I think the comparison is all right. The figures for the first quarter of 1956 are not yet available. These are the figures of earnings from which you subtract the increase in the cost of living and these figures show that our real earnings continue to rise above that cost of living. I venture to say that the index figure for the first quarter of 1956 will show a continued rise in real earnings.
We thus have a situation in which quite considerable compensation has been secured by the whole community of workers in every field of industrial endeavour. We have not attempted to impose any wage freeze or standstill Order on wages. A standstill Order or a wage freeze will be no part of the policy of this Government. A situation has now been reached in which, I think, it is reasonable to say to the employers, on the one hand, and to trade unions on the other hand, and to industry generally, that we have got to be careful as to where we are going. What we need now is a period of stability in which people will know what their money will buy, in which workers will know what their wages will buy, and in which everyone will endeavour to put his shoulder to the wheel for the purpose of helping the nation over the difficulties which at present beset us.
If we are to have further upward rises in prices and wages, they can have no other effect than to destroy and dislocate the whole economy of the country and I think it would be the workers and the wage earners who would suffer most in a situation of that kind. The Government have had talks with the provisional committee of both trade union congresses. These conferences have been full and well-informed. The congresses have approached the situation with a statesmanlike understanding of the difficulties and have shown an appreciation of the necessity for an orderly appraisal of the situation and a recognition of the difficulties involved. Discussions with those organisations and the employers' organisations will, I hope, be continued, and I hope that on both sides, the trade union side and the employers' side, there will be a voluntary recognition, in the interest of the bodies which they represent, of the necessity for a proper and frank exchange of views. I hope that that will instil in each of them a recognition of the desirability and imperative necessity of avoiding violent upward movements in prices and violent upward movements in wages or any type of industrial conflict which would weaken the economic fabric of the State, in view of the necessity for increased production on the part of every element in the State.
I did not say in my speech, as Deputy Lemass alleged, that the whole responsibility for the increase in prices was due to increases in imports. I mentioned that coal, which is a raw material of many of our industries, had increased abnormally and that freight charges had also increased. These are charges the control of which does not reside with us and, so far as we have to buy coal, then we have to pay the world prices for that coal and buy it from those who are in a position to sell it. As far as freight prices are concerned, a small country like this, with its mercantile marine still in the process of being built up, could never hope to set the pace in freight rates, or to keep down the freight rates that would be set by other countries.
An examination of the prices situation is interesting. In the period between February, 1955 and May, 1956 the consumer index figure showed an increase of 6.4 per cent. In terms of points, the increase has been 7.9. Let us get a break-down of that 7.9 and see what items in the consumer goods index have been affected and which contributed to that increase. Of that 7.9 increase recorded in the period between February, 1955 and May, 1956, the increase for food was 2.5; the increase for clothing was .25; the increase for fuel was .78; the increase for housing .3 and the increase for sundries was 4 points.
If you look at the food increase of 2.5, you will find that two items alone contributed to 1.1 of the increase. Tea was responsible for an increase of .7 out of the 2.5. We do not grow tea. As regards tea, we can do either of two things: we can either buy tea at the price at which we can get it or do without it. We could never hope to regulate the price of tea here. Another increase was in respect of milk. Here the increase was .44, almost .5. I understood that most parties in the country were anxious that the farmer should get more for his milk. Those who take that view cannot, therefore, lament at the same time if the price of milk goes up so long as the profits on the price of milk go back to the man who owns the cow.
All the other increases are trifling increases extending from tomatoes to pork sausages, oranges and biscuits. Out of the increase of 7.9 points only 2.5 is accounted for during that period by an increase in the price of food. An increase of 4.06 in the price of sundries is accounted for by an increase in the price of tobacco and cigarettes to the extent of 1.66; an increase in travel inside and outside the country of .73; an increase in drink of .40; an increase in newspapers of .52—so that the increase in newspapers alone was responsible for one-eighth of the increase in the sundry group. People who write articles in newspapers ought to remember that. Education is responsible for an increase of .11. Miscellaneous increases are expressed in the figure of .5.
These are the facts. When they are examined against the background of the movement in our food prices, it is not a record of which anybody ought to be ashamed that, in spite of considerable difficulties, the food position during that period, in an increase of 7.9 points in the consumer goods index, has been held down to an increase of 2.5.
I have already quoted the figures of the index of industrial earnings which show the percentage increase granted to workers whose wages are used for the purpose of ascertaining the index of real wages. They show that these workers have got more compensation in wages than the increase in the cost of living ordinarily would justify, but I take pride in the fact that, if we give people more wages and better wages, we give them a better standard of living, we give them a means of purchasing more goods from our producers, we create, by purchasing power in their hands, a bigger and wider market and we give those who produce agricultural goods or industrial goods an opportunity of selling them to customers who have money in their pockets to buy them.
I cannot see any farmer ever getting rich by hoping to sell agricultural produce to a man who has no money in his pocket. I cannot see any industrialist believing that his standard of production will increase or his standard of prosperity move upwards if he has the task of selling goods to people who have no wages, or little wages, or not sufficient wages to buy what the industrialist produces. So long as purchasing power is the passport to buying goods, whether from the farmer or the factory, or buying services in the offices or in the public utilities, then, so long as we can have an ordinary development of the nation's economic life, money in the man's pocket and money in the housewife's purse is still the best means and the only one that I know of to ensure prosperity for agriculture and industry.
The question of rural electrification and the E.S.B. programme generally was raised in the course of this debate. I do not like to see the E.S.B. a shuttlecock of Irish politics. I do not think that helps the E.S.B. I hope we will get away from this temporary eruption in what otherwise has been a kind of neutral approach to the problems of the E.S.B. and electrical development generally. So far as rural electrification is concerned, I gave the story at the outset. Judging by some of the speeches that have been made, what I said was either unread by Deputies or its significance unappreciated. In 1951-52, the number of areas in which rural electrification had been completed for that year was 49. In 1952-53, it was again 49; in 1953-54 it was 60; in 1954-55 it was 75 and in 1955-56 it was 99. Is that not clear evidence for anybody not politically blinded that rural electrification has been accelerated at a rate previously unknown?
So far as I have been concerned, I have told the E.S.B. to drive ahead on the rural electrification scheme. These figures show that in 1954-55 and 1955-56, that is, during the last two years, we have hit the highest targets ever—75 in 1954-55; 99 in 1955-56. I hope that, at least, that pace will be maintained. I should like to see it still further accelerated.
I mentioned earlier that the E.S.B. had now found that they were over-planted, that is, that with the plant in commission and in sight they had more plant than they would need up to 1960-61. I want to put this simple question to anybody in business, anybody engaged in agriculture, anybody who has even a modicum of common sense—is there any value to anybody in building a plant that you cannot work, that you cannot get value for? Is there any advantage in telling the E.S.B. to put up new power stations even though nobody will consume the current from these new power stations because the board have more capacity than they can sell from the other power stations already in existence? Is not it just a matter of plain common sense that the E.S.B. ought to adjust its plant requirements to its capacity to sell its current? The board have taken the view now, as I said in my opening speech, that it is over-planted, that is, that it has too much plant, and that it has been geared to a programme which the board, with its knowledge of electricity and with the technical advice which it can get—and that surely must be superior to anything we here can get—say they have more plant than they need, that is, that what is in commission and what is now operating is sufficient for their requirements for some years to come.
I put it this way in my speech:—
"The development programme of the E.S.B., as set out in the Appendix to the White Paper which was published in March, 1954, provided for an increase in installed capacity to 1,022.5 mw. by 31st March, 1961, to meet a demand for electricity estimated at 3,350,000,000 units during that year. The estimates of increased demand over the years were based on assumptions made in 1953 that the demand for electricity would double itself every five to five and a half years. The rate of growth in demand for electricity has, however, shown a tendency to decline. Between 1952-53 and 1953-54 the demand increased by 11.3 per cent., and in 1954-55 it increased by a further 12.8 per cent. over the preceding year. In 1955-56, however, the growth in demand was less than 8 per cent. despite the energetic sales campaign by the board and the considerable increase in the sales of its electrical appliances."
That is not just an E.S.B. experience. That is a world experience if anybody had taken the trouble to examine the world figures. The position, therefore, is that the board have passed a revised development programme which provides for a reduction to approximately 728 mw. in installed capacity in commission on the 31st March, 1961, to meet a demand which is now estimated at 2,430,000,000 units in that year instead of 3,350,000,000 units as contemplated in the White Paper.
The board go on to say that: "Notwithstanding this downward revision it is anticipated that the margin of spare capacity available at times of peak load will be considerable, varying between 22½ per cent. and 33? per cent. over the years 1956-57 to 1960-61". That is a surplus of actual generating capacity. It is not based at all on the theoretical generating capacity of the board. That excess of generating capacity is on the normal operation of the board from day to day—not its theoretical generating capacity which will have to be measured by the assumption that every plant was running at full blast for every minute of a 24-hour day.
This increase is over the day to day generating capacity. I think the statements made by Deputy Lemass indicated that he believed we were responsible for forcing the board to adopt this programme. That is not so. That is not true. The position is that, when the matter was discussed with the board, the board said to us that the figures in the White Paper of 1954 had proved to be unrealistic. The assumption then was that the consumption of electricity would double in from five to five and a half years.
Experience has shown that it is taking something over 11 years instead of the five to five and a half years to double the consumption of electricity and the net question the board asked themselves is: Are we going to install plant on the basis of an unrealistic belief that the demand for electricity will double itself in from five to five and a half years, which is a world record now, or are we going to adjust our plant requirement to the realities of the situation as we see it here and to our anticipations for the future?
I will quote this fact in furtherance of what I say. The fact that existing installed capacity is more than adequate to meet the demand is illustrated by the fact that in the year 1955-56, which was very dry and during which a very heavy demand might have been expected on the steam stations, the Pigeon House station produced only 95,000,000 units. In 1952-53, when comparable weather conditions were experienced, that station produced 417,000,000 units as compared with 368,000,000 units in 1951-52. The stand-by capacity is more than adequate to meet any emergencies and the coming into commission of more stations during the next few years will take care of any likely increased demand.
My information, obtained through an O.E.E.C. Report, on the electricity supply industry in Europe, published in January last, shows the rate of expansion for O.E.E.C. countries during 1954 and 1955 was approximately 9 per cent. That is the same percentage increase that the E.S.B. is experiencing, so that what the E.S.B. is doing is adjusting its plant requirements not only for the day but for the future, to its own ascertainment of what the demand for electricity will be.
When you come to testing its decisions against the realities of the electricity supply industry in Europe you find the E.S.B. anticipated production, judged by the O.E.E.C. Report, represents the average increase in electrical production in the various countries comprising the O.E.E.C. Is not that a test of reality? Is not that an indication that the E.S.B. in this matter has been proved right? Is anybody going to suggest that they ought to be asked to build up plant on the assumption that the demand would double itself in five to five and a half years when their own experience and the whole European experience is that it is now taking between 11 and 12 years to double the demand for electricity?