It would be very easy for me to take this motion, and the documents behind it, introduced by the Taoiseach yesterday and use the opportunity solely for the purpose of ramming down the neck of the Taoiseach and the Fianna Fáil Party the untrue attacks that were made some nine years ago, attacks in which I was the target. I do not propose to regale myself with that pleasure. I am perfectly satisfied that in due process of time, history will write the correct tale and the judgement then, in history, on the actions of the Government of which I had the honour to be a member, will be that we took the right steps at the right time, and that the mistake that was made then was perhaps that at Christmas of that year we did not lighten up just before the general election and the mistake that was made by the Fianna Fáil Government who succeeded us was that they, deliberately, for their own ends, accentuated the trough of depression and deliberately, for their own ends, made certain that we would get into the depression from which the country suffered until 1958.
Any observer impartial in any respect who goes back and looks at what happened then will see without question that, apart from the catastrophic breach in confidence caused by the Fianna Fáil Party tactics in the general election of 1957, the salient point is that the Government of that day retained the levies and in certain cases built them permanently into our whole customs structure. It would be easy for me to go back to that time to contrast the speeches that were made by the Taoiseach with the speech he made in July last and with the speech of the present Minister for Industry and Commerce made in July last, which I did not have the opportunity of reading then but which I have since read.
In 1956, the whole cry of Fianna Fáil was: "Too little and too late", that the Government of that day had not imposed a serious enough deterrent. When speaking here at the close of the debate last July, the Taoiseach, at column 1549, expressed the view that the Coalition Government of the day did too much too soon.
I am not interested in endeavouring to see what was said then and what is said now for the purpose of justifying the action that was taken at that time. I am interested solely in examining what transpired for the purpose of seeing how it can be applied to the present situation. As I have said already, I am quite satisfied that the verdict of history will be that the action taken then by the Government of which I had the honour to be a member was the right action at the right time and in the right degree and that the verdict will be favourable. I am equally certain that the verdict on the Fianna Fáil Party of that day will be as unfavourable in history as the verdict that will be placed by history on their leader of that time who is interested only in his own personal aggrandisement and the aggrandisement of the Party, instead of considering the national interest, even right down to the time when he denied his own shadow Minister, Deputy MacEntee, who came to see me in reference to the arrangements for the debate of that date.
We face a position today in which the Government have taken certain steps. The Government announced that they would take certain steps in July. With the remarks of the Taoiseach on that occasion I shall deal later but we are discussing today primarily the levies, the 125 new taxes, the Government introduced, not in a Budget speech—because they were afraid to come in here and introduce these levies in a Budget speech, as we introduced them to the House. They had to do it by mere Government Information Bureau statement outside in respect of which they could not be criticised or challenged. They have brought in these 125 levies and they have done it because they say the situation requires them to do something.
I want to brand 1965, not as the Taoiseach said last July when he was referring to another observation, as the Zulu War or the night of the big wind, but as the year that will go down in history as the year of the great deceit, the year in which Fianna Fáil fraudulently deceived the people in the spring, before the general election, and the year in which, since the general election, they have been so incredibly incompetent as a Government that anyone in business would be ashamed of his life if he had carried on in the way in which they have carried on, never knowing from day to day what they wanted to do, shilly-shallying, wobbling, announcing one thing and changing it the next minute, as I shall show in a few minutes, and, above all, hiding from the people the true state of the economy as they knew it, or should have known it if they were competent to know their job.
Yesterday, the Taoiseach said in the House that the Government had no knowledge of any circumstance other than knowledge that was available to the ordinary people. I want to brand that as an untruth, saying so with all the knowledge that was available to me as Minister for Finance when I was over there, and to say categorically that any Minister has available to him, and the Taoiseach more than any has available to him, advance information in relation to statistical trends the ordinary public has not got. I want to go further and say that the members of the Government have also available to them skilled economists to portray, to decipher, to gauge and to determine the strength of the economic statistics available to the Government and not available to the ordinary person.
I shall give certain specific factors and I challenge the Minister for Industry and Commerce who, I presume will speak in this debate, and I challenge the Taoiseach when he is concluding the debate, to deny that these specific factors were known to the members of the Government and were not known to the public and that they were either fraudulently concealed from the public so that the Fianna Fáil Party might get a verdict in the general election or else that the Government did not know and are too incompetent to care what was happening in relation to the national economy.
I think I am right in saying that the general election took place on 7th April. Last March, a foreign body, the Organisation for Economic Co-operation and Development, printed from Paris an economic survey on Ireland. The Minister for Industry and Commerce may not know but his colleague, the Minister for Finance, will tell him that before that survey is printed a draft of the survey is discussed with the officials of the Department of Finance and that the officials of the Department of Finance were aware of the facts that would be commented on in the publication of March. I am certain that those officials brought their knowledge to the notice of the Minister at that time.
On page 23 of that report, it is made clear that the inflow of capital in 1965 was bound not to be as great as it was in 1964 and yet the Fianna Fáil Government and the Fianna Fáil Party went out to the country saying that they would spend more and more capital in 1965, though they had that special knowledge that the ordinary people of the country had not got.
On page 14 of the report it was stated:
The net capital inflow in 1964 was exceptionally high and may have included some short-term funds.
We were saying at that time, without the knowledge that was in that report, then secret and not available to the ordinary people, that it was certain that there had been some short-term transfer of funds from Britain and elsewhere to here that was masking the position in relation to our current deficit in the balance of payments. We said it again and again but the proof of it had not come to our notice and, had not become available to the public but it was available, not perhaps to Deputy Hillery because he was considering Education at the time, not Industry and Commerce, but to the Government as a whole and, above all, it was available to the Taoiseach and the Minister for Finance.
The second item of which the Taoiseach knew and of which he would not tell the country was the drop in the external assets of the banking system. Before I give the exact figures in respect of that drop, let me draw the attention of the House to a revealing question I asked here in June last. It was always considered in earlier years that the important ratio of our external assets was the ratio of net external assets to imports, so as to ensure that we would, come what may, have sufficient external assets to be able to carry our imports for a substantial time. In the year ending 30th April, 1956, our net external assets were 91 per cent of our annual import bill. In the year ending 30th April, 1957 they were 106 per cent and year after year since that they have dropped, so that, in the year to 30th April last, the percentage of 91 per cent has dropped to 58.2 per cent. The figures in relation to that were not completely known to everyone until I asked for them in a question in the House, when they were made known and if the members of the Government had wanted to take the trouble to inquire and did not want to deceive the public, they could have done so.
Let us look at the figures for the net external assets which, with the exception of June and December, are made up to mid-month in every month and are on the table of the Minister for Finance, as well as I can remember, on the last day of that month or the first day of the succeeding month. I am certain the practice in existence when I was Minister for Finance of those figures being made available to the Minister for Finance has not been discontinued or, if it has been discontinued, why? Was the Minister for Finance not interested? But as far as I know, those figures would be there on the last day of every month.
What was the position in January 1965 or, mid-January? In 15 days approximately, 15 or 16 days, according as how the week ended, there had been a drop of £5 million in our external assets, double the situation of the preceding year. In mid-February there had been a drop of £5,700,000 in these external assets, in March a further drop of £3,100,000, compared in the previous year with a rise of £7 million in March. These figures were available to the Taoiseach, these figures were available to the Minister for Finance, showing a serious trend, a trend that had to be considered. Yet the Minister and the Taoiseach decided they would not disclose them to the public but they would go ahead lest it might interfere with their chances in the general election.
Then we come to the next point mentioned by the Taoiseach in July, which is hire purchase. The increase —and the Minister for Industry and Commerce will be able to verify this from his own Department—in the March to December figure was virtually double what it had been in the March to December period of the previous year. Again, there was no mur-mur about that, or about the import excess trade figures for any month which are available by the middle of the following month. I agree, of course, everybody knows the trade figures when they are published but only the Government know, only the Government have an assessment, until the full quarterly returns come in, as to how that trade figure has been made up. It is only the Government who can tell whether it is a consumption increase, whether it is an increase of producers capital goods or whether it is an increase of materials for further production. They know because they are given an assessment. At least, I was given an assessment and I am certain the Minister for Finance of the day is given an assessment in the same way. It is not the flat knowledge of an import excess that matters but the knowledge of how that import excess can be segregated, is distributed and can, therefore, be construed.
In February of this year the import excess was £15 million against £8,700,000 in February of 1964. In March it was £18 million against £12 million the March before. In April it was £20 million against £14 million the April before and, in May, it was £17,850,000 against £9,730,000 the May before. It was double—as near as makes no difference—but was there any effort by anybody, knowing this trend was coming along, to say a word to the public before the 7th April? The public were deceived and the Government kept concealed from the public the information it was the public's right to know.
Worse than that, once the election had come and gone, the Government, by their handling of the matter, showed themselves utterly incompetent to deal with the situation. It was bound to come. We have been saying this for some time, that it was bound to come, and the boys over there have been jeering at us. How could it be otherwise?
We had a deficit in our balance of payments in 1962 of £13,500,000 and in 1963 of £22 million. The deficit in 1964 was £31 million. How did we meet them? We met them by borrowing from other people who are bringing their money in—capital inflow. Was it not bound to happen that that would one day stop? Was it not bound to happen, as OECD agreed, that the amount of capital which would come in in anticipation of the formation of a Labour Government in Britain would go back once the British Labour Party had given its indication of the pattern of Labour taxation in England? We built up by depending on other people's capital to finance Fianna Fáil's current deficits and anyone could see that was not likely to be an unending situation. It is a glorious thing to go on drawing from the bank as long as the bank manager allows you to go on drawing, never asks you to pay back and never asks you not to go further. That was what Fianna Fáil were doing in relation to our general account and now nemesis has overtaken them and they are a bit surprised.
If we look at page 4 of the June trade statistics we will see there that one of the things happening was that we were getting in a substantially increased amount of consumption goods in the first six months of this year, a preview of which must have been available, by way of assessment, to the Government, which should have acted as a warning light: £3,500,000 in those six months alone purely on consumption goods. There were also increased many of those items such as that we heard today in relation to Ballymun that could have been mentioned here but nobody was bothering to do so. Had not "Buy Irish" meant "Buy Irish" for everyone other than the members of the Government, as was proved by the Minister for Local Government today?
The fact remains and cannot be gainsaid that in relation to every economic index of which the Government had knowledge and on which the Government should have acted, it was certain that this was going to come at the time of the general election. I charge the Taoiseach with deliberately concealing from the Irish people the true facts in relation to our economic position. I charge him with having sent out his boys, his Ministers, for the purpose of painting a picture which he must have known in his heart and soul was not a true picture, the picture that we were to have more and more and to pay less and less for it.
Let us look, for example, at that expert in extravaganza, the Minister for Agriculture. He said. "We intend to continue our policy of economic planning for the future, to expand the incomes already achieved until we reach a level of prosperity equal to that of the most advanced country in Europe." How? With levies, with a credit squeeze, with restricted hire purchase? I have plenty of quotations from the Golden Boy, as somebody calls him. In the final rally in Dublin, he said: "Our simple purpose is to do everything better in the next five years." How? Better with levies, better with hire purchase restrictions, better with a credit squeeze?
He has done better in one respect. He has done better in respect of the manner in which imports of cereals are coming into the country. I concede that perhaps because of the harvest weather, wheat imports will have to be higher. They are going to be 5,100,000 cwts. this year. But barley was a good crop and yet, apparently, we are to import 1,625,000 cwts. this year, although we have never imported that amount since 1950. And then we are told: "Buy Irish, grow Irish." This is the Golden Boy. In regard to maize, we find it is not possible to give particulars of maize alone because there is maize, milo maize or seed wheat. Even now we are in a situation that we are to import 1,700,000 tons in the remainder of this year, although we have already imported 1,500,000 tons. Again, with one exception, this is the greatest amount imported in any single year of the past ten years. And we are told to grow more Irish. In that respect, at any rate, he is planning better than he did last year.
It is not, perhaps, fair to pick on him. He was just carrying out the instructions of the Taoiseach, the instructions of the Government who told him that there was nothing to worry about, and perhaps they gave him an order that this disturbing economic phenomenon was not to be circulated to Fianna Fáil speakers in case some whisper of it might get to the people. Yesterday the Taoiseach referred to these things and to speeches he made in January and February last warning the people that there were dangers. He made speeches in January and February but the moment he decided to declare the general election, he stopped those speeches. It is now quite certain that the reason the Taoiseach decided, when Deputy Mrs. Desmond won mid-Cork, to declare a general election was that he knew the pattern of these economic trends, knew what was going to happen and decided that he had better get his election over before the cat was out of the bag.
There was no other reason for it, and it must now be obvious, even to the Deputy from mid-Cork who was then the Fianna Fáil candidate in the by-election. I know his name. I was one of the people he came to when he wanted to join Fine Gael. But it was not as a member of Fine Gael he wanted to join. It was like the recruit going to join the Guards who, when asked why he wanted to join, said it was not the Guards he wanted to join, that it was the superintendents he wanted to join. And the portfolio of Finance was the one in which he was interested.
Now let us come from the general election to the present time. The general election was on 7th April, Again I do not know the reason—it may have been that knowing that they had deceived the people in the general election, the Government in office were afraid to let the cat out of the bag any sooner—the Budget came in on 11th May and what did we discover yesterday? We discovered something about which there was not a word in the Budget. This was kept secret until yesterday when the Minister for Finance acknowledged that the day before the Budget was introduced, the banks were told to clamp down on credit and reserve it for certain purposes.
Is there a word in the Budget about that? If the Minister for Industry and Commerce has not a copy of the Budget speech before him when he rises to speak on this motion, I will lend him mine. There is not a word of that in the Budget speech. Either the right hand did not know what the left hand was doing or else it was not disclosed for the reason that if it was disclosed, then it would look as if they had failed to tell the people the true situation during the general election. Nothwithstanding the fact that they had before them the OECD Report, they put out a plethora of documents, including a statement on the capital programme. I do not object to a plethora of documents but when they push out all these figures in the course of one week, it is impossible for anyone to assimilate them in the days immediately before the Budget.
One of the things mentioned in the statement on the capital Budget was that there was £7,700,000 which was classified as capital services and which should properly be met out of current revenue or out of borrowing. With all the trends there—trends the Government now have to acknowledge—what did they do? They deliberately poured petrol on the flames by injecting that £4 million additionally into the economy to make for further inflation.
They also went on to say they had made certain changes in relation to some items. Did they give any indication that they were making those changes because of any dangerous trend in the economy? Oh, no. They said they were doing it because time had made closer examination possible. I wonder was that true? Looking back, I wonder was it not the beginning of the cut in the capital programme they were trying to hide, by pretending it was merely a later examination, a later estimate? Or was it that they were so incompetent that they did not know what they were talking about, just as in relation to capital expenditure by the Government the Taoiseach has shown himself utterly incompetent within the course of a few months?
When replying to the debate at the end of the last session, the Taoiseach made it very clear—I shall turn up the quotation in a second—that the Government were going to ensure that the capital programme was not in excess of the programme as outlined in the Second Programme for Economic Expansion. As Deputies will see if they look at page 270 of the larger blue volume, the Second Programme for Economic Expansion provided £95,570,000 for public capital programme. The Budget estimate published on 11th May was £103,720,000, an increase of £8,150,000. On 11th May, the Minister for Finance told us that the appropriate figure for this year was not £95,570,000 but £103,720,000 and on 13th July, as reported at column 1094 of the Official Report, the Taoiseach said:
To summarise therefore the immediate measures the Government consider applicable to this economic situation, they are: first, the reorganisation of the Government's capital programme for this year to keep the total outlay on capital account within the forecast in the Second Economic Development Programme.
"To keep the total outlay on capital account within the forecast" in the Blue Book. We now come to the White Paper published in October—August, September, October, three months afterwards—and what do we find? A White Paper published with an entirely different figure again. I thought perhaps it was "laid by the Minister for Finance" and that the Minister was ignoring what the Taoiseach said, but it was "laid by the Government". Instead of being within the amount laid down to make for expansion within the Second Programme, it was to be £5 million in excess.
When will the Government make up their minds as to what they are going to do, or is it that they do not know, that they are incompetent, that they are afraid of taking the appropriate steps? Why did the Taoiseach come in here in July before the House broke up for the recess, and make the solemn assertion that he, as head of the Government, was going to see that the capital programme was kept within that figure? Then, before the House resumed we had another White Paper denying the Taoiseach's words. Had they changed their minds again, or was the Taoiseach chancing his arm when he spoke here in July, or had they not got down to the question at all?
During the course of the general election, we heard statements by the Minister for Local Government in particular, that if only Fianna Fáil were returned to office, there would be a rising bounding building programme of a kind never seen before. I invite the attention of Deputies to paragraph 23, page 9, of the White Paper on Government Capital Expenditure which makes a liar of the Minister for Local Government, because it says that even if balance of payments difficulties had not arisen, the recent rate of expansion could not have been maintained. It seems very hard to see where they are going when they do not know from one day to another themselves.
We now have 125 new taxes imposed by—is it the Minister for Industry and Commerce or the Government?—Government order, I think. Included in that is a licensing provision. I think the effect of that licensing provision will be that people will tend to look for raw materials outside the country, even though those raw materials may be available within the country. I have in front of me one comment by a business man who knows what he is talking about. He said business had been anticipating that the levies would be introduced and accordingly would be pre-stocking to beat those levies and that, in addition, designers and buyers tend to order from their traditional sources of supply. That is natural, and the very fact that there is this licensing provision will mean that they will more and more go to that traditional source rather than see for themselves whether it is not possible to improvise in relation to what we need.
I want to know from the Minister for Industry and Commerce what he proposes to do to ensure that we get out of this economic difficulty, crisis, phase, depression, whatever word one likes to use. What does he propose to do in relation to industry? We know that so far as the Minister for Finance is concerned on the day he brought in his Budget, there was not one single incentive of any sort, kind or description introduced for the purpose of industry, for the purpose of agriculture, for the purpose of saving. Then suddenly about a month afterwards, when we came to the Committee Stage of the Finance Bill, he got a brainwave and decided that it was terrible that there was not a single incentive and that he had better put one in on that Stage. He decided to increase the incentive I gave for small savings in relation to deposit interest. After nine years, he just increased one figure. That is all the Government were able to think of. They are barren of ideas. They show that they do not really know where they are going by changing from day to day or else are deliberately deceiving the people. I will leave it to them to explain which it is.
We have to ensure that there is greater agricultural production at home; we have to ensure that those imports to which I have referred are not going to be continued. We have to ensure that we get for our exports proper markets and proper terms. In relation to the free trade area, let me say that I want to be satisfied in any discussions or in any agreement that is made on the free trade area that we get worthwhile concessions for agriculture. Paper concessions are not worth a curse. A reduction, for example, in the period for which our cattle have to be in England before they qualify for the British subsidy is not worth anything. Unless we can get clear, full and unrestricted access for cattle, sheep, lambs, butter, pigs, pork and bacon it is not going to be worthwhile giving up what we have to give up on the other front.
It is because rumour has it that the Government have failed in that respect that we take the critical attitude we do take in relation to that failure. It has got to be done if we are to succeed and the Minister for Industry and Commerce has to do some new thinking in relation to industry. He must take other steps, other leaves out of our book, as the Government have done in relation to certain aspects of our incomes policy. Speaking as far back as February 1964 in this House, I made it clear that I felt that one of the things necessary was an incomes policy to ensure that we would be able to get that orderly marketing, that orderly prices regulation, that orderly paying out of the increases in national production that all of us would desire. Even as late as the general election six months ago, the Taoiseach said he was against it. I welcome the conversion, welcome it wholeheartedly. The only thing about that is that in other respects where Fianna Fáil have taken over Fine Gael policy they were usually too incompetent to carry it out properly.
I want to make sure, too, that in these difficulties the truth is told to the people. What is the use in the Minister for Industry and Commerce or the Minister for Finance saying outside that these levies will be on for a period of six months, to the end of March, 1966, when the Minister for Finance comes in here, as he did yesterday, and says solemnly that he does not think we are going to get out of the difficulties before March, 1967? How can we reconcile the two things? Is this another indication of the deceit of the Government in their desire to fool the people?
I do not think that even Fianna Fáil could have the local elections before March, 1966 and get away with it. Certainly from what I have heard people are beginning to see through their deceit. This was bound to come because, for one reason, three consecutive years of Budget deficits by Fianna Fáil, over £4 million in 1963, £2,219,000 in 1964 and £4,069,000, in 1965, or £11 million of accumulated Budget deficits in three years, have added fuel to the flames and more fuel was added in the seven months of this financial year.
In the first seven months of this year, up to 31st October, expenditure rose by £15 million over last year and receipts rose by £12 million. We have gone £3 million further in the red in the first seven months as a result of Government action, of Government incompetence at a time when they are pretending they are trying to rectify the situation. Anyone who wants to see these figures can see them in Iris Oifigiúil for 2nd October —receipts up by £12 million and expenditure by £15 million. At the same time, the Government have injected £9½ million extra into the economy in below-the-line issues in that period.
There is a striking indication in another place of the manner in which the Government are causing difficulties for the commercial community, because as we can see on page 13 of the July Central Bank Bulletin, in mid-July, total bills, loans and advances at £329.9 million were 14.5 per cent above the level of 12 months earlier. Borrowing by the Government and local authorities showed an increase of 36.1 per cent over mid-July of 1964. Borrowing by the Government was up by one-third on the previous year. How could there be enough money for the private sector when the Government were taking it all? How could the ordinary farmer looking for credit, the ordinary businessman, the person trying to buy his house, hope to get money when the Government were, in plain, if rather vulgar language, hogging it all? That is what it amounts to.
We have heard from the Taoiseach some comment on the free trade proposals. I want to be perfectly clear, as the Minister for Industry and Commerce has come back again, and to say that we want to be sure that these proposals will give to us unlimited duty-free access and unlimited access as to quantity without quota into the British market for all our agricultural products. Without that, we will consider the Government have failed in their task in negotiating a proper trade agreement. As regards the interim, let the Government act as a Government. Let them make up their minds about what should be done and keep to it and not have the shilly-shallying or the wobbling or the deceit or the change of direction there was between July and October in relation to the Government capital programme.
Let the Government stand up to their responsibilities even—and I can say this—if in doing so it makes one temporarily unpopular. The permanent record of history is worth far more. This country is sound and can be saved in spite of Fianna Fáil. Our economic problems can be solved and we can do it provided there is a proper lead. A Government can be certain that they will not get from this side of the House, the suggestions, the under-currents, the sabotage with which they were so glib when they were over here. I want to make it quite clear, as did Deputy Cosgrave, Leader of my Party, that we believe without question that these problems can be solved and we refuse to see any question of devaluation arising. There will be no suggestion by us as there was in 1956 by members of Fianna Fáil that devaluation was on the way. Devaluation is not on the way and must be rejected and if the Government are not capable of rejecting it, they should get out and make way for a Government who are.
