I move:—
That the Estimate be referred back for reconsideration.
I wish to express my own personal appreciation of the fact that the Taoiseach has continued the practice initiated some years ago of giving a sort of economic review, at the outset of the debate on the Taoiseach's Estimate, so as in some way to give an indication of the economic state of the nation and also, as he has just said, to give some direction as to the course along which the debate, which is largely dealing with general Government policy, should be conducted.
In the circumstances which confront us to-day, when we are here on this, one of the most important debates in the year, considering the past and future of our country, we cannot but be affected to the extent of feeling a certain oppressive anxiety about the very serious international development of recent days. We can only hope that those people charged with the serious responsibility of maintaining world peace and the Organisation of the United Nations to which we, as well as all other small independent nations look for protection against the terrible evils of war, will succeed in bringing about a situation whereby we shall not be confronted with an even worse conflagration than we had in our own lifetimes on at least two occasions.
This debate, as I have said, furnishes the opportunity annually of criticising and examining general Government policy. On this occasion it is of even more importance because it is the first time since the Government came into office that we can really see what Government policy is, or rather I should say we can try to ascertain if there is any general Government policy, what its results have been and where it is tending.
Last year, when this debate was in progress, we were in the position where the Government could only say they had not time to develop policy. In fact, of course, they were largely carrying out our policy during the few months following their entry into office and in the Dáil were putting through the Bills we had prepared. They have now had 12 clear months in which to formulate and at least put into operation to some extent the particular policy which they promised in the last general election would give such outstanding results if they were returned. They have had a full 12 months of complete leisure and complete freedom from anxiety of snap divisions or any disruption of affairs in the Dáil. They have now no alibi or excuse. Therefore, what we on this side of the House have to do is to try to ascertain from an examination of what has happened during the past 12 months if there is any general Government policy and, if so, what it is.
I endeavoured as far as possible to approach the matter quite objectively and I found myself, I think, engaged in an occupation which was somewhat analogous to the rather unrewarding effort of driving nails into a fog. I was unable to find any general principles. I will say there emerged within the past few months not a policy, not some general guiding principles directing any of the Government actions as a whole, but something in the nature of a pattern—a patchwork pattern, indeed—without any recognisable picture. I say again that I appreciate the manner in which the Taoiseach approached this Estimate in that he did not try to over-paint the picture and did not try to make it appear from the statistics or the figures available to him that conditions were better than they were or better than the statistics of the general economic trends would make them appear.
In the general economic picture that emerges during the past 12 months there are some good features and some bad features. There are gloomy spots and a few bright spots but, taking it as a whole, I do not think the Government are entitled to claim that any great achievement has been reached as a result of their efforts over the past 12 months. The Taoiseach gave certain general indications of the economic situation. I do not want to weary the House with statistics. I just want to indicate some of the features underlying what he said and proceed to examine the position as regards general Government policy in reference to those features.
It is true, as the Taoiseach says— fortunately it is true—that our agricultural exports are being maintained at a very, very satisfactory level and at remunerative prices. I do not think we could be blamed for claiming the credit, practically the entire credit, for that very satisfactory position. I do not think I am overstating the position when I say that the present Government have done no single thing to bring about that very satisfactory position. We have that situation at all events which is the most satisfactory factor in the whole of our economy at the present time.
The Taoiseach referred to the balance of payments figures issued in recent days. What saved those figures and what largely prevents any undue anxiety being felt in regard to those figures is the very satisfactory record, indeed, for our exports which are largely, of course, agricultural exports. That is a very, very bright feature in our situation.
The second feature to which the Taoiseach did not refer is that, in fact, bank loans and advances have increased in the past year but while they have increased, the figures show that there was only a very slight increase in loans to farmers and agriculture generally. The level is still below the figure in 1956 which was the beginning of a bad period. The external assets of the commercial banks increased considerably.
The Taoiseach referred to the fact that there was no anxiety about our external assets. In fact, the external assets of the banks increased in the past 27 months by practically £1,000,000 per month. The external assets of the Central Bank also increased.
There was a rather significant reduction in our import prices and a drop in freight rates. There was something approximating a 7 per cent. reduction in import prices. That, to us, seems to be a highly satisfactory feature because we had to face the situation, when we had to deal with the adverse balance of trade, that import prices and the terms of trade were running strongly against us. During the past 12 months import prices dropped nearly 7 per cent. and the terms of trade tended consistently to be in our favour.
From that very bright spot one would have expected that there would have been a greater increase in economic activity accordingly. Certainly, we would have expected that the reduction in import prices would have reflected itself in the cost of living to which I shall have to refer later on but it has not done so. State capital formation at current prices showed a slight increase last year over 1956, but taking it at 1953 prices, the figures indicate a decline over the past four years and that decline has, unfortunately, contributed to the aggravation of our unemployment position.
The Taoiseach referred to the increase in the national income which, I think, is something in the order of £90,000,000. That, however, was only an apparent increase because, in fact, when the matter is reduced to real values, there was a reduction of 2 per cent. in real output because the value of money went down by 6 per cent. last year. The Taoiseach also referred to the disappointing results from our industrial sector and rather equated the position to 1956. In fact, industrial production has not yet reached the figure at which it stood in that bad year of 1956.
Those are the only matters to which I want to refer at the moment, because I propose to deal with and to emphasise mostly the two problems of unemployment and its related problem of emigration and the cost of living in the course of the critical remarks I have to make to-day. Before I deal specifically with those two problems, I want to go back to the task I intended to set myself at the outset—to ascertain if there is any general Government policy. I can find none. As I said, I found merely a patchwork— something in the nature of a patchwork pattern—but no general recognisable picture.
I have always endeavoured, as far as possible, in speeches I have made criticising my opponents, to make constructive suggestions, as far as that lies within the scope of our duty as an Opposition. I want to refer back to the principles underlying the policy we had when we were in Government and which are still the basis and guiding principles of our policy here, subject to necessary reassessment and adjustment in the light of changing conditions. Beyond indicating the general principles, I do not feel called upon to make specific proposals. That is not within the scope of my duty at present.
I was glad to hear the Taoiseach say that the basis of all our prosperity must rest upon the agricultural industry. Those words created an echo in my mind. They are almost the words I used in the Taoiseach's Estimate I introduced in July, 1956. At column 1699, I described the agricultural industry as:—
"... the vital source and fundamental basis of whatever prosperity we have so far achieved or are, in future, likely to enjoy..."
And further on, towards the end of the same column, I said:—
"... It is to agriculture, primarily, we must look for that essential prerequisite of economic progress in our circumstances, an expanding volume of production from goods that are marketable abroad in quality and at prices competitive with similar goods offered by the producers of other countries."
That was the basis of our policy and it is still the basis of our policy. Even the Minister for Industry and Commerce, Deputy Lemass, who down through the years has not been very noticeably recognisable for his appreciation of the importance of agriculture in our economy, appears now to recognise the necessity for a proper basis of agricultural production on which to build a proper industrial edifice. Although lip service has been given in recent years to that vital principle, in fact nothing has been done by the present Government in the last 12 months to better the position or fully recognise that principle.
That was the very basis of our proposals. Because of that, we put as our first principle that we would place investment in agriculture over all other forms of investment. That is still our policy. We favoured and encouraged private investment to supplement and relieve the pressure on public investment. We favoured home investment rather than foreign investment—high investment in Ireland based on high savings. We encouraged all kinds of exports, not merely agricultural, and we gave incentives, which the present Government have developed, to secure greater and greater exports of nonagricultural products. We desired to achieve the results by co-operation rather than by compulsion.
Those were the principles, and supplemental thereto and coupled therewith, we had a policy for a capital programme of the highest amount comparable to our production and capacity for productive purposes. Those were our principles and are the principles governing our present policy. Having regard to the economic situation outlined by the Taoiseach, and slightly referred to by me just now, where is the policy to meet that situation?
I think it must be asserted that there can be no possible progress in business, nor can there be what the Taoiseach says is his primary object —the ending or betterment of the unemployment situation and the amelioration of emigration—unless we secure a reduction in taxation at the earliest possible moment. Business is bad; industry is not expanding; initiative is stifled—all because of the fact that taxation is too high. I know I am open to the charge that we were in office for three years and increased instead of reduced taxation. But in the first three years of our office, on two occasions we reduced taxation. It had been our intention and our aim so to develop conditions in the second year of our office on the last occasion as to be in a position to reduce taxation. Unfortunately, circumstances over which we had not any control—the economic blizzard that hit this country at the time—prevented us from achieving the purpose we set out to achieve. However it is to be done, there can be no possible progress in this country until taxation is decreased.
We all desire the greatest measure of social security. We all appreciate and are fully alive to the plight of the old age pensioners, the widows and orphans and those in receipt of unemployment assistance. There can be no hope of increasing social services until economic activity is so secure that there can be achieved the result we achieved in the first three years of our period of office and failed to achieve in the last period—that we can get from lower taxation a greater yield of revenue. That is the outstanding feature of our economy at present. We are far too heavily taxed, not merely business and industry and to some extent agriculture, but even those people who are finding it so hard to live—people on fixed incomes and with fixed salaries. Until there can be some decrease in taxation, there can be no hope of increased economic activity, without which it is hopeless to try to better the employment and emigration situation.
I have endeavoured to try to extract the general principles of Government policy. The Taoiseach says agriculture is the basis of our economy. Let us test that on the last 12 months. What has been done? We had difficulties that any Government, including the present Government, would have had to meet—we would have had to meet them, too—by reason of the extraordinary surplus of our butter products. That was a matter vitally affecting our farmers. The price of milk vitally affects them.
That situation was not approached in a realistic way. Instead, shortly before our Government had to meet the British Government with a view to coming to an arrangement to meet the attack on our economic position and on our markets in Great Britain —not merely regarding butter but which might affect others of our agricultural exports—when we had to meet that serious threat from our very well placed competitors, we decided in accordance with the policy of the Minister for Industry and Commerce to antagonise one of the most important sections of the business community in the City of London: the tea trade. That is not the way in which Government policy should operate.
The Taoiseach has said that we have not made any very great progress in industry. We have tried over the years—and I think the present Government have tried, too—to bring people into this country with their wealth, their scientific techniques and their business techniques, to expand our industry and bring wealth to the country. We have tried to get foreign capital; we have tried to get people from the United States of America to come into the country to help to develop our undeveloped resources by giving us their market resources and their techniques in business affairs. In this way, we hoped they would enable us to build up an export market and to give employment to our people. What is the use of asking those people to come in here? What is the use of trying to bring to their attention the attractiveness of this country from the point of view of investment, while at the same time we bring a Bill into this House, not to repeal the Control of Manufacturers Act, but to continue under a false name to control foreign manufactures when they come into this country. That is not the way to get wealth into the country from the United States of America to build up our industry.
Then we had the performance of the Minister for Agriculture regarding wheat prices and the Cereals Bill. I hesitate to pass any comment on any individual but I think his performance here was not in any way such—to put it at its highest possible level—as to engender confidence among the agricultural community in the agricultural policy of the Government.
Again, at a time when we were trying to increase our exports, trying to get people to help us by taking our exports, trying to get people from the United States of America to come in here with their money and with their knowledge, trying to get even our own people, our own kith and kin in America to take our goods, the produce of our manufacturing and agricultural industry into the United States, we proceeded by our foreign policy to affront our own people there and our friends in the United States of America.
That is, so far as I can see, the general Government policy. They have done nothing to increase agricultural exports, nothing to better the agricultural industry but, on the contrary, have put that industry into confusion and something amounting to despair and have given at least an indication of a reversal of the policy of Deputy Dillon and of the inter-Party Government of guaranteeing minimum prices to our farmers. That policy is steadily being eaten away and will probably disappear gradually. It is no wonder that we have had no increase in agricultural production. It is no wonder that the Taoiseach is not able to see any dramatic increase in employment or decrease in unemployment.
My primary purpose here to-day is to deal with unemployment and the cost of living. The Taoiseach did frankly admit, I think, that the situation, certainly the situation in regard to unemployment and emigration, is highly unsatisfactory. It is now 16 or 17 months since the change of Government. Of that period 12 months have elapsed during which this Government have had a clear majority in this House. They got from the elecorate in the last election what they asked: a strong Government with a clear majority. They have no worries from the parliamentary point of view, therefore. They have no alibis and no excuses. What have they done to justify the confidence placed in them by the electorate in the last general election, and, above all, what have they done to justify the hopes they deliberately held out of an immediate decrease in unemployment, if not an end to emigration?
The Taoiseach referred to the problem of emigration and I have the greatest sympathy with him in that. I have the greatest sympathy with this Government, or I would have if they had not acted before the change of Government in the way they did act in this House. If they had not carried on the propaganda they used during the general election, they would certainly have got my sympathy because I know what it is from personal experience to try to tackle the serious problems that face a Government in connection with unemployment and emigration. But from the Opposition side of the House for months before the change of Government every tactic that could be employed was used to discredit the efforts of myself and my colleagues when facing the serious situation that threatened the economic life of this country. The whole effort from every seat on this side of the House was directed at discrediting the Government, even at the expense of the nation itself.
In the course of the general election campaign, this is what Deputy Lemass, as he then was, said: "Unemployment and emigration are the acid tests of policy. A Fianna Fáil Government will measure the effectiveness of its work by these standards." That was held out to the electorate then by the man who is now Deputy Prime Minister. At that time, they were criticising us for the unemployment which unfortunately existed through no fault of ours. The electorate were told that unemployment existed because we were not able to carry on a capital programme to give employment for lack of the capital which we would have liked. That was not the fault of external conditions, they said, not the fault of the Suez situation, but the fault of the Coalition Government who could not make up their own minds and come to agreement as to policy. The electorate were told that if a strong Government were put back, if they kept out a Coalition Government, unemployment would be solved immediately and emigration tackled and solved in a very short space of time.
I have no objection to political Parties making whatever propaganda within the limits of Christian charity that will give them victory over their opponents, but what produced a very great tragedy and great damage to the country was the manner in which it was suggested in this House before the general election and then during the general election campaign that unemployment need not exist and that if only a strong Government were put into office, it would no longer exist. According to the chief spokesmen of the then chief Opposition Party who are now members of a Government with a clear majority, obtained as a result of that propaganda, unemployment is the acid test. I propose to apply that test acidly to Government policy this time.
Then, on another occasion, the same Deputy—now the Minister for Industry and Commerce and Deputy Prime Minister—said that the immediate task of Fianna Fáil would be to get work for the unemployed—"their immediate task". What would any unfortunate man, any unfortunate family, think, listening to a speech of that kind, but that, if Fianna Fáil were returned with their strong Government, their immediate job would be to end unemployment and that they could end it immediately. If there was any doubt about that, it was cleared up by another speech he made when he said: "The unemployed could not be expected to wait until long-term production plans brought them permanent benefit."
I propose to-day to test the Government policy on those declarations of the Deputy Prime Minister and to apply that acid test to Government policy. If the Fianna Fáil Party at that time, either from this side of the House or in the course of the general election campaign, had decently made the people aware of the real situation that confronted us, they would have said frankly that the situation was such that any Government would have been faced with a difficulty and problems almost insoluble at that time.
We had laid the foundations, when we left office, because of our handling of the balance of payments situation, for a very considerable expansion in the whole of our economy. We had given to the public—not through words but in writing—a well thought out policy for production to meet the situation we were about to meet after we had tackled and partially solved the very difficult problems that confronted us at the end of 1956 and the beginning of 1957.
According to Fianna Fáil, those problems were not world problems but were problems created because the Coalition Government could not agree amongst themselves. They had not long-term plans for unemployment but immediate plans to end it—and that is where the electorate were deceived. The unemployed man and the wife and family of an unemployed man know only that they have no money coming in to them, that they have no jobs. It is no comfort to them that their unemployment has been caused through international difficulties, through international upsets, through matters such as Suez, through matters such as the rise in terms of trade against us and the drop in the price of cattle due to the Argentine dumping of cattle on the British market at that time. The unemployed do not understand that. They know only that they have no money coming in to them.
When an attractive proposition was put up to the unemployed with the forcefulness of Deputy Lemass, and his apparent earnestness, they and many people throughout the country were convinced that if Fianna Fáil were returned with a clear majority, with no trouble about parliamentary instability, snap divisions, and so on, they had the remedy and the plans for the immediate solution of unemployment, emigration and other problems that afflicted the country.
We were told that unemployment is the acid test and that the unemployed could not be expected to wait until long-term production plans brought them permanent benefit. I could have some sympathy with the Fianna Fáil Government had they frankly recognised and stated to the public that no Government could solve the problem of unemployment overnight, that it required planning of at least some considerable duration, if it could not even be called long-term planning. I could have some sympathy with the Fianna Fáil Government if they had not secured their majority in this House largely—certainly in Dublin City and elsewhere in urban areas—because they held out those alluring prospects to the unfortunate people who were unemployed as a result of conditions impacting on this country over which no Government could have any control. They must now take the consequences.
This morning, the Taoiseach said that employment was increasing and unemployment slightly diminishing, but that it still remains our most serious economic problem. That is what they did not say 17 months ago at the general election. On that occasion, we were told by the Fianna Fáil Party that their immediate task would be to get work for the unemployed and that the unemployed could not be expected to wait until long-term production plans brought them permanent benefit.
The Minister for Health sneered at me when I spoke on the Taoiseach's Estimate on 25th July, 1956. The reference is column 1708 of the Official Report. I had spoken at that time on the very difficult and serious problem of emigration that was facing us and that would face any Government. I had also referred to a topic to which I hope to refer briefly to-day—the topic of the extraordinary disease of disillusionment and cynicism that afflicted the country. I had referred to the problem of emigration and, to a certain extent, I had analysed the report of the Commission on Emigration with a view to inviting all sides of the House to consider those problems as national problems and to give their contribution towards the ending of emigration.
Did I get co-operation from this side of the House at that time? I did not. Deputy MacEntee had this to say: "... it is the Government who have the responsibility for formulating a policy in regard to emigration...." He made that statement from these Opposition Benches. That is what he had to say from this side of the House when I asked for the co-operation of all sections of the House and of the people in dealing with the problem of emigration.
Seventeen months after this Government came into office, having denounced us for our failure to deal with the problems of emigration and unemployment, they come in here and, on the first occasion on which we have an opportunity of seeing their policy in regard to emigration and unemployment, all that the Taoiseach can say is that there is a slight decrease in unemployment, a slight increase in employment and that the problem of emigration is still the gravest problem we have to face. He has not uttered a single word about any plan for ending unemployment or emigration.
I do not believe in those plans or those declarations that a particular Government or a particular Party has the entire prerogative and all the answers to all the questions for dealing with our national problems of unemployment and emigration. The present Government said they had those plans. They said they had immediate plans for an immediate ending to unemployment. The position is now that the Taoiseach has sat down without giving the slightest indication of any plan for ending unemployment or emigration.
He has stated that there has been a slight decrease in unemployment and a slight increase in employment. The actual position, according to official figures from the Central Statistics Office issued on the 10th July, 1958, is that the total number of unemployed on the register on that date was 52,971. That shows a decrease over the figures for the corresponding month of last year of 1,746. After a period of 15 or 16 months in office, does that justify what members of the Government said when seeking and getting the votes of the people—"to give immediate benefit to the unemployed, to carry out the immediate task to get work for the unemployed, that the unemployed could not be expected to wait until long term production plans brought them permanent benefit"? That is the best they have been able to do, after the lapse of nearly one-third of their possible period of office.
That is not the whole of the story. Although there has been what the Taoiseach described as a slight reduction in the unemployment figures this year as compared with last year, they have not yet come down to the figure for unemployment in 1956, when times were beginning to be bad with us. At that time of the year, in 1956—and recollect that that was the year in which all the troubles descended upon us— the figure for unemployment was 49,297. The figure at the present time, after the Government has been in office for nearly one-third of its posis 52,971, after they had promised immediate relief for the unemployed without any long term production plans.
The Taoiseach said there was some increase in employment. The figures he gave yesterday, I think, do not bear that out. The figures he gave in the House yesterday, taking the employment equivalent of insurance stamps sold in the year 1955, show the number of people in employment as 496,300. In 1956, the year when things were getting bad, the number was 498,500. In 1957, Fianna Fáil's first year of office, it was 463,100, that is to say, some 33,000 fewer in employment at the present time than there were in 1955 and 35,000 fewer than in the year 1956, the bad year. That is what the Government has done, as the result of its 16 or 17 months in office. That is the acid test. Applying that acid test, is there any justification whatever for the Government deluding the electorate, as they did during the general election and in the months prior to it?
That is not the whole story, because these figures have to be taken in the context of emigration. The Taoiseach frankly admitted that emigration was still running at a very high level. Figures were given in the British House of Commons on the 7th July, 1958, a few days ago. Those figures give the number of people who applied for the first time for National Health Insurance cards from the Republic. Those figures were for the year 1956, 57,480; and that was our bad year. This House still rings with the denunciation from these benches of "the bad, bold Coalition Government that had sent our people abroad to England and elsewhere because they were unable to be a strong Government and agree upon a policy". The country still rings with the denunciations similarly made. Everything was to be good, if the present Government got back, as they got back, with a clear majority, as a "strong" Government; and look at the result. In their first year, 1957, 58,672—an increase of approximately 1,200 on the previous year—and in the first five months of this year, 19,013 people have gone. That is unemployment, taken in the context of emigration.
The context in which it is really to be taken is the demoralisation which has been produced in the country by the fact that the people were led to believe that there would be an immediate decrease in unemployment and an immediate increase in employment.
Nobody could believe that, of course, who had any experience of Government, but, as I said before, unemployed people have no experience of Government, of politics, external assets or anything of that kind. They were deluded into that and the present Government must now take the consequences.
I listened for a few moments this morning to the Minister for Local Government, unable to prevent himself from indulging in a gibe against the last Government, even at this late stage and in spite of facts brought out again and again. The Department of Local Government during our time, had so reduced matters, he said, that he had to start from the ground floor up. I remember the denunciation that came from this bench, from Deputy Briscoe, about our failure to give money for housing in the country, and particularly in the City of Dublin, and especially our failure to give money for the Small Dwellings Acquisition Acts loans.
I felt at that time, as head of the then Government, that the Minister for Finance had treated me and treated the Corporation of Dublin generously, at a time when it was impossible to get money, even for productive purposes, when we were able to give the Corporation of Dublin precisely the same amount in that particular year as had been given in the previous year, when money was not so scarce, and when we insisted, and the Minister for Finance insisted, that they were not given that money unless they were giving sufficient money for the Small Dwellings Acquisition Act loans. We were crippled as a Government by Deputy Briscoe denouncing us here in this House at every opportunity and at the Dublin Corporation meetings, for what he said was our failure to give money for housing for the City of Dublin. The money was there, but it was prevented from being spent by the machinations of Deputy Briscoe in order to obtain kudos for himself and bring political discredit upon us.
When I heard Deputy Norton, on the Budget debate, recording the effect of the Budget on thousands of our skilled craftsmen in the building trade, on builders' labourers, plasterers and the rest who had left the country last year because there was no building work, it was certainly some satisfaction to me to know that, for the first time in the history of the country, when we were in office in our first inter-Party Government, building workers came back to work here in Ireland to build houses for Irish people. I was sent on the Radio by my colleagues at that time to ask them to come back; and the plasterers, carpenters, craftsmen and builders' labourers consequently came back. During that first period of the inter-Party Government, we reached the nearest figure to full employment ever reached in this country.
In the worst time that ever hit this country, during the year 1956 and the beginning of 1957, we gave the Dublin Corporation—and, so far as we could, every local authority—the fullest amount of money available, but we were crippled by the deliberate efforts to prevent people from getting loans and from building houses. I understand that there are still some restrictions upon the building industry here in this country—certainly, in the City of Dublin and in County Dublin. I want to suggest that there should be taken off the Small Dwellings Acquisition Acts procedure any restrictions whatever, so that these people who should be entitled to get the benefit of that very advantageous procedure should get it without restriction. That will give a stimulus to the building industry and enable employment to be increased in the cities of Dublin, Cork, Limerick and Waterford.
I want to speak about the cost of living. The Taoiseach did not refer to it. I do not propose to go back over the old story of the promises made by the Taoiseach and the Minister for Industry and Commerce in regard to not removing the food subsidies. I propose merely to draw attention to the very serious position that arises from that. I have already referred to the necessity for reducing taxation. The whole history of Fianna Fáil has been one of an increase of taxation and not of reducing it. We reduced taxation twice during our period of office but I cannot recall any occasion on which Fianna Fáil reduced taxation.
Their record as regards the cost of living is precisely the same. The position we are in, and the position that section of the community who can least bear it is in, is a direct result of the deliberate Fianna Fáil policy of increasing the cost of the necessaries of life. The Budget of 1952 has spread its evil results to the economy of this country to the present day. The Budget of 1957, in which the food subsidies were withdrawn, is still doing its fell work in preventing the cost of living from being maintained at a stable figure and in preventing economic activity.
I have already adverted to the fact that import prices fell by nearly 7 per cent. in the past 12 months and that the terms of trade were in our favour. It would have been proper to expect that those favourable conditions would have reflected themselves in a reduction in the cost of living. So far from doing that and so far from there being any stabilisation in the cost of living, the last figures, published in June, the figures published in the last few weeks, show a further increase of two points in the cost of living. In the past year, as a whole, the cost of living has increased by eight points and in the food group alone, the cost of living has increased by 13 points.
Since 1950, the cost of living has risen by 46 points. In other words, the value of money has gone down by nearly 50 per cent. That is the result of Fianna Fáil policy. Whatever may be said about us during our term of office, the fact is that we spent ourselves, and used every device available to us, and subjected ourselves to the innuendoes, frequently fraudulent, that came from Fianna Fáil when they were on these benches in our efforts to keep down the cost of living. In our last three years, the most difficult period of all, the cost of living went up by only three points. That cost of living went up because of circumstances beyond our control, because at that time import prices were rising and our export prices were falling. During that time, and as a result of our efforts to keep down the cost of living, our balance of payments went into imbalance.
All our efforts went into keeping down the cost of living and it went up only two points as a result of the very serious difficulties with which we were faced. It has gone up since 1950 by 46 points and during most of that time the present Government had control. Deputy MacEntee was responsible for the 1952 Budget and Deputy Dr. Ryan was responsible for the 1957 Budget. As a result of their activities and their actions, the cost of living went up by 46 points.
I suppose I should retract what I said in the beginning that there was no general policy. There appears to be the general principle activating Fianna Fáil that food prices should go up. Deputy MacEntee, in 1952, said that his view was that there was no longer any need for food subsidies and in 1957, the food subsidies were wiped out. It would have been expected that the effect of the withdrawal of the food subsidies in the Budget of May, 1957, would have worked itself out of the economy of the country by this time. However, in spite of that, in the June quarter, the cost of living went up by two points and the Government made no effort to control the cost of living.
It does not need any great oratorical effort on my part to paint the picture of the effect of that on the sections of the community least able to bear it, on the old age pensioners and the unemployed. In addition to that, small business people throughout the country are feeling the effects of it. Those living on limited incomes are now reaching the verge of impossibility of maintaining themselves in decency. Those living on fixed incomes have not got any adequate compensation to equate the loss they sustained as a result of the withdrawal of the food subsidies.
Deputy Dillon has again and again drawn attention to the fact that the cost of living impacts on the farming community also. It is true that some effort had been made to give industrial workers and others, such as State servants, a little, but not adequate, compensation to clear them for the increased cost of living; but the farming community, in addition to having to face the impact of the cost of living, have also had to face the impact of falling prices. I do not see how the Government can, with any degree of satisfaction, face that situation and it is no wonder that the Taoiseach did not refer to it in the course of his opening remarks.
I referred earlier to-day to our foreign policy. I want to occupy the House for a brief period to deal with the impact of our foreign policy, not in connection with our security, but in connection with our economy. I have repudiated again and again those people who say that we are spending too much on our Department of External Affairs and that those very efficient officers in the Department who are working abroad on behalf of this country are wasting their time at cocktail parties. For 700 years, this country sought recognition as a nation and one of the marks of nationhood is the right of legation.
I want to deal with the impact of our foreign policy on our material affairs. I want to refer to the fact that our people, belonging to a Christian, and largely a Catholic, country, having secured our nationhood, and by the intervention of Providence, having been saved from two terrible wars, have a duty to our less fortunate neighbours in Europe and elsewhere. While we have a chance, as we have a chance, in the United Nations of doing our part in an independent way as an independent nation, not tied to the tail of any big nation or any small nation, we ought to do our duty without looking for material rewards as a result of it. But, looking at it even from the point of view of materialism, you will not get countries to take our goods, you will not get people of other nations to come in here and help us to develop our country or help our manufacturing industries if we do not do our duty in matters of international affairs and help them in the international difficulties that are confronting them at the present time. Some of the big nations are bearing the most intolerable burdens, wasting their material and wealth and the lives of their people in defence of peace.
One of the reasons we cannot get in foreign capital is the fact that we are branded as isolationists and have not done what we ought to have done, given as good a contribution as possible towards helping those countries who are bearing the burden of preserving peace in the world. The foreign policy, or the lack of foreign policy, of the Government is to a considerable extent responsible for that.
I have briefly referred and again only briefly refer to what occurred last year at the United Nations. We were unable to extract from the Minister for External Affairs during the debate on the Estimate for the Department of External Affairs any indication whatever that he had any foreign policy. So that, the position we find at the present moment is that we do not know and the country does not know what is Government policy as regards our foreign affairs but we do know that, as a result of the step taken by the Minister for External Affairs last summer, our traditional friends in America, our own kith and kin there as well as those other people who are very favourably disposed to us, were outraged at the attitude that was taken up at that time.
