I want to say one or two words on this Estimate because I think that people are losing sight of the fundamentals. Inflation is the prince of thieves; it robs the poor and it enriches the speculator. I conceive it to be the primary duty of every democratic Parliament in the world to protect the defenceless sections of its community against the evils of inflation. What are they? The first characteristic of inflation is a rising cost of living. Now this Government protested when they introduced the turnover tax that the cost of living would increase by 2½ per cent and no more. We told them that if this tax were introduced it would have repercussions all through the economy and result in a very marked increase in the cost of living. Since this time 12 months ago the cost of living went up by 12 points. It went up to 171 points, at mid-May of this year, compared with 159 points at mid-May, 1963 and the cost of living is continuing to rise.
Those who are organised in trade unions and so forth have managed to get some compensation for the increased cost of living but there is a wide section of the community who are now on that endless escalator trying to chase the cost of living with their income and discovering that they are not able to do so and so having thrust upon them a lower standard of living. It is these elements in our community who have no organisation to speak for them who suffer the impact of this burden. They are the self-employed farmers working the family farms, the people living on pensions, on fixed incomes of one kind or another; they are the unorganised workers who have not benefited as fully as the organised workers have in increased wages and working conditions, and they are the wide section of the community who fall within no broad category but whose problems arise at every turn.
Let me give the House an instance of the kind of problem that inflation involves for the young married couple. I know of a case—and I believe there are many such—of a young married man or a young man contemplating matrimony, who arranged to buy his house and budgeted for the house and for the furniture he would put into it and calculated that he would be able to meet the charges on them from his wages. The wedding day was fixed and then he was informed by the building contractor who was to build the house:
With reference to your booking fee paid on Site 219. We now inform you that owing to the rise in prices of materials and labour, stemming all round from the 12 per cent rise in wages, the price for this house is now £2,715 nett.
The original price was £2,460. The letter continued:
This is a fixed price, not subject to increase on signing of contract, or on your written confirmation of acceptance of this offer.
We regret that we have not been able to inform you of this increase before, but we have been unable to stabilise a price because of the continuous rise in materials.
We would be glad to have, before June 16th, your confirmation that you intend to complete the purchase.
We would confirm that there will be no further rise in price of this house to you.
He was also informed that if he wanted a garage, for which there was to have been a charge of £180, it would now cost him £220. The man who contemplated purchasing that house simply cannot buy it. He could not get the house out of his wages and he has had to give up the idea and look for alternative accommodation for himself and his wife. These things are going on all around but we close our eyes and pretend they are not happening. They are happening and they are creating hardships. They are the direct and inevitable consequence of the decision of the Government to raise their revenue by taxation on the essential food, fuel, and clothing of our people. It is dishonest to ignore that fact and in my submission it is catastrophic to the long term interests of the country.
I recognise that "inflation" is a word too easily employed without any precise definition of its meaning. Mark you, it would be a very useful thing, both in Oireachtas Éireann and elsewhere, if this whole question and the true meaning of inflation were more precisely defined. I suggest to the House that if you want to determine whether a community is in a state of inflation, you have two criteria. One is the cost of living and the other the balance of trade. If you find, in an open economy such as ours that these two are moving up at the same time, you ought to look out for storms. Our adverse trade balance in the year ending April of this year was £118 million and the adverse balance of payments was from £20 million to £25 million which is large enough. It would be twice that but for the movement of foreign capital into this country and we ought to turn our minds most deliberately to the question of foreign capital coming in here.
The influx of foreign capital is a good thing for the development of industry and the promotion of exports so long as it is based on the provision of decent employment for our workers, the production of exports and the financing of the interest charges on capital investment. That is good for our economy and for the country but I want to ask Deputies this question: is it desirable, when you are running a large adverse trade balance, to finance a substantial part of the adverse balance of payments by selling out old established businesses and the land on which the people have lived for generations? There is a fundamental difference between capital investment for the establishment of new industries and for the promotion of exports and capital investment by way of take-over.
Capital investment which increases exports of existing manufacturers or produces new exports is good but suppose you have an industry operated by our own people, the profits of which have circulated in our own community and the dividends of which have been garnered by shareholders in Ireland, an industry owned by our own people and carried on by them for generations. Is it desirable to see an anonymous foreign financial enterprise take over that industry and, without any addition to the total output, simply collect the dividends? I do not think it is and it is a trend that we ought to watch with acute care.
So great a country as Canada has reacted most violently against that trend. United States investment in Canada has reached such a scale that Canada finds it difficult to extricate herself. This has created bitter resentment at the extent to which the economy of Canada has come under the control of America. France also has reacted most emphatically against the take-over. In all countries you will find the distinction made between the investment which creates new industry and new exports and the kind of investment which means the take-over of existing industries and, in our case, the take-over of our land.
There are grave economic and social implications in this problem and it is one to which I advise the Government to turn their minds. In my judgment, investment of the take-over character is of an extremely dangerous order and we should watch with great care such investment in our industry except in exceptional cases. There are exceptional cases in which the take-over procedure can be a benefit. If you have an industry producing a commodity for export and that industry finds itself cut off by the operation of foreign cartels from its export markets, the only solution is to establish a contact with the particular cartel and through it to get access to the markets. Rather than see that industry closed down, it is better to make peace with the cartel and to get access to the markets of the cartel. This means that one must be prepared to face a realistic world and a realistic world is not a pretty world. There is no use in cutting off one's nose to spite one's face and in those circumstances the take-over procedure must be tolerated.
Where a take-over is founded on no better basis than that an enormous foreign financial trust sees an opportunity of a quick profit, we should be on our guard and we should not accept calmly that though we have an adverse trade balance of £118 million, the adverse balance of payments is only £25 million because we are selling out for cash our businesses, our land and our assets. So long as the money for these purchases is coming in we do not have to worry but we should remember that every million pounds that comes into this country for the purpose of financing a take-over imposes for the future an annual charge of approximately £70,000 on our balance of payments. It is unwise to imagine that the capital that comes in take-over produces corresponding visible or invisible exports. That is by no means all the consequences of such a sale as I described.
The Government's whole attitude to the cost of living is irresponsible and well-nigh criminal to the whole economic future of this country. I do not believe that there is any use in applying the soothing unction to our souls that if you do all the things calculated to increase the cost of living, you can then prevent it going up by holding public inquiries. We have had inquiries into the prices of soap and other goods and in every case the Minister has come back to the House and said he found that the increases were justified. You have deliberately taken fiscal measures to increase the cost of living and there is no use persuading yourselves that the cost of living will not go up.
We told that to the Government and the country 12 months ago. We heard the Taoiseach say, after the imposition of the turnover tax, that the cost of living would increase by 2½ per cent. Now we are learning the bitter fact that it increased by much more than 2½ per cent and that the increase will continue. The increases will go on and the economic consequences are as inevitable as the dawning of tomorrow's day.
I am fully aware that in these days of inflation a great many people feel there is more money in circulation; wages are going up. It is a rather enjoyable experience and it is very often not politically profitable to point out the inevitable trend. Nevertheless we in public life have a certain duty and that is, whether it is popular or unpopular, to speak the truth to the people. What I am saying now is the truth and the Minister for Industry and Commerce knows it is the truth. I believe the Taoiseach knows it, too, but he is a gambler and he trusts that something will turn up to remedy the situation and, if nothing else turns up, he lays this flattering unction to his soul, that everybody else is doing it and it will all come out in the wash. That is the rock he will split on.
There is an inflation going on, certainly an inflationary trend both in Great Britain and the United States of America at the present time as a result of the political events that are impending in those two countries. What the economic atmosphere in Great Britain and the USA will be after the elections have taken place is quite another story but anybody who reads about or has any contact with Europe is aware that in Italy, Holland, even in Germany and Switzerland energetic measures are on their way to reverse inflationary trends that have been developing in those countries. If we imagine that our costs of production can continue steadily to rise and that we shall remain competitive in Great Britain or any other foreign market indefinitely we are making a terrible mistake. If we lose our capacity to compete in foreign markets with our industrial goods we shall find it very difficult to get back into the markets into which we have so painfully and with such great effort made our way.
The short view is the comfortable view. The long view is the honest view and our responsibility, we believe, is not to plan for today and tomorrow but to plan for the long term. We must ensure that, if we invite 100 men into employment in this country, invite them to marry and establish families, we are not creating a situation in which, when the family responsibilities have gathered around them, they will find themselves on the side of the road because the industry in which they have entered and in which they have made that incomparable investment not of their money but of their lives folds up under them and leaves them, perhaps in early middle age, with the skill of their particular employment but without the means of using that skill because the industry in which they have made the investment of the best years of their working lives is no longer able to compete in the market where its output must be sold.
It is astonishing to me how people can deceive themselves as to the real trend. I do not think anybody will deny that vast sums of public money are being spent for the promotion of employment. The Government have already borrowed £280 million and we are going to borrow £85 million this year. That is over and above the revenue which is being paid out by the Government amounting to £215 million and which is twice what the Government were spending seven years ago.
Yet we have the astonishing fact, in spite of all the Government building that is going on, in spite of all the investment in building and capital activity of one kind or another which is engendered by this vast expenditure of borrowed money, there are more unemployed people on the 6th June, 1964, than there were on the 6th June, 1962, in every category. There are more men drawing unemployment benefit on the 6th June, 1964, than there were on the 6th June, 1962. Taking the total of men, women, boys and girls, there are more drawing unemployment benefit in 1964 than there were in 1962. If you take the people on unemployment assistance, applications current, in every category there are more people drawing unemployment assistance in 1964, on the last available date, than there were in 1962. There are 1,400 more people on the live register on the 6th June, 1964, than there were in 1962. I confess that figure astonishes me because when I see the scale of the capital expenditure being financed by the Government I should have imagined there would be a very substantial fall in the number of unemployed. When I remember that in the last seven years approximately 300,000 young people between the ages of 18 and 30 years have emigrated to Great Britain, it is a source of amazement to me that at this moment we have more unemployed than we had two years ago. I would be interested to hear from the Minister for Industry and Commerce if he has any explanation to give for that because I find it extremely difficult to understand.
When I hear of the glorious triumphs of the Programme for Economic Expansion which seem so to intoxicate Deputy Gallagher, I ask myself what is the purpose of economic expansion if it is not to employ our own people in our own country; what is the purpose of a plan for economic expansion that shovels 300,000 young people out of the country and leaves us with more unemployed to-day than we had two years ago? If that is the result of a programme for economic expansion, then all I can say is that I am not greatly impressed.
I do not doubt there are some people who have made money out of it. I do not doubt there are some people better off to-day than they were five or six years ago. I admit that in the presence of an inflation the rich get richer and the poor get poorer but what happens to the poor in this country is that when they reach a certain state of poverty they emigrate. There are 300,000 gone. That is what I mean by the poor getting poorer. I do not deny there are more Mercedes Benzes going around the town. I see a few Rolls Royces travelling around the town. I see Bentleys getting relatively frequent. They are welcome to them and I acknowledge their proprietors have done well. The rich have got richer and the poor have got poorer but that is not the kind of economic expansion I ever thought we would glory in in this country.
If we were living in a closed economy and if those 300,000 were gathered around us in poverty, clamouring at the doors of the labour exchanges, demonstrating in the streets because they were poor and claiming their fair share, a very different atmosphere would obtain in Dáil Éireann. I doubt if we would be reading glowing accounts in the OECD report about the triumphant success of the First Programme for Economic Expansion. Where would we stand to-day if the 300,000 poor had not emigrated? Instead of having 45,860 unemployed, would we have 345,860 unemployed? I certainly do not glory in the fact that the poor have grown poorer while the rich have grown richer or in the fact that the poverty has been concealed from us because we have shipped the poor to Birmingham, Coventry, London or Glasgow or other industrial slums in Britain.
I knew a young chap who went abroad in 1938 and he worked in England all during the war. At the end of the war, he went to America and then he came home. I said to him: "John, what change do you see?" He was living in the country. Said he, "I see two changes: one, the houses are a bit better and the second is that the people are all gone." He is now living in the west of Ireland. "When I was here last," he said, "you could go out and walk into seven or eight houses on a summer evening without any trouble. Now it is very hard to find any house that is lived in within a reasonable distance of your own home." That silent, catastrophic change is proceeding. In our open economy, it is the consequence of the poor becoming poorer and the rich richer. It is not a development of which I think we have any reason to be proud.
I want to draw the attention of the House to a very strange kind of investment. First, I want to make this clear: I believe that where private enterprise cannot provide the capital to establish a desirable industry that will provide our people with employment in their own country, the Government or the community ought to do it. I have not the slightest hesitation in rejoicing on looking back on the capital investment that was made on behalf of our people in the Electricity Supply Board—£60 million. I rejoice to look back on the fact that we provided the capital to establish the beet sugar factories. All these were good investments. They could not have been established without Government investment.
I think there are other spheres where Government investment might very suitably be considered, the fertiliser industry and other industries where a virtual monoply exists, the flour milling industry and where industries fail to fill the needs of the community I would not hesitate to see public investment in them in order to ensure that they are expanded and developed for the service of the people rather than for ulterior motives. But then I come to an investment about which the time has come to speak out and, if I am wrong, correct me in public. It is much better that this kind of thing should be said in public rather than whispered behind closed doors. The Minister has a right to have any matter of this kind raised so that he can challenge it and correct it if the story circulating is not correct.
I was told through the public press that Verolme Dockyard at Cork secured, after intense and fierce competition, a contract to build a ship of 30,000 tons deadweight. The ship was called the "Amstellhof" and the order to build it, it was alleged, was obtained in the face of exceedingly stiff opposition from shipyards all over Europe. That order, I understand, was placed with the Verolme dockyard by the Netherlands Freight and Tanker Company, Limited, of The Hague. The chairman of that company is Mr. Verolme.
Mr. Verolme, chairman of the Netherlands Freight and Tanker Company, went out and, after exceedingly stiff opposition, gave himself a contract to build a ship in the dockyard at Cork. We can all picture Mr. Verolme competing and wrestling with himself and eventually yielding reluctantly to the superior competitiveness of himself and he decides to build the ship in Cork. That was all very nice. About three weeks before this vessel was completed, the Minister for Industry and Commerce came in and announced that he proposed to give Mr. Verolme a subsidy of £350,000 in order to enable him to meet the contract price on foot of the agreement which had been made in the face of exceedingly stiff opposition between Mr. Verolme and himself. We provided £350,000 to enable him to reach his target and he reached his target and the "Amstellhof" was launched— I am not sure whether the Minister went down to launch it or whether it was the Taoiseach who went. There was a party and great celebrations when the "Amstellhof" took to the sea. It sailed in ballast for Vancouver to take on a load of wheat for the Netherlands for the Netherlands Freight and Tanker Company Limited.
But a remarkable development took place. Before the Blue Peter was lowered and the "Amstellhof" took to the sea the vessel was sold to N. V. Stoomvaart Maatschappij Nederland of Amsterdam. Nobody knows what that company paid for the "Amstellhof" but it has been estimated that it was not less than £1 million sterling. I should like the Minister to tell us if he is informed of the history of these transactions and, if it is true that this order was obtained by Mr. Verolme from Mr. Verolme in the face of exceedingly stiff opposition, how it came about that it was necessary to pay a subsidy of £350,000 on the ship and, if it was necessary to pay it, how did it come about that it was suitable or becoming that the ship should be sold for an unascertained sum estimated to be not less than £1 million within a few days of its having been launched?
Another ship is now in hands on which we have undertaken in advance —as I understand it—to provide another £350,000 subsidy but this time she is not being built for the Netherlands Freight and Tanker Company of The Hague. This time she is being built for the Liberian National Shipping Lines. God knows, Liberia is far enough away from the Hague, down on the west coast of Africa, and this order has been obtained in the face of stiff opposition from many other yards. But then when you begin to inquire into who is the Liberian Shipping Company, some remarkable facts begin to come to light. The Liberian National Shipping Line is a company in which there is substantial State participation. Fifty per cent of the capital of the line belongs to the Liberian Government. But there are two other shareholders and the House will not be astonished to discover that one of them is Mr. Verolme. He owns 25 per cent.
Here, again, Mr. Verolme has been wrestling with himself all over Europe and the outside world in this stiff and vigorous competition and the nett result has been that the traditional pattern has been followed. After all the dust and sweat of the arena of competition, Mr. Verolme has bought the boat from himself, but with the provision that we will contribute £350,000 to the transaction. I am all for building ships if we can build them on any basis which holds out a prospect that, at some stage, we will be delivered from the necessity of assisting the purchases thus dramatically entered into.
Are these facts substantially correct? If they are not, I hope the Minister will correct me. If they are substantially correct, as I believe them to be, I want to ask the Minister for Industry and Commerce does he think that this type of investment in industry is calculated over the long term to help the workers of this country? I would be prepared to contribute a good deal towards creating employment for 600, 800 or 1,000 men in Cork if the employment were permanent employment, if the employment were enduring employment. But, if all the wrestling and competition and struggling to secure shipbuilding contracts so far has, in fact, been Mr. Verolme wrestling with himself in his various roles, whether it be as Dutch shipbuilder, Liberian capitalist or any of his other various capacities, I ask myself are we creating a permanent and enduring industry in Cork or are we teaching men skills—remember, the workmen in Cork are investing their lives in this industry—which in five, ten or 15 years' time they will be told are no longer required? The picture, as it appears at present, does not seem to me very reassuring. I should like the Minister for Industry and Commerce to give us some correction, or reassurance, in regard to that particular matter.
Now, Sir, there is another very strange story which has reached me and which I think it right to give the Minister the opportunity of dealing with in public. We authorised the Government to spend £1,000,000 on the establishment of a trade and industry exhibit, or a stand, at the New York World Fair. It is, of course, perfectly proper that due emphasis should be given to cultural and other aspects of our life as well as to matters strictly relative to trade and industry. I assume that this large investment of public money was designed to have some return other than the edification of the crowds who are attending the New York World Fair. Mark you, many of the sophisticated visitors to the New York World Fair may be intrigued by extracts from Shaw, and Joyce, and Yeats, and from others of our national poets, but pleasant as they may find the exhibition, with its scenic pictures and so forth, and bearing in mind the general cross-section of the public attending the Fair, I should imagine they have a good deal of interest in more practical aspects of life as well.
I fully appreciate that every due regard must be had to national dignity, and so forth, in the administration of a stand of this kind but, having surveyed the circumstances fully, it was decided apparently that there should be made available to visitors to the Irish stand refreshment, alcoholic and otherwise, for those who wanted to buy it. That decision was taken, I suppose, after prudent consideration with the best advisers we could secure in New York. Notwithstanding that, this astonishing fact has been reported to me by people who have visited the stand: on being informed that alcoholic refreshment was available for those who wished to pay for it, they asked for a glass of Harp Lager, or a glass of Guinness, and were told that those commodities were not available on the Irish stand. Now the Dutch stand, the Danish stand, the German stand are all promoting their respective national products and I think it is true to say that, if one goes to the Dutch stand, one will get only Dutch lager beer and, if one goes to the Danish stand, one will get only Danish beer and, if one visits the German stand, one will get only a cross-section of German beers. If one goes to the French stand, presumably one gets French wines.
I could understand it if the Irish stand said: "We do not propose to provide refreshment of any kind. We will cut that right out." It might be a mistaken decision, but I could understand it. But when they take the decision that there must be made available for the convenience of their guests and visitors alcoholic and other refreshments on request and then it is discovered that people calling at the Irish stand, asking for the products of the biggest brewery in the world, which is spending some hundreds of thousands of pounds on advertising in the United States, cannot get Harp Lager or Guinness and, if they want lager, must go to the Danish, the Dutch, or the German stand seems to me the essence of insanity.
I want to make it clear I am not authorised to speak on behalf of the brewery here. I am speaking on information given to me by constituents of mine who were in New York and went to the World Fair and who were astonished to be told, when they asked for a glass of Harp Lager at the Irish stand that if they wanted to get lager they had better go elsewhere. That seems to me to be quite daft and represents such an extraordinary low level of judgment that I find it very hard to understand it. For all I know, maybe the brewery would not provide beer for the Irish stand. I do not think that is so, but possibly it is the explanation the Minister will give us. Of course, if the brewery refused to provide the beer, or collaborate in any way, there was nothing the Minister could do about it. But I do not think that is so and I think it is a matter of material consequence, and one on which I am entitled to expect a full explanation from the Minister, because he is the Minister responsible for trade promotion with special reference to export, when he comes to reply.
The last thing to which I want to refer is this question of the Common Market. One of the most interesting things in public life is watching how public questions mature in the minds not only of public men but of the community as a whole and how frequently the whole genesis of a fundamentally important question gets lost. I shall not speak much longer. I am afraid I have exceeded the allotted time to which we agreed to confine ourselves but the House will perhaps excuse me if I ask for a further five minutes in order to refer to this matter.
The plain inescapable fact is that, when the Common Market was established, and Great Britain applied for full membership, this country was faced with the dilemma that if Great Britain went in, we had to go in, and, if Great Britain stayed out, we had to stay out. Why? If one looks at the 1963 Report of Córas Tráchtála and the Irish Export Board one finds that our total exports amounted to £195,908,000, of which £140,948,000 went to Great Britain and to Northern Ireland. We cannot afford to stay out if Great Britain goes in, because if we did, the Common Market tariffs would be raised up between us and the area to which we send 70 per cent of our exports. We cannot afford to go in if Great Britain does not go in, because we cannot afford to raise the Common Market tariffs against the best customer we have.
Now, the attitude of Fianna Fáil is that this is true but we must not say it. I think that is dishonest and disreputable. I listened to the Taoiseach yesterday wriggling like an eel in a bucket when the query was pressed on him: "What are you going to do about the Common Market?" That is what we are going to do about the Common Market. If Great Britain goes in, we will have to go in, and if she does not go in, we will not go in. I can assure Deputies it is humiliating at international gatherings on the continent of Europe to see people sniggering behind their hands at some of the representatives of this country talking about Ireland "going it alone." They know perfectly well—and they fully understand it—that that is quite out of the question. They know the agony which Denmark is going through because her trade is half with the Common Market and half outside it, with the area to which we send 70 per cent of our exports. To talk of our going into the Common Market on our own is just blatherskite, and everyone who understands the situation knows that. It is a humilitating situation that our Government, for what I think are unworthy motives, are prepared to say that they are prepared to "go it alone."
To me the Common Market was indissolubly associated with the concept of the Atlantic Partnership. I say with profound regret that having regard to the death of President Kennedy, and the foreign policy of the President of the French Republic, I am afraid the whole concept of the Atlantic Partnership is now long postponed. That is a great tragedy for the world and it involves the world in substantial danger into which it would not be proper for me to go on this Vote.
I want to renew my affirmation of faith in the over-riding concept of the Atlantic Partnership enshrined in the speech made by President Kennedy at Philadelphia on Independence Day, 4th July, two years ago. I believe that great concept will one day be revived, but I do not believe it will be revived in the immediate future. Therefore, for me the Common Market has lost much of its attraction. I want to warn the House that if Great Britain enters the Common Market, we will have to enter it, but I think that, as it is developing under the growing influence of the Government of France, this country will have to take a look at the Common Market again and ask itself if the Common Market is developing into the kind of political and economic unit in which this country positively desires to participate.
In my judgment, it is changing from what it was first conceived to be. I hope that change will not take it too far down the road which would make it very different from the organisation of which we aspire to become a full member. Changes are taking place, and, in the absence of the Atlantic Partnership, and in the presence of those changes, I think this whole concept requires close and careful consideration. I would not be prepared to predict what the future of the Common Market will be until after the election in Great Britain, the election in the United States of America, the election in Sweden, and the general election in Holland. We will know with a great deal more certainty on 1st January of next year.
In the long term, I believe a united Europe and an Atlantic partnership is the destiny of the free world. Looking at it from the long term, I want to be part of it, and I want Ireland to be part of it. I imagine that some day a united Ireland can form a useful and constructive part of it. In the short term, until that ennobling concept comes within our vision, we should walk warily, and reconcile ourselves boldly and honestly to the fact that if Great Britain joins the Common Market, we will have to join it, and if she does not, we cannot.
The Minister should tell us what he thinks of the situation in regard to the cost of living and the adverse trade balance. Where does he think we are going? Is he easy in his own mind in respect of the two specific matters I have raised in connection with the Verolme dockyard and the Guinness products on the Irish stand at the New York World Fair? I think we are entitled to a pretty detailed explanation from him.
