Finance Bill, 1952—Second Stage—(Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Rúnaí Parlaiminte don Aire Leasa Shóisialaigh (Seosamh Ó Cinnéide)

Nuair cuireadh an díospóireacht ar ath-ló, bhíos ag cur síos ar ceist airgeadais i gcein. Leanfaidh mé ar an abhar sin ar feadh tamaill. I was referring to our external assets when the debate was adjourned on Thursday last. In the last month or six weeks the value of these external assets has been deprecated by the opponents of the Government. I shall refer to the speech made by a former Minister for Finance, Deputy McGilligan, when he was dealing with external assets a year ago. In opening his economic survey in his financial statement on the Budget of 1951, Deputy McGilligan paid tribute to the Central Statistics Office and in another part of the speech, to which I will come later, he gives thanks to them again for certain figures that he was able to quote. In view of the suspicion thrown on that office it is well to refer to that.

Dealing with external assets, Deputy McGilligan said—Volume 125, No. 13, Official Report, 2nd May, 1951, column 1884:—

"Only if the gap in the balance of payments is narrowed so that external disinvestment is balanced by additional home investment—rather than by excessive consumption—can we be satisfied that as a nation we are making ends meet and not wasting our past accumulations. One of the great benefits conferred by the possession of external assets is ability to ride out periods like the present of exceptional difficulty and stress, but this external mass of manæuvre is the mainstay of our economic independence."

Now we are told by the Leader of the Opposition that these external assets are rotting. It would be pertinent to ask whose is the voice of Fine Gael; what is their policy towards these external assets; will they forcibly bring them back; will they confiscate them; will they give a direction to investors as to what they will do with them? We have had an indication from Deputy Corish, when he says we must keep on spending until we do away with these altogether.

Breanndán Mac Fheórais

Who?

Mr. Kennedy

Deputy Corish in a speech recently. I read a speech of Deputy Corish in which he said, referring to the excess of imports over exports, that it is all the better, that it would do away with these external assets. If I misquote the Deputy I regret it but that is what is reported in the daily papers.

At column 1882, Deputy McGilligan, referring to the dangers of inflation, said:—

"This is an appropriate point to introduce the term ‘inflation'. The classical definition, in popular language, is ‘too much money chasing too few goods' and, therefore, driving up prices. In our circumstances the definition might be reformulated as ‘too much money attracting too much imports', since overspending by the public and the State is able to find an outlet in purchases from abroad financed not from income but from our past accumulations."

Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,

Mr. Kennedy

Deputy McGilligan went on:—

"In a state of normality, we should be able to live on our income and indeed save enough of it for capital purposes not only to maintain but actually to increase our production and, therefore, our standard of living.

It is still proper and eminently reasonable to draw on our external assets if thereby we speed up the process of capital development at home. What is abnormal and, if it persists, can be seriously damaging, is to use up our external resources for consumption purposes. Have we been doing that?"

He went on to examine that point and, at column 1883, comes to the conclusion:—

"The position is, however, far from satisfactory inasmuch as the basic £10,000,000 deficit of 1949 was repeated in 1950 and the disimprovement in the terms of trade in that year has also still to be made good."

He indicated in that speech that the value of our external assets in one financial year had depreciated by £20,000,000 and that only £6,500,000 had gone into capital development.

Deputy Collins talked here about making posterity pay for everything. Every local board in the country, since a couple of years after the war, has been engaged in housing, and, for the purposes of housing, they borrowed money which is repayable over 50 years. They are not half-way through their housing programme and the local rates are going up all the time. In County Westmeath, the rate for housing in 1947-48 was 1s. 9.982d. in the £ and in this year it is 2s. 9.629d. We have two other big schemes to come on, but that is an increase in four years of 1/- in the £. Our fifth and sixth schemes are yet to come and these will mean a further increase.

What is true of housing is true also of waterworks and sewerage schemes. In our county, we have several waterworks and sewerage schemes on paper, and every other county has the same thing to do. The rate for waterworks and sewerage schemes in 1948-49—I do not quote 1947-48 because health was in with sanitary services at that time— was 7.855d., and this year it is 1s. 1.383d. Whether it be in the form of ratepayer or taxpayer, the burden for a considerable number of years on the citizen will be an increasing one, so far as local rates are concerned. Deputy Collins talked about making posterity bear the burden, but in respect of housing and waterworks and sewerage schemes, it means bearing the burden for at least 50 years.

Mr. O'Leary

That is long enough.

Mr. Kennedy

I remember that long term loans were once loans for a period of 25 years. They increased to 35 years, and are now 50 years for housing. I think that is long enough, because the rate of interest makes the repayment of interest very severe on the ratepayers. In fact, there is something to be said in regard to some schemes for shorter loans, but the point I want to make now is that the citizens, the generations following this generation, will have to bear that increasing burden for housing and sanitation purposes at an increasing rate all the time.

The Opposition say that our social services are not good enough, that they would give greater social services. Social services are a continuing thing, and you cannot charge them against capital. Therefore, we ask them where they intend to get the money, when they become a Government, for better social services than we have in contemplation in the Bill going through the House? They say they will give better health services. Where is the money to come from for these better health services? You cannot have your cake and eat it. You cannot keep pulling down taxation and giving better housing, better sanitary services, better waterworks and sewerage schemes, health services and social welfare schemes.

Mr. O'Leary

And higher rents because the term is too short.

Mr. Kennedy

The Deputy is a member of public bodies and he knows that every house built by the State is an increasing burden on the ratepayer and that the rents in many cases do not go half-way to meet that burden.

Another matter mentioned here was the remission of the dance tax. It was Fianna Fáil who removed the dance tax in 1946 and while they remained in office there was no dance tax. The Coalition restored it. When that dance tax was removed, there were speeches of appreciation from all sides of the House and, as the then Minister for Finance indicated, no dance tax was evaded as much as this was.

Mr. Hughes

You were paid for taking it off.

Mr. Kennedy

I will answer Deputy Hughes in this way. There are a great many dance halls in my county but there is only one privately-owned dance hall there. The rest are parochial halls or halls belonging to this association or that association. In defence of the man who owns the private hall, I know him to give that hall for charity and for other very good purposes. By and large, all the halls in County Longford and Meath are used for hurling and football clubs and political clubs for one good cause or another.

I would like to have an examination made to ascertain the number of privately-owned halls there are in the country as against the number of public halls. I imagine, although I do not know, that the number of public halls will exceed that of privately owned halls. The point I am making is that men who would not wrong you in regard to a farthing all their lives have been made rogues of with the dance tax. Two men were on the door and there were two or three detectives outside watching the excise officer coming, whether the function was being run by a Fianna Fáil club or a Fine Gael club——

Mr. O'Leary

They were the biggest offenders.

Mr. Kennedy

——or a Labour club. The minute they got the word that the excise man, whose car had to be paid for, was coming the stamped roll of tickets was produced and used while he was there but it went back into the bag when he went out.

Mr. O'Leary

That was the Fianna Fáil policy. That was how you did it.

Mr. McGrath

A Labour man was fined £100 in North Cork for obstructing an excise man.

Mr. O'Leary

Fianna Fáil got away scot free.

Mr. Kennedy

No Party can throw stones in connection with this matter. There was complete evasion of the tax. Men who would not wrong you in regard to a halfpenny in ordinary life became rogues as a result of the dance tax.

Mr. O'Leary

You had to pay for a special car for that man going around.

Mr. Kennedy

Anyway, we want £15,000,000 and the sum involved is £100,000. It was not the private dance hall people who made the most representations at that time. A man sat at the door to collect to pay for the band fee, the hall fee and the printer's fee and there was not £2 left when you went and paid the tax or attempted to pay it. The removal of this dance tax was and is the most popular thing for people who run dances for objects throughout the country.

Mr. O'Leary

It is very popular for the dance hall proprietors, all right.

Mr. Kennedy

The question of unemployment has been gone into. I answered a question for Deputy Sweetman to-day as regards unemployment in the County Kildare. I want to be accurate on this as there will be a tabular statement in the Official Report. Kildare is not one of the textile areas but there are a number of textile workers unemployed there. A big percentage of the increased unemployment in the country, as compared with last year, is in the textile industry. That is not confined to this part of Ireland. It is also in the North. It is also in Britain. Britain has now over 400,000 unemployed and that is on the increase. I am not rejoicing a bit about that.

I took an extract from the Manchester Guardian of the 14th May, 1952:—

"A traveller driving from Manchester north through the cotton and mining towns of central Lancashire would notice little about the straggling, grey town of Padiham.

Of its 6,000 working population over a third is either unemployed or temporarily stopped. There are 18 mills in the town and the villages around it; one of these, a small one, has closed completely, another has closed its spinning section, three are working only alternate weeks, and the rest are working three days in each week.

If the traveller pondered this situation one of the men on the bowling green might give him one answer. ‘I am a weaver,' he would say. ‘I work three days a week— Tuesdays, Wednesdays and Thursdays. I draw unemployment pay for Monday, Friday and Saturday. That is about £3 10s. from the mill and 13/- from the "labour"—nearly £5. It's not much, but it's not starvation either.'

The man leaning over the bridge regarding the idle machinery in the mill on the far bank would tell a slightly different story. ‘I am stopped completely—redundant they called it—so I've got nothing but what I get from the "labour" and the bit I've put by these last few years."'

One of the big problems you are up against is the big number of unemployed in the textile industry. How that is going to be solved I do not know.

When I was making my speech on Thursday, I referred to the fact that the same price labels were in the drapers' shops as were in them a year or two years ago. In connection with that, all over the country the wool producers had to take the rap for the last 15 months. The wool buyers had come to the verge of bankruptcy. The wool brokers had to put up with their losses, and it is time that the drapers took some of the losses and pulled down the price on their labels a bit. They did it in the Six Counties and they have done it in Britain, where there is a purchase tax on every article sold. It is time they did it here.

Much ado has been made about the burden of taxation on us here. In the Six Counties the taxation per head is £100. Taxation per head here, even with those new taxes, is £34. The other day I was looking at the returns of taxation for Britain. For the ordinary services, apart from the army, navy and revenue, the amount of taxation was £44 per head. Social services alone were £13 per head. Therefore, the burden of taxation here is not so terrific as our opponents make out.

This is an honest Budget—a Budget facing up to the situation. Deputy McGilligan, in winding up his speech on the Budget a year ago, at column 1884 in that volume of the Official Report from which I have already quoted, said:—

"The conclusion to which the analysis leads is that, while the extra external disinvestment we incurred in 1950 was balanced as to roughly two-thirds by new home investment and increased stocks, there still continues to be a substantial use of past savings merely to lever up standards of consumption. Making all allowance for the exceptional conditions now obtaining it is to be feared that we are not producing and earning enough to pay our way. The implication is obvious. We cannot have both consumption and capital development on the present scale unless we save more and produce more."

Like every other country in Europe we want better conditions for our people, a continued standard of living, improved housing and improved services, but we can do it only in the way intimated by the Minister for Finance. He has not juggled with figures but has given the facts and has asked the Dáil to face up to these facts.

Mr. Cosgrave

The House will remember that after the last election Fianna Fáil issued a statement that if elected to form a Government they would implement a policy set out under 17 headings. In the early months of the Fianna Fáil Government it was reasonable enough for them to make the case that they had not the time or the opportunity to implement their programme but with the introduction of the Budget in April of this year it was possible to see how their performance lived up to their promises. It is, I think, right and proper for the House and for the country to examine what has been achieved in the last 12 months and how far the policy as announced by the Fianna Fáil Party when in opposition has been carried into effect.

That programme contained a number of proposals, and the point which most intimately affects and influences the lives of the people generally is point 15: To maintain subsidies, to control the prices of essential foodstuffs, and the operation of an efficient system of price regulation for all necessary and scarce commodities. When the Budget was introduced by the Minister for Finance, and the taxes to which legislative sanction will be given by the Finance Bill imposed, the Government abandoned that policy. Leaving aside the increases which have already occurred since the Government came into office in the prices of milk, bacon, eggs and butter, the Budget will increase the retail price of the 2 lb. loaf from 6½d. to 9d.; the price of flour will go up to 4/9 per stone; the retail price of sugar will go from 4d. to 6½d. per lb.; the price of butter, having gone from the previous price of 2/10 by the addition of 2d. by the present Government to 3/-, will go to 3/10; tea will go up in price from 2/8 to 5/- or higher. As an offset to those increases it is proposed to increase the old age pension by 1/6 a week and to increase the children's allowances. Does anyone believe, however, that these increases will compensate for the rise in the cost of living? I asked a question some weeks ago to ascertain the effect on the cost-of-living index of the abolition of some of the food subsidies and the reduction of others, and the reply, prepared by the Central Statistics Office, was that it would result in a rise of ten points. It might be reasonable for the Government to propose the abolition of these subsidies if it proposed to provide adequate compensation. Anyone who makes a rough calculation of the quantity of food consumed by an average family will recognise that the increases proposed in respect of old age pensions and children's allowances will in no way compensate for the increase which will affect every individual in the community, particularly the average wage earner, who will be obliged to meet the rise in the cost of living from 4th July next.

That aspect of the position is serious but the fact that the Government have reneged on the policy announced after the general election and have gone back on the programme issued when the Fianna Fáil Party were seeking the votes of a number of Independent Deputies in order to secure office is what we regard as a betrayal of the confidence which a section of the electorate reposed in them. Not merely have they gone back on the announced policy by these increases in the cost of living, but the increase in the tax on tobacco and beer was mentioned during the course of the last election and was denied by two prominent Opposition spokesmen who are now Ministers. During the last election the present Tánaiste said:—

"A Coalition Minister has said that Fianna Fáil, if elected, would increase tax on beer and tobacco. Why should this tax be necessary? There is no such reason why we should reimpose these taxes."

That is from the Sunday Press, May 13th, 1951. The present Minister for Finance, speaking in Rathmines Town Hall, is reported in the Irish Independent, 16th May, 1951, to have said that:—

"A number of persons in the licensed trade were spreading a rumour about that if Fianna Fáil were returned to power taxes imposed on drink in the Supplementary Budget of 1947 would be reimposed. There is no truth in any such rumour."

I think that the country is entitled to an explanation of the change of front and the adoption of an entirely different policy from that which the present Government put before the people during the last election. They have since abandoned that policy by a whole series of measures, but especially by the introduction of the Budget in April this year. It is true that they have kept one promise which they made to a section of the electorate. During the election the secretary of the Dance Hall Proprietors' Association wrote to some of the Fianna Fáil Deputies and the present Tánaiste replied on behalf of a number of them intimating that if Fianna Fáil were returned it was proposed to repeal the dance tax. There has been a good deal of talk about the dance tax during the Budget debates and the Second Reading of the Finance Bill.

I do not think anybody on any side of the House welcomes taxation. Deputies of different Parties would, if it were possible to do so, avoid—and it is only natural—the introduction of any additional taxation. The amount of revenue which it is anticipated will be lost to the Exchequer as a result of the repeal of this tax is not very considerable, and for that reason it is not worth a great deal of attention. But what people object to is that in the same Budget, which raises the cost of bread, tea, sugar and butter, essential foodstuffs, and imposes additional taxes on tobacco and beer, it is possible to repeal a tax which is a tax on amusements. Normally the amount of revenue that would be the subject of a tax of that sort would not be worth mentioning but it is significant that while the Budget and the proposals which are before the House in the Finance Bill provide for an increase in the cost of a whole series of essential foodstuffs and an increase in the cost of a number of other commodities, such as beer and tobacco, it is proposed at the same time to repeal a tax on dances.

It does not make sense and it is because it does not make sense that, when introducing the Second Stage of this Bill, the Minister for Finance devoted so much attention to it and, in fact, went to such pains and to a considerable amount of research to provide a case for the repeal of the tax. Normally, no one would pay particular attention to the amount of revenue involved but what is significant is that this was a promise or an undertaking given to a section of the electorate who received a letter from the present Tánaiste undertaking to repeal the dance tax. But the vast majority of the electorate who read the two speeches of the present Tánaiste and the present Minister for Finance were not as fortunate as the small section who received the letter undertaking to implement a certain policy if Fianna Fáil were elected. The majority of the electorate were told that it was no part of the Fianna Fáil policy to reimpose taxes which were repealed when the inter-Party Government removed the taxes imposed by the Supplementary Budget of 1947. They were told by two authoritative spokesmen of Fianna Fáil on one occasion: "There is no truth in any such rumour", and on another occasion: "There is no reason why we should reimpose these taxes."

We have repeatedly said, during the course of these debates, that we are prepared to abide by the result of any test which the Government prepares to put to the electorate. We invite them to offer this Budget to the electorate, and to get their decision on it. We say, and I believe that it is the opinion of the country, that this Government has no mandate for the introduction of the Budget, and for the imposition of the various increased taxes proposed thereunder. In respect of the taxes, which are regarded as penal taxes, and in respect of the reduction of the food subsidies, two major issues, they have reneged on the policy that was announced by the then major Opposition when they asked the electorate to return them as a Government last June. Not merely have they gone back on the two statements made by two principal spokesmen during the election, but they abandoned point 15 of the 17-point programme that was published after the election when Fianna Fáil sought an over-all majority and, when they had failed to secure it, were endeavouring to enlist the assistance of the Independent Deputies, who subsequently supported them.

That policy has been abandoned, and it is legitimate to say that when they abandoned it they should have put the issue to the people and asked for a vote of confidence on it. If in the months to come people get an opportunity of deciding for or against this Budget, if they decide for it, then we will accept that decision, and it is only right and fair that the Government should implement the programme as outlined.

Mr. MacEntee

Why did the Deputy not accept the decision in East Donegal in 1948?

Mr. Cosgrave

Did you accept West Donegal? We accepted West Donegal and we accepted West Cork. You lost a seat in West Donegal, and you only retained the seat you had in East Donegal. We are prepared to accept the verdict of the electorate if the Government puts the issue to the test. Deputies will remember how on former occasions the present Taoiseach always expressed the view that it was not possible to implement the Fianna Fáil policy in the absence of a definite majority. On a number of occasions they went before the electorate. It may be that the experience of the general election of 1948, and even the experience of the election of 1951, has forced them to think again before putting issues of this sort to the test.

What respect can the public have or what faith can people have when public men, in prepared speeches, indicate one policy, and when they are elected operate another? What hope is there for any degree of public respect for a Government and for a Party that announced a programme containing a number of points after the last general election? As far as the livelihood of any individual in the community was concerned the one that affected the life of every individual intimately was point 15, which affects the cost of living. In that respect the Government abandoned and reneged the policy that was put before the people and, as far as those who supported them were concerned, succeeded in securing public support on the basis of that policy.

During the course of this debate it has been possible to see what has been accomplished during the last 12 months and to compare the results of the Fianna Fáil policy with those of the policy which was in operation under the inter-Party Government. We adopted a policy of expansion and development, a policy designed to expand the economy of the country by providing increased employment, by expanding and developing industry, by expanding and developing agriculture, by providing houses and other social benefits or amenities. That policy resulted in substantial improvements in the short period of three years. I do not claim that every aspect of the policy that was put into operation was perfect or that every aspect of it achieved all that the most optimistic hopes anticipated, but it is reasonable to say that during that period of three and a half years there was a substantial increase in industrial employment; there was a substantial increase in the number of houses built by local authorities and by private enterprise; there was a substantial increase in the hospital and other health services provided as well as in certain social services. Since June last there is a different story to tell on at least two major aspects of our economic and social policy. The numbers unemployed show a rise of 12,000 persons. On an average 1,000 persons a month are unemployed now over and above those who were unemployed this time last year.

During the inter-Party Government's term of office, there were, on an average, 1,000 persons per month placed in insurable employment. As I said already, that period was one in which a policy of development and expansion was operated. It was reasonable to assume that the same progress, though perhaps not at the same rate, would have been maintained. However, since last June, the numbers of unemployed people have risen steeply. During the three years' régime of the previous Government, the house-building programme expanded with the result that a substantial number of additional houses were constructed. The Statistical Abstract for the year 1951 shows that in 1947 1,765 houses were built and reconstructed under state-aided schemes; by 1948 the number had gone up to 2,079; in 1949 the number was 4,028; in 1950 the number was 9,215. Deputies are familiar with the record which was achieved in the house-building programme in 1950 and in 1951. Since then, however, the rate of building progress has not been maintained. In fact, the development works which were planned, the schemes which were in operation and the programme that was adopted by the inter-Party Government have not been kept up since the change of Government. When the present Government was elected, it was reasonable to assume that the efficiency of the programme in operation and the rate of expansion in house building as well as the rate of expansion in the numbers put into additional employment would have been continued. On two major aspects of our economic and social policy, the rate of progress has not been maintained.

Quite a considerable amount of time has been devoted in this House during the last six months to the effect of the restriction of credit, or the limitation of advances, on economic development. I appreciate, and I believe that any Deputy who examines the banking accounts will see, that the bank advances have not declined but that, in fact, over a period of years, they have expanded. What has prevented the continuation of the house-building programme, especially by private enterprise, is the fact that the banks have instructed their offices to limit the period for which overdrafts have been permitted. The result has been that, although aggregate bank advances are up, the limitation of the period of time has forced a number of builders and a number of industrial concerns either to liquidate stocks or to limit their programme. Any person familiar with business recognises that, owing to the present high prices, it is inevitable that more capital is required to keep business going, even at the existing rate. The position has been worsened for a good many persons in the community owing to the limitation of time which the banks have imposed on the overdrafts held by private individuals as well as by companies. We believe, if it is necessary to provide State assistance for housing programmes, if it is necessary to subsidise the building of houses for local authorities and to provide grants under the Housing Acts for the building of private houses, that nobody outside the State should, in any way, interfere with the implementation of that programme or in any way restrict its scope. Such has been happening as a result of the limitation of the period of time for overdrafts, and it has had a depressing effect on the expansion of the housing programme.

We put forward a policy which had as its main objective the development of the economy of the country and the expansion of social and other services. In a short time that programme achieved a considerable degree of success. We do not say that if we were returned to office we could provide Utopian conditions, but we undertake that there will not be any increase in the cost of essential foods and that, in so far as it is necessary, subsidies will be provided to maintain the price of bread, flour, tea and butter at a reasonable level. We undertake, just as we undertook prior to the 1948 General Election, to carry out a certain programme. After that election, we implemented that programme. We have shown that it is possible for the people to have faith in a programme which we put before them because we were prepared to implement it. In fact, we implemented our programme in a very short space of time after the 1948 election and we are prepared, if returned to office at any election in the near future, to implement a policy which will provide subsidies for essential foodstuffs—a policy which will enable a reasonable standard of living to be maintained by those sections of the community who need essential foods at a fair price.

I feel it is something to be proud of to be able to say that it was possible, during a period of rising prices and during a period when the cost of imported commodities was rising, to provide essential goods at the same price at which they were provided two or three years previously. We propose, if elected, to implement that policy again. We are not prepared to promise anything more than a fair deal for all sections, but we are prepared to implement the programme that we have outlined and carry it into effect so that we can, in some way, alleviate the hardships and the increased burdens that all sections of the community have been obliged to bear since the Fianna Fáil Government assumed office.

The effect of this Budget not merely on the cost of living but on business and on commerce is bound to be depressing. It is the experience in this country, as in other countries, that any increase in taxation limits initiative and places additional burdens on industry, commerce, trade and business. In addition to the increased burdens, which will take place when the effects of the reduction in food subsidies are felt next July, it is inevitable that trade unions, workers and all sections of the community will seek higher wages to compensate for the loss in purchasing power. In previous years, when a rise took place in the cost of any commodity, and when there was a rise in the cost-of-living index, there was an immediate claim by trade unions to the Labour Court for wage adjustments. It was possible, because of the abandonment of the wage fixation policy, to get adjustments in wages either by negotiation or by awards under the Labour Court. In every case in which these adjustments occurred, or almost in every case, they resulted in an increase in the price of the commodity being manufactured or an increase in the charge for the service provided. It is true to say, however, that substantial as were these increases either in the cost of living or subsequently in the wages granted, they were less than the rise which will occur in the cost of living when the subsidies are removed and the cost of bread and other commodities is increased next July. The Central Statistics Office estimates that when the subsidies are removed the cost-of-living index figure will rise by ten points.

Can anyone imagine the clamour there will be for wage increases? Can anyone imagine the effect that the elimination of these subsidies will have on the ordinary household? Is it not an inescapable fact that the demands before the Labour Court for wage increases, the demands which will be presented by trade unions to employers and the demands by every individual in the community, except the extremely wealthy, for increases in salaries and emoluments will inevitably result in higher prices for whatever is manufactured and higher charges for whatever services are provided? Previously it was possible in a number of cases to recoup these charges by increasing production, by expanding output, by increasing sales. But, with the recession which is there at the moment, with the reduction in purchasing power available, nobody can foretell what the result of these increases will be. It is certain that there will be no commensurate increase in output and that there will be no offset by way of increased consumption.

The effect of this Budget, as was anticipated in the report of the Central Bank, will be a reduction in consumption or, alternatively, if there is not a reduction in the consumption of foodstuffs, some other expenditure will have to be curtailed. It is only fair and reasonable to expect that first things should come first and, if people are obliged to pay more for food, then it will mean that less will be spent on other commodities. Some people might find no fault with that alteration in the pattern of expenditure. But, when employers are faced with demands for increased wages, when businesses are obliged to meet claims for increased compensation in respect of the rise which will have occurred in the cost of living, then it is obvious that there are only one or two ways in which these increases can be met, either by increasing sales, expanding output and disposing of what is produced or by a reduction in the number of staff. Either course will have to be adopted. It may be that in some cases the only course open will be to increase the cost of whatever is manufactured or the cost of the service provided.

There has been a great deal of talk about paying our way and providing a remedy for the gap in the balance of payments. But this Budget and the proposals for increased taxation do not appear to provide any definite remedy. It is obvious that the increase in the cost of living will have bad results on employment and on the economy of the country, bad results for all sections, but especially for those whose existing incomes are barely adequate to meet the rise which has already occurred. It is obvious from the policy adopted by the Government that they are not really serious about the remedies which they propose to close the gap in the balance of payments. As long as it is possible to spend dollars on some of the nonessentials on which they are still being spent, it is obvious that this Government are not really serious in the effort which they are supposed to be making to achieve equilibrium in the balance of payments; that it is motivated by political aims; that the Budget was presented to the House for political purposes.

They have so far refused to put it to the country. We now ask, as we have asked during the course of this debate, that they should put this issue to the electorate. We are prepared to abide by the result. We believe that the policy enshrined in the Budget, which is designed to increase the cost of living, designed to make life harder and more difficult for all sections, designed to provide additional revenue, designed to expand the ever-widening grip of the Exchequer on the pockets of the people, is one which cannot and will not achieve an improvement in the standard of living of our people.

During the course of this debate quite a number of statistics have been quoted to show how our economy expanded in the short space of three years. We can see from the Statistical Abstract that there was a very substantial expansion in our export trade. While it is true that during the latter part of 1950 and during most of 1951 imports were at a very heavy rate, the House will remember that the end of 1950 coincided with the start of the Korean War, the armament drive by a number of countries, and the resultant stockpiling in anticipation of a rise in prices by the purchase of commodities which were likely to be scarce, and that therefore there was an abnormal drive to secure imports. Leaving aside the abnormal conditions at the end of 1950 and during the greater part of 1951, conditions which affected every country in the world, to which we were no exception, and in which we were prepared to allow a temporary disequilibrium, a temporary expansion in the import excess, it is obvious from the returns in the Statistical Abstract that the substantial expansion in export trade offers a permanent hope of a better balance of trade.

I am glad to note from the figures for the first three months of this year that that expansion in exports has been maintained. In 1947, the total domestic exports were valued at £38,568,000; in 1948, £47,800,000; in 1949, almost £60,000,000; in 1950, £70,000,000; and in 1951 they went up to £86,000,000. During the first three months of this year they amounted to over £22,000,000, and these months, from our previous experience of the pattern of trade, are normally not the heaviest months for exports. That trend in itself indicates that there was an improvement in the export trade.

While there was a serious import excess towards the end of 1950 and during 1951, that should not allow us to be deflected from the programme which was in operation and from the general pattern of our economy which showed increased employment, increased housing, increased social services, increased health services, increased opportunities for our people. These were the result of a carefully designed policy which was in operation for a limited period and which showed economic and social improvement. We believe that that policy and the results of it would secure for all our people a better and higher standard of living.

The alteration in the policy which is being proposed in this Budget may be only of a temporary character. But, whether it is long or short, it is not justified by the facts and by the programme put before the electorate and which was announced by the present Government before they assumed office. We reiterate our assertion that the Government should put this issue to the test and abide by the result. We believe that if the people are in favour of the policy pursued by the Government they are entitled to say so and that if, on the other hand, they are in favour of the policy and of the programme which was operated by the previous Government they are entitled to have it put once more into operation.

We do not believe in putting into effect in this country a policy which, in the main, was designed for different circumstances and different conditions. Quite a number of Government spokesmen have alluded during the course of this debate to present conditions in Britain. On Thursday last, the Parliamentary Secretary to the Minister for Social Welfare, Deputy Kennedy, stated that there is heavy unemployment in the North of Ireland even though they were not at war. I have always understood that one of the claims of the Six-County Government is that they were at war and that they regard as one of their achievements the part they took in the war effort. However, that is not of any great consequence here. The important thing to bear in mind is that Britain fought two world wars and had to utilise all her resources in order to provide armaments and equipment to meet the challenge to the conditions and way of life of her people. No such circumstances obtained here. There is no justification, in our circumstances, for the implementation of a policy which was designed for Britain and for British conditions. I do not think there is anything wrong, in certain circumstances, in adopting a particular policy even if the British are also putting it into operation. There is nothing wrong with the adoption of a policy by an independent country even if the same policy happens to be adopted in Britain or anywhere else. We should get rid of any historical antipathy we may have to following the same policy — but the same policy for the same circumstances is one thing and the same policy for different circumstances is another.

We say — and I think the people of the country in general believe it also — that there is no justification for the implementation in this country of a policy which was designed for circumstances entirely different from those which exist here—a policy which was designed to meet a condition of affairs where the British were obliged to endeavour to overtake the havoc that had been wrought not merely by the recent world war but also by the first world war and the leeway that had to be made up during the intervening period. We in this country have also a good deal of leeway to make up. There are historical reasons for the lack of development of our country and for the lack of enterprise and initiative here. We cannot overtake seven centuries of domination in 30 years of freedom. However, if we have a programme which aims at the development of our economic resources and the expansion of our social and other amenities we will help to bring about better conditions and a better way of life for our people. We believe in such a policy rather than in a policy of increased taxation. We believe in a policy of national development. The policy of the Government is to obtain increased revenue to pay certain increased allowances while, on the other hand, it withdraws subsidies and other State benefits which will result in a substantial rise in the cost of living. As a result of the withdrawal of the subsidies the costs of certain essential foodstuffs will rise, thereby imposing extra hardship on those sections of the community least able to bear it.

This Budget is not justified by the facts of our economic situation and it is not justified on the basis of the policy enunciated by the Fianna Fáil Party at the general election. Therefore, we reject the proposals for increased taxes. We invite the Government to give the country an opportunity of deciding for or against the Budget and for or against the policy at present in operation.

Mr. Keane

Apparently it is the intention of the present Minister for Finance, irrespective of any appeals made to him in this House or by various bodies representing the people in this country, to pursue a policy of direct taxation. The Minister is insisting on imposing extra taxation on the masses of this country amongst whom are the old age pensioners, widows, orphans, blind pensioners and the unfortunate people in receipt of home assistance.

At times, the present Minister gets very fond of our friend, Seán Buidhe. Despite all the hardships which this country suffered during seven centuries of domination of England we were never so much under British control as we are at the present moment under this Fianna Fáil Government. Never before was so much taken ad lib. by a Government from another Government, without a protest of any description, as is taken by Fianna Fáil from Rab. Butler, the Chancellor of the Exchequer in the British House of Commons. The members of the British Government have, however, certain humanitarian concepts. Instead of including the categories I mentioned a moment ago in this burden of extra taxation, the Minister could put into operation any few Christian concepts he may have left—I am afraid they are very few — by exempting the old age pensioners, and so forth, from the extra taxation which will be imposed on the community by reason of the removal of the subsidies. I understand that the British Government give tobacco to old age pensioners and other categories of the community who can ill-afford to pay for that supposed luxury.

They also give these sections of the community certain other concessions. With one scratch of his pen the Minister for Finance in this Fianna Fáil Government removed a source of revenue which yielded approximately £160,000. I refer to the dancing tax. Surely that money, or some of it, could have been given to the widows, orphans, old age pensioners, blind pensioners, and so forth, by way of a special licence or docket to enable them to purchase the essential food commodities at the prices which operated before the Minister hammered out the present Budget.

I cannot speak with authority as to the practicability of that suggestion but I am sure the Minister, with his typical northern technique, has gone very thoroughly into everything from time to time. I heard him called the triple ex-Minister when he was over here. He occupied three different Ministries at various times during his term in this House. Surely, with all the various factors at his disposal, he should be able to do as I suggest, because I can see no other way to assist the people who will undoubtedly suffer as result of the balanced-ration Government of Fianna Fáil in 1952. I do not know whether Deputies generally know the meaning of "balanced ration" but it is well known in rural Ireland. It has a fundamental basis with a couple of admixtures. The fundamental basis in the case of the Government is Fianna Fáil and then you have two doctors, a solicitor, and a farmer keeping them religiously at that side of the House. That is the balanced-ration Government that has imposed this Budget on the Irish people in 1952.

The Minister for Posts and Telegraphs itemised very carefully certain increases in the price of commodities and gave the aggregate amount of the increase per head that would arise as a result of the removal of the subsidies. I have not the same staff at my disposal, neither have I the same technique in presenting a case, as the Minister for Posts and Telegraphs has but from various statements made by the members of the present Government, when they were in opposition and since they went again to that side of the House, I gathered that there was some class of a black, green or blue market in the unrationed commodities. Peculiarly, the Minister for Posts and Telegraphs suddenly forgot all about the unrationed commodities. I saw salt tears wept over white bread not so very long ago—"one bread for the rich and another bread for the poor," and about the poor having to buy the bread provided for the rich. The poor when they can buy bread ad lib. will have to pay 9d. for a 2 lb. loaf for all their bread. At one time they paid 6½d. for a 2 lb. loaf and if they wanted it, and could afford it, they paid 1/-for the white loaf. Now they will have to pay 9d. for all the bread they use and if there is a special loaf, like a cottage loaf or a loaf which the bakers call by some other fancy name, the price will probably go up to a “bob”. Deputy O'Reilly would not like that to happen or that these poor people would have to pay that price under an inter-Party Government, but he has probably decided that it is the price of political liberty, now that a Fianna Fáil Government is in office.

I maintain that there will be an increase of approximately £1 3s. per week on the weekly outlay per head of the male population as result of this Budget. I am taking all ages from 14 up to 70 and I am cutting out luxuries, even such a doubtful luxury as the pint of porter, in arriving at that computation. There will be a somewhat similar increase in outlay for the female population. I should like to have these figures contradicted if it is possible to do so. As I said I cannot itemise to the extent that the Minister for Posts and Telegraphs itemised. Neither can I travel incognito on a continental tour to interview various types of persons, mostly workers, in these continental countries. All I can do is, when travelling from Dublin to East Cork, to listen to some of the remarks passed by ordinary civilians. They are not at all too complimentary to the present Minister for Finance who at one stage in his ministerial career insisted on the road workers of Cork being offered an increase of 2d. per day and never held his head in shame afterwards. Some of the people who are now terribly anxious to vindicate the present Budget expressed themselves strongly in criticism of the present Minister when they were on that side of the House supporting the inter-Party Government.

Since Fianna Fáil regained, through some dubious device, power in this House, almost everything has increased in price. Jam, cheese, peas, beans, fresh meat and bacon increased under the régime of a Party that got into power under false pretences. Between the June election and the line-up on the 13th June the psychologists of the Party went to work and they hammered out 17 points. One point in particular was to recruit two Independents — Deputies Noel Browne and ffrench-O'Carroll. They were not going to touch subsidies. They recruited Deputy Cowan in a different manner entirely. He was a little bit harder a nut to crack than the two young doctors. He is an old soldier like myself with a vast experience of human nature and is, I suppose, an experienced psychologist. At one time he was a terrible thorn in the side of the present Government. I remember him here on the ex-Taoiseach's Estimate at one time speaking of ghosts.

An Leas-Cheann Comhairle

The Deputy seems to be getting away from the Finance Bill.

Mr. Keane

Not a bit.

An Leas-Cheann Comhairle

The Chair thinks so.

Mr. Keane

I feel that I am entitled to reply to some interjections Deputy Cowan made last week when he said he was annoyed because he did not get priority in this House when he was going to speak about the Budget, either for or against it. I am giving a remark of Deputy Cowan's. I think a wide area has been covered by speakers previous to me. I bow to your ruling if you think I am getting too irrelevant, but I will not go further on that line. I only wanted to say that, not much longer than 12 months ago, Deputy Cowan had a motion on the Order Paper to reduce the cost of living and I heard him pass a very unparliamentary remark here one night when he asked if he would be in order in calling a Deputy a sewer rat. That was a terrible thing to say.

An Leas-Cheann Comhairle

It is totally irrelevant at the moment.

Mr. Dunne

He never said that? Whom was he referring to at all?

Captain Cowan

The Deputy should give the words of my motion.

Mr. Keane

I am not sure what the words were, but I think sewer rat was used. Neither am I sure about the shelmaliers who were about to invade the Six Counties. Of course, there is a different Minister for Justice now from when we had Deputy Seán MacEoin in that position. I believe that the Minister's reference to borrowing, in his excuse for introducing the Second Reading of this Finance Bill, was most unfounded. I would not take so much notice of what the Minister for Finance would say at times, only that the satellites at that side of the House and down through the country are all shouting about selling our country to the Yank—or our soul as I think Deputy Cowan said. Every record of the Fianna Fáil opportunists and propagandists down the country is "The Yanks are coming."

That is an old record of the 1914-1918 War. I remember when the present Taoiseach escaped the carbines and rifles through being an American citizen in 1916. We directed the present Taoiseach to go to American and get a load of dollars to enable us to carry on the fight for Irish freedom. The Taoiseach then went as President of the Irish Republic and he was fêted, appreciated and respected in every city and State in America. Now it is a different thing: if we accept any money from the Yanks we are selling our soul and selling our country. I wonder who are selling their souls and their country—I am just wondering.

Any Party that would remove a tax which is bringing in £160,000 a year, for the sake of mustering in financial support from the dance hall proprietors, should not be talking about selling anything. This statement about America is re-echoed throughout the Republic of Ireland at the moment by every Fianna Fáil county councillor and urban councillor and I wonder if any decent man holding high rank in the Fianna Fáil organisation would think of putting a stop to it. They tell the country people that but they are not fooled as much as Fianna Fáil think they are. The Yank was always a friend of this country and always will be. As a back bencher of the Labour Party, I would say one thing to the Yank: "Yank, we dinna forget." I know that some people get up on public platforms down the country talking about patriotism and their fight for Irish freedom and this and that and they have as much regard for the people they have tried to gull as they have for the people out in Tanganyika.

We are faced here with the removal of the subsidies on tea. I believe some member of the Fianna Fáil Government—I am not too sure if it was the Minister for Industry and Commerce— said that the removal of this subsidy on tea would probably ensure that we would get a better quality tea. Apparently we are dealing direct with Darjeeling and Ceylon. We removed our custom from the people with whom we liked to consort at times, Mincing Lane, which was the recognised tea market of the world at one time. We are now getting a particular quality of tea called Broken Pekoe and we are paying an extra tax to the Indians for the privilege of trading in that tea. But you would want a dessertspoonful of it to make a cup of tea. I wonder if, as a result of this removal, we will get a better quality tea for the 6/- or 7/- per lb. that is to be paid for it. I wonder if Deputy Killilea would try to use his influence in Strasbourg when he goes there again to get this raised as an international question. It is very dangerous and the nerves of the people are becoming affected by it.

Mr. Killilea

Mind your own nerves. Do not slip up there.

Mr. Keane

There is one thing, I do not take too much notice of the Deputy's threats from time to time. I believe people were going to be beaten up here not so long ago. In support of this Budget statement, we had another Fianna Fáil back bencher—I do not know if I should call him that— Deputy Corry. In my opinion he is the advance, the van and the rearguard of the Fianna Fáil Party—though I do not know what they think about him. He made a statement that £125 of an increase was given to officials—he was very careful to use the word "officials"—to people who had the sole authority to put people into cottages; and that this increase was made by the care taker Government of 1951 and that it was also made to home assistance officers and home assistance superintendents.

Deputy Corry has made a share of scurrilous statements here but I think that was the worst he ever made. I know the man to whom Deputy Corry referred. Deputy McGrath knows him also. He is a better man than Deputy Corry ever was in the fight for freedom. Just because he does not obey Deputy Corry's will it is alleged that he got this £125 from the caretaker Government as a bribe to put our supporters into cottages. Deputy Corry will read the Official Report. As far as making excuses for the Budget goes, I ask him to withdraw that statement. He must have some ideas of decency. There is a decent streak in everyone and if one digs deep enough one will always meet rock. If he does not withdraw that statement the time may come when some of us will lose some of the decency that we have and descend to personalities. If he is making any further excuses for this unchristian budget introduced by the near-miss Minister for Finance—and he had many near-misses—I ask him to keep away from the officials of the Cork County Council, officials who are doing their work according to their conscience and not perhaps in the way Deputy Corry wants them to do it. We in the Labour Party have a good record as compared with other people. Personally, I would be prepared to compare my record with any member of the Fianna Fáil Party.

An Leas-Cheann Comhairle

That does not arise on the Finance Bill.

Mr. Keane

I will say no more. I am sure the Minister when he is replying will be very chary, as he was on one occasion when he was asked questions, about mentioning any of these concessions to the old age pensioners, the blind pensioners and the widows and orphans. I venture to prophesy that before food subsidies are done away with some untoward events may occur. There may be riots affecting the motor cars and horses at the inauguration of the President. If there are, Fianna Fáil will find itself back on the Opposition side of the House and they will remain on that side for the rest of their existence. Their race is finished. The Minister's Budget for 1952 has completed the disintegration of the Party. The only excuse that can be offered now is that the Yank will come and take over the country if we borrow any more dollars.

I hope other sections of the community will receive the same concessions as did the special contributors to the coffers of Fianna Fáil, the dance hall proprietors. Fianna Fáil paraded themselves at one time in posters, on platforms and from every chapel gate as being the poor man's Government. They have proved that they are the poor man's Government because, if they remain long enough on that side of the House, there will be only poor men and women left in this country.

Mr. Browne

In my opinion this Budget is an unwise one. It imposes an added burden of taxation on the people at a time when they are unable to meet any increases, particularly increases in the way of food increases. When the Government were deciding to abolish these subsidies did they consult their own members who represent rural constituencies? I have no doubt that if they did so they would have been advised against the imposition of the taxes this Budget will impose on the ordinary people. I represent a rural constituency. Three-fourths of my constituents live on bread, flour, tea, sugar and butter.

Mr. Killilea

They do not make any butter of their own?

Mr. Browne

They do. Before I finish I shall have something to say in connection with butter. I am glad the Deputy reminded me of it. Deputies who represent rural constituencies know that an ordinary purchase by the small farmer, the labourer, and those in weekly or daily employment, is ten stone of flour, which is a popular purchase for the ordinary householder over a period of two or three weeks.

The increase in the price of flour is going to be a very serious matter indeed for the small farmers living in the poorer areas of the country where wheat cannot be grown. They do not see wheat grown within 40 or 50 miles of where they are trying to rear their families. An increase of 1/9 per stone is going to be a very serious matter for them. If we can believe all we hear, these poor people who can get tea to-day at 2/6 a lb. are going to have to pay 2/- or 3/ a lb. more for it. We all know that with their big families one lb. of tea would not be sufficient for them at all in the week. They will have the same problem to meet as regards sugar. The price is to go up by 2d. or 3d. a lb. We are told, of course, that they can eat cheaper jam. I want to say that it is the jam manufacturers who are going to reap the real benefit from the cheap sugar. I understand that the price of it for them is to come down from 9d. to 6½d. a lb. But the poor man living on a small farm in a rural area is faced with an increase in the price of sugar of 2d. or 3d. a lb.

It will be the same as regards the price of butter. We all remember, during the last election, the amount of abuse which the previous Minister for Agriculture got because of the increase of 2d. a lb. on butter. How, I ask, will the Government and the Deputies opposite face the people again in view of the fact that the price of butter is to be increased by 10d. or 1/- a lb. in comparison to what it was before the change of Government took place? I do not know how the ordinary people living in the rural areas will be able to meet those increases. I believe they will not be able to do so, and it is hard to imagine how they will be able to eke out an existence at all.

Credit was never more restricted than it is to-day. One may say that the banks have more or less closed down on giving credit. Even the local business people are finding it hard to get credit from the banks to enable them to buy in the commodities which they need to meet the demands of their customers. In fact, one may say that credit is almost as good as gone.

There is another aspect of the taxes in this Budget that I would like to refer to. They are going to fall in a very heavy way on the general taxpayer because of the fact that he will have to meet the increased demands which will have to be made on him by the local authorities. There was a reference to-day to the local authorities in regard to sewerage and housing schemes, long-term loans, repayments, rents and so on. In my opinion this Budget is going to have a much more serious effect on the local authorities than it will have in the way of direct taxation due to the withdrawal of the subsidies. When the local authorities made out their estimates for the supply of commodities to the various local institutions for the year ending 31st March, 1952, these estimates were based on current prices. Now the prices of bread, flour, tea, sugar and butter are to be increased from the 4th July next. The local authority, therefore, will have to make provision to meet the increase in the cost of all these commodities for the nine remaining months of the year. In the following year they will have to make further provision to meet the cost of these increases. All that, of course, is going to mean an increase in the rates. In my opinion, the increase will be anything from 5/- to 7/6 in the £.

On a few occasions in this House I listened to the Deputies on the opposite benches talk about the stockpiling that went on in 1949, 1950 and 1951. I do not think it was wrong for any businessman to do a bit of stockpiling during that period in view of the fact that there was the danger of a world war. There is no use in anybody saying that it was the inter-Party Government or its Ministers who were responsible for stockpiling. My view is that it was an ordinary business transaction. In fact, if there was anybody who did encourage businessmen to stockpile during that period it was the members of the Fianna Fáil Party who were continually talking about the strength of our Army and the dangers of war. That, surely, was an indication to business people that the time had come for them to make up their minds and do some stockpiling. They did so because of the views that were then expressed by the members of the present Government. They knew, of course, that if war came they would not be able to get in supplies for their customers, and so there was no course open to them except to stockpile.

With regard to the licensed trade, it was attacked in the 1947 Supplementary Budget. The inter-Party Government took off the taxes that were then imposed and now they are being brought back again. Those engaged in the licensed trade have a very heavy responsibility to discharge. In fact, one of their principal duties is to act as tax collectors across the counter for the Government. I believe that a big number of them are going to be taxed out of existence. They will not be able to meet the increased taxes on spirits, stout and wines. They may be able to continue for a little time, but I believe they will gradually disappear. Therefore, the revenue which the Government expect to get from these taxes will not be forthcoming at the end of the year. It may be, of course, that a man who has a business premises in a good centre in a town will be able to survive, but those who have their premises in back or side streets will, I believe, find it very hard to carry on.

The position at present is that business is bad in every town. The stocks are in the shops and they cannot be sold. There is no money in circulation. I meet people every other day of the week, whether I am at home or in Dublin, and I can say from experience that the only bit of money that is in circulation to-day is that which is either in the hands or in the pockets of the people living on the land.

There is no money in circulation in towns. Unemployment is increasing daily. I do not know but I am given to understand that some of the factories that have stockpiled have no sales for their stocks. It is a question of how long the employees can be retained in full-time employment. It is a question as to when they will be able to dispose of the stocks. I do not know if that is correct. I am only saying what I am told. In the event of the stocks not being cleared, the employees will have to find alternative employment or to go on a half-time or quarter-time basis. The money that is in circulation is money that is in the hands of people living on the land. The foundation policy set by the previous Minister made it possible for them to have that money. If it were not that they have that money, the position would be much more serious than it is.

There is the question of the increase in the tax on petrol. I shall not say whether it is wise to increase the tax on petrol or not but to my mind there is unfair competition in this matter. The private owner of a car or lorry who has to pay the increase in the tax on petrol has to compete with a company like Córas Iompair Éireann, which is subsidised and which, no matter what increased tax is put on petrol, will not be affected by it because the money will be got through taxation to meet it. The ordinary private owner of a car or lorry will have to meet the increased tax and it is questionable if the increased traffic that he may get will compensate him for the increase in the tax.

According to the daily paper, the number of registered unemployed on May 10th was 64,810, compared with 66,023 in the previous week and 52,950 a year ago. That is an increase of 11,000 to 13,000 in the number of unemployed, at a period when the people are confronted with an increase in the cost of living of anything from 15 to 20 per cent. and can see no way of increasing their income to meet that increase in the cost of living.

Why the Government decided to withdraw the subsidies is a mystery to me. Personally, I never believed that the present Government would dream of withdrawing the subsidies. I was a member of the inter-Party Government and I can say on behalf of my constituents that if the subsidies were withdrawn by the inter-Party Government, I, as representing my constituency, would certainly not vote in favour of that policy, because I know the effect that the withdrawal of the subsidies would have on the people whom I represent.

Let the Minister or any member of the Fianna Fáil Party come to my constituency. Let them come to the town of Ballina where there is a population of 7,000. This Government or any other Government never made any provision for the establishment of a factory in that town, apart from one. At one period I was given to understand that Ballina was to get a factory. A permit was given for the factory just before the last war. As far as I know, the local contribution was put up by the people of Ballina. When the war was over and when they were making arrangements to proceed with the project it was found that the permit had gone, that permission had been given to transfer the factory elsewhere, with the result that there is not a factory in the town of Ballina with the exception of the meal and flour mills. Seventy per cent. of the people of that town have to live on tea, sugar, bread and butter and milk. In some cases it is their only food for breakfast, dinner, tea and supper.

Let any Government or any Party visualise the plight of those people. Let them go into the town of Ballina and see the plight of the poor people there. Let them come into areas like Erris and Achill, where the people live in isolated places, where they have no land. In other areas the people can produce their own milk. In these areas there is no land for them to produce their own milk. They will not be able to produce the milk or to buy the butter. They will not be able to grow beet or wheat. Yet they will have to meet the increased cost of the flour, tea and sugar.

These are important matters that concern the people. I know what concerns the people in my constituency. There are other constituencies that are just as seriously affected. The people in the big and small towns and the poorer areas will be the first to suffer as a result of the withdrawal of the subsidies. The subsidies should not have been withdrawn. I admit that some day it might be possible to remove them but that day has not yet come nor is there any sign of it coming. It will take years before a final decision can be taken to withdraw the subsidies. It is not a question that can be decided by a stroke of the pen without consulting the people. In my opinion, before the subsidies are withdrawn, there should be a general election so that the people could decide whether the subsidies should be maintained or withdrawn.

There are other things I want to say but I do not wish to take up the time of the House. I will conclude, as I started, by saying that as far as the Budget is concerned, it was unwise and not properly thought out, a Budget which should not have been introduced by this or any Government. They should have waited to get the views of their T.D.s in the different areas, by which time perhaps something would have turned up to make it possible for the Government to introduce a Budget different from that which has been introduced. This Budget is a bad Budget, an unwise Budget and the decision to introduce such a Budget was a bad decision. By next October, November and December, it will be seen to have a very adverse effect on a big percentage of our people.

Mr. O'Hara

I am rather new to this House, but I must say that I hold the opinions which I formed in the first couple of months of my membership more strongly than ever to-day. It seems to me to be the political game of the Fianna Fáil Party to make the people believe that they, and they alone, are competent to rule this country. They have got away with that for quite a long number of years, but I feel it my duty to remind them that they are not likely to get away with it much longer, and particularly if we have a general election, as I expect we will have in the not too far distant future.

I cannot claim to be one of those who played an important part in bringing about the political freedom which this country enjoys. I did not live at a time when I could make my contribution, but I was a member of the Defence Forces during the emergency period and we all know that the history of this country is a history of which we can justly be proud — the men of 1916 and, going far back to the days of the Land League, the days of Davitt and Parnell and the other great Irish leaders down through the years. We know that the Irish people in face of mighty opposition stood by Faith and Fatherland. They were anxious that we should have a Government of our own which would rule this country to the best advantage of the Irish people, but there are many Irish people to day, like myself, who feel that the sacrifices and efforts made by these great Irishmen have been forgotten. There seems to be no appreciation by the members of this Dáil of the great sacrifices and work of these people down through the years. As I say, it seems to be the game of the Party opposite to make the Irish people believe, to expect them to believe, that a group of men who are as good Irishmen as the men opposite, set out deliberately during their three years and a few months of office to wreck and ruin this country. I may remind them that there are on this side as many men who played their part and risked their lives through the years as there are on their side.

The additional taxes imposed by this Budget show very clearly the utter disregard of the Party opposite for the needs and the well-being of the Irish people. Yesterday I visited many parts of my constituency. I visited the new turf schemes at Bangor Erris and the whole Erris area. I met many of the workers there and discussed many matters with them. I was told reliably that there is a scarcity of labour in that area and, in fact, I was told by the Minister for Industry and Commerce in reply to a parliamentary question some time ago that there was a certain amount of difficulty in getting labour in that area. Every day I see bus loads of boys and girls leaving my native town of Foxford for England, the country we were taught to hate by the Party opposite. They are emigrating to-day in thousands, as their forefathers did, to England and it seems to me that the Party opposite have no concern whatever for these people. So far as they are concerned, they might be animals.

Little do we know of the difficulties with which these people who emigrate are faced in a foreign country. Thank God, as I said before, many of our Irish boys and girls who have emigrated are a credit to their native land, but we, as the elected representative of the people for the time being, should realise our responsibility and we should strain every nerve as Irishmen, having, as I say, authority from the Irish people for the time being, to reduce our emigration figures and to keep our young people at home. As I come along the road to Dublin day after day and morning after morning, I see young boys and girls at the crossroads. Their mothers are there, too, and very often their fathers. They are watching those dear ones whom they reared, perhaps, in thatched cabins of rural Ireland, emigrate. They are watching them go away to another country and they do not know what is going to become of them. It is a sad thing to think that any Irish Government, let it be Fine Gael, Fianna Fáil or any other Government, would not take their duty more seriously and realise that we should start with the work of building this nation to make it a place where Irish men and women might live in peace and prosperity.

The introduction of this Budget, as I have already said, shows a complete disregard for the needs of our people. In order to try and make the ordinary citizen of this country believe that the inter-Party Government had bankrupted this country, the Party opposite imposed these penal taxes. I have no doubt but that certain little impositions would be justifiable—people actually expected them—but to tax them to the extent to which they have been taxed is unchristian and un-Irish. You will drive from rural Ireland thousands and thousands of people to foreign lands.

Captain Cowan

Those opposite do not like to hear the truth. Yesterday, I visited a sanatorium in a certain part of my county and many of the patients there asked me what good was 2/6 or 5/- of an allowance at the present time. They need their smoke, too, and they are entitled to it. They asked me to do what I could to try and bring about increases in the case of allowances for tubercular patients. They have my sympathy. They are people who for the time being cannot provide for themselves. They are dependent upon this State to a great extent to provide for them. You will have many such calls due to the removal of these subsidies and the imposition of these taxes. Thousands and thousands of pounds will be required by local authorities, county councils and other bodies with a consequent increase in local taxation. The present Government, to a great extent, seem to have turned their eyes and their minds away from rural Ireland entirely. They cut down the amount of money allocated for drainage. They found fault with the land project and everything that was done by the inter-Party Government.

I say, in all sincerity, to the Party opposite, that if they want to build up this country they cannot do so by building up a bigger Dublin. It can only be built up by building up rural Ireland. The Party opposite are certainly not going the right way about building up rural Ireland by the imposition of these taxes.

Emigration is the curse of this country and let us not forget it. It is one of the greatest evils we have, particularly from a moral point of view. The Party opposite seem to have no regard for these things. They seem to have no regard whatsoever for the safety and the well-being of the population of this country. They have shown utter disregard for the people of this country by the imposition of these taxes.

I have heard a lot down through the years about the preservation of the language and how important it was that the language should be preserved. I agree with all that. I agree that the Irish language, Irish culture and Irish games should be fostered. They are treasures we should be proud to possess, but what contribution have the Party opposite made to foster them? By this Budget, by the imposition of these taxes, they are compelling Irish people to leave their native land and to take shelter in a foreign country that they might get a livelihood there.

I listened some time ago to an appeal on the wireless from the Taoiseach— from the Gresham hotel, if you do not mind—to the farmers of Ireland to grow more wheat. The country was in danger, he said, and it was to the farmers of Ireland he appealed in particular to save the nation as there was a danger that we would be short of bread and flour. Of course, the appeal would not be strong enough coming from the Minister for Agriculture and it had to come from the Taoiseach himself. Although we were reminded that if the farmers of Ireland did not get busy, take their coats off and go to work at once the country was in danger and there would be no flour or bread, strangely enough we find now, however, that if we pay black-market prices there will be lots of bread and flour and there will be no limit whatsoever to the amount we can get if we are prepared to pay for it.

Mr. McGrath

It was you who did that.

Mr. O'Hara

This year's crop of wheat will not be milled into flour until July, so if we examine the accuracy of these statements, the sincerity and the truth of them, we can form our own opinion of the honesty of the Taoiseach when he made that appeal. If we can pay substantially increased prices for these commodities they will be available quite freely and we can buy as much as we like. He will not fool the Irish farmers with that sort of claptrap. The Irish farmers have awakened to the deceit, the trickery and the treachery that has gone on down through the years.

It is not so very long since a large number of business people got a very rude awakening. In order to prepare the ground for the present Budget a scare rumour went out that the country was going down, that the inter-Party Government had brought it down financially and that we were faced with a serious financial crisis. Bank managers throughout the length and breadth of the country were instructed from their head offices to notify their clients that they must cut down their overdrafts. I wonder did the Government realise how seriously these instructions affected the business community? I wonder did they realise that it is quite a common practice for the average businessman, in the West of Ireland in any case, and in other provinces probably as well, to give credit during certain periods of the year to the farming community and to workers? Did they realise the serious implications of cutting down credit? If they did they seemed to show a total disregard for these implications. I know, and know very thoroughly, that this restriction of credit had the effect of putting many thousands of solvent firms out of business while side by side with that it left many a family throughout rural Ireland hungry because business people in turn could not afford to give credit to their customers, customers to whom they would have liked to give credit. They could not give that credit because of the instructions given by the Central Bank here in Dublin to the head offices of the various banks in the country. This was a preparation for the hair shirt policy, the tightened belt policy.

If the Government think that they can get away with that let them face an election and they will have their answer. These things are very much to the fore in the minds of the people. I can tell the Party opposite very reliably, although some of them may be inclined to smile, that my hand is as firmly on the pulse of rural Ireland as the hand of anybody else. I do business with these people in many ways, I buy their produce and I know their feelings. I know that they are waiting for the day when they will have an opportunity of putting the present Government out.

The policy of the Central Bank and of bankers generally is not one which the Irish people would like to follow because it is alien in outlook, not intended to serve this country. It has not served the country down through the years and it will not do so in the future. I do not claim to be an expert on the banking business—far from it—but at the same time I do know that if we can afford to lend millions of pounds of the Irish people's savings to a foreign country we would be better employed by investing it here at home in the land of Ireland, the surest bank of all. We do not want to see Irish Ministers going across the water in pairs to consult with the British Chancellor of the Exchequer as to what is right and healthy for this country in the way of banking. Who would have thought that a Fianna Fáil Government who claimed to be the Republican Party and the only Republican Party in the country, would ever have stooped to that? I remember as a young lad listening to their politicians outside church gates. The Fianna Fáil policy, at least on paper, and the speeches delivered by their speakers, were certainly very heartening. On seeing the finished article, I, for one member of the House, have certainly been disappointed.

Before I came here I, personally, did not much mind whether a Fianna Fáil Government, a Fine Gael Government or any other Catholic or Christian Government ruled as long as they brought prosperity to the country. I feel that any sum of money, however large, which is spent on the land of Ireland on drainage, afforestation, turf schemes and the rest, is money that will pay dividends. That is where security lies. The present Government should realise that. They should realise that no longer will the people of rural Ireland tolerate them or their tricks. They got their answer in the last election in a small way, perhaps in a very small way, but if they come before the people, as I sincerely hope they will be forced to do in the near future, remember that the answer they will get will be a far more telling one than the answer they received on the last occasion.

Mr. McGrath

If the prophecies made by Deputy O'Hara are anything like the prophecies I have heard made by other people on the Opposition Benches I do not think the Fianna Fáil Party need have any fears as to the future. It might interest the Deputy to know that we tested the pulse of the people very well last Sunday and that we are quite satisfied with the response.

We have heard a lot of talk in this House from Deputy Costello, from Deputy McGilligan, from Deputy Dillon and from other Deputies opposite about the over-estimation in this Budget to the extent of £10,000,000. I do not think anybody is going to look on these Deputies as prophets or mathematicians, knowing the result of their year's working, and the fact that their estimation left a deficit of £15,000,000. When speaking on the Undeveloped Areas Bill last December, Deputy Dillon told us that he would grind up the Aran Islands and deposit them in Connemara, and that he would fertilise the Gulf Stream to improve fishing. Of course, he prefers an egg himself. What would be our fate if we were to take the advice given us by Deputy Dillon in his speech reported in column 1512, Volume 101, of the Official Reports. When speaking about the sugar factories he said:—

"Perhaps the Minister will be kind enough to tell me if I am right in saying that the total consumption of sugar in this country is approximately 200,000 tons per annum? We will call it 100,000 tons. Do Deputies realise what the beet sugar is costing this country? The present price of beet sugar consumed by the consumer in Ireland, without any customs and excise duty of any kind, is 5d. per lb. and that price is based on the present rate paid for beet. Does any Deputy anticipate that the price for beet is going to be materially reduced in future or does he not agree with me that if the cultivation of the beet crop is to be maintained in this country, the price must be raised, if not at least maintained at the present figure? Do I exaggerate when I say that, prior to the war, the price of cane sugar, refined, delivered free on quay, Dublin, was about 1½d. per lb. and that, post-war, we may anticipate, when things have settled down, it will fluctuate around 2d. per lb. If that estimate is correct, the cost of the beet scheme in this country is 3d. per lb. of sugar; call it £30 per ton; £30 per ton on 100,000 tons is £3,000,000 of money per annum. Give me that money and to-morrow morning we can increase the family allowance going into every house from 2/6 to 7/- per child. Is there any Deputy who would argue with me that our community is getting better value in the maintenance of that daft scheme at a cost of £3,000,000 per annum than it would get if we were in a position to raise the family allowance in every poor house from 2/6 to 7/-? Every farmer in this country who had four children in his house could receive for the benefit of these children 14/-per week in lieu of the 5/- he is now getting; 14/- per week every week in every year, until those children had passed the age of 16, with the money we propose to squander on maintaining the beet sugar crop."

That is what Deputy Dillon said on 6th June, 1946. He is the gentleman who was selected by the inter-Party Government to be Minister for Agriculture in this country—the man who said that peat, beet and wheat would go up the spout and God speed the day.

An Ceann Comhairle

What the Deputy is saying is not very relevant.

Personal remarks about any Deputy's business are irrelevant, and should not be indulged in by any Deputy.

Mr. McGrath

I bow to your ruling, Sir. I hope Deputy Dillon will bear what you have said in mind. There are quite a lot of things which could be said about Deputy Dillon's business during his period of office.

An Ceann Comhairle

The motion before the House is: "That the Finance Bill, 1952, be now read a second Time."

Mr. Dillon

You would not blame him for not wanting to discuss that.

Mr. McGrath

The Parliamentary Secretary to the Minister for Social Welfare, Deputy Kennedy, was interrupted by a Labour representative, Deputy O'Leary, here this evening, when he spoke about the incitement to dishonesty that that tax created. It may be news to Deputy O'Leary to learn that a Labour member of the Cork County Council was fined £100 during the régime of the inter-Party Government for obstructing the excise officer at a dance in North Cork.

Is it correct that I will win my six-to-four bet?

Mr. D. Costello

Since the debate on the Budget Resolutions and the debate on the Second Reading of the Finance Bill last year several startling and, to my mind, serious changes have occurred in the Irish economy. It is unnecessary to remind the House that unemployment has risen by nearly 12,000 since this time last year. It is also unnecessary to remind the House that the latest figures for emigration demonstrate that there is probably as much as 80 per cent. of an increase in the emigration taking place now as compared with this time last year. Every Deputy must also know that there has been a large recession of trade since last year. It is also, of course, within the knowledge of everybody that there has been a large increase in prices since this time last year.

Let the Irish Minister for Finance answer.

An Ceann Comhairle

Let Deputy Costello make his statement.

Mr. D. Costello

I am glad of the interjection that Deputy Cowan has made. The Minister is not in the House now, but I hope the Parliamentary Secretary and the Minister's advisers will advise the Minister of the misrepresentation that is going on throughout the country which is damaging our national credit and which may injure our relations with America. I should like him to clear up this misrepresentation and take the earliest opportunity to do so.

Not only has this misrepresentation been afoot, but there is also a misunderstanding as to the nature of the Marshall Aid. The Minister, in winding up on the financial resolutions, as reported in Volume 131, No. 6, column 934, of the Official Reports, asked the rhetorical question: "Am I to visualise as real things the plant and capital equipment upon which the Coalition pretend they spent the £46,000,000 of Marshall Aid?" The Minister must know that nobody who understands what the purpose and the aim of the Marshall Aid was has ever stated that the Marshall Aid moneys were to be spent on capital goods, on plant and capital equipment. Nobody who understands what the purpose of the Marshall Aid was believed that Marshall Aid was given to this country to import capital goods. It is correct and right that we should introduce into this country as much capital as we can.

I should like to see a greater proportion of our imports being in the form of capital goods. That argument, however, is irrelevant when dealing with Marshall Aid, because Marshall Aid was given to this country, as it was given to other countries, to finance our ordinary dollar requirements because of the famine in dollars which had occurred in the Western European countries.

It must be remembered that it was the Fianna Fáil Government in 1947, who negotiated the Marshall loan. It was Fianna Fáil Ministers who went to the first meeting of O.E.E.C., and it was partly through their efforts that the Marshall loan was given to this country. When the change of Government occurred in 1948 a full debate took place on the ratification of the agreement. We did not hear, until this new development occurred in these economic discussions, of any conditions being attached to the American loan or of any profligacy in the expenditure of the dollars allocated to us. It must be stressed as strongly as possible that the American dollars were not made available to us specifically for the importation of capital goods. They were made available to enable us to import our ordinary necessary dollar requirements which were largely consumer goods or near consumer goods. The capital part of the American loan was that the proceeds of the moneys paid to the Minister for Finance here were held in what was known as the American Loan Counterpart Fund. The American Loan Counterpart Fund was made available to finance capital projects in this country.

The inter-Party Government spent only £18,000,000 of that American Loan Counterpart Fund. We say we spent that £18,000,000 on goods of a capital nature. We have not yet been told what item on which some of that £18,000,000 was spent was not capital. Since the change of Government which occurred last year the balance of that loan, amounting to something like £24,000,000, was spent. The Fianna Fáil Government spent about £24,000,000 of that money in less than a year. That, I understand, is the true position concerning the Marshall Aid Funds. I should like the Minister to deny what I have said, if I am wrong. Certainly I should like him to deal with the situation because I feel, as I said earlier, that the use of this question of Marshall Aid is purely political and is doing this country a lot of harm. I think it is a deliberate effort to take the people's minds away from the true position and the true economic controversies with which we should be dealing now.

The last Deputy who spoke echoed what has been said here by Government speakers time and time again in recent weeks. He criticised the last Government for their borrowing policy. I was very interested to hear the Deputy's remarks. I feel he was merely echoing the sentiments expressed by the Minister for Finance in his opening speech on the Second Reading of this Bill. At column 1438 of the Official Report of the 13th May, 1952, the Minister for Finance is reported as saying:

"We have been borrowing and borrowing for the last three years. We have doubled the national debt. We have more than doubled the amount which we must provide in this Budget for sinking fund and interest, the amount which we must raise under various heads for sinking fund and interest charged to the Supply Services and sinking fund and interest charged to the Central Fund. It has risen from £4,000,000 to £9,000,000 over the last three years. It is quite clear that we could not go on evading our responsibilities in this way and failing to meet our obligations honestly as they arise, continuing always to resort to borrowing. It has got to come to an end some time. Were this the last thing that Fianna Fáil ever did, it is going to come to an end this year."

One would assume, on reading that statement, that the Government were going to finish borrowing this year. That is a very interesting revelation, if it is true.

If we turn to the Budget speech we find that we propose to spend this year a sum of £35.92 million on services which the Minister says are capital services. If the Government is not going to borrow that £35.92 million I presume they are going to raise it by taxation. If that is the issue that divides the Opposition and the Government I am glad, at any rate, to know it, because we can argue therefrom on the advisability of raising taxation for capital purposes and on the advisability of borrowing for them. Our policy was to borrow for capital purposes and to develop the country by large-scale Government capital investment. Our policy was to finance that work by borrowing from the people. If that policy was wrong, and if we should have financed the work by money raised by taxation, I should be glad to hear the arguments for so doing. We have not heard them yet. All we have got from the Minister is an intimation that the borrowing policy is going to end and that the Government propose to spend £35.92 million on capital goods.

I do not wish to misrepresent the Minister. Deputy McGrath and other Deputies criticised the inter-Party Government's borrowing policy and presumably he took his line from the Minister for Finance. The Deputy may not have read an interjection which the Minister made in the course of the debate in an effort, I think, to cover up his remarkable statement. When the Leader of the Opposition was dealing with this point the Minister intimated that he was against the policy of borrowing for "current services". If the Minister is against the policy of borrowing for current services, then we are all in agreement. Everybody believes — certainly in present circumstances — that it is wrong to borrow for current services. If that is Fianna Fáil policy we are in agreement with it. So far neither the Minister nor any member of his Party has pointed out which part of the borrowing done by the previous Government was borrowing for current services. I ask Deputies opposite to go through the figures which are in the Budget statements of Deputy McGilligan and to read the amounts borrowed during the régime of the inter-Party Government. I ask them to read the exact projects towards which that borrowed money was directed. I ask and challenge them to point out which of these items were current and should have been met out of current taxation.

That is not a new challenge. We made that challenge to the Fianna Fáil Party when they were in opposition. It has not yet been taken up or answered. We admit that we borrowed freely, but we say we borrowed for capital services, and that it is our policy to do so because we believe that it is vitally necessary in order to end unemployment and stem emigration that the capital assets of this country be increased, and that the Government must undertake that capital creation because the private sector of the economy is unable to do it on its own. I think those are the points on which we rely when this charge of profligacy is levelled against the inter-Party Government. I ask the Minister to state, when he is replying to this debate, what items, during the years the inter-Party Government were in office, were current services and should not have been borrowed for. These are matters which have arisen in the course of financial debates for the last few months. They are matters, the introduction of which I regard as not being fair in dealing with the facts as they exist, matters which I think it was wrong for the Government to use in the manner in which they did use them in the course of these financial discussions.

The Taoiseach, when speaking on the Budget, announced what I regard as a very retrograde step in the concept of budgetary policy in this country. As reported in column 232, No. 2 of Volume 131, he said:—

"As I have said our Budget, as far as I am concerned, was not related to any ideas of inflation or deflation. I would have been very cautious if there were suggestions that it was simply to deal with inflation as such."

There are inflationary tendencies. If I am told that such and such is an inflationary tendency, I have got to use my eyes if I do not want to see it presented in a certain form. But I cannot help seeing it. I know, for instance, that if you have widespread capital expenditure in this country, wholesale capital expenditure — suppose you had that and that it was not immediately productive and not likely to be — surely you are putting out purchasing power in advance of the goods that were to be purchased and you are creating an inflationary situation. That is clear to anyone, provided, I admit, that there is an understanding on the whole question of what is inflation. There are, I know, many shades of difference between people in their acceptance of that. But take it in its broad sense. It is generally accepted as meaning this, having more purchasing power than there are goods to meet the claims. That would have the effect of sending up prices and so, generally speaking, would have an inflationary effect.

Now there are inflationary effects. I see some deflationary ones too, a certain number of them, therefore my attitude as one member of the Government has been this. I am not going to go on any theories, either inflationary or deflationary. Whilst I understand these things in their general sense and what they mean, and what they mean to any observant person, I am confining myself and will confine myself to a very simple piece of work, namely, to make ends meet and to see that our income will meet our expenditure, to see that we have capital resources to enable us to do the development which I think ought to be done in this country and which, I think, is capable of being done. I will admit to anyone who may differ from me on this—the difference should not come from this side of the House or from the Labour people; it should or ought to come from the dyed-in-the-wool Fine Gael — I do not know what they are now — that I could not deny their contention that expenditure, even the large capital expenditure that we were contemplating ourselves in the past, would in the present world circumstances, lead to inflation."

Before dealing with what I regard as inherent in that statement, I should like to give my view and to contradict the Taoiseach when he says that large-scale capital development in this country would, in present world circumstances, lead to inflation.

If the Taoiseach means by that, that if the Government in present world circumstances undertake large-scale capital development and thereby put into the hands of the people a large degree of purchasing power, before consumer goods are available, and if he tries to infer from that that the classic definition of inflation, namely, too much money chasing too few goods, will come about, I disagree strongly. What occurs in this country when there is large-scale development is not a rise in prices due to too much money in the economy driving the purchasing power so created into an increased demand for goods; what occurs in this country when there is large-scale capital development is a large-scale demand for imports, and not inflation as such. If we appreciate that, we can appreciate many of the things that occur as a result of Government policy. The inter-Party Government appreciated fully that their large-scale capital development programme was going to mean an increase in imports.

It cannot be stressed too often that, if we desire to repatriate sterling assets — I still do not know whether or not it is Government policy to repatriate sterling assets—the only way to do so is by creating a deficit in the balance of payments. The Government could take active concrete steps to repatriate sterling assets by increasing capital expenditure so as to bring about deliberately a deficit in the balance of payments. If the Government believed, as the last Government did, that it was right to repatriate some of these external assets, the proper way to bring that about is by a large-scale capital development. Then you will not have inflation as such, in this State, but you will have a great demand for imported goods, which will bring about, if exports do not expand proportionately, a deficit in the balance of payments.

What I do wish to join issue on particularly with the Taoiseach and the Government—I presume it is Government policy — is this idea of confining themselves simply to the task of making ends meet and not bothering about questions of inflation and deflation, because it appears to me that the Government, by this statement, are deliberately abdicating one of their most important functions, one of their most vital roles, in managing the affairs of this country. The Government have at their disposal, through the means of the Budget, one of the strongest, in fact, the strongest, weapon for fighting inflation or for dealing with deflation, if such exists; but it is an abnegation of their responsibility to say that they are not concerned with inflation or deflation. It appears from the Budget statement that the Government are not quite certain whether there is deflation or inflation in existence in the State to-day.

Whether one or the other exists, the Taoiseach by these statements appears not to be interested in fighting inflation if it exists, or in stimulating production if deflation exists. The Government appear to be merely concerned with the bookkeeping task of an accountant in balancing the books of the nation. Mr. Gladstone, or Mr. William Pitt himself, might have made a statement of that kind. I think it is the type of statement one might expect to hear in the heyday of laissez-faire economics in the 19th century. It is not the type of statement one should hear from a responsible Government at this stage in the 20th century. The Government cannot get rid of its responsibilities. There is either an inflationary or a deflationary situation in the State. I believe there is a deflationary situation and that the Government should, by means of the Budget, see that that situation is remedied. Modern economic thought now recognises that budgetary policy does play a very important part in raising the level of economic activity in the State. It was a recognition of the power of the State, through the Budget, to raise the economic activity of the State that brought about the inter-Party Government's policy of the dual Budget and the tremendous capital development programme which it initiated.

It is commonly accepted now that there are three different types of unemployment. There is frictional unemployment, due to inability to change from one type of work to another; there is cyclical unemployment which results in resources of the community being left idle in times of trade depression; and there is long-term unemployment, which exists in some countries and in this country, even on the top of a boom, due to the level of activity being too low. There is a fourth type of unemployment in this country, namely, under-employment, by which men and women even though they are employed are under-employed, are not working at their full productive power.

We have, and this Government has, a duty to remedy all these four types of unemployment. Perhaps the frictional type is more properly to be dealt with through legislation. Certainly now we have got cyclical unemployment — we have 12,000 more unemployed now than we had last year, and we have increased emigration, due to inability to find work in the country to-day. We also have the long-term problem, stemming from the Act of Union, the flight of capital from this country, the long-term problem of increasing capital assets so as to increase employment facilities.

As I understand it, it was the policy of the inter-Party Government by means of its large-scale capital development programme to fill in the gaps where the private sector of the community failed to create a demand for labour, and the problem of cyclical unemployment was being tackled by the last Government in this fashion. The long-term problem by which the labour of this country was being left unemployed, by which there was a constant drain of our people out of this country because they were unable to find employment here, was also being tackled by means of this capital investment programme.

My view is that the only way we can deal with these problems, the only way of raising the level of the economic activity of this State, is by developing our national resources by means of Government intervention in the creation of capital assets. To my mind, that is the direction towards which budgetary policy should be turned. To my mind, it is the capital side of the Budget which is the most important. These problems which we now know to exist, and which we all deplore, can only be solved if a policy on these lines is followed. It is an abdication of responsibility to say it is not the policy of the Government to take the problems of inflation or deflation into account, and they are merely washing their hands of responsibility by saying that all they have decided to do is to balance the books this year. I have said before, and it is unnecessary to go into it again, that these economic difficulties, which bring attendant hardships on the people, the undeniable trade recession which exists at the present time, the mounting unemployment and emigration, are problems with which it is largely within the scope of the Government to deal.

Our economy has deteriorated since this time last year. We have said, and we believe, that that deterioration is due to the failure of the present Government to take the proper financial steps. That belief is strengthened by the introduction of this Budget, whose sole aim — no matter how the truths are clouded over by the verbiage to which we have listened—is to reduce consumption within the State in order to remedy the deficit in the balance of payments. We believe in large-scale capital development in the State. It is in that direction that the Government should be bending its energies, and it is only in that way we may hope to deal with the very urgent and very vital problems that are now besetting this State.

I do not know when there will be a change of Government but unless there is a change of Government very soon, or unless the present Government drastically alters its present financial policy, these problems which I have indicated and which we all know to exist will be greatly increased. The progress and prosperity which we all desire to be brought about may be put off for many years to come unless some drastic change in economic policy is forthcoming in the very near future.

Mr. MacCarthy

This debate has dragged its weary length along and at the end we are no clearer than we were at the beginning as to the general trend of discussion. A lot of arguments have been revived and it appears to me that when people make a pleading, whether they are right or wrong, they try to stick to it and insist on it regardless of the arguments against it. Deputy O'Hara has come here to-night to say that our budgetary position was brought about largely by a scare which the Ministers of the Government created in the country last autumn. At that particular time, and ever since, our general financial position gave concern to everybody who had the interest of the country at heart. Economists who had studied it had come to the conclusion that there was a problem needing urgent attention. The Opposition themselves were a party to that attitude.

In order to prove that, I will read for the House a statement made some few months ago by Deputy John A. Costello in the Courthouse, Cork — I am quoting from the Cork Examiner—as follows:—

"While there is no crisis, I think it proper to emphasise that I believe there are now, as there have been for some years, grave problems."

Now, the difference between "grave problems" and a "crisis" is, to my mind, just a question of legal interpretation. Grave problems surely are very serious things. He stated they require solution and he went on:—

"The balance of payments position ultimately places a load on the extent of our expansion. We regard our foreign assets as national assets, to be guarded and preserved by this nation. We deplore any improvident waste of these assets merely because they are foreign. The real danger in the domestic situation is that a proper balance in the economic activities of citizens may not be struck between activities directed to the production of goods and services for home consumption and those for export. The atmosphere of crisis should be dispelled. There is time to get this matter right. In the ordinary way the crisis would not be upon us for many years. Certainly, we must reject the Government's policy of anticipating the unpleasantness of real crisis by having an unnecessary one now."

It is simply a question of the interpretation of the words "crisis" and "grave financial problems." I will leave the House to judge for itself as to the difference between Deputy J. A. Costello's interpretation and that of the Government spokesmen.

If we want to go a bit further we can quote Deputy McGilligan, then Minister for Finance, on 2nd May, 1951:—

"One of the great benefits conferred by the possession of external assets is ability to ride out periods like the present of exceptional difficulty and stress, but this external mass of manoeuvre is the mainstay of our economic independence."

If we had had another two years of inter-Party Government there would have been no mainstay of economic independence left for all our external assets would have disappeared.

Let us examine further to see what other nations thought of the same problem. In Poland we have a statesman saying:—

"Our economic prosperity for many years to come will be very much reduced but we must see to it that our economic position and culture are not dragged down with it. Our future as a nation and our place in history depend on it."

For the purposes of comparison we can go a little bit further and examine the position of Portugal. At one stage in her history Portugal passed through very serious revolutions. There was more or less a military régime. In a quiet country district a noted professor of economics was carrying on his teaching of his pupils. One morning a military car arrived at his summer residence. The delegates in that car approached him and asked him to take over the control and direction of the State finances. His mother was ill at the time but when he asked her for her consent she said: "You would not have been sent for if there was not a great crisis in the nation and if you can remedy it I see no reason why you should not go." Dr. Salazar left his mother and agreed to take the responsibility on condition that he would be allowed to balance the State finances and on condition that the military leaders who, at that time, had absolute control would not have the right to interfere with him. After five weeks he resigned because his efforts to balance the Budget were being thwarted and the State drifted on for two more years. Again he was approached and asked to resume office as Minister for Finance. He was told that no opposition would be made to his plans. He took office on that condition and he straightened out the finances of his country. He was subsequently appointed Prime Minister. He was offered the position of President but he refused it because he would no longer have control over the finances which he had adjusted.

Having examined the position in countries comparable with ours in relation to the balancing of State finances and the principle of meeting current expenditure out of current taxation, we can now examine the position here on broad lines. The Minister has already put before the House the position as it exists. The criticism has been advanced that the Minister for Finance and his advisers — advisers who have served this and many other Governments — are unable to go through the ordinary arithmetical processes of adding, subtracting, multiplying, dividing and assessing, but the Trade Union Congress, having examined the Estimates, issued the following statement on the 28th April, 1952:

"We do not doubt for a moment, despite suggestions to the contrary, that the various Estimates, both revenue and expenditure, were made as accurately as forecasting of this nature could allow."

Deputy John A. Costello persists in the opposite contention. It seems to me that when you make a special pleading you must stick to it irrespective of whether it is right or wrong or else you lose face. Deputy McGilligan stated that our external assets enabled us in 1951 to ride out periods of stress and difficulty and that they were the mainstay of our economic independence.

I will read for the House now a United Press cable which says:

"There was no question of military aid to Ireland at the present time. Ireland was one of the five countries which permitted the cutting off of American aid last January rather than sign a new agreement under the terms of the Military Security Act of 1951. One paragraph in that Act broke up Irish-American negotiations for a new technical assistance agreement."

This paragraph states that a Government receiving American aid must agree to make full contribution within its powers "to the development of its own defensive strength and to the defensive strength of the free world", whatever part of it that may be. Those words need no elaboration from me.

Mr. McGilligan

You are all wrong.

Will you dismiss them now?

Mr. MacCarthy

Mr. MacCarthy

There are many members left in the House who have passed through the Sinn Féin days and the national movement and who understood the principles of the men of those times and even though they differed, it could easily be recognised that they were all working for the national interest. Jurisdiction over portion of our country is denied us at the moment.

We have to work as best we can for the portion that is our own. In doing that my only appeal to the House is that we should face the situation squarely and straightly; having examined the position and made up our minds on it, then to take our decisions in the national interest and preserve this country, financially and otherwise, from any difficulties that may confront it.

Mr. MacBride

May I get away from some of the details of the proposals contained in the Finance Bill to draw attention to what I think is probably one of the greatest difficulties associated with the policy pursued by the present Government? As I understand the Government's proposals, the capital development schemes are to be financed from moneys borrowed during the course of the year, and they will be carried out only in so far as money can be borrowed for that purpose. Originally, as has been pointed out by different members of the Opposition who were Ministers in the previous Government, the intention was to float a loan in the course of last summer in order to finance capital development projects. The present Government — I suppose just in order to behave differently — did not float a loan at that time. They allowed the time to pass by, and accordingly got severely into debt and dipped into the proceeds of Marshall Aid funds, the Counterpart Fund, to meet day-to-day expenditure. The difficulty I see at the moment is that the Government has more or less precluded itself from being able to raise the loan which is essential if the capital development schemes already initiated by the previous Government are to be carried on. In other words, they have practically put themselves in a position in which they will be unable to carry out the capital development programme.

The discussions which have taken place in the course of the last few months and the speeches made by different members of the Government throughout the country since last September or October, coupled with the Central Bank Report, have, I think, successfully shaken the credit of the country. In addition to that, the bank rate has been raised, which means that it will now be extremely difficult for this Government, or indeed for any Government, to raise, by way of public loans, the moneys essential for carrying out the capital development programme. That is a very serious situation, serious for every Party in this House. It will mean the discontinuance of many of the works undertaken. It will lead, naturally, to a greater percentage of unemployment and emigration.

In order to deal with a situation of this kind, in order to restore the credit and the confidence which has been shaken, it is essential that there should be a Government with a substantial and steady majority that would have the confidence of the country. I think that members of the Government would agree that the present situation is undesirable, and is a situation which does not lead to confidence. I should, therefore, like to take this opportunity to suggest that the three by-elections now pending should be held in the immediate future and that, if they prove adverse to the Government, the Government should then go to the country, so that the country may be in a position to decide finally these issues. In my view, it is absolutely essential that, in this situation, and in order to deal with the problems which face the country economically, problems which have been largely created by the Government, there should be a Government with a substantial majority in this House.

I suggested earlier, after the last general election, that a National Government should have been formed for a period of two years with certain definite objectives. If that course had been taken, the credit of this country would now stand much higher and we would not be facing the economic slump which we are facing. Indeed, probably many of those who had to leave the country in the past few months would have been able to remain here. Likewise, the figures for unemployment would not have risen to the figure which they have reached in the course of recent months. I would seriously urge on the Government the necessity of holding these by-elections in the immediate future and deciding to have a general election if they lose them, as I think they will. Every day, every week, every month that goes by in this situation is harmful to the country.

Complaints have been made by speakers from Government Benches, as well as by newspapers that support the Government, that members of the Opposition have not put forward any constructive alternative policy. I do not think that is so. So far as I am concerned, I am quite satisfied that the present budgetary proposals include over-estimation amounting to some £8,000,000 to £10,000,000. The Leader of the Opposition, Deputy Costello, has dealt with this in some detail, and I am satisfied that there is, by way of over-estimation on the expenditure side and under-estimation on the revenue side, a surplus of from £8,000,000 to £10,000,000. In these circumstances, it is quite obvious that there is no necessity to remove the subsidies.

It has become fashionable to argue that subsidies are, in themselves, nefarious or objectionable. At first sight, that argument sounds quite plausible, but, on examination, I think that most people who know conditions in the country and in the cities will realise that subsidies are the best means of rendering social assistance to that portion of the social structure which requires it most; in other words, subsidies benefit particularly workingclass people with large families and they particularly benefit the woman of the house who has to provide the food for the family. We examined on many occasions while in the Government the position in regard to subsidies and always came to the conclusion that, so long as it was necessary to give social assistance to the community, subsidies were probably the best way of reaching these sections of the community which required help most urgently.

Deputy MacCarthy—I am sorry I missed the beginning of his speech— was discussing Marshall Aid when I came into the House and was, I think, making a suggestion which has now become a daily suggestion from Government Benches that Marshall Aid or America could be said, in some way which is never quite defined, to be responsible for the Government's present difficulties and for the economic position of the country. That, of course, does not bear examination.

The position in regard to the Marshall Aid moneys, which were generously made available to this country by the United States, was this—we had no dollars and no means of obtaining dollars. As in the case of most other countries in Western Europe, goods were supplied and paid for in dollars by the United States and we deposited the equivalent amount here in sterling. Naturally, the question then arose, according as the Counterpart Fund grew, as to what was the best way of disposing of the sterling Counterpart Fund that was growing rapidly month by month here. Two alternatives were open. One alternative, which is, no doubt, the alternative which the Government would follow, was that the money should be exported to England and invested in England. That is what I think the Central Bank meant in their report when they suggested these funds should be frozen and that they should have been added to the sterling assets in Britain and left there.

I would ask Deputies to pause a minute and examine what would have been the result of that policy. We would have sent over to England a sum of £40,000,000 to be invested in British Government securities in the course of the last three years. By now, 20 per cent. of that money would have been lost on the British stock market in the same way as this Government and the Central Bank have lost about 20 per cent. of our capital assets invested in British securities. That would have been the result.

Instead we chose to utilise this money here for development purposes. Of course, all the arguments used from the Government Benches in regard to Marshall Aid were very thin when you recall that every step taken in regard to Marshall Aid and the utilisation of the Counterpart Fund was discussed in this House month by month practically.

As the Minister responsible I issued no less than 11 different White Papers to this House in regard to the progress of the operations related to Marshall Aid and E.C.A. In these White Papers we outlined exactly the purposes for which the Counterpart Fund was to be used. We discussed these purposes with the United States Government. Let me say here, in passing, many suggestions have been made sometimes by the Independents, principally by the Independents who support the Government—the suggestion also came from the Government Benches—that the United States Government tried to tie some tags on to the moneys made available to Ireland during that period and that they tried in some way to influence the policy of the Government or to take advantage of the fact that we, in common with every other country in Western Europe, had had to borrow dollars from the United States.

On no occasion did I find any attempt, by direct or indirect methods, being made by the United States authorities to influence the policy of the Government or to influence the use which was to be made of the moneys made available to us.

In a White Paper published in 1948 entitled: "Report on Operations under the Economic Co-operation Agreement between the Governments of Ireland and the United States of America for the period 3rd April to 31st December, 1948," which I presented to the House, details were given of the use to which the Grant Counterpart Fund was to be put. I now quote from paragraph 30, on page 10, of this White Paper the proposals which were made and agreed to between our Government and the United States Government:—

"The question of the utilisation and safeguarding of the funds that will accrue in Irish currency as a result of the loan negotiated through E.C.A. received the careful consideration of the Irish Government. Broadly, the policy of the Government will be to use these funds for development purposes to increase the productivity of the nation. Four main considerations will govern the policy of the Irish Government in utilising those funds to increase productivity:—

1. The development schemes, in so far as they are financed out of the loan fund, will have to be such as will ensure repayment prospects, either by creating economic conditions that would increase the national income, thus enabling increased revenue to be obtained, or which would, in themselves, produce direct returns to the Exchequer.

2. The utilisation of this fund will have to be planned carefully so as to avoid inflationary tendencies.

3. By reason of the fact that the Irish economy generally is based on free enterprise, the development schemes will have to be planned in spheres where they do not come into competition with private enterprise.

4. The development schemes will be mainly directed to the development of the primary natural resources."

Paragraph 31 reads:—

"The schemes envisaged for the utilisation of these funds include land development by way of drainage and restoration of soil fertility; a re-afforestation programme based on a minimum plantation of 25,000 acres per year; the development and expansion of the fishing industry; the development of hydro-electrification and of turf-burning generators; agricultural research, training and education; the provision of credits and technical advice for planned industrial development; the rehabilitation of farm buildings and equipment, and the provision of credits for housing and health services; provision of deep water quays."

In that White Paper we set out the purpose for which the Grant Counterpart Fund was to be used. This White Paper was presented to the House. I think the provisions of it were discussed in this House on a number of occassions. Every step taken in regard to the use of the Marshall Aid and Counterpart Fund was fully discussed in the House.

No; apparently the Minister and his colleagues were so anxious to get votes that they promised to increase the price of milk to the farmers so as to get that Deputy's vote and they got into office. It was easy to see that it was not the personal moneys of the members of the Government that were being disbursed; it was public money on that occasion.

Mr. Cunningham

It would not cost much to purchase 2,000.

Mr. MacBride

I did not get the relevance of that.

Mr. Cunningham

That is all you got.

Mr. MacBride

That may be all I got. Certainly. What about it? I am here.

General MacEoin

How many did the Minister for Posts and Telegraphs get? It was hard to buy them.

Mr. MacBride

It has also been suggested that our participation in Marshall Aid was a blunder, something which should not have been done, that this was one of the follies of the inter-Party Government. Does that bear examination? I have a little booklet here, another White Paper published and presented to this House, which contains a speech made by the present Tánaiste, then Minister for Industry and Commerce, in Paris if you do not mind, when he took part in the opening session of the Economic Conference which set up O.E.E.C., and decided to participate in Marshall Aid. I will not trouble the House by reading his whole speech but it was a speech enthusiastically in favour of economic co-operation in Europe and the acceptance of General Marshall's offer. That was on the 14th July, 1947.

The same booklet also publishes the text of a statement made on the 22nd of September, 1947, by the present Taoiseach who had gone over to Paris as the principal Irish delegate to draw up the proposals for the setting up of O.E.E.C. If I am not mistaken he flew over in a special plane with a host of officials of one kind or another to this conference and there started off his declaration by saying — and I quote:—

"We should be very grateful to the American Secretary of State whose speech at Harvard gave our nations this great opportunity for coming together in mutual help. We are all pleased that the opportunity has been so well availed of."

Then he announced that the Marshall Aid was an act of unprecedented generosity. We even have a photograph of the Taoiseach signing the preliminary agreement for Marshall Aid, quite a good photograph sitting in Paris with officials, and at the side of the photograph is a quote from a statement made by the Taoiseach at the time which is worth reading now: "May I express the hope that the co-operation now so significantly begun will continue long into the future?" But that is not all. You might say that the members of the Government had now forgotten that they had taken such an active part in bringing Ireland into the Marshall Plan, but the matter was discussed in this House and the agreements entered into with European Governments and the Government of the United States were submitted to the House and fully discussed then. It is true that the Taoiseach, when this was being discussed, expressed certain doubts as to the wisdom of borrowing dollars from the United States unless we could foresee a way of repaying the loan in dollars as distinct from sterling. Speaking in this House on the 1st July, 1948, Volume 111, column 2059, the Taoiseach, who was then Leader of the Opposition, said, with regard to the question of borrowing money from the United States in dollars :—

"There is no doubt that we have certain assets, but how far they would be available for loan repayment in dollars is another question. We are not, unfortunately, completely and absolutely in a position to control the use of these assets. They can be controlled from outside. We hope that we will be able to have an arrangement in such a way that these assets will be made available."

Deputy de Valera, as he then was, was concerned only with our ability to convert sterling assets into dollars for the repayment of the loan which had been arranged.

In any case, if it was so wrong to borrow this money is it not just as wrong for the present Government to spend it, and spend more of it in 11 months than we spent in three years? I think all speakers from the Government Benches should cease trying to muddy the waters of good relations that have existed between Ireland and the people of the United States. That is merely done in rather an unworthy attempt to confuse the issues in the minds of the people.

I am not going to review the hardships which the additional taxes and the removal of the subsidies are going to inflict on the people and on every individual section of the community. They will naturally fall most heavily on that section of the community which is least able to bear them. Obviously, additional indirect taxation and the removal of subsidies will affect much more harshly the lower income groups than the higher income groups.

But there is one aspect of the whole economic policy of the Government with which I would like to deal for a few minutes. The whole purpose of the additional taxes and of the removal of the subsidies is to reduce the purchasing power of the community. The Minister made this quite clear in his Budget statement; one of the main arguments which he advanced in support of the policy he was pursuing was that wages and earnings had increased proportionately more than the cost of living since 1938. That is more or less the same argument that was put forward by the Central Bank in its report. The Central Bank in its report went on to urge that the purchasing power of the community should be reduced. That is, in effect, the policy which is being implemented in this Budget. The aim of the Budget is to reduce the purchasing power of the community.

Let us examine what effect that will have. Obviously, if the community have less money to spend they will buy less. Obviously, too, shopkeepers will sell less; in turn, the shopkeeper will buy less from the manufacturers and the producers. Manufacturers and producers, being unable to sell their goods, will reduce production. They will do so by laying people off or putting people on half-time or by dispensing with their services completely.

It has succeeded in keeping out imports and providing employment at home.

Mr. MacBride

The Deputy is very much concerned about Donegal. Let me tell the Deputy and the House one of the reasons which have led to unemployment and increased emigration at the moment. It is the restriction of credits that has been imposed largely by the British Treasury and indirectly by our Central Bank and other banks, and by our Government policy here.

I would like to ask the Minister—I hope he will give us an answer to it in replying to-night—whether he has seen a letter issued by banks having their headquarters in England, directing their branches in Ireland this year to restrict credits and reduce overdrafts in respect of any expenditure which was not related to either increased exports to the dollar area or to the British rearmament drive.

I am informed that such a letter was sent to their Irish offices by the head offices of banks having their headquarters in England. I am also informed that the Central Bank was supplied with a copy of that instruction. I feel that the Minister might tell us whether that is so and whether any steps have been taken by him to counteract these instructions and to ensure that our banks will act independently of the policy of the British Treasury.

In my view, the consideration of a Budget of this kind, or of an economic policy of this kind, must be related to the effect which it will have on employment. This was one of the aspects with which the Minister did not deal at any stage in his speech. The number of unemployed persons has increased by 12,000 since this time last year. It is quite apparent that, unless the present policy is reversed, and reversed very rapidly and very definitely, this figure will have increased considerably by the autumn, and that, in addition, the emigration figures will increase proportionately; emigration always provides the safety valve for unemployment in this country.

I would again like to urge that the Government should, out of a sense of responsibility, realise that, in its present position in the House, it is unable to carry into effect a policy of this kind and that it should seek the verdict of the people at the earliest possible moment. I am sure that the Minister himself must realise that a Government having such a slender and such an uncertain support as his Government has cannot possibly hope to secure the confidence of the people when they seek the loan which is essential if the capital development schemes are to be carried out.

Captain Cowan

This debate has been characterised by an especially venomous and abusive attack on me by Deputy Dillon. Many people outside consider it an honour to be attacked in that fashion by Deputy Dillon. Every patriot of our generation and of our time has had the foul tongue of Deputy Dillon directed against him. Every patriot of our generation has felt the venom, the bitterness, the pent-up hatred, the innuendo and the false suggestions of Deputy Dillon. At every stage of Ireland's fight for freedom from 1916 onwards, Deputy Dillon was the enemy of the people. He opposed the Sinn Féin movement; he opposed the Irish Republican movement; he opposed the Irish Republican Army; he opposed the economic war; and he opposed our policy of neutrality in the last war and would have involved this nation in that holocaust if he could. Deputy Dillon is still playing the rôle of enemy of the people. His policy and object now is to tie us up so securely by dollar debt to the United States that the freedom we won for this country would be in danger and that, deprived of liberty of action, we would have no option but to take part as a belligerent in the new war which he believes, hopes and prays will envelop the world in the near future. A few years back General MacEoin, a leader of the Fine Gael Party, refused to be associated any longer with Deputy Dillon in Fine Gael. As a result, Fine Gael and Deputy Dillon parted company. If Fine Gael has made some little progress since then, it was due to the fact that Deputy Dillon no longer belonged to the Party. Let me say that I welcome the return of Deputy Dillon to the Fine Gael Party. The fact that he is accompanied by Deputy Flanagan makes my welcome stronger. These two, as rotten and rotting apples in the case of fruit, will damage and destroy the whole Fine Gael organisation from its executive committee right down to its latest branch. It is just as well that the capitalistic and reactionary tendency of Fine Gael should be weakened in that way from the inside.

Mr. Sweetman

This is not entirely relevant to the Bill, but it is extremely humorous.

Captain Cowan

Everyone in this House knows that Deputy Dillon is unbalanced and that he is a megalomaniac. It is, indeed, a reflection on our whole political set-up that an individual with that record should be a member of this House.

Deputy Dillon, with characteristic brazenness, attempted to make the Minister for Finance responsible for a statement I made during the course of this debate. When Deputy Blowick was speaking I interjected a remark which is quoted at column 1626, Volume 131, of the Official Report of 14th May, 1952. It runs as follow:

"The Minister had two alternatives. One was to impose taxes, and the other was to sell this country to America for dollars."

As I say, Deputy Dillon, with characteristic brazenness, has attempted to make the Minister for Finance responsible for that statement. Deputy Dillon knows that the Minister has no such responsibility. The Deputy is aware that when I speak in this House I express my own views and that I only am responsible for those views.

We should, as a nation, live on our own resources. We should make it our duty to make our exports pay for our imports. In other words, it is our duty to build up our economy so that we will not have to import the goods we can produce at home. If we do not do this, our existence as a nation is in danger.

I saw the grave danger to this country if it once had got into the hands of international moneylenders. I was the only Deputy in the Dáil who opposed Marshall Aid. If I had been listened to then and if my views had had the support of this House, we would not to-day be in the financial mess in which we find ourselves. At the time I was opposing Marshall Aid I was supporting the Government in which Deputy Dillon was a Minister. Did Deputy Dillon feel then that he was responsible for my views, actions or opinions? If he did, it would have been an impertinent assumption on his part. The modern nation which borrows money from another nation, and particularly from a more powerful nation, puts itself into the danger of becoming a subject of that nation.

The only country from which we can borrow money now is the United States of America. I have pointed out time after time that to borrow from any country is dangerous. To borrow money from the United States of America which we may not be able to repay may be the first step in the surrender of the freedom and liberty of this country to the United States of America. My views on this matter, which I have expressed openly and publicly, not once but on many occasions, have been scandalously misrepresented and misused by Deputy Dillon and others, but principally by Deputy Dillon.

I am aware of the ties of blood and friendship that exist between the people of Ireland and our kith and kin in the Republic of the United States. Millions of our people have found refuge, employment and welcome in the United State of America and we are glad to be able to say that they contributed enormously to the establishment of the Republic of the United States, that they contributed to its defence and support, to its advancement and progress, and to placing it in the strong position it holds in the world to-day. Those men and women of Irish blood and Irish birth were never afraid and never hesitated to make whatever sacrifices were necessary and rendered every service they could to their adopted nation. There are mutual ties of friendship based on the blood relationship between a considerable section of the population of the United States and the people of Ireland and those ties create a spirit of friendship and understanding between the common peoples of Ireland and the United States. Those ties do not entitle us, great as have been the services of Irishmen and Irishwomen to the United States, to any subservience from the United States. Similarly, they do not entitle the United States to any subservience from us.

The fact that we have the ties that I have mentioned with the United States of America must not blind us to realities. In the Napoleonic days Ireland was on terms of friendship with France. The arms and the military aid that France could give us were welcomed, but no Irish patriot would accept that military assistance if its acceptance involved in any way subservience to France, the great Republic of that time.

I allege that he is reading a carefully prepared statement.

(Interruption.)

An Ceann Comhairle

Deputy Cowan.

Captain Cowan

In every case in which we received assistance from friendly nations in our fight for freedom we made it clear that we received that assistance without any obligation and without any subservience to the donors. Never at any time in our history prior to 1948 did we borrow money to meet our ordinary day-to-day obligations.

Captain Giles

What about the Russian jewels?

Captain Cowan

If we were to continue to borrow money to meet our everyday obligations a situation would be created which would inevitably lead to the loss of our economic and our political freedom. If we borrow money from the financiers of the United States, those financiers will tell us where we are to spend our money, where we are to purchase our machinery, where we may buy the goods that we need. That is an obligation that has been imposed on us by foreign financiers. It is an obligation that has been imposed on other countries by the financiers of bigger and more powerful nations. If we ever reach that position we have lost our freedom and the sacrifices of many generations will have been in vain.

I have always felt it my duty to draw attention to this fact. It is a serious duty, and I sincerely hope that the views I have expressed with regard to that matter will be clearly understood by the people.

Mr. Dillon

Turn the page.

Mr. MacBride

He turns the page.

Mr. McGilligan

They say you turn the page.

Captain Cowan

The Independent Deputies who have supported the Government have been subjected to abuse, particularly by Deputy Dillon. What is an Independent Deputy? An Independent Deputy is nothing more or less than a Deputy of this House who is not bound by Party pledges to follow the leadership of a particular individual or to accept and abide by the decisions of a Party. Every Independent Deputy is in that position. Speaking in 1932, Deputy Dillon made this statement in the Dáil—the reference is column 26, Volume 41, of the Official Report of the 9th March, 1932:

When Clann na Poblachta was mooted I assisted in founding it, in writing its policy and its programme and in establishing it. I ceased to belong to Clann na Poblachta when the Leader, Deputy MacBride, had me expelled in 1948 for exercising my constitutional right in this House to oppose Marshall Aid.

Whatever my political affiliations may have been, I challenge any Deputy in the House to say that there has been any change in my principles. I have always adhered to the principles of James Connolly. In his writings I found my first political inspiration and I have never to my knowledge deviated from those principles. In putting the Fianna Fáil Party into office last year—thereby helping to smash the unnatural alliance between Fine Gael and the Labour Party—I was doing something which the Labour Party itself has now decided to do. In that connection, may I refer the House to a statement made in this House in 1932 by Deputy Norton, then Leader of the Labour Party, and I think still Leader of the Labour Party? It is reported at column 28 of the Official Report of the 9th March, 1932:—

"Here in this House for the past ten years the Labour Party have pleaded with the Cumann na nGaedheal Party, with the Government Party of the day, to remember the democratic programme of the First Dáil. We have pleaded year in and year out that the Cumann na nGaedheal Party ought to remember the pledges which, as part of the old Sinn Féin Party, it gave to the workers of Ireland. But we have pleaded in vain, we have pleaded with the Party and with the Government which has not been concerned with the interests of the plain people of the country. We have pleaded with the Party whose main interest was the interest of the rich, whose concern for the poor was a very poor concern indeed. To-day, after ten years of pleading, we see them on the eve of going out of office. Having regard to their record towards the workers I think there will be no tears shed and no regrets expressed. So far as the Labour Party is concerned, so far as the plain people of this country are concerned, they can bid adieu to the outgoing Government with no feeling of regret whatever and with no kind wishes for their early return."

As I say, in voting for the present Government, I was doing something, as I said then, to restore its soul to the Labour Party. In opposing any financial policy that may endanger our freedom and liberty, I am acting as the Labour Party should act. Deputy Dillon has condemned me for changing my political associations. Deputy Dillon's own political career, if I may use a famous word, has been kaleidoscopic—Nationalist, Fine Gael, Independent and now Fine Gael again —and all the time there has been, running consistently through it all, a sinister hostility to Ireland.

Deputy Flanagan is one of the leading bayers in Deputy Dillon's pack. He started with Fianna Fáil, he became an Independent, and now I understand he is Fine Gael. He has gone right across the whole social strata of society —right from the Left to the Right.

Breanndán Mac Fheórais

What Left?

Captain Cowan

Deputy O'Leary has availed of this debate to take part as a sort of huntsman with Deputy Dillon. In Deputy O'Leary's short political career he has had some changes.

Mr. O'Leary

It is longer than yours, and it will remain longer.

Captain Cowan

Mr. Cogan

May I ask if Deputies will have an opportunity of getting that quotation?

An Ceann Comhairle

I am not an information bureau.

Deputy MacBride, then Minister for External Affairs, called on Dr. Browne, then Minister for Health, to resign from the Government.

An Ceann Comhairle

I cannot see what this has got to do with the Second Reading of the Finance Bill, and I cannot let the Deputy proceed further on that line. It has nothing whatsoever to do with the question whether this Bill be read a Second Time or not.

On a point of order, what Deputy Cowan is suggesting is completely untrue. There was no tampering with the constitutional position, and I think the Chair so ruled at that time.

An Ceann Comhairle

The Chair never attempted to construe the constitutional position. The Chair cannot make any statement on the constitutional position, as it is not competent to construe it. Deputy Cowan, on the Second Reading motion.

Captain Cowan

Mr. O'Leary

But you do not want food subsidies.

Captain Cowan

Old age pensions have been increased to £1 per week. There will be another increase from 1st July of 1/6 a week. The means test has been substantially altered. These are important facts which must be taken into consideration by any Deputy who is concerned as to how he will vote on the Second Reading of this Bill. If this Government has done and is doing the things that I want it to do, how can I as an Independent Deputy, except for the gravest reasons, vote in such a way on this Bill as to bring about the defeat of the Government and its replacement here by a Government in which I and the country had lost confidence?

In the artificial atmosphere created by the propagandists, the Deputies that I have mentioned, and the capitalist Press, ordinary people may be inclined to forget facts and principles. It is clear to me to-day, as it was clear to me a year ago, that the country no longer wants a further spell of inter-Party government. The duty of presenting a Budget is the duty of a Government and if I, or any other Deputy, consider that the overall national interest demands that this Government should be retained in office rather than an inter-Party Government, then it is my duty as an Independent Deputy to vote for the Finance Bill and so retain the Fianna Fáil Government in office.

Mr. O'Leary

You are afraid to do anything else.

Mr. Rooney

What would your constituents do?

Captain Cowan

Captain Cowan

Not only were you backing Fianna Fáil then but you were trying to wreck the Labour Party then. I have tried to be charitable. I have tried to restrain myself in regard to that but I will answer any of those taunts that come.

The Independent group of Irish newspapers consistently condemned the British Labour Party and consistently sang the praises of Mr. Winston Churchill and the Conservative Party. The same group of newspapers support Fine Gael and their fellow-travellers, not in the interests of the Labour fellow-travellers, not in the interests of Labour, not in the interests of progress, but in the interests of the Irish Conservative and reactionary Party, Fine Gael.

Mr. Rooney

Tell us something about the Finance Bill.

Captain Cowan

The distinguished visitor, Dr. Summerskill, must have wondered at this extraordinary phenomenon.

Captain Giles

It is a pity she is not here to-night.

They went with a Budget which was deliberately framed for the purpose of getting more votes, and the response was surprising. Many people were surprised, including Deputy MacBride, who is now the Leader of a Party just as large as himself.

I have spoken on this matter longer than I intended. There are certain aspects that I would have liked very much to have mentioned. However, that will come another day. As one who has been subjected to considerable vilification and abuse, I want to make this clear, that I stand over every action of mine in this House. I will answer to my constituents when the time comes for every vote and action of mine here, and I have no doubt, having made a deep study of Irish history over the centuries, that the Irish people will always stand by those who stand by and for them.

Mr. Desmond

Having listened to Deputy Cowan, I consider that it is my duty to congratulate the Minister. We have often heard of very successful lion-tamers in the circus arena, and the Minister has certainly proved himself an excellent tamer, where the Deputy is concerned. I might also suggest that, if one of the members of the Press Gallery would be so considerate as to act as the biographer of Deputy Cowan, it would certainly be worth publishing in serial form in a certain paper, because his approach and attitude to the matter under discussion is far beyond any member who wishes to consider it in a serious way. I have no intention of wasting the time of the House in drawing attention to anything he said, except to say, as Deputy Cowan is leaving the Chamber, that it was a happy day when he was put out of the Labour Party.

This Budget has been discussed for a long time and I am anxious to make my contribution as short as possible. In the few words I got in on the Budget I pointed out that the Minister's views, which are at variance with the views expressed by many members of the Opposition, are quite clearly views which will affect the economic and financial position of the country in the years to come. I listened to Deputy MacCarthy, who gave us a good insight in a very short time into the life of a famous statesman in one of the European countries, but the Deputy forgot to tell us that in that country they had, to a far greater extent than we have here, valuable mineral deposits which they could utilise both in that country and in their colonies.

What struck me most forcibly, however, were his concluding words that there were still members in the House —and I hope they will be here for a long time yet—who lived in the days of Sinn Féin. They are on both sides of the House and we are glad to be amongst them, but what I cannot understand is how it is possible for men who believed in the policy of "Sinn Féin amháin" in 1920 and before it, who now sit on the opposite benches as a Government, to have adopted the conservative policy which they have adopted in the 1950s. Would it not be correct to say that if these men were told in 1920 that, at this stage in the life of the country, they would adopt a financial policy in full conformity with the financial policy of countries not so far away, they would vigorously deny it? I believe that these men—young men as they were—would rather commit suicide than believe they would ever so degrade themselves as to adopt the policy which the Minister and some of the leading financial experts of the Government are now trying to foist not alone upon the House but upon the people.

They have condemned the inter-Party Government for the financial policy which they adopted for three and a half years and they have told us of the huge amount of money borrowed and the capital indebtedness of this country, but they conveniently forgot what that money was used for. Does the Minister now stand by his statement when introducing his Budget that, unless he can raise the loan by borrowing, he is not going to do as the inter-Party Government did while in office—embark on housing schemes and hospitalisation plans so essential for the country? They condemned borrowing. We realise that if this country were in a position to finance such large schemes, so important for the welfare of its people, we would all wish not to have to borrow, but I believe there is a duty upon us, each and every one of us, individually as well as collectively in Parties, to realise that if other countries could borrow into the future to win a war in which millions of lives were lost, it is a sad commentary on us that we should have men in control of government who think so little of our people that they are not willing to finance, even by borrowing, the future advancement of our people.

The removal of subsidies means little to Deputy Cowan or to the Minister, but it is a very different matter in the case of the farm worker in the South of Ireland with his £3 10s. or £3 12s. a week, if he is an outdoor man who has his meals at home, and it is poor satisfaction to the casual road worker in County Cork so much beloved by the Minister for Finance in days gone by when he was so considerate as to give them 2d. Remember that the removal of the food subsidies will mean much more to these workers than the Minister will ever realise. If he and the speakers behind him who are acting as bulwarks for the protection of their little financial wizard realised the terrible change which additional financial burdens mean in the lives of the people in rural Ireland, then perhaps they would be more conscious of their political responsibilities and duties to the people.

Deputy Cowan stated that subsidies should be done away with and replaced by a decent standard of wages. I will ask any member to pause and concentrate for a moment on the statement of the Minister when introducing his Budget, that he was determined that where workers, manual and clerical, were concerned, there should be a restraint on them in regard to seeking wage increases. Who is going to win the next round? Will the Minister agree with Deputy Cowan now when he says that these wage earners have not got enough?

Will he agree with Deputy Captain Cowan, who is now so anxious to lead an industrial revolution so far as the workers are concerned, or will he act the part of the lion tamer, and put Deputy Captain Cowan back in the back benches where he was all the evening? Simple as these matters may seem they are of vital importance to the people. The Minister and the Front Bench members of the Government are trying to tell the people of this country that the removal of the food subsidies will mean an increase of only 1/6 in the cost of living. I should like to know from the Minister what he means by that, having regard to the fact that an increase of 5/- per week to farm workers has been reduced by an increase of 4d. per day in the cost of living? If that is so how can the Minister tell us that the removal of the food subsidies after the 1st July will only mean an increase of 1/6?

As far as the Minister and his colleagues are concerned it is quite clear that they have not the faintest idea what effect the removal of the food subsidies will have on the people. Other matters have been discussed, but I do not wish to go into them now as there will be a time and place for doing that later. I believe that the Minister could have reduced the Estimates by £2,192,288 in addition to the sums mentioned by Deputy Costello and others as being over-estimations. As I say, we will have an opportunity of discussing these matters on the various Estimates, when I hope to have the pleasure of hearing from the Ministers responsible for these Estimates why some of these increases have taken place.

During the course of this debate the Minister dealt with estate duty, which was one of the matters raised by some Deputies on the Opposition side. According to his own statement, the Minister is afraid, if he puts on increases in regard to estate duty, that some of our new landed gentry, who have arrived in this country, will be upset. He says it is better to keep them here rather than have them go elsewhere. That is one of the changes that come, perhaps, with middle age or old age. What a change that was from the view of the Minister when he was on a different plane and when he believed in the true independence of this country. While the worker must face up to the additional hardship placed on him and while the old age pensioner must be prepared to accept the burdens that are placed upon him, our new-found friends are welcome to our shores. They are welcome to stay and we will give them a guarantee that we will not place an unduly heavy burden upon them for fear they may depart from us.

One member of the Fianna Fáil Party mentioned race meetings and many of us were not surprised that the present Minister should indulge, during the debate, in offering some of his little personal criticisms of members who were not even present in the House. I believe that fundamentally it is our duty, both as Irishmen and members of the different Parties who believe in a true Christian standard of living to see that there is no room in this country for spivs and other classes who can enjoy the fruits of their ill-gotten gains.

The Budget will mean nothing to those people because they will not be hit as hard by it as the ordinary people down the country. In being generous to those people the Minister will have to be answerable to the people who have been so badly affected by the Budget.

When speaking last week, Deputy O'Reilly mentioned that there was no statement made by any member of the Opposition regarding the food subsidies. Had Deputy O'Reilly been in the House, or had he read the reports in the Dublin evening newspapers or the Dáil debates, he would have seen that a colleague of mine, Deputy Tom Kyne, stated quite clearly that the Labour Party would demand the restoration of the food subsidies. I do not know whether Deputy O'Reilly forgot that or not but it is quite obvious that these members are merely endeavouring to protect the Minister for Finance from the hard winds. Perhaps they have not even studied this financial statement or understood the full implications of the Budget which has been before this House for some time.

I am afraid of breaking the tuppeny-ha'-penny man.

Mr. MacEntee

You are afraid of the answer.

Mr. McGilligan

I regret the absence of Deputy Corry from the House at this particular moment, because to give him an answer would be a useful introduction to a speech on the Second Reading of the Finance Bill, but it does not seem too good to answer when he is not here.

Listening to the debate this evening I thought it was a great thing that no foreign visitors were here to listen to the deflated comments of the old-time swashbuckler who was going to lead his private army to attack the North. He told us why he put the inter-Party Government out—or rather gave one of the reasons. I wonder would it get to his ears if I say that he did not give the real reason. The real reason cannot be explained here because it had to do with his attitude to the Irish hierarchy couched in terms which even Deputy Cowan in his most swashbuckling humour would not dare to speak publicly in this House. That is why he changed the situation. He thought that the present Government, particularly the Minister for Finance, would be the people who could push the Irish hierarchy in the face—that was one of his phrases. If people feel complimented by being put in that position I wish them luck in the future, but that is one reason which motivated Deputy Cowan to make his change.

Mr. MacEntee

On a point of order——

Mr. Blowick

Stop.

Mr. MacEntee

I am making a point of order, if the Deputy will sit down.

Mr. McGilligan

I hope that it is a point of order, not a rowdy interruption.

An Leas-Cheann Comhairle

The point of order.

Mr. MacEntee

The Deputy has made a serious charge against Deputy Cowan. Surely he must adduce some evidence other than his own words because the Deputy has made charges in this House before and when asked to prove them before a tribunal ran away. He has made a charge against Deputy Cowan, and I suggest that the charge must be substantiated by some proof other than Deputy McGilligan's own word.

Mr. Donnellan

Deputy Killilea said once that he was a hangman.

Mr. McGilligan

That was the Minister's view of the person whose support he is now seeking.

Speaking on that occasion—the 10th June, 1948—Deputy Cowan is reported at column 865, Volume 111 of the Official Reports as follows:—

"It is perfectly clear that Deputy MacEntee has lost all hope of returning, because if he had any hope of returning in the near future he certainly could not, with any sense of responsibility, put down the series of amendments he has put down to this Finance Bill. It is perfectly clear, as far as Deputy MacEntee is concerned, that he knows that office has disappeared forever from his grasp."

I think it was Deputy Cowan who spoke about the flotsam and jetsam that the Minister for Finance was, and now they are both here trying to save a little bit from the shipwreck.

Mr. Burke

I must say that Deputy McGilligan is a most charitable gentleman.

Mr. McGilligan

This at least can be said to my credit: that I never described anybody as a red nuncio. I do not know whether the Deputy would take that as a personal remark if I said it about him. I would not be referring to his complexion anyhow. The remark was not intended to be referring to Deputy Cowan's complexion; it was a scurrilous comment to do that man harm in connection with his parliamentary reputation in this country. If he did not succeed, the Minister is now the happier man; he has the support of Deputy Cowan, who slandered him for being a no-good waster. I think Deputy Cowan will agree that that was the tenor of his remarks.

Deputy Cowan raised a point that was more serious when he began to speak about the United States aid. It is to be regarded as a matter of history that on the occasion, in July, 1948, when the convention for European Economic Co-operation was brought before this House, Deputy Cowan was the only person who raised anything in the way of protest against it. It was a foolish protest and he had no factual backing for what he said, but it at least gave ventilation to a certain point of view. Deputy Cogan from Wicklow tried to follow it but he succumbed. He felt he could drool along in matters connected with farming but that this was a big affair.

It is interesting now to look back on that debate. The present Tánaiste, then Deputy Lemass, talked about the White Paper that had been issued with regard to commodities that were going to be brought from America and that interest was not being provided on the money. In fact, interest was provided through Marshall Aid. The Tánaiste questioned the document and asked was it a proper document or a faked one. He was interrupted by the Minister for External Affairs, now Deputy MacBride, to say that the list was prepared by the Tánaiste himself while he was in office and that it included a certain amount of American coal which the inter-Party Government had cut out.

Later in that debate the present Taoiseach, then Deputy de Valera, spoke about the difficulties with regard to this American money. He said:

If he knows anything of a condition upon our acceptance of Marshall Aid he should now state it, but apparently I am not going to get an answer. He should find a statement on the file at that particular time in which Sir Stafford Cripps said that even when it came to the servicing of the loan the reserves of sterling area dollars were behind us, and that promise still holds. But possibly the Minister surrendered that on the occasion of his recent conference with the Chancellor of the Exchequer.

There were no conditions attached in those days and Deputy Cowan is only making a parade of this anxiety of his to see that this country is going to be free from foreign commitments. After all, one has to pity Deputy Peadar Cowan. If he had anything he could boast about it was that he had at least paraded himself as the champion of the oppressed—the lower income groups. The man, I thought, would have raged and raged if there was any question of putting a ceiling on subsidies, let alone reducing them. He tells us now if he has a Government put into power by his vote who are doing things that he wants done, why should he put them out? What are the things he wants done? As far as this Budget is concerned he has joined the breadsnatchers. He has talked of the idea of bread and spread. After the Budget has had its full effect by the 4th July there will be less bread and thinner spread.

He says he wants a wages policy. Does he? Will he get an echo from the Minister for Finance on that? The Minister's Budget statement is founded on this, that present incomes have gone beyond the increase in the cost of living and it was time that was put an end to. I would not call it a very favourable atmosphere for Deputy Cowan to try his strength in getting a new wages policy. He also says he wants social welfare. He wanted a mother and child scheme but he fled away from that. He wanted old age pensions increased and he now says he has got that. Let him go down to the Five Lamps and explain to the people down there how he has got that. What has he got? The Budget statement: deduct saving on food subsides, £6,688,000; less compensatory social welfare benefits, £2,750,000; net saving to be deducted, £3,918,000. On the same side of the Budget there is provision for the proposals in the Social Welfare Bill and other current services, and that is supposed to take in a mother and child scheme and a variety of other things—£3,000,000.

Deputy Peadar Cowan has got for his constituents social services. He wants no mother and child scheme but some increases in old age pensions. Do not forget that he is giving them £3,000,000 estimated benefits and taking from them nearly £4,000,000 worth in the saving of food subsidies, and he is supporting a Finance Bill based upon a Budget to which the opening statement — and I want this phrase remembered—was to the effect that the Minister was not removing the whole of the food subsidies this year. There is a bit still to come next year, a bit still to be saved. This year it is only food subsidies we are dealing with. There is a difference in principle between the food subsidies and subsidies for the building of houses. I should have thought food, the necessity for which is more widespread, would have been treated more tenderly than subsidies on housing, but the subsidies for food are gone as to 75 per cent. this year and there is the threat of the further 25 per cent. following in due course. When will we then move towards making people pay for the houses at the full cost that will be incurred in building houses in modern conditions?

The Deputy wants an increased wages policy, and he asked rhetorically: Did the Labour Party object to a policy for increased wages? Of course none of them said they did, but it was with great difficulty that the Minister for Finance restrained himself from saying: "Well, I do," because he does. An increased wages policy does not fit in with the Budget scheme as it has been put to this House. What Deputy Cowan ought to remember is that the theme of the Budget is that this country is living too well. People are living beyond what is called their means. In order to prevent a gap in the balance of payments occurring next year we must reduce the people's means. One of the things we are going to do is make them pay millions of pounds more for their foodstuffs. When we get them to pay more for their foodstuffs there will be a rise in the cost of living, necessitating increased wages. This will mean that the people will have to pay more for boots and shoes and other essential goods. I move the adjournment of the debate.

Debate adjourned.

The Dáil adjourned at 10.30 p.m., until 10.30 a.m. on Wednesday, 21st May, 1952.

Dáil Éireann díospóireacht - Tuesday, 20 May 1952

Finance Bill, 1952—Second Stage—(Resumed).

Dáil Éireann díospóireacht -
Tuesday, 20 May 1952