When the House adjourned last week, I was attempting to state as clearly as possible that the difficulty which we now face is due in no small measure to the political climate of this country, encouraged by the members of the present Government ever since 1948. They started a habit of mind among our people—or, should I say, among 50 per cent. of our people—which has never yet been arrested, a habit of mind of believing that everything could come relatively easily, so long as money was played around with and so long as the Government appeared to be making things easy for the people by taking action which, at the time, seemed very generous and helpful, but which, if examined carefully, would be seen to be of a temporary character.
I have been trying to look back through the records of the Dáil to see whether at any time a Minister of real importance understood the position of this country since 1948 and warned the people. I speak of a Minister of the Coalition Parties. I discovered a statement by Deputy McGilligan, which he made at the time of the 1951 Budget, and which remains the solitary and sole statement by a Coalition Minister, made at any time between 1948 and the present day, in which there was an element of realism about our trading position, about the care we should exercise in making promises to people that they could vote themselves better living standards. Deputy McGilligan, at column 1884, Volume 125, in the course of the Budget statement, said:—
"Making all allowance for the exceptional conditions now obtaining it is to be feared that we are not producing and earning enough to pay our way. The implication is obvious. We cannot have both consumption and capital development on the present scale unless we save more and produce more. Additional saving would ease the congestion that now exists and causes consumer demand to seek an outlet in imports. It would relieve the pressure on the balance of payments and help confine external disinvestment—or surplus imports —to what is needed for home development."
Since the time Deputy McGilligan made that speech, which was a very definite abbreviation of the Central Bank report, everyone on the Coalition side vilified the Central Bank and went as far as they could to deny the truth—the solitary truth—uttered by Deputy McGilligan in 1951, when exactly the same circumstances were occurring as are occurring now, and when everybody realised that the position would have to be extremely carefully watched from that time onwards, if we were to make quite sure that our trading position was secure and that our ability to buy imports, without borrowing from the British banks and without going on our knees to foreign trading interests, was to be safeguarded.
Two volumes later in the Dáil Report, Deputy McGilligan reverses his opinion—I do not know whether at the instigation of the Labour members of the Coalition or for what reason. In column 1717, Volume 127 of the Official Report, Deputy McGilligan said:—
"If people who have reserves want to spend them, why should they not do so? Have we not got at least to that degree of liberty in this country where a man, if he has a few hundred pounds and wants to buy a wireless set with it or improve his house by putting in a wash-basin or by putting in new carpets or furniture, is at liberty to do it? What is the merit in preventing him from doing it? We are getting completely authoritarian if we say that even the owner of savings who has reduced his consumption at an earlier period in order to get those savings cannot put those savings to some purpose which he considers advantageous if not profitable to himself."
I could go on repeating statement after statement made by the members of the Coalition Government repudiating what Deputy McGilligan said on that solitary occasion and clearly indicating that they were not prepared to tell the country the true position.
I have tried to summarise the things that the people have been taught since 1948 by Coalition members—the things that roughly one-half of the people of the country believed judging by election results. I am glad to say it was not the whole country, or we would be in a far graver position than we are in now. I should like to catalogue this collection of economic nonsense which has been our lot ever since then.
The first is that living costs are largely the responsibility of the Government; the second is that subsidies involve no taxation and come from the moon, and that no one need ever question the amount required for subsidies, or what the effects may be if the amount required in taxation for subsidies is excessive; the third is that, when costs go up, salaries and wages automatically go up. It does not matter how far they go up; that so long as they keep going up the country is well off and all will be well; the fourth is that, when you promise to bring the cost of living down with a bang and cannot do it, if you get wages raised, you have fulfilled your promise and your political conscience is at rest; and the fifth is that, if you have huge sums invested, there is no danger of their liquidation: that you do not need to worry about them: that the reserves are so large that you can completely disregard them.
We can use them to build up a stockpile out of your foreign investments and if you do not replace the foreign investments, it does not matter. Secondly, we can use them for the importation of raw materials to be used for current industrial production. If we import the raw materials in large amounts and do not replace the foreign investments, it does not matter and the nation is no worse off. Thirdly, we can import them for consumer goods. We can buy refrigerators. It does not matter. It is all putting money into circulation, helping the people and increasing the flow of trade. The consequences mean nothing.
I am not going to weary the House by quoting from statements made ever since 1951 in which members of Fine Gael and the Labour Party never could make up their mind quite how much of the appalling nonsense talked by Deputy MacBride on the subject of national credit and foreign investments they were prepared to believe. They dillied and dallied, some going a certain distance, others going the full distance.
Deputy Declan Costello is a young Deputy and one would like to regard him as likely to reach ministerial status some day. I have been reading his speeches, but he could not resist, with all his knowledge of economics, the statement that he believed in selling out our foreign investments for consumer goods. He thought, on the whole, it was a good thing and that, in some mysterious way, it would raise the permanent level of prosperity. If the result was that we could spend less money on fertilisers and agricultural machinery and less money on increased production, once these savings had gone, somehow or other everything would be all right, somewhere or other some cat would come out of the bag and once more we would see the country well off—a mysterious economic doctrine which has no following in any intelligent or well-known country in Northern Europe.
The members of the present Government will find none of their views since 1948 genuinely believed in either by socialist administrations or conservative administrations in Northern Europe. They will find that the only real philosophic originator of all this doctrine is Deputy MacBride and the Clann na Poblachta Party. He started the whole thing and the Coalition Government has been following him ever since.
The seventh doctrine that has been taught the people is the fact that, if you have some £400,000,000 invested abroad, you need never even speak about our liabilities abroad. The fact that we have anything up to £250,000,000 of liabilities abroad need never be mentioned. It is not convenient. It is much more convenient to give the people the idea that these foreign investments can be liquidated the moment anybody feels slightly uneasy, to relieve the situation. The people have been taught never to think of the liability. It does not exist. It is a shadow liability and no one need worry about it.
We often tried to stress it. It is a curious thing that in all the debates I have read during the past two years —I have been going through a lot of them—no serious Minister of the Coalition Government who really studied foreign finance has ever deliberately and actually contradicted the statements made by Deputy de Valera that the actual total public and private net balance of foreign investment is something between £100,000,000 and £125,000,000, involving less than one year's imports. Some of the lesser fry indulged in a lot of fantastic economic nonsense about what could be done, but I noticed that some of the more serious Ministers have not actually contested that statement, and whether they felt they could not go as far as denying it or conveniently forgot it, I do not know, but at all events the statement remains uncontradicted, even by the Minister for Finance in his speech dealing with the Vote on Account after Deputy de Valera had expressly stated that in the North Kerry by-election in an important speech which he made. As I have already stated, the balance is not as large as has been taught to the people by the Coalition Government. We can only count on the "get-atable" foreign investments of the commercial banks. We cannot touch the private assets which are of no use to anyone for immediate trading purposes.
The next statement made—No. 8 in this category of nonsense—is that bank advances are rising; that it does not matter how much they rise because it is always good for the country. It can only mean prosperity. It may not mean that some people are borrowing that much money and leaving too little money available which might assist in increasing production. The country's economic progress since 1948 has been judged glibly by the Coalition Government, among other things, simply on the basis of by how much the bank advances rose, without ever questioning whether it might not be that certain people were borrowing money at other people's expense.
The next doctrine, No. 9, was that so long as the amount of money in circulation goes on rising it must mean that the country is well off. If plenty of money is circulating, if the Central Bank announces that another £5,000,000 is in circulation, that automatically means prosperity, that automatically means we are paying our way, that automatically means that the country's financial position is sound.
The tenth doctrine is that it does not matter if exports fall or if there is a recession in trade or that money spent on every kind of venture that is not productive can continue to be spent. It does not matter if exports fall and it does not matter about our having to pay for all the materials which we must import for capital purposes. You can go ahead and, when you require money, you can ask the country to lend it to you. It is always good to go ahead with the programme: nothing can stop it.
The eleventh doctrine is that an increase in industrial production, however good it may be at giving employment, must automatically be a proof that the country is doing well. It does not matter if some of the production increase involves such heavy imports of materials that the actual nett good done by it, while excellent from the long-term point of view, is barely helping the country at a time when imports have become so important and so much a factor in our economy that you cannot just boast that our production has gone up and that, therefore, trading is all right. You can say that industrial production is excellent from a long-term point of view. New skills are brought into the country. Employment is provided in rural districts. They are a sign of good times in the future but one cannot say that an increase in production of that kind automatically helps us in relation to our capacity to pay our way. It may, later on, but not in the immediate sense.
Lastly, and perhaps the most important point, in the twelfth, we have heard the fraudulently dishonest doctrine that agricultural production has increased so much since the war that everything is all right—so long as Deputy Dillon remains Minister for Agriculture. I do not think I need repeat here all the figures that have been given many times about agricultural production or the fact that it remains, under our Government and under the Coalition Government, a most frighteningly serious problem. From the point of view of agricultural production, 1947 was the worst weather year in our history. When Deputy Dillon boasts of an increase in agricultural production he selects 1947 for the purpose of comparison. Why, for example, would he not take 1945, after the end of five years of war, or 1939 or 1926 or 1911? If he did, he would find that the increase in production has been very small indeed. He chooses to take 1947 when production had gone down in the previous two years by 12 per cent., as everybody knows, because of the appalling two years of weather that were the main feature of our agricultural life at that time.
When Deputy Dillon, the Minister for Agriculture, chooses to say that agricultural production has gone up by 24 per cent. since 1947, it is arrant nonsense to quote this as proof of how well the country is going and of how perfectly the Coalition Government policy has succeeded. Even Deputy Dillon's statement about the number of young cattle in the country is wholly fraudulent. On the figures, you will find about half a dozen occasions from 1926 onwards when there were 1,000,000 cattle under one year in this country. The figures for the last full year are in respect of 1955. In that year there were 1,044,000 in the country. That represents a very welcome increase but it is fractional. It is nothing to justify Deputy Dillon's saying that he has very nearly solved the agricultural problem. The people in the country have come to believe that. So long as the price of cattle went on going up, they felt that everything was all right.
Other Coalition Deputies have been comparing the costs of cattle in 1939 and now as if that were automatically bringing in some enormous gift of prosperity to the country, without counting any of the other items that make up the total balance—items such as increased wages and salaries and increased import costs. They speak as if we would never have to face any balance of payments difficulty. It is all a fraud and a delusion.
The Minister for Finance made a very gentle academic statement—very quiet and mild—about the balance of payments. I do not know whether he imagines that the ordinary man in the street understands these facts or whether it is possible to talk about the balance of payments in just one speech on the Vote on Account, after having defrauded the people for years about all these matters. Why does he not indulge in exactly the same sort of publicity as he did during the 1954 Election? The people who have received these millions of leaflets about 1951 and 1954 prices deserve to be treated by the Minister for Finance with another 1,000,000 leaflets in which the Minister should, in plain and simple language, print the dangers and difficulties we face and in which he should answer some of the questions he has not yet answered in his speech on the Vote on Account.
It is always easier to take the offensive by making easy promises than it is to defend a difficult policy. That was the position in which we were always placed by the Coalition. Offence— making easy promises—is much easier than defence—explaining the complicated pattern of a nation's economy. How much easier it is for Deputy Sean MacEoin, the Minister for Defence, to go down to Longford and talk about the £500,000,000 we have invested abroad than it is for me to go there and, off a platform, to people standing waiting after Mass, to explain to them the character of our economy—the huge imports from countries other than England to whom we sell practically nothing, the complicated pattern of our investments in Great Britain, our liabilities, the annual burden imposed upon our balance of payments, all the items that go to make the whole Budget.
Does the Minister for Finance imagine that, having had his colleagues talk this nonsense throughout the country for the past three years, he can now explain to the worker, to the machinist, to the small farmer who has much too much to do to study economics, that he is unsaying everything he said? We need another 1,000,000 leaflets with all these explanations.
I would repeat again what Deputy Lemass said here the other day. I ask the Minister for Finance to explain to the people in his closing speech the following matters, to give the answers to the following questions in language which every single person can understand. The first question is: why have imports increased so largely in 1955? What is the reason? Why have imports gone up, over and above any question of stock-taking or any other temporary thing? Why have they gone up, even allowing for any increase in the price of the commodity? What is the reason? I dare the Minister for Finance to be honest enough to tell the people specifically, in language they can understand, why imports have gone up. If he tells them, then we should at least have arrived at the position that everybody in Ireland will believe what is the truth. If we are forced ourselves to go around the country giving these answers, there will still be the difficulty that the whole people will not accept the position as it is. So, we challenge the Minister to give a clear and succinct answer to that question: why have imports increased? The Minister, I know, will be very embarrassed when he gives the answer if he gives it honestly, explains it in detail and makes perfectly clear to the people what the import of the answer is.
The second question we should like to ask the Minister is this: why is it that it is not easy to secure credit for industrial or productive ventures at the present time and that the rate of interest has gone up? Why is it that, in spite of all that the Minister for Finance said about rates of interest, in spite of all that the Minister for Agriculture said when he talked of banana republics, and although there is a desperate urgency to increase production, the Minister is unable to take any special steps to maintain an exclusively lower rate of interest for productive purposes even although he himself says that the demand for increased production is tremendous? What is holding him back? Will he explain to the people and give them a succinct answer to why it is impossible for him to discriminate between rates of interest for one purpose and another purpose? Will he justify his decision? Will he justify his failure to do the one thing that he could have done to live up to some of the frantic nonsense that has been talked in these last three years by saying: "Well, we have got to expand production; the emergency levies are only part of the answer. I will now make available £X million of capital to anyone who wants it at 3½ or 3 per cent. — some interest far lower than that available at the present time." I should like to ask the Minister that question.
I think the Minister should explain also to the people in very clear language what he considers to be the current balance of trade position, to go a little more into detail about it. It will not do any harm. The whole country has been very much shaken by these emergency levies. Everybody has started thinking about it. Now that we know that all the nonsense that was talked before is accepted as such, let the Minister for Finance turn over a new leaf and tell us how he regards our external reserves, what he considers to be the total amount of available liquid assets in Great Britain with which we have to carry on our day-to-day trade and finance our purchases from areas to whom we sell relatively nothing in return. Let the Minister for Finance take the people of the country into his confidence. Let him at last give what he considers to be the figure. He will quickly remove the £400,000,000 by itself — that large comfortable, fat sum will not emerge from the Minister's lips any further so long as this Government is alive — but he might perhaps go more into detail and explain to the man in the street just exactly what the position is.
Let him explain to the man in the street the answer to another question: Why it is that every time the Government spend money imports increase and that every time the Government borrows money imports increase and, no matter what they borrow it for, even if they borrowed it to spread on the land limestone made in this country, there would be some increase of imports, not enough to be worried about but there would be some. Let the Minister explain to the people in simple language how is it if a Government borrows money and spends it wholly in this country that, nevertheless, inevitably, imports will increase as a result of their spending.
We have heard nothing of that kind from Coalition Ministers up to now. We want to have them explain these difficult facts. It is much easier for the Coalition members to promise to reduce the cost of living from the 1954 to the 1951 level than it is to explain to the people why it is that every £ of Government money spent must result in some import and when there comes a point when you do not export enough to pay for the imports that we are then in severe economic trouble. We should like the Minister to answer that question too.
In conclusion, I should like to say a few words about the relation of the 1952 Budget to the present Vote on Account. A few Coalition speakers have dared to suggest that the 1952 Budget in some way has an effect on the present economic situation and even on the Vote on Account. We want to make it perfectly clear that the present emergency levies and any other measures that are taken by the Government are in addition to the 1952 Budget. When the Government came in, if they thought the 1952 Budget was wrong, they should have reversed it. There was nothing to stop them. We never heard any comment from any Coalition Minister——