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Dáil Éireann debate -
Tuesday, 29 Oct 1963

Vol. 205 No. 3

Private Members' Business. - Increase in Social Welfare Benefits: Motion.

I move:

That Dáil Éireann is of opinion that, following a general increase in wages, a proportionate increase (apart from Budget increases) should be granted immediately to all those in receipt of social welfare benefits, because a general increase in wages is usually followed by a general increase in the cost of living.

I have waited a long time to introduce this motion. I was not certain when it would come up until I was informed today that it might come up tonight. Naturally, when it comes up suddenly, one is not as well prepared as one would wish to be. I should like to be able to speak until 7.30 p.m., and to speak again, but I do not think I shall be able to do so.

The question of social benefits first arose in a haphazard manner. We know that in or around 1911, old age pensions were first introduced by Lloyd George. To do that, he had to introduce surtax. There was much opposition to this proposal, especially by those who were asked to pay for it. It is only since then, and gradually, that we have had other benefits. All those benefits should relate in some way to some figure. I am taking the labourer's wage as a case in point.

Let us accept that at present a labourer's wage is £10 a week. Therefore, there ought to be a reassessment of what the various beneficiaries should get — whether the person be a single man, a young man, an old age pensioner, a widow, a dependent, and so on. There ought to be a complete reassessment and there ought to be an improved scale, in relation to what the labourer earns to maintain a wife and family, if he happens to be married.

Social beneficiaries have never received a sufficient income in relation to the cost of living and in relation to the wages paid to a labourer, that is, £10 a week at present. Benefits are very much advanced in Britain compared to here. We are told they have to pay for them and we know that Britain is a far wealthier country than this. The social benefits in the North are far superior to ours. They are similar to those obtaining in Britain and are subsidised or paid for by the British Exchequer.

Within the past year or two, this Government said they aimed to increase social benefits and to bring them as near as possible to the British level. That will depend on increased productivity and on the general economic wealth of the country. That should be the aim: the Government say it is the aim.

A Select Committee ought to be set up to go into the whole question of what each person or couple or family ought to receive and, having established that, allowing, among other things, for the cost of living and for the age question because age has much to do with it. For instance, if you consider that an old man should get, say, 50/- you might not consider that a young man should get that amount, because young men have ways and means of earning money. They can go away; they can join the Army, and so on. It is, perhaps, not a good thing to encourage a young man but, allowing for the age difference, there should be a reassessment in the light of modern standards. It should not relate to past standards.

In the past, whatever benefits were granted were granted in a begrudging manner. I understand that when old age pensions were first paid in Britain the amount was 5/- a week. There are many people who sympathise with this class of people but when they are asked to contribute they do not want to do so. Prior to 1911, as we all know, old people died in the workhouse. There was no unemployment assistance. From our readings about the Famine period we know that starving people were housed in huge workhouses. We know that people lived largely on potatoes and salt and that large numbers of them had to emigrate. There was no assistance. Even contributions to assist those in the workhouses were objected to by the big ground landlords. In fact, some of the landlords shipped many of those people in the workhouses to America in the coffin ships. They considered it cheaper to do so. It is a very difficult matter when it comes to the wherewithal. However, we have advanced since then.

It is extraordinary that the French Revolution was not commenced by any organised body but by mobs of unemployed, destitute people. The other people took it up afterwards. There was a complete disregard, over the ages, for the old, the destitute and the feeble. About 50 years ago, we made a start but I am not satisfied that what they receive now is a just amount, taking into consideration the cost of living and other aspects of the matter.

A man who has to live on an old age pension ought to receive at least a quarter of the amount an employed manual worker earns. We cannot encourage young people in this respect but we cannot let them starve or we should have more crime. A new figure should be reached for all the various classes I have in mind. Then we ought to consider how they may receive increases because they must receive increases from time to time just like wage earners. Up to now, it has been pot luck. It depends on the Government, on the Minister, on whether the Government are strong or weak. Nothing is regularised and it ought to be.

The fate of the people I speak for should not depend on the whims of any Government or Minister. They ought to have the right to receive an increase in proportion either to the increased cost of living or at least wage increases. Nowadays, wage increases are general. We heard talk about the eighth round increase, and so on. Whenever there is a round of increases, two general increases follow. All the people who pay those increases automatically increase the cost of their goods or services.Later, the Government, being the largest employer and having to meet the same demands, increase taxation to pay their employees and all the people depending on them. Therefore, a general increase in wages is followed immediately or thereabouts by a general increase in the cost of living. The State will increase the cost of living because they must pay the same increases to their employees. I would like to see all this regularised. I do not like to see these people being treated as pawns, depending on the whim of the Minister, on the health of our finances, on whether an election is due or not. There should be some way by which they would get an immediate increase.

As time passes, we are organising in this direction. We are now told that wages should be related to productivity and national income. The Labour people, both here and in England, have begun to see the importance of this relationship. Some individuals think that the old way is the best. It is not. If you do not relate increases to the ability of people to pay, you can do serious harm to the very people expecting some additional support. Consultation is now taking place to relate wage increases to these other conditions.

Likewise, increases granted to those in receipt of social benefits should also be related to something. Old age pensioners should not be made the pawn. From time to time we have people tear jerking and seeking votes. If there was a procedure by which those in receipt of social benefits would obtain those benefits as of right, there would be no need for individuals or groups of politicians to cash in on this because it would be no longer their business. That is the principle behind my motion. It is up to the Minister to do something about a reassessment along the lines I have suggested. I have a right to speak again, and I know this is a matter on which a lot of Deputies would like to express themselves.

The motion on the Order Paper contains a reference "apart from budget increases". I should like to explain that. At Budget time, a Minister may give an increase of a shilling or anything else; but if, within a few months, there is a general round of wage increases, independent of that shilling or whatever it is, a proportionate increase should be given. I should like to hear the views of other Deputies on the motion.

Is there a seconder for the motion?

I did not make arrangements. It is worth seconding.

I wish to second the motion. I agree with Deputy Sherwin that the suggestion behind it is certainly worthy of consideration, and I feel, and my colleague, Deputy MacEoin feels, that Independent Deputies who go to the trouble of putting down a motion of this sort are at least entitled to the courtesy of having it discussed in the House. There is something attractive about the proposal, that, if it is possible to do so, a Government should try, when increases in the cost of living take place, at least to balance up the position of those in receipt of social welfare benefits.

On reading Deputy Sherwin's motion —perhaps I had better not be too critical of it since I am in the position of seconding it — it seems to me he may be putting the cart before the horse in that in his motion he refers to a general increase in wages usually followed by a general increase in the cost of living. I think our experience here over the years, and certainly in the last decade or so, is that wage increases have been sought and secured because of increases in the cost of living and in particular, because of increases in the cost of living deliberately imposed by successive Fianna Fáil Governments.

Deputy Sherwin will recollect, as I do, that when Fianna Fáil returned to office in 1951, one of their first actions —in fact, the principal feature of their first Budget after returning to office— was to interfere with the structure of food commodities in operation at the time, and by deliberate, positive Government action the prices of essential commodities were increased. The recipients of social welfare benefits, and, indeed, workers generally, found it more expensive to live. As a result, wage demands were made and granted. There was another general election which put Fianna Fáil out of office, and a period of stability followed; but on the return of Fianna Fáil to office in 1957, the then Fianna Fáil Government, again in their first Budget, swept away the remainder of the food subsidies, with a saving of about £9 million to the Exchequer. But the result, as far as the workers and the recipients of social welfare benefits were concerned, was that, again by deliberate, positive Government action, the cost of living was increased. The cost of food and clothing, the essentials of life was increased on these people and consequently and naturally they sought compensatory benefits. The workers sought increased wages and secured them and the recipients of social benefits had to be compensated to some extent.

There is something attractive in the idea behind this motion. I disagree with Deputy Sherwin in that in his motion he seems to attribute cost of living increases solely to increased wages; I think our experience over the years is that they were principally due to deliberate actions of Fianna Fáil Governments. In any event, when the increases occur, the weaker sections of the community, those who can least bear the strain, and those who nowadays, once food subsidies have been removed, have no buffer against increased prices, are clearly those in receipt of social welfare benefits. The only person who can deal with that situation, can remedy it in any way, is obviously the giver of the social benefits, the State. If anything can be done to balance up increases in the cost of living, particularly when those increases are caused by State action, the remedying measures obviously must also be taken by the State.

I do not know what the consequences of this motion would be in regard to legislation and I should like to hear the views of the Minister for Social Welfare on it. As Deputy Sherwin rightly pointed out, it is one thing to have the cost of living going up and then have the Minister for Social Welfare, as the Government's spokesman in the matter, announcing some small compensatory benefit to these people. Frequently, our experience is that in almost all cases the benefits given by way of compensation for price increases do not, in fact, compensate the recipients at all. With the increases that have taken place in the cost of living over the years, I think I am not inaccurate, certainly not grossly inaccurate, in saying that since virtually the foundation of the State, there has been no real increase as compared with present day prices in the value of the benefits to recipients of social welfare allowances.

We are now in a situation, in discussing this motion, in which the Government by recent budgetary provisions have caused a situation where, again by deliberate positive action on their part, there is to be an increase in the cost of living and where, on their own admission, something like £13.5 million is to be collected by a turnover tax. On the statement of the Minister for Finance in his Budget speech, it is clear that threequarters of that sum is to be collected from the basic essentials of life, food, fuel and clothing.

It is equally clear that the people for whom Deputy Sherwin speaks in this motion will contribute very largely to the revenue to be gained by the Government from the turnover tax. I do not want to be taken as endeavouring to conceal it or put a gloss on anything: it is true that the Government are making compensatory payments because of the increases they are bringing about but I have no doubt that these compensatory payments will, in fact, not compensate the people for the losses incurred by reason of the 2½ per cent tax.

That is exactly the kind of problem Deputy Sherwin is dealing with in this motion: that it should not be the case of the Government cracking down on the food, fuel and clothing of the people and other basic essentials through their financial policy and then doling them out some kind of sop to try to soften the blow. The case he is making is that for the future we shall get away from that and have some kind of automatic arrangement whereby if wages are increased to offset a cost of living increase, social welfare benefits should be automatically increased.

I do not know what machinery would be necessary to bring that about. I do not pretend to know the full extent of the problems that might be created for the Minister for Social Welfare or the Minister for Finance in implementing such an arrangement. We must get that kind of information from the Minister and the Government.It may well be that such a suggestion would not be feasible. It is for the Minister to let us know but this motion is worth discussing and the idea is worth considering and I should like to have the Minister's views on it.

On behalf of the Labour Party, I support this motion and I hope when the Minister speaks on it he will not term Deputy Sherwin's action irresponsible. Ministerial pronouncements in the past few weeks have usually described statements on national policy or otherwise by members of Parties other than Fianna Fáil as irresponsible if the policy advocated is not in accord with Fianna Fáil policy. I hope Deputy Sherwin's action will not come to be so described when the Minister speaks. Having regard to the present situation, I have no doubt the Deputy will be spared that ordeal, as I am sure the Minister will be very cautious in approaching a motion proposed by a man who carries such great weight as Deputy Sherwin does at present.

We must bear in mind that since Fianna Fáil took office in 1957, taxation has increased more than 50 per cent, without taking into account the tax which comes into operation next Friday, the turnover tax and which has been the subject of many discussions in the past few months. We know that will increase the taxation level sharply, and it is not unreasonable to assume that it will result in netting £16 or £17 million and not just the £10 or £11 million the Minister for Finance told us about some months ago.

The Minister for Social Welfare has made great play with the many advances which Fianna Fáil have made in increasing social welfare benefits. Let us see what the present position is. The non-contributory old age pensioner today gets 32/6 weekly. When old age pensions were first introduced by the British Government away back in 1908, the rate of pension was 5/- per week. Because of the decline in money values, that 5/- bought just as much, I am convinced, 50 years ago as does the present non-contributory 32/6. For old age pensioners, who have no other income, the standard of living has not improved over the past 50 years.

To a great extent, the same could be said of all the other benefits. Undoubtedly, social welfare recipients —old age pensioners, widows, and those unfortunate enough not to be able to obtain employment and who have to go to the employment exchange for unemployment assistance — have found great difficulties over the past years because of the declining value of money and rising costs, rising costs for which the present Government are to a great extent responsible. I think it would be helpful to them if the suggestions in a motion such as this were to find their way into the Statute Book. Like Deputy M.J. O'Higgins, I believe there will be no great difficulty in drafting the legislation necessary to implement Deputy Sherwin's motion. As I interpret it, he asks that where there is a wage increase, and where the cost of living increases, or prices increase, there should be a proportionate increase in the allowances paid by the Department of Social Welfare. I need not dwell further on this matter, other than to say the Labour Party support the proposal and hope the House will approve Deputy Sherwin's motion.

The wording of this motion demonstrates clearly that Deputy Sherwin has been in this House only during the period in office of Fianna Fáil Governments. The motion implies that increases in social welfare benefits come almost automatically with every Budget. During the period in which Deputy Sherwin has been in this House, it is true that there has been this continuous process of improving social welfare benefits. Other Deputies, however, who have been longer in this House realise that that process has been anything but continuous. During the period of the two Coalition Governments — the alternative Government to Fianna Fáil — these payments remained practically static. It has not, therefore, been the normal thing for increases to come with every Budget, except under Fianna Fáil.

The giving of an increase involves a decision by the Government to do something to improve social welfare payments. That decision involves complementary action by the Minister for Finance to that taken by the Minister for Social Welfare. It also involves a decision by Dáil Éireann to enable the Minister for Finance to provide the necessary moneys. These two separate actions have always to be taken in deciding to grant increases in social welfare benefits.

Deputy Sherwin is anxious that there should be some automatic method to make increases available. That would involve, of course, some automatic arrangement by which the increased money needed would also be made available. We have made it clear that we intend, so far as it is possible, to balance our Budgets, to see that expenditure is covered by revenue. While we appreciate that there may be a temporary worsening of the position on occasion for social welfare recipients, we, in Fianna Fáil, still stand by the principle that it is our duty to the people to make arrangements for the collecting of the necessary money before we allocate more money. During the period in office of the two Coalition Governments, we have seen the result of Government cynically refraining from making these necessary arrangements. The tax arrangements made in the last Budget are a step forward, but only a step. It is still necessary to make a positive decision in regard to the steps to be taken to provide money for social welfare increases.

It is not necessarily a result of wage increases that there should be also an increase in the cost of living. That has not always been the experience. It is true that wage increases that are not justified by increases in productivity will be likely to have that effect, but, where the wage increases are accompanied or preceded by a commensurate gain in productivity, there need not be a proportionate effect on the cost of living. In the last years for which information is available, the round of wage increases in 1959 and early 1960, it is interesting to note that weekly earnings in manufacturing industry rose by five per cent in 1959 and by seven per cent in 1960, while the consumer price index actually dropped by 1½ per cent in 1959 and increased by less than three per cent in 1960. It is clear, therefore, that what was happening in that case was not, as Deputy O'Higgins tried to convey, a question of the workers chasing increases in the cost of living but rather of the workers benefiting from the increased prosperity that resulted from the change of Government in 1957.

Debate adjourned.
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