This Budget affords the Dáil an opportunity of reviewing the policy of this Government during the past 12 months and at the same time of examining the direction in which the country is being asked to travel during the ensuing year. That being so, I propose to devote some time to an examination of the Government's record over the past 12 months with advertence to the circumstances in which it assumed office two years ago. No Government took office, with greater opportunities or greater possibilities than those which were available to this Government in 1951. We had for the first time, established politicalpeace in this country. The political strife—the acrimonious political strife—which was a feature of our national life from the establishment of this State had completely evaporated. The periodic executions, the internments and the general political unrest had been brought to an end by 1951, and the country was then entering on a period of political quietude such as it had never previously experienced.
In the economic field, the Government was presented with a situation such as this country had never previously experienced from the standpoint of the opportunities available to the Government. We then had a situation in which employment was rising, and rising rapidly. We had unemployment decreasing at a rate never previously experienced. In fact, our unemployment figures in 1951 were down to the lowest level that had operated in this State for many many years. The cost of living had been held relatively stable, notwithstanding many adverse international factors which tended to disturb the cost of living. Our industrial production was rising at a pace which afforded substantial scope for congratulation.
If proofs be needed of these assertions we can get them quite easily. The trade statistics show—taking industrial employment in what is described as the volume of production in transportable goods—that the index figure of production in 1947 was 119; in 1948, it increased to 130; in 1949, it jumped to 148; in 1950, it jumped to 168, and in June, 1951, it was 181. The latest figure on which I can lay hands is the figure for June, 1952. It shows that the figure had fallen from an index of 181 in June, 1951, to 163 in June, 1952.
So far as industrial employment in transportable goods was concerned, the statistics issued by the Central Statistics Office show that there were 133,000 persons employed in the production of these goods in December, 1951. That figure had fallen to 125,000 by December, 1952. I think that if the latest figures were available they would show that there was a still further fall, because our industrial production has continued to fall.
If one looks at the situation in respect to housing, and again quoting from the figures issued by the Central Statistics Office, which is under the Department of the Taoiseach, we find that there were 11,100 persons employed on local authority housing schemes in December, 1951. That figure had fallen to 8,600 by December, 1952. If the later figures were available I should say that they would show a still further diminution in the number of people employed on local authority housing schemes as well.
If we look at the broad figure of unemployment, we find that since May, 1951—since this month two years ago— the number of unemployed has increased by no less than 29,000. Even since last year's Budget, the number has risen by no less than 16,000. These increases have occurred, notwithstanding the very substantial increase in emigration which took place over this period and notwithstanding the recruitment of additional persons to the Army.
Let us examine the situation so far as the cost of living is concerned. Again, the official figures of the cost-of-living index show the enormous transformation that has taken place in a relatively short space of time. The index figure of all items comprising the cost-of-living index was 99 at mid-February, 1948. By mid-February, 1950, it was 100—an increase of one point. By mid-February, 1951, it was 103. What is the situation to-day? By mid-February, 1952, it had jumped from 103 to 114. Between February, 1952, and February, 1953, it jumped to 123. The net position, therefore, is that in mid-February, 1948, the index figure for the cost of living was 99. That figure was 103 in February, 1951. It is now 20 points up, the latest figure —for mid-February, 1953—being 123.
If we examine the situation regarding the increased prices for food, the position is equally revealing. In mid-February, 1948, the index figure for food was 97. By mid-February, 1951— after three years of inter-Party Government—it had increased one point, to 98. But since February, 1951, it has increased by 24 points to 122. Therefore, during the period of office of this Government, we have had a situationin which unemployment has increased by 29,000 and in which the cost of living has increased by no less than 20 per cent.—and even more than 20 per cent. so far as foodstuffs alone are concerned.
The situation to-day is that—thanks to last year's Budget and the increased burdens imposed by it on the people, together with the fact that last year's hardships are being continued by the Budget which we are now discussing— the purchasing power of the people has been crippled because of the high prices which they are compelled to pay for food. As a result of the substantial increase in the cost of foodstuffs —an increase of more than 20 per cent. —the people find that they have not sufficient money to purchase the barest necessaries of life, much less to be able to find a margin for the purchase of less essential commodities.
In these circumstances, is it any wonder that there has been a substantial recession in industry? The figures of declining production are available for anybody who is interested enough to examine them. As a result of the decline in industry and the recession in trade generally, our unemployment figures are mounting so that we can now say that we have a more serious unemployment situation to deal with than we have had for many and many a year.
Even the figures which I have quoted in respect of industrial production do not, in fact, give a full picture of the sag in industrial production in particular respects. Official figures show that the impact of the scarcity of money, consequent upon high prices, has been felt in some industries to an even greater extent than in others. Again, official figures show that production in furniture manufacture has fallen by 15 per cent.; the production of men's and boy's clothing has fallen by 12 per cent.; the production of boots and shoes has fallen by 14 per cent; the production of woollen and worsted manufactures has fallen by 16 per cent. and the production of vehicles has fallen by no less than 19 per cent. These are all serious figures—and not merely in themselves. They are an index of the fact that our whole economic position, consequent upon the Government'shandling of the situation, is now such that, unless effective measures are taken to grapple with it, we may be faced with a still more serious position in the months to come.
I looked up a Press cutting of a speech made by the present Tánaiste, Deputy Lemass, at a luncheon given by the Publicity Club of Ireland. On the 12th October, 1951, the Tánaiste was reported as follows in the Irish Pressin reference to the economic position as he then saw it. He said that if we did not soon get to the position of maintaining our present standard of living, without drawing on reserves, then, sooner or later, we should have to pay for it. He said that whether it took the form of rising unemployment or increasing emigration, higher prices or higher taxation, it would represent the defeat of all our hopes for the future of this country. That situation looks as if it has now arrived. Since the Tánaiste made that speech we have had rising unemployment, increasing emigration, higher prices and higher taxation. The Tánaiste said in October, 1951, that if we did not do certain things we should pay for it in the future by these four evils. We have reached the stage now in which we are in the midst of and keeping company with the four evils which, the Tánaiste said, if they made their presence felt would represent the defeat of all our hopes for the future of this country. That is the economic position which the Tánaiste saw as likely to arise. Now it is present with us. We have a confession from the Tánaiste—by clear implication—that we have now arrived at a position in which all our hopes for the future of this country have been defeated. In the face even of that warning by the Tánaiste, there is no evidence whatever in the Budget speech that the Government realise the necessity to take effective steps to deal with a rapidly deteriorating economic position. What matter if the economic position were incapable of remedy, but the situation has been impacted upon us by the gloomy speeches made by Ministers, by the miserable prognostications of ruin andbankruptcy facing the country, that the country was “consuming too much” and must cut down its living standards—which means it must cut down also opportunities for employment in the production of goods.
The cumulative effect of all that has given us these four manifestations of which the Tánaiste warned the country when he spoke in the Publicity Club in October, 1951. Nobody will attempt to deny that there is serious slackness in every branch of industry. No one will attempt to deny that every shop in this country can tell its own sorry tale of falling sales, of a buyer's resistance produced by the fact that the people simply have not got the money to buy the goods which are in the shops. The shops in turn cannot take the products of the factories, because there is no demand for the goods they would normally be taking from the factories if there were a buoyancy in the demands of the people for those goods.
To-day we see over 82,000 persons trekking to the labour exchanges to get the inadequate benefits made available to them under the Social Welfare Act. The 82,000 people undertake that miserable trek each week looking for employment which they know is not there and every week adds to the grim total of the numbers who are losing employment and who are finding the employment exchange the only refuge—not a refuge where they can hope to get work but the only place they can get some income to sustain them in the trying ordeal through which they are passing as a result of the general recession in trade and industry.
Look at the situation we have reached in respect of housing. Nobody will deny that there has been a sag in housing, in the past 12 months in particular. That shows itself in our unemployment figures, as there are 6,000 more unemployed building and constructional workers to-day than there were 12 months ago. Everyone knows the reason for that. The Minister for Finance decided during the year, after maligning the creditworthiness of the country for 18 months, that he wouldask the people, against the background of his own malicious talk on the country's solvency, to lend him £20,000,000. As he said, in his own elegant phrase, he offered them 5 per cent. for the money because he did not want "to spoil the ship for a ha'porth of tar." As a result of the Minister's policy in offering 5 per cent. on a State loan, a much higher rate of interest than any local authority in Britain is borrowing at, we have reached the situation now in which anyone who wants to buy a house from a private builder has to pay 5 and 6 per cent. on the loan. As a result of such high interest charges being demanded, they are not able to face up to the responsibility involved in undertaking to repay those loans.
Any Deputy who is keenly interested in this matter—and I am sure Deputy Gallagher could supply starting information—has only to go to the building sites around this city, or around the City of Cork and ask the private builders what is their experience in the matter of selling houses. Every one of them will tell you that if they could get rid of the present vacant houses, lying there with no purchasers, they would clear out of private building altogether, as they know now that it is not easy—in fact, it is almost impossible—to sell houses if the repayment terms are 6 per cent, thanks to the dear money policy inaugurated by the Minister for Finance in his State loan of 5 per cent. during the year. Look at what the building figures show —6,000 more unemployed building and constructional workers last year, thanks to the dearer money policy of this Government.
In the City of Dublin alone, there are four times more unemployed building craftsmen than there were in July, 1951. I am quoting here from a trade union journal, the journal of an organisation which represents building trade workers. It uses this phrase:—
"It is safe to state that if to-day there are five craftsmen idle for each one who was idle in 1951, there are at least ten builders' labourers out of work at present for each one without a job two years ago."
Is not that a nice situation? That situation has been brought about largely through the sag in private building and the sag has been brought about by the inability of potential purchasers to pay the high interest rates demanded, either by the local authorities or the building societies. I do not blame the building societies. They have to borrow money from the banks and if the banks can get 5 per cent. on gilt-edged State loan, they are certainly not going to lend at less than 5 per cent. to a commercial building society. The Minister's policy of paying 5 per cent. on State loans has caused an additional 6,000 building and constructional workers to go to the employment exchanges, 6,000 who were in a job two years ago and had all the indications that they would remain in those jobs.
When the last Government was in office, so keen was the demand that you could not find a single building craftsman unemployed. They simply never went to the employment exchanges, there was no need for them to go as they were whipped up or were even being booked from job to job at that time. That is not the situation to-day. This trade union journal shows that there are five times more unemployed building craftsmen idle in Dublin than in July, 1951. Anyone who goes to the building sites around this city will find abundant testimony of the complete transformation in the building of private houses which has taken place, especially during the past 12 months, in consequence of the Government's dearer money policy.
We have been told by this Government, in some of the dreary and depressing speeches made over the past two years, that this country was eating too much, was consuming too much, that its standard of living was too high, and that we would have to get back to the situation of being a poor, distressful country—producing food for export, building up sterling assets in another country while our own people went without the commodities necessary to ensure a decent Irish life under concepts compatible with the Irish sense of human values. TheCentral Bank started the racket. The Central Bank attitude was that this country was enjoying too high a standard of living; that it had to cut down; that it was eating too much butter; that it should eat less and export the butter to Britain and build up in Britain reserves in the Bank of England, which would be used by the Bank of England at 1½ per cent., while we borrowed money to build our own houses at 6 per cent.
The Central Bank said at that time that there was too much employment available and that it was a dangerous situation because it tended to lift wages if there was a scarcity of workers, that the real remedy was to have a pool of unemployment and to keep it there as a challenge to the employed worker and the organised worker because so long as that pool of unemployment was there, it would act as a brake against the possibility that, because of a keen demand for workers, wages would tend to rise. We had from the Central Bank a recommendation that the large-scale schemes of public works should be eased off in order to get this pool of unemployment which would act as a brake on the possibility that wages would increase still further and we got the final piece of advice from the Central Bank that the food subsidies ought to be slashed because they were a concession to wages and in that respect incurred the displeasure of the Central Bank directors.
Look at what has happened in relation to these four items. That was the advice the Central Bank gave the Government. The Government said: "We do not propose to take that advice". Maybe they did not, but they have arrived at precisely the same situation. The Government have created a pool of unemployment of 82,000 people, a figure which would be much larger were it not for the fact that there is an Employment Period Order current at the moment which has brought down the number. The actual figure is nearer 100,000.
The Government has created a pool of unemployment and in respect of large-scale schemes of public works hasslashed to almost microscopic proportions the grants available under the Local Authorities (Works) Act and by its dearer money policy has prevented local authorities from undertaking large-scale schemes of public works because the rate of interest on borrowed money is now crippling. The Government have slashed the food subsidies which the Central Bank said were a concealed subsidy to wages. Look at these three situations now. Have the Government not done everything the Central Bank advised them to do? They may say they spurned that advice, but they arrived at precisely the same situation. Either they have done it on the advice of the Central Bank, or, thinking separately and independently, they decided to do what the Central Bank thought it was desirable to do.
We said when the Central Bank report was issued that if the Government took the advice of the Central Bank, certain things would happen. We said that the advice of the Central Bank was clearly the advice of people who wanted to see a deflationary régime inaugurated in this country, and that, if the Government took that advice, we would have mass unemployment, increased emigration, higher prices, a fall in production and a general economic depression. That was two years ago. Have we not arrived at that situation, the situation to which the Tánaiste referred at the Publicity Club luncheon? All that has been due to the fact that, whether they took the advice of the Central Bank or not, the Government have arrived at a situation in which all the advice tendered by the Central Bank has been implemented by the Government, either on the advice of the bank or as a result of their own deliberate policy.
We were told to eat less and to export more. We have now reached a situation which must be Gilbertian from the point of view of Irish economics. We get an announcement sprawled across the newspapers recently that it is an offence to eat Irish creamery butter in Dublin or BrayDid anyone ever imagine that we would reach a situation like that? Wecannot eat our own butter in Dublin or Bray—we have to get New Zealand butter. How, in the name of heavens, can we manage to develop our agricultural economy if we are to prevent our own people eating Irish butter? Can anybody imagine anything more ludicrous? Can anybody imagine the French Government saying that the French people could not eat French butter in Paris, that they must eat New Zealand, Australian or Irish butter? There have been less interesting comedies in the Abbey Theatre than that situation.