948 either in respect of what any person having an ordinary labourer's wage could buy with his weekly pay packet or in any other respect. We never got any substantial or worthwhile answer to these challenges. We were never told by the Labour Party that the figures given by their own organisation—an organisation designed to help them—were false, were lies and were produced in their office in Geneva solely to assist Deputy de Valera and his Party. At the same time, they never denied them. That was the position.
We heard this evening from the Taoiseach that the reason why the 30,000 people who caused the defeat of the Fianna Fáil Government in 1954 changed their views was not because of the promises to reduce the cost of living but because of the severe effect of the 1952 Budget. Yet, the facts show that, as the months have gone by, every single aspect of our financial policy was proved and has been proved by the present Government to be right and proper.
The present Government charged us with lunatic expenditure. The present Minister for Defence went around Longford and Westmeath accusing me of believing in a super State. He accused me of believing in a super State in which the Government extracted a vast proportion of the people's wealth and spent it. The Minister for Defence went on to say, that that was an ungodly kind of State and that I was advocating it. He said the Government was extracting a wholly excessive proportion of taxation from the people and, as a result, the people were unable to live according to the family principles held so dear by him. What was found? It was found that there was no lunatic extravagance. Examining the Book of Estimates and the Budget of this year it was found that the Minister for Finance was unable to make any but marginal changes and that most of the savings he was able to effect, before he announced a Budget which involved a greater expenditure by £4,000,000, were of a purely marginal or windfall character. There was not the slightest evidence of lunatic extravagance.
We were told that, even with the lunatic extravagance, taxes were levied unnecessarily. We were told there was a deliberate over-taxation of the people because we wanted them to live a hair-shirt existence—that we wanted them to consume less, to eat less, to drink less and to amuse themselves less.
When the new Government came into office they were unable to make any notable change in the level of taxation. During the course of this debate we have frequently challenged the Taoiseach to tell us why he cannot, even now, promise to remove the hideous and abominable features of the 1952 Budget. All we have had is the lame excuse that it takes some time to alter the financial structure of the country's existence and that the damage cannot be undone in the course of two years of office. I am willing to prophesy that, unless production increases so much that the whole incidence of the yield of taxes changes, the Government will find they will never be able to make the drastic changes in taxation that they would have to make if they are going to prove the contention that the 1952 Budget was savage and unnecessary in character. They have had an opportunity of examining all these things. They had an opportunity for 17 months of examining the incidence of all these taxes.
It somewhat surprised me that the Minister for Finance did not take a chance with some of the existing taxes on the basis that the taxes were unnecessary and cruel and that if they were reduced there would be a greatly increased consumption of the commodities upon which they were charged and the result would be that he would get perhaps more rather than less money. It was interesting and consoling to see that the Minister for Finance did not take 3d. off petrol in the belief that people would drive their cars so much further that he would get the 3d. back and some more. It was interesting and consoling to see that the Minister for Finance was not able to take a single chance in respect of any of the main taxes which had to be imposed in 1952 in the hope that consumption would increase, that people would enjoy themselves more and consume more and, as a result, that he would get back the money and achieve the level of revenue he desired and perhaps a bit more. It was consoling not to see that and we know well that the present Government will never be able to prove that the taxes levied in 1952 were unnecessary.
Everything goes to show that, in fact, the level of expenditure at the end of our period of government could not be reduced: that, if all the promises in regard to social services, in regard to educational services and in regard to all the other services of the House of a social welfare character—which amount to something like £60,000,000 a year—were to be carried out and maintained and expanded it would be quite impossible to reduce taxation to the level promised during the general election. Of course, if social services are further increased it will require a measure of taxation in order to pay for them. As the cost of living rises during the remainder of this financial year, and as the effect of increased wages, with increased production to a sufficient degree, causes prices to increase still further, the cost of Government will increase again and make the task of the Minister for Finance again more difficult in the Budget of 1956. We were all aware of these things. It is very difficult to explain to people down in the country who have not the time or the inclination to study all the details involved in Government finance and budgetary practice how these increases take place and why.
One of the features of the attacks made on us when we were in office during the period from 1951 to 1954 was that we were exaggerating the difficulties in regard to the deficit in our balance of payments. We well remember all the nonsensical propaganda that emanated from the Opposition Benches. We were told that the taxation was unnecessary, that we were hair-shirted economists, that we were following strictly in the line of Mr. Butler, the British Chancellor of the Exchequer, that Deputy MacEntee, as Minister for Finance, was apparently in league with him and that budgetary policy here was following the same line as British budgetary policy.
I was amazed to see that the present Minister for Finance has made one more confession about budgetary practice. I do not think that either the members of the House or the members of the public have examined in sufficient detail the speech of the Minister for Finance at the Dublin Chamber of Commerce. There were some things he said which would delight the heart of any member on this side of the House who had had to listen to the filthy propaganda during the year 1952 about our being in some secret conspiracy with the British Chancellor of the Exchequer. I refer to the statement made by the Minister for Finance in which he asked the people to spend less and to save more, that it was essential for the country that the balance of payments deficit should be corrected. To be quite fair, he said it had not grown to serious proportions, but nevertheless it might become serious, and he begged the people of this country to spend less and save more.
In 1951, at the end of that year, as everybody will remember, the total adverse balance of payments was in the red by £61,000,000. In this year we have been told that the figure may rise to something in the neighbourhood of £16,000,000 to £20,000,000. We were also told by Deputies like Deputy Declan Costello in 1952 that it did not matter if the external assets position was unbalanced, that it did not matter if we imported huge quantities of consumption goods which we had not paid for with our exports. Now we see a complete volte face, a complete change by members of the Coalition Government. Once they are in office, it is dangerous to have a deficit in our balance of payments, and if we buy ordinary consumption goods which we have not paid for by means of our exports, under their Government, to try to restrain it is no longer a conspiracy entered into with the British Chancellor of the Exchequer and it is perfectly all right with them to make an appeal to the public to spend less and to save more; but, of course, if Fianna Fáil does that in circumstances which, though not exactly analogous had some element of similarity, we are then supposed to be in a conspiracy with the British Chancellor of the Exchequer.
It so happens that the Minister for Finance made his speech at the Dublin Chamber of Commerce almost exactly at the same time as the British Chancellor was begging the English people to spend less and save more. The two Ministers were speaking in unison on the same subject and they were speaking on the same subject because it is not only an Irish or an English problem. It is a problem of the whole sterling world in which we live and I suppose that we could very easily, just before this by-election in West Limerick, publish in thousands of broadsheets the parallel speeches of the Minister for Finance and the British Chancellor of the Exchequer, and accuse the Minister for Finance of entering into a secret conspiracy with the British Chancellor to try to reduce the standard of living of the Irish people by begging them to spend less and save more.
That would, in truth, be following the line of the Coalition Parties, but we are not going to do it, because we do not believe that any Minister who is fully acquainted with the facts can fail to observe that there is a similar state of affairs in every country in the sterling area. Therefore, as I have said, we do not propose to indulge in dirty propaganda of that kind, but we could say it, and could point out the fact that when the Minister for Finance at the Dublin Chamber of Commerce asked the people to save more and spend less, he was, in slightly different but analogous circumstances, merely giving advice of the kind which in some ways was necessary during the short period of the Korean inflation.
As I have said, the Taoiseach in the course of his speech implied that the people of this country were cruelly hurt as a result of the taxation measures. Nobody liked to impose these taxes; nobody liked to reduce subsidies, none of us wanted to do these unpleasant things. The result was a reduction in consumption by the people, according to the figures published by the present Government, of not more than 2½ per cent. in the year 1952 as compared with the previous year, and most of that could be ascribed to the fact that everybody had stocked up during the period of the Korean war and that during the year 1952 their tendency to buy was not so accelerated, and, as a result, there was a very slight decrease in consumption—practically none in the case of foodstuffs, practically none in the case of essentials, but the 2½ per cent. covered all the commodities the people of this country bought.
That is a fact, and it cannot be denied by the present Government, but we were supposed to be forcing the people to indulge in a hairshirt economy, to be forcing the people to consume so much less and forcing them into a state of misery. Of course, in 1953 and 1954, there was a very great measure of improvement in the trading position. There was a considerable measure of improvement in the industrial production of the country and there was a mild but satisfactory increase in agricultural production in 1954, all of which brought back consumption to the highest level it had ever reached, and in 1954, when the full facts are published, I am quite certain the present Government will have to admit that the very slight reduction in our expenditure on goods had been entirely overcome, that the expenditure on goods in that year, I imagine, would have reached an all-time record, that production and trade, we know, were satisfactory and, in fact, that we had gone through a typical period of inflation, followed by recovery, such as was experienced by practically every country in the world where the conditions were the same.
But of course, when we had to experience the same slight recession in trade, the same sharp increase of prices as took place in all the other countries of the sterling world, that took place in Great Britain, in Denmark, in Holland and in this country, it was solely because Deputy de Valera, the then Taoiseach, wanted the people to consume less and to enjoy life less, because he wanted them to don a hairshirt. I think the people of this country, whatever their political Party affiliations, can really afford to laugh at the idea that they were wearing hairshirts in 1952, 1953 or 1954. The idea that there could be the slightest element of hairshirtism in the last year of our office is nonsense and I think it is about time we heard the last of that phrase.
As I have said, the present Government in admitting the increase in prices are admitting their inability to cope with the situation. They have made, I imagine, the last of the quadruple apologies that were due to Deputy de Valera as head of the Fianna Fáil Government. This discussion on the cost of living and this diversion of the people's minds from the more fundamental problem of production has taken a long time to come round full circle. It began in 1948 and the increase in the price of tea, without subsidy, which has recently taken place, is, at last, I hope, the ending of the discussion and the closing of the circle.
The people will now know that under all heads the previous Government was fully justified in what they did. They now know that they were not overspending; that they were not overtaxing and that they were not permitting an increase in the cost of living to take place without making whatever effort they could to stop it and that, in fact, the cost of living was rising for reasons over which they had no control.
I noticed, too, in this debate, that as always, when it is convenient for them, members of the Coalition Government occasionally become extremely correct in their statements about the increase in the cost of living that took place in 1952 as a result of the withdrawal of the subsidies and the increase that took place between August, 1950, and August, 1951—I think it was about 11 per cent.—and the increase that took place subsequently for exactly the same reasons that have caused the recent increase in the cost of living because of import prices. Just occasionally they will have for the moment a flicker of honesty in analysing that position.
I can assure the members of the Government that during the course of the general election and during the course of the local election there was never any such separation on issues in the way that the candidates spoke. They never separated the seven points rise that was the result of deliberate Government action because we could not afford to maintain the subsidies at their previous level. They never spoke of the compensating advantages of increased social service benefits. All we heard from one end of the country to the other was that the whole of the cost-of-living increase was due to the deliberate action of the then Fianna Fáil Government.
As I have said, I suppose it is rather natural in the heat of political debate to forget to be accurate but the extent to which the members of the Coalition Government forgot to be accurate amounted to a tirade of completely nonsensical talk about the whole question of the inflation that took place in this and every other country in Europe during that period. It is very much easier to accuse Deputy de Valera and Fianna Fáil of being responsible for this condition than it is to explain in patient language all the economic issues and all the economic facts to prove that we were merely facing a universal situation that had to be faced by practically every country in the world save those countries whose currencies were much stronger than ours— countries such as Belgium, Switzerland and America and even in those countries the cost of living went up.
I should like to hope that some time in this House it would be possible for us to have far more discussion on the very much more serious problem of increasing production; that we would consider far more the important questions. It would be much better if we were to spend some of the time we spent on discussing the cost of living on how, for example, we are going to compete with the Danes in the British bacon and pork market in the future and how we can make use of our land so as to have that take place.
It might even be possible to devote more capital and expenditure from our public funds to all these far more complex issues if the present Government was not itself bedevilled by this insistence on the cost of living as distinct from the purchasing power of the people, the amount that we sell abroad for goods we could purchase at home and the amount we can purchase of things we now import. These are far more fundamental questions the solution of which would do more than all the talk in the world on the cost of living to make our people happy.
The people of this country have got into a habit of mind in which price is everything. Price is the be of all and the end all of an existence in which the cost at which a person pays for goods is the major consideration of life. We have failed entirely since 1948, largely because of the tactics of the Coalition Party, to consider any of these more fundamental things. People think always of how to get more wages because the cost of living is going up and not of how to produce more goods so that they can be sold at a lower price so that people in turn will have greater purchasing power and be able to buy more goods of different kinds. We think always of how much a given article is going to cost.
We have no discussions in this House of how we can reduce the price of an article by higher productivity so that when a person buys that article he will have money left in his pocket to buy something else. That type of talk about productivity is absolutely non-existent in this country except by a minute percentage of either our industrialists, agriculturists or any of the people. I might say, to be quite. honest, that in this House we are all bemused with this discussion of the cost of living. No matter what Party we come from we have not yet got down to the fundamental question which is the principal question affecting this country.
Deputy Dillon, the Minister for Agriculture, will have to admit, if he uses his agricultural statistics properly, that although there has been a heartening increase in agricultural production in 1954 and again in 1955 in certain sectors there are deficiencies in regard to other kinds of agricultural production and that compared with other countries in Europe we have tremendous leeway to make up before we start talking about annual increased output.
The attention of the country has been diverted from these fundamental questions by all the discussion about the cost of living which began in 1948 and which has been continued ever since. There are enough aspects in connection with increasing productivity to have taken up the whole time of the present Minister for Industry and Commerce when he came to speak on the problems facing this country and his contribution to increased production. It would have taken the whole time of his speech to deal with these problems. If we were all really thinking of them it would have taken all the time of the former Minister for Industry and Commerce, when speaking on his Estimate, and on the occasion of other debates dealing with these matters and thinking of them, when, in fact, he was fighting a battle to defend his own position against the trend towards inflationary increases of prices and defending the reasons for taking the budgetary action we had to take in 1952. The wine of productivity is not flowing in the national bloodstream nor in the bloodstream of this House and I hope that some day we will get down to this fundamental problem of productivity.
