asked the Minister for Finance if he will make a statement on the effects of devaluation of the pound sterling with particular reference to the effect on the cost of living and the effects of a change of interest rates on housing and similar projects.
Private Notice Questions. - Devaluation of Pound.
asked the Minister for Finance if he will make a statement on the economic effects on this country of devaluation of the pound sterling and related deflationary measures taken by the British Government; on the social and economic effects of devaluation of the Irish pound; and if such a statement will include his proposals to deal with these effects.
With your permission, a Cheann Chomhairle, I propose to take these private notice questions together.
Statements have already been made by the Taoiseach and myself on devaluation and its effects. I propose to deal further with the matters raised in these questions in introducing the Estimate for my Department on Tuesday next, 28th November. The debate on the Estimate will provide an opportunity for discussion of all the relevant issues.
Will the Minister indicate, either then or before it, the precise effect which devaluation will have on the cost of certain imports such as oil, petrol and wheat and also the effect of the revised interest rates in respect of housing? Can the Minister indicate whether the Government have any proposals in mind to ease the problem in respect of the building industry and house purchase?
I hope to deal as fully as possible on Tuesday next with all of these matters though, of course, a number of aspects of this matter will take some considerable time to come into full perspective. I think, however, I should say at this stage that one of the main aspects of the whole matter from our point of view is that of prices. I would point out that the rate of devaluation itself is moderate and there should not be any question of immediate rises in prices. Most people have stocks of one sort or another. I would advise everybody engaged in trade and commerce, if asked to bear an increase in price, to satisfy themselves fully that such increase is justified by devaluation. If they are in any doubt about that, they should refer the matter to my colleague, the Minister for Industry and Commerce, because price control machinery is still operative on the basis that no rise in price should be permitted unless it is fully shown to be justified by increased costs.
I thought this matter was to be directed towards the Taoiseach. Would the Taoiseach or the Minister for Finance be able to say now whether or not an instruction has been given to the Minister for Industry and Commerce to set in motion immediately machinery to ensure price stability and the prevention of profiteering? The Minister says he will make a statement on this matter on Tuesday or Wednesday next. We appreciate that. In the meantime, certain increases have taken place. I am informed today that shipping freight charges have been increased. There was a report in one of the newspapers this morning that certain items of drink were increased in price. There was no notification to that effect. Might I also remind the Minister of what he said recently during one of his television appearances, namely, that we should not have devalued if Britain had not done so, that we should not have changed our rate of interest if Britain had not done so? Is there any guarantee that the Government will ensure that we shall have greater monetary independence in the future or is it the position that as soon as Britain devalues, we do likewise and, as soon as she changes her bank rate, we change ours?
The Deputy has asked a lot of questions. The first thing I want to say is that I am not sure how far we should go in this discussion now in view of the fact that we shall be going over all of these matters next Tuesday. In regard to the interest rates, we have succeeded in maintaining our bank overdraft rates at a full one per cent below the British and Northern Ireland rate.
Who was the first person to change the policy of slavishly following the British in this regard?
Little Jack Horner, of course.
Exactly.
This is really not a question of monetary independence at all. It is basically a question of trade——
And diversification.
We are following Britain in devaluing. Deputies should realise that the statute law of this country is that parity must be maintained between our £ and sterling. We have no option, as the law stands, but to devalue fully in accordance with the British devaluation. This question of devaluation has been in the air for many months now. Any Deputy who wished could have come along at any time in the past four, five or six months and suggested that we change the law. It is a bit late to come along now and talk in that strain.
(Cavan): The Minister could have changed it himself.
On the question of prices, I want to assure the House that, as a Government, we had been considering this matter for some considerable time before devaluation took place. It was obvious to us and to most other people that it was a possibility. We have taken all the necessary steps to minimise the effects of devaluation, one of the most important of which is the question of prices. The Minister for Industry and Commerce had this matter under very close review before devaluation took place at all.
What did he do about it?
He made all the necessary preparations.
The Government took no steps. There are no steps open to the Government.
The price control machinery is there.
Static.
Effective.
Did the Minister say that the debate on the Estimate for his Department will be taken without fail next Tuesday?
Certainly. That is the idea. The purpose is to give the House an opportunity to debate this matter.
This will not be a separate debate on devaluation?
The occasion of the discussion of my Estimate can be used to debate devaluation.
Can the Minister say, when this matter was discussed here before, whether one of his colleagues—then, as now, in a position of irresponsibility namely, Deputy MacEntee—said that the £ was being devalued, causing losses and suffering to pensioners and is it now proposed to take any action in that regard? Deputy MacEntee wrote a very silly article some years ago in the Irish Press.
I have no knowledge of any such article. It would be very wrong and irresponsible that it should go out from this House that people's pensions will be worth less.
Tell that to Deputy MacEntee. He said it: I did not say it.
The Deputy is saying it now: I did not say it.
Retrenchment.
This is developing into a debate. Deputies will get ample opportunity of discussing the question next week.
In the public interest I must make this statement.
Why did Deputy MacEntee make that statement in 1949, as an ex-Minister for Finance?
In so far as this country is concerned, every single £, whether it belongs to a pensioner, a wage earner, or a salary earner, is worth as much today as it was last week or last month.
We are grateful to the Minister for branding Deputy MacEntee as a liar.
(Interruptions.)
I am calling on the Taoiseach. We cannot have any further discussion on this matter.
We have put down a motion to refer back the Estimate and that will give us an opportunity of discussing it.
I hope it will be more intelligent than the statement you put out last week.
Diddlum Dandy.
The most inane statement ever put out in——
Diddlum Dandy. That was before the Minister came into the House.
Deputy Cosgrave could not be found last Sunday.