Dáil Éireann díospóireacht -
Wednesday, 15 Dec 1954

Vol. 147 No. 11

Supplementary and Additional Estimate, 1954-55. - Vote 68—Remuneration.

Mr. Sweetman

I move:—

That a sum not exceeding £890,000 be granted to defray the Charge which will come in the course of payment during the year ending on the 31st day of March, 1955, for payment of certain Remuneration in respect of the year 1952-53.

It will be within the recollection of the House that the previous Government, when faced with an arbitration finding for the Civil Service and the analogous bodies—effective from 1st November, 1952—decided against paying the increases in full and made them payable only from 1st April, 1953. Leading members of the present Government, when in opposition, protested strongly against this decision for reasons of justice and for reasons based upon the public interest and they gave solemn undertakings that, if and when they took office, that decision would be reversed. Members of the House will be aware that the decision was based on the fact that the members who now constitute the present Government were clear that in an ordered society there must be arrangements made peacefully to solve differences of opinion. One of the ways in which the ingenuity of man has arrived at a method for such peaceful solution is that of arbitration. It is, of course, analogous to the way in which there has grown up over the years of civilisation similar methods in regard to other disputes between man and man in the same nation and in the same state.

The whole field of industrial disputes has had in the same way the same influence brought to attention upon it. The Labour Court, which was set up by the Fianna Fáil Government with the concurrence of all the members of this House, is a type of arbitration and it has, as every Deputy will readily admit, done extremely good work in the settlement and avoidance of disputes. It is part of the same principle of arbitration to ensure that there will be a peaceful settlement and that there will not be, in so far as is possible, any dislocation that would arise from disputes. It is from that point of view in regard to the Civil Service that arrangements for arbitration machinery were made without, of course, overriding in any way the constitutional duty that devolves on any Government in dealing with the public interests.

The House will also remember that when I spoke here on the 16th June last I referred to the undertakings that had been given by the members of the present Government when they were in opposition. This Estimate is now being presented in fulfilment of that undertaking. The members of the House will also be aware that the arbitration machinery which was set up was availed of on the 22nd July, 1952, when a claim for a general revision of pay on cost of living grounds was submitted to my then predecessor. After discussions in the ordinary way, in accordance with the terms of that machinery, the statement of case for arbitration was submitted by the staff side on the one hand and by my predecessor, in due course, on the other hand, and after special sittings of the arbitration board on the 3rd and 4th November, 1952, the report of the board was, on the 18th November, 1952, signed by the chairman and transmitted to the Government.

The board, as I say, recommended certain increases to be paid with effect as from the 1st November, 1952. The Supplementary Estimate now before the House is for the purpose of covering the payments that require to be made for the period from the date when the board so recommended—on the 1st November, 1952—up to the 1st April following the date upon which the previous Government determined that the award would come into effect.

As I have said, the total is the sum of £890,000. That sum covers various classes, not merely civil servants, but the various classes that are set out in the Supplementary Estimate which has been circulated.

I should like to stress that the amount which is involved will be spent to a very large extent in the country as apart from the City of Dublin. It is not necessary for me to enumerate all the various classes in the country who will receive the arrears of this award. They vary from postmen on the one hand to more senior people working down the country on the other hand, but I might mention in passing that the Post Office classes outside the capital involved a sum of £100,000. The total sum that will be paid to personnel outside Dublin out of the total award is approximately £550,000. I mention that because sometimes people are inclined to think in a matter of this kind that it is purely one referable to Dublin and only to Dublin.

But the House and the Deputies in it will, I think, readily accept the view that public servants should be on the same basis in regard to increases in the cost of living as are persons in other walks of life. It is common knowledge to us all that the cost of living rose substantially during 1952, that in fact the figure—the cost-of-living index figure—rose from a figure of 115 points in May of that year to 123 points in the following November. During the latter half of 1952 and in the early part of 1953, employees in many walks of life in private undertakings, by negotiation or, in cases, with the assistance of the Labour Court, as I have already stated, all secured increases in their wages and in their remunerations. I think Deputies will accept that it is only right that public servants, when the same reasons operated to affect them, should be treated in the same way as other people in private employment, and it is for those reasons that I recommend this Estimate to the House.

Mr. Aiken

Before the Minister concludes, I should like to ask him whether he would say if this sum will be met out of savings this year?

Mr. Sweetman

As I indicated to the Deputy's colleague, Deputy Lemass, on a previous occasion, the exact extent of the savings which will be effected cannot fully be ascertained until the close of the financial year, and I have no doubt that, when the close of the financial year comes, the Deputy will submit me to a most rigorous examination on the returns I put before the House.

Mr. Aiken

The Minister did not advert at all to the effect on the rates if the local authorities act in the same manner and go back to that period which is covered now for civil servants. He did not say anything at all about No. 5 on the details. Perhaps he would explain it to us?

Mr. Sweetman

Of course the Deputy will agree it is not for me to give any directions to the local authorities.

Mr. Aiken

Exactly what is covered by No. 5?

Mr. Sweetman

I was about to come to that. If local authorities do decide that they wish to follow the same lines then, by reason of statutory enactments, of which the Deputy is aware, further contributions will have to be made from the Central Fund to those local authorities by way of reimbursement. The item set out here under No. 5 is not by way of a direct payment by the State to employees of local authorities but is provision for reimbursement to local authorities in the statutory manner if local authorities, or any local authority, wish to follow the same line.

Mr. Aiken

The Minister does not know exactly what effect it will have on rates?

Mr. Sweetman

I cannot tell until I know what local authorities are going to do.

Mr. Aiken

It is interesting to know from the Minister's opening statement and from his reply to my questions that he is not quite so sure about all this fat that was knocking around in the last Budget. According to statements made all round the country the Budget was dripping with fat and all anybody had to do if he wanted more fat was to hold out his hand, give his vote to Fine Gael, and he would be filled with all the fat in the surplus that was going to be in the Fianna Fáil Budget.

The Minister has no idea, or, if he has, will not tell the House, even though the financial year is drawing towards a close, whether this sum will be met out of savings, whether he is going to tax for it this year, whether it will be met out of taxes next year or whether it will be met out of taxes which will go to pay interest and sinking fund on moneys borrowed for the payment of this fund.

During the last general election Deputy McGilligan, who most people thought would be Minister for Finance if the Fine Gael Coalition came back, said, on the eve of the poll, in a letter which was published in the Sunday Independent—but only in the city editions; it was not for country consumption—that there was “abundant money to meet these arrears” which Fine Gael would pay. Now the abundance of money seems to have disappeared and the Minister is not certain about it or is very coy in admitting that he will have to borrow for it instead of meeting it out of the abundance of money that was knocking around when Deputy McGilligan was speaking.

Here last week there was a question asked by Deputy MacBride in relation to this matter. In the question he made an allegation; he asked when the Minister was going to introduce this Estimate "for the payment of arrears due to State employees on foot of the Civil Service arbitration award which was repudiated by the previous Government". No award by the Arbitration Board was repudiated by the previous Government. The Government made an agreement with the Civil Service for an Arbitration Board and the terms upon which that board would act were quite clearly set out in the circular which the Minister for Finance issued on the 15th July, 1952, enclosing a copy of the proposed arbitration procedure. For the purpose of the record I want to read certain articles of that communication dealing with arbitration. The whole circular dealt with the scheme of conciliation and arbitration machinery for the Civil Service. The following articles Nos. 19 and 20 are taken from part IV dealing with arbitration:—

"19. Within three months of the receipt of a report from the chairman of the board the Government will present it to Dáil Eireann or, if at the expiration of three months the Dáil is not sitting, then on the first day of the next sitting. No such report will be published before submission to Dáil Eireann."

The House will recollect that that article was completely carried out and that the Minister for Finance reported to Dáil Éireann.

"20. (1) Subject to the provisions of sub-paragraph (2) following, the Government as soon as may be after such presentation will either signify its acceptance of the finding contained in the board's report or will introduce a motion in Dáil Éireann recommending either the rejection of the finding or such modification therein as it thinks fit.

(2) When they receive a report from the Arbitration Board on a claim for a general revision of Civil Service pay, the Government will, when presenting the report to Dáil Éireann, in accordance with paragraph 19 preceding, adopt one of the following courses:—

(a) Signify that they propose to give immediate effect to the findings of the board in full;

(b) Introduce a motion in Dáil Éireann proposing the rejection or modification of the findings;

(c) Signify (i) that they consider that it would not be possible without imposing additional taxation, to give full effect to the findings within the current financial year, (ii) that they propose to defer a final decision on the report until the Budget for the next following financial year is being framed and (iii) to what extent, if any, they propose in the interval, without prejudice to the final decision, to give effect to the findings, the extent of the payment to be determined by the amount which can be met without imposing additional taxation."

Every single clause of that article was strictly followed out. There was no repudiation of an award. The civil servants were told openly and candidly exactly what the Government proposed to do under the scheme of arbitration. The Civil Service agreed to the arbitrator, the nominee who was proposed or suggested by the Government and that arbitrator sat and made his award. But there was nothing in the scheme of conciliation and arbitration to say that the Government would forthwith have to proceed to carry out every bit of the award. The Government cannot constitutionally divest itself of its responsibility to the taxpayers. It is ridiculous for the Government and civil servants to be equated in their relationship to that of a private employer and his workers. The Government is not in the position of an employer paying out his own money, in the course of his own business to his own workers. If an ordinary individual in the course of business goes to arbitration over a wage dispute with his employees and if the arbitrator gives what he thinks is an excessive award, he can go out of business.

But the Government cannot go out of business and the Government is not paying out of its own pocket. It is going to pay out of the pockets of the general public, so that it is absolute nonsense to equate the Government's position to the position of the normal employer. The Government does not find the money out of its own pocket; it finds it out of the pockets of the taxpayer. In fact, in the last analysis, the Government and the Dáil became the arbitrator between the servants and the taxpayers.

I want to say, first of all, that the scheme of arbitration to which the previous Government agreed was followed to the letter by that Government. No civil servant had any right to expect that the Government would automatically implement the award of the board. It was pointed out in this scheme that the Government would take into consideration the state of the finances of the country and whether the people could afford to pay in that particular year, and whether there was sufficient money in the Exchequer, and it was the custom of the Fianna Fáil Government to pay as it went as far as possible and not to give the people sprees at the expense of future taxpayers.

We all know, of course, that it is the aim of every individual, whether he is a civil servant or not, to improve his lot and to live as well as he can and get as much money as he can get, but the civil servants and others who are paid by the State must have some regard to the standard of living of the taxpayers who are supplying the money. This particular promise is the only one that it is carrying out of the many promises which the present Government made during the election.

Parliamentary Secretary to the Minister for Agriculture (Mr. O. Flanagan)

That is more than you can say.

Mr. Aiken

It did not throw high prices overboard.

Mr. O. Flanagan

Tell me a promise that you kept.

Mr. Aiken

It did not throw high taxation overboard, and it is going to add to that taxation now.

Mr. O. Flanagan

What about the butter?

Mr. Aiken

There are a lot of people at the present time who are paying extra for cocoa, for coffee and oatmeal, and when you tot up the price increases in the past few months in the cost of living you find it went up two points. Talk about butter—it is a bagatelle compared with the other increases that have occurred.

Parliamentary Secretary to the Minister for Local Government (Mr. Davin)

You do not know anything about it.

Mr. Aiken

Deputy Davin, of course, is quite case-hardened since he took the shilling and he thinks that the people should be prepared to pay extra prices for everything under the sun so long as they get a few pence off the pound of butter, that is, provided they can afford to eat butter after having paid the other price increases since the Coalition came in. They did not throw high taxation or high prices overboard.

Mr. O. Flanagan

We threw you overboard, anyway.

Mr. Aiken

Judging by the discreet silence of the Minister for Finance taxation is going to go up next year if the Government is going to meet its commitments next year. They are quite prepared to slide out of their commitments next year. They are quite prepared to slide out of their commitments this year notwithstanding the pretence that the Minister for Finance does not know whether the Budget is going to be balanced or whether there is any blood of fat around out of which he could scoop this sum for the civil servants. There are a number of people who would be paying this who were made promises —just as the civil servants were made promises—that have not been kept. This particular promise was made by Deputy McGilligan as I pointed out on the eve of the election and only in the city editions of the Sunday Independent—not in the country editions. We all know why Deputy McGilligan made this particular promise to the civil servants in his constituency. We know that in the 1948 General Election he came in on the ninth count at the bottom of the poll: in the 1951 election he came in on the fifth count and at the bottom of the poll, and he hoped to get in the 1954 election a somewhat higher place. He succeeded in that.

Mr. Davin

You had a narrow escape yourself.

Mr. Aiken

Well, I am here and that is what Deputy Davin does not like.

Mr. Davin

I have nothing to complain about.

An Leas-Cheann Comhairle

Let us get back to the motion before the House.

Mr. O. Flanagan

Deputy Aiken is a good judge of the bottom poll.

Mr. Aiken

I have not been there yet, and if I am I will have to take it.

An Leas-Cheann Comhairle

The question of the bottom of the poll does not arise.

Mr. Aiken

Deputy McGilligan made this particular offer to the people of his constituency but there were offers and promises made to people in other constituencies. There were promises scattered all over the country such as this one in regard to wheat which was repeated by the present Taoiseach— then Deputy Costello—when he was on the air during the general election. There was this one which was issued in the constituency of the Minister for Finance appealing for votes for him and then an advertisement or leaflet entitled: "Facts for the tillage farmer and his worker." It appeared as an advertisement in the Leinster Times of the 15th May, 1954, in regard to wheat. It said:—

"Believing that more wheat would be produced by inducement rather than by compulsion, Mr. Costello's Government gave a four-year price guarantee in 1948...."

An Leas-Cheann Comhairle

I cannot see how we can discuss the question of wheat on this specific motion.

Mr. Aiken

I just want to put this on record as a general election promise that was made and was not carried out:

"The price announced for the present season is in accord with that policy and will be paid by Fine Gael. Fine Gael in 1954, would, as a Government, give another five-year guarantee."

Have they given a five-year guarantee?

Mr. Sweetman

Two, and before the two years are ended we will add another three.

Mr. O. Flanagan

And another five after that.

An Leas-Cheann Comhairle

Order! Deputy Aiken.

Mr. Aiken

Is the present price in accord with that policy and will it be paid by Fine Gael?

Mr. Sweetman

Of course it will.

Mr. Aiken

Is it going to be paid for the five years as indicated?

Mr. Sweetman

It was not indicated and the Deputy knows that.

Mr. Aiken

Everybody can read——

Mr. Sweetman

Everybody can read.

Mr. Aiken

——and people throughout the country took it when these advertisements were issued and these promises were given that the farmers of this country were going to get a five years' guarantee instead of the year's guarantee that was given by Fianna Fáil and that they would get the prices in accordance with Fine Gael policy. Is a reduction of 12/6 or 15 per cent. in accordance with Fine Gael policy?

An Leas-Cheann Comhairle

That point does not seem to have any relevance to this debate.

Mr. Davin

He does not mind what you say at all.

A Deputy

That is an aspersion on the Chair.

Mr. Aiken

It is all very well for Deputy Davin to be prepared to give a sum of money to the civil servants which the Government is neither legally nor morally compelled to give to them and at the same time make a 15 per cent. cut in farmers' prices. But the farmers of the country who are going to suffer a 15 per cent. cut on their wheat, if they can afford to grow it at the price, will have to pay additional taxation next year; if they do not pay it in one year, they will have to pay additional taxation in some form for the next 40 years to recoup this sum. It was calculated that the £2,400,000 per year, which is the cost of this award continuosly for the future, granted by the Government to civil servants on foot of this arbitration, would cost 2d. on the pint. 1d. on cigarettes and 1d. on sugar. If one does not like that group of commodities, one can take another group and increase the taxes by 1d. on the pint, 1d. on cigarettes and 4½d. on income-tax. Numbers of people will have to pay these taxes, or some other taxes, in order to meet this particular Estimate introduced by the Minister. The Minister has given us no indication as to how he proposes to find the money and, before the debate concludes, I would like him to give us some indication in that respect.

The Minister raised the broad issue as to the approach of the Dáil on this question of arbitration and in general he seemed to take the view that Government should automatically come forward to the Dáil with an Estimate to cover any award given by the Arbitration Board on foot of the present arbitration scheme. Now that is a very different attitude from the attitude taken up by some of the Fine Gael Party not so very long ago. Indeed, it is quite different from the attitude taken up when a Fine Gael Minister for Finance was negotiating with the Civil Servants when the Coalition first came into office. The attitude taken up at that time was somewhat equivalent to the attitude expressed in articles 19 and 20 of the agreement for arbitration made by the previous Fianna Fáil Government. As far back as 1946, one very prominent member of the present Coalition, who now seems to be carrying all the other members of the Government at his heels when he wants to smash wheat or anything like that, made a speech on this particular matter. That speech will be found at column 232 of Volume 103 of the Official Report. Deputy Dillon, as he then was, said:—

"I do not agree with Deputy Norton that a democratic Government can delegate to any arbitration tribunal the duty of determining the salaries, wages and conditions of employment of State servants whose salaries and wages are charged upon the Exchequer. I do not believe that any democratic Government can divest itself of the responsibility for making the final recommendation in regard to that matter. They cannot bind themselves in advance to burden the Exchequer with what three persons, who have to direct responsibility to the electors, choose to say should be put upon them."

Mr. Rooney

What date was that?

Mr. Aiken

23rd October, 1946. I have given the volume and the column. Deputy Dillon says so much that sometimes he says something that is of some value and I think that his attitude in that particular part of his speech was a sensible one.

Mr. Davin

It suits the purpose.

Mr. Aiken

When Deputy Davin is talking to civil servants he takes up the attitude that he would like them to fix their own salaries. When he was in opposition, and talking to farmers, he took up the attitude that he would like the farmers to fix their own prices for everything they had to sell. At the present time he is quite prepared to grind down the farmers; he is quite prepared to collect any taxes necessary to pay the civil servants something that is not legally due to them. It is very important from the point of view of the future that we should get it straight that Government is not in the position of the ordinary employer. The Government in this matter is merely the agent of the Dáil and of the taxpayers negotiating with the civil servants. It cannot constitutionally hand over its powers and authority to an arbitrator and say: "Go, and carry out the work of the Government and carry out the work of the Dáil." If that is to be the way of it, it will have a very inflationary effect on the Budget. When people come along looking for money, be they civil servants or anything else, no one likes to refuse them. Certainly the people who have the right to refuse awards which they think the community cannot bear are those who are supposed to protect the general interests of the community as a whole. In one part of his speech to-day the Minister said that public servants should be treated on the same basis as other members of the community in relation to the cost of living. Apply that principle to farm prices. Farmers have to buy things as well as civil servants but farmers will suffer a cut of 15 or 16 per cent. in one commodity alone.

Another point to be remembered is that civil servants are not in the same position as ordinary employees. It is right that civil servants should have security, should have good pensions and should in general be treated as well as the community can afford for the sake of good government; the community, through the Dáil, goes out of its way to give civil servants that security and to give them salaries which are high in relation to the income of those who pay them. Indeed, salaries in some groups within the Civil Service are higher than those paid in Britain notwithstanding the difference in income-tax, the price of beer, cigarettes and other things. In return for that, civil servants should be reasonable. I think that the vast majority take a reasonable approach to this question of salary and conditions. There are, of course, organisations in the Civil Service whose raison d'être is to agitate for higher pay, better conditions and bigger pensions. It is healthy that these organisations should exist, that they should be vocal and that they should be free to put their case to the people and to the Dáil but it would be very bad, indeed, if there were to grow up in this country a system whereby civil servants would put political pressure and would vote in certain key constituencies, like Deputy McGilligan's constituency, to affect an issue in the Dáil. It is important that there should be a Civil Service which will, as the Civil Service here has always done, work with equal loyalty for all Governments that are sent along by the people. It is important, too, that civil servants should not try to dominate in politics, because if that were attempted on any widespread scale, it would soon mean that politics would dominate them, as it does in other countries where civil servants are free to take part in politics and to pursue political aims. The other side of that picture is that you have a clean sweep when there is a change of Government.

Parliamentary Secretary to the Minister for Local Government (Mr. Davin)

Is the Deputy aware of the fact that £380,000 of this sum is to be paid to non-civil servants?

Mr. Aiken

Is it going to be paid to the farmers?

Mr. Davin

Read.

Mr. Aiken

Deputy Davin was going about talking to the farmers and telling them what he was going to give for wheat for five years.

Parliamentary Secretary to the Minister for Agriculture (Mr. O. Flanagan)

They believed Deputy Davin but they did not believe you.

Mr. Aiken

I know they believed him once but the question is will they believe him again? I want to conclude by saying that it is important both for the Civil Service and the country to recognise that the previous Government did not break their word in regard to the scheme of Civil Service arbitration, that the Government, when they set up the scheme and got the civil servants' agreement to the chairman of the board, undertook to pay within the year only if they thought it was the right thing to do by the general taxpayers of the country and by the state of the Exchequer and that there was a provision in the scheme to postpone or to amend any award made by the Arbitration Board. It was done in relation to the period which this Estimate covers simply because the Minister for Finance at that time could not see his way to bring in a second Budget to find the sum which would be necessary to meet the award for that financial year. He had a little more sense of responsibility to the country than to pay the award out of borrowed moneys, leaving it to future taxpayers to meet the sums he spent.

Parliamentary Secretary to the Government (Mr. O'Donovan)

When I listened to the first few sentences of Deputy Aiken opening his speech, I realised the type of speech it was going to be. Deputy Aiken has a long way to go to catch up on the record of his Party in regard to the farmers and, therefore, for the last month or so, the members of his Party cannot talk of anything else except the farmer. We had it even on the Local Government Bill. On every issue that comes before this House, they speak of the condition of the country districts. In what condition were the country districts when the country was handed over to the inter-Party Government in the beginning of 1948? Were the farmers better able to pay the Civil Service then that they are now? Everybody knows what the answer is.

Mr. Cunningham

What is it? Tell us.

Mr. O'Donovan

That is sufficient about that particular subject but we can watch the Party opposite for the next 12 months. They have a long way to go to catch up on their record. I have been around the country for the last six months and I realise the kind of support the inter-Party Government has amongst the farming community. The Opposition, by this constant ologoning in regard to the conditions that are supposed to exist for the farming community, are endeavouring to get the Dáil to refuse to meet this legitimate debt. If Deputy Aiken thinks that that is going to get the Party opposite anywhere, he had better start over again.

I understand by the word "arbitration" quite a simple concept. Two people have a dispute about something and the matter is submitted to a third person who will arbitrate and give his judgement. In this particular case the selected arbitrator did give a certain decision. Civil servants might well have taken the line that it was a very harsh judgment from their point of view. It was not by any means generous but on the whole it was fair and reasonable. I, personally, would not have objected to it but civil servants might well have taken objection to it. The Government some months earlier had put into the so-called scheme of arbitration the phrase that should the Government consider that it would not be possible without imposing taxation to give full effect to the findings within the current financial year, they might refuse to give effect to it. We know the manner in which the finances of the State are run. A Budget is introduced each year by the Minister in charge of the Department of Finance of the particular country. He makes his arrangements and any additional charges which arise are me out of the proceeds of taxation from the Exchequer, out of the Central Fund and "the growing produce thereof" as the phrase has it. That is the case in every country. At the very time that the Party opposite repudiated the terms of the award— Deputy Aiken said they did not repudiate them but I think I am correct in saying that they repudiated them——

Mr. Aiken

No.

Mr. O'Donovan

I say they did.

Mr. Aiken

"Repudiation" is a completely wrong word. They carried out the scheme.

Mr. O'Donovan

One of my colleagues has suggested that the word "ratted" would be a more suitable word.

Mr. Aiken

It would suit some of the Fine Gael Party all right.

Mr. O'Donovan

At the very time that the Government were repudiating this award, all ordinary employers, through machinery set up by the Government of this country, were compelled to pay increases to their employees. Of course it was necessary at the time. The cost of living had been put up that year by the Budget to the tune of about 15 points and ordinary people working with firms and semi-State companies had got additional remuneration. Were the people who were to benefit from this particular award of a different kind or were they wealthier people?

Deputy Aiken continually referred to civil servants, but as Deputy Davin pointed out, substantially the larger party of this award is for people who are not civil servants though they are employees of the State. Certain figures were produced at the time. If we take civil servants, that is taking Deputy Aiken on his own ground, we find that out of 32,000 civil servants at the time, 24,000 had under £8 per week and much more than half had under £6 per week. These are the people to whom the Government of the day refused to give an award of 12½ per cent. on the first £200 of their salary, to meet an increase in the cost of living, due to the policy of the Party opposite, which was at least 15 per cent. The Party opposite at that very time having compelled other people in the country including farmers to pay additional wages and salaries to their employees, proceeded to repudiate something to which they had agreed previously. Now I would like to get away from that. I feel personally that this Estimate indicates the mentality of the Party opposite. They will put a burden on people who have no option but to bear it. They will put it both ways. They will put it on the ordinary people who have to live by private enterprise and they will not put it on themselves. Why? Because they might have to finance it, because it might show them up.

Mr. Aiken

The present Government is not financing this particular Estimate.

Mr. O'Donovan

We have not said as much about the Deputy's colleague's Budget as the Deputy and all of his colleagues did about Deputy McGilligan's last Budget, when he was Minister for Finance. We have kept quite about the subject.

Mr. Aiken

You are very vocal about the fact——

Mr. O'Donovan

We might say plenty about it yet. The Deputy might not start that particular cock-fighting. He may hear more than he bargains for on that particular subject.

Mr. Aiken

The country was going to be drowned in fact.

Mr. O'Donovan

The Deputy might be well advised to keep quite on that subject. When this arbitration was arranged, Deputy MacEntee, the then Minister for Finance, had increased taxation substantially in that particular year's Budget and he would not pay this sum of £890,000 to the civil servants. Was it for a political reason that he did not pay it? Was it that he wanted to make a political answer to the case which Mr. Costello, then Leader of the Opposition, had made, that there was £10,000,000 of surplus taxation in the Budget?

Mr. de Valera

Was there?

Mr. O'Donovan

Of course there was, as proved since.

Mr. de Valera

Give us the £10,000,000.

Mr. O'Donovan

If the Leader of the Opposition wants some figures on it, there has been no substantial change in taxation since then. I take it the Leader of the Opposition would agree with that.

Mr. de Valera

Where has the surplus gone?

Mr. O'Donovan

Just one moment.

Mr. Morrissey

Do not let him sidetrack you. That is an old trick of his.

Mr. O'Donovan

We are still dealing with Budgets arranged by Deputy MacEntee as Minister for Finance of the Fianna Fáil Government. The expenditure up to the 13th December, 1952 above the line was £66 millions, just £66 millions. The expenditure to the 12th December, 1953 was £69½ millions. The expenditure up to the 11th December this year is £74½ millions. Is it not obvious, therefore, that there was surplus taxation because, in addition to the expenditure going up since, there were Supplementary Estimates that particular year to the tune of almost £10 millions? The Government at that time looked around everywhere it could to scoop in debts to pay bills of all sorts in an attempt at that time to make provision that their Budget for the year 1953-54 would be a terrific success. It did not come off.

Mr. de Valera

You should know.

Mr. O'Donovan

It did not come off because the whole economic system was based on complete failure, the system set up in the 1952 Budget was entirely wrong. Now it is easy to jeer, why did not we come in and change the whole thing overnight by turning on top of our heads or something like that. We have put in hands the change and do not let Deputies opposite forget it.

Mr. Aiken

Let future taxpayers pay.

Mr. O'Donovan

Ah! I would say this, that the inter-Party Government left the Exchequer in a far better position when they left office on the 13th June, 1951, than the Government that went into opposition this year. There is no question about it, from a financial point of view. Are the Deputies opposite going to suggest to me that from the point of view of the Exchequer it would not have been better that this award had been met when it became due? Of course it would have been better if it had been met. You proceeded and you left a debt which you knew would be honoured by the Opposition of the day when they came into office. They said so repeatedly.

Mr. Beegan

The Minister for Lands did not say so.

Mr. O'Donovan

A number of remarks of various sorts were made by Deputy Aiken, that the abundance of money seems to have disappeared, that civil servants should be reasonable, meaning, of course, that civil servants are unreasonable people and that the only person who is reasonable in this regard is Deputy Aiken. He suggested on other thing, for example, that it would be ridiculous to equate the Government to the normal employer. I quote his words as nearly as I can: "It quote his words to equate the Government to the normal employer." The normal employer has only one method. If he is an ordinary man engaged in private enterprise, he has to depend on that private enterprise to get the wherewithal to enable him to pay his employees. It is well known that the manner in which Budgets are created, in which the State is financed, is that first of all you add up your commitments and then you see where you will get the wherewithal to meet them. If you are prudent you will keep your commitments as low as possible. Is there any indication from the figures I have read out that the Party opposite when they were the Government in 1951 to 1954 were prudent in their commitments? Of course, they were not prudent in their commitments. The expenditure figures I have read out prove that up to the hilt.

It was also suggested and, really, there was no point in it—it is hardly worth answering—that Deputy McGilligan made this promise on the eve of the election. Deputy McGilligan had made it specifically in this House. Note alone that but, with all respect to Deputy Aiken, I do not think Deputy McGilligan was in any danger of being defeated in the election which happened last May. I do not think he was in any danger whatever.

It was also suggested by Deputy Aiken that the Government of the day, the Government here to-day, is not entitled to pay this award. Of course we are entitled to pay it. If we put it to the ultimate test in a democracy, our promise to pay it was vindicated at the polls on the 18th May this year. If we put it to that ultimate test, we are entitled to pay it.

I do not mind about references to other promises made by the Parties on this side of the House, references to sense of responsibility and that kind of thing. That is all in the nature of the kind of speech that Deputy Aiken set out to make.

I would like to finish on this particular note, the same note as that on which I commenced: If we take the whole period back to the year 1920, the 30 years of self-government, the farmers of this country who have to bear their portion of the cost of this award will know from their own experience, they do know it from their own experience, particularly the young farmers, which side of this House is more favourably disposed to them.

We do not mind what people say in this House. They can judge by the way they are treated by the different Governments that have been here. They can judge by the condition of their own affairs when one Government goes out of office and another takes its place. It is the only test. You had two Governments in office in this country, one from 1948 to 1951, another from 1951 to 1954. The Party opposite, of course, suggests that the Government from 1948 to 1951 borrowed this country into a depression, all that kind of thing. I do not believe that anybody takes them seriously when they say that but, as I have said, they are changing their tune. As has been pointed out, Deputy Lemass quite recently said the future depended on agriculture. Deputy Lemass had plenty of time when he was in charge for the development of agriculture. It is a bit late in the day now for the Party, especially on an issue like this, where an obligation is in question and which does not involve directly either civil servants alone or the City of Dublin. The greater part of the money is being spent outside the City of Dublin and outside the Civil Service. I may have a very juvenile idea of the obligation of Government, but I believe Governments should keep their word. I think that must have been the belief when a scheme of arbitration was set up— that the Government should be very slow to repudiate any part of an arbitration award. The excuse which was made in this particular case by the Minister that he had not made sufficient provision in taxation in the year in which he had to meet enormous taxation increases——

Mr. de Valera

Was there a surplus at the end of the year?

Mr. O'Donovan

The Leader of the Opposition is not so simple as to think that things like surpluses alone would be reckoned when computing the total of expenditure.

Mr. E. de Valera

It is the surplus that counts.

Mr. O'Donovan

There are all of these complications as to the amount of money on the pipeline.

Mr. Sweetman

And what about the carry over from the financial account?

Attorney-General (Mr. McGilligan)

Increase the carry over from the financial account.

Mr. O'Donovan

It is the kind of thing that would tax the Institute of Higher Learning.

Mr. E. de Valera

What the Government is supposed to do is to act fairly between the various sections of the community.

Mr. Sweetman

Would the Leader of the Opposition explain why he did not use the increased carry over from that year?

Mr. E. de Valera

How much was the increased carry over?

Mr. Sweetman

Why did not you use it.

An Ceann Comhairle

The Parliamentary Secretary is in possession.

Mr. O'Donovan

I have practically completed what I have to say on this subject but I should like to add that I think Deputy Aiken restricted himself to the issue here as to whether a Government should regard itself as being above all questions of fairness and equity to its employees. But to come along and say "Oh, the poor farmer will have to pay this!" Deputy Aiken knows as well as I do that that is just a lot of code.

Mr. O'Malley

I do not want to get myself entangled with financial wizards, but I should like to ask a few simple questions on this matter. I would ask the Minister to elucidate further on the proposals for payment under the heading dealing with "Local Authorities." Does that mean in fact that a similar sum will have to be made available by the local authorities throughout the Twenty-Six Counties and, if so, does this mean that there will be a further imposition on the rates? I am concerned particularly about the position in Limerick City.

I have here a report of the corporation meeting there last night where it was stated that as a result of the Government's decision to implement the Civil Service award the effect on the rates will be to increase them by a further 2½d. in the £ to meet payments to employees of the corporation. The city manager explained that some of the money necessary to meet the corporation's commitments under the award would come out of the health grant, and that the remainder would come out of the rates. I, in my innocence, understood that there would not be any imposition on the rates—that the entire sum to meet this Estimate would come out of the Central Fund, and I should be very glad if the Minister would elucidate further as to what will be the position of the individual local authorities, and if the rates will have to bear 50 per cent. or 100 per cent. of the payments necessary. I did not understand very clearly the Minister's reply to Deputy Aiken. The Parliamentary Secretary, who has now gone out, made reference to the moral obligations of accepting an award. I hope the Minister for Agriculture will bear this in mind when he is considering the findings of the Milk Costings Commission. No doubt there is a slight difference between arbitration and Commission.

Mr. Sweetman

Slight?

Mr. O'Malley

The Parliamentary Secretary spoke of the £10,000,000 surplus which the then Leader of the Opposition, the present Taoiseach, foretold we would have, and he proceeded to contradict himself very vehemently by justifying their action because, he said, they would come to the Dáil with further Supplementary Estimates because we had cut things so tightly. I am delighted for the civil servants' sake, but I am afraid there is going to be a bit of juggling with this £20,000,000 loan which the Minister recently got.

I notice the Labour Benches are very empty at the moment. One would imagine that when arrangements were being made to have this £890,000 paid to the civil servants the Labour Party members would have said that the widows and orphans and the unemployed should have got preference if not precedence under this matter. The civil servants have been treated very fairly by the Fianna Fáil Party down the years. They are getting something now but all they are getting is the back pay—something I would think, like £30 per vote. However, that is a horse of a different colour and I would again ask the Minister to elucidate the position in regard to the local authorities.

Mr. E. de Valera

I think this is a very serious matter which should be approached and dealt with on its merits. There is nothing so pleasant as to give. That is true in the case of a private individual and it is far truer in the case of a Government. It is very pleasant to be popular and to be held as a good fellow. We would have liked to have been a good fellow to with the servants of the State. We had nothing but good to say of them. We were in a very peculiar position when we came into office. We took over machinery of State which had been built up during the time in which there was bitter conflict here in this country. The individuals who came into the public service, the Civil Service, the Army, the Gardaí, were recruited by our opponents. It was built up by the Government that preceded us at a time in which there was bitter hostility to us. But we came into office and I can say that we got loyal service from every section of the State services.

I should therefore have been more than pleased to give to the servants of the State any moneys that we felt it was just to give them or that we felt the community could afford. The only barrier to our liberality and to our desire to be liberal was the public interest and how the public interest was best to be served. We were said to have repudiated the agreement.

We acted fully within our rights according to the agreement and as an arbitrator, as has already been suggested, between the section of the people who have to pay the taxes and the people to whom their money is to be paid in compensation for their services. When the agreement was being made it was made with very definite provision in it to try to safeguard the interest of the community and to enable the Government to act as the final arbiter in regard to those interests. It was definitely provided in black and white what was to happen when an award was given by the arbitrator. Precisely because it was not thought to be in the public interest that there should be moneys paid beyond the amount that was coming in during the year, provision was made by which a Government was able to exercise its discretion; if it was unable within the revenues provided in the year to meet any back portion of the award it has not to be paid. Even though increased taxation to an enormous amount had had to be put on in order to bridge the gap in 1952 to meet current expenditure by current revenue we faced the position. We knew perfectly well-and it required courage on the part of the Government to take the action—what the political reactions and the reactions of people who did not wish to pay increased taxes were going to be, and the effect upon the political fortunes of our Party. We did what we considered to be our duty in the public interest and that was to try to make revenue equal expenditure and it was for that reason that we had to meet that gap of £15,000,000 by imposing taxation.

The present Taoiseach talked arrant nonsense from this side, and he knows he talked arrant nonsense, when he said we were taxing for £10,000,000 more than was necessary. Everybody knows that no Government in its senses would attempt to do it. Of course when the accounts for the year came in not merely had we not £10,000,000 too much taxation but we had, I think, £2,000,000 of a deficit which had to be met by borrowing.

When we were considering the award we were anxious to meet it, but when we looked at the situation we saw that at the time there was danger of a deficit, as it proved to be ultimately, and we felt that we would not be justified, unless we brought in a Supplementary Budget to deal with it, in borrowing for what was obviously current expenditure. The Minister was asked did he think it should be paid this year out of current expenditure? He will not answer. It will only be an extra item in the deficit if it is a deficit. As I said already, nothing is so pleasant as to give; nothing is so pleasant as to be hailed a good fellow. We had to deny ourselves that pleasure. The present Government is not going to do it. I will not say they are not entitled to do it. They are entitled to do anything that they think is right in the public interest, and they can undoubtedly back up their doing it on this occasion by saying it was one of the issues of the election. Very well, I, for one, will not vote against it on that account—if they put it to the electorate, as they say they did. They are able to point out that when this matter was first raised here in the Dáil they said they were going to reverse our decision. It went to the electorate and they can certainly justify themselves now in paying it. If the people who have to provide the money in taxation have any complaint they can make it against themselves very largely because if they do not want things like that to be done then they should exercise their rights at the poll and by their vote see that those who are going to do it will not get the opportunity.

I agree, therefore, that the Government can say they are entitled to do this on the basis that they presented it as part of their programme, and I have nothing further to say on that. All I do say is that a Minister for Finance who is doing his duty by the country and a Government that is doing its duty should see that this item is regarded as an item of current expenditure and should come out of taxation instead of being borrowed. If we are not able to pay it this year they should see that it is provided by revenue from the next year. That is the proper way of doing it. I have made it clear that if the Government want to pay this they are entitled to do it, but any suggestion that we as a Government broke an agreement is not true. We kept strictly to the agreement and these powers were put into it deliberately and accepted by the Civil Service. They were put in to safeguard the needs of a Government in cases such as that to which I have referred.

Now with regard to this question of arbitration in general, during most of my public life I have tried to suggest that conflicts of various kinds should be resolved by peaceful methods. Whether they are international or other conflicts that are involved, one of the methods is arbitration. I was in favour of that system. I believe that peaceful arrangement of disputes, whether they be industrial or other, by means of third party arbitration is in general a desirable procedure. Why did we not earlier apply it to the Civil Service? The reason has already been referred to here, that in one sense the Government is itself an arbitrator. It is not private moneys that it is dealing with. It is money it had to get by way of taxation. The only check there is on Government expenditure, on being the good fellow to everybody, giving higher benefits in every direction, is that they have to go and get that money out of other people's pockets. When that procedure of taking the money out of their pockets comes to take effect, those out of whose pockets the money is being taken will object and those who put their hands too freely into those pockets will not be allowed to continue in office. There is no other check.

If there is a period of five years' administration the temptation is that the Government in the earlier period of their office are likely to be much more extravagant than they are later because the hour of judgment is a little bit further off. However, if the Government does want to do its duty and be honest and fair between the different sections of the community it has to consider whether the means are sufficient to enable them to do the good things which they desire to do. If they allow some third person to come in and decide that matter for them, the third person has no idea very often of the difficulties there are in getting the money that is necessary to meet commitments of various kinds, and the effect of increased taxation upon the welfare of the community.

When I was in the opposite benches I have said that one of the most important things for the future benefit of the country was to try to put a stop to increases in taxation and to try to diminish the level of taxation if it could possibly be done. A third person who has not got the material at his disposal or if it is not his day-to-day business as it is the business of Ministers of Government, may not be alive to all these implications and it is very easy for him to take a one-sided view of the matter, to think only of the fact that a certain section such as the servants of the State should be paid more. He does not take into account at all the reactions that will occur from providing these increased amounts. I think £2,400,000 additional taxation every year was involved in that award apart altogether from the retrospective payments involved here. We accepted that and said: "All right. We have got to meet that claim for the civil servants and we will have to put on every year in the future a sum of £2,400,000 extra which will have to come from the people by way of taxation following that award."

The arbitrator may or may not— I am talking about Mr. X who is brought in to arbitrate on these matters—be fully alive to all the consequences of this and even if he is aware of them he may lean in one direction and there is nobody to call him to account. He is never going to be called to account. But the Government is going to be called to account. It is the Government that has to bear the responsibility of taking the judgment. Therefore it was a very serious matter for a Government to agree at all to the idea of arbitration. It was agreed to, however, as possibly being the lesser of two evils. Discontent in the Civil Service would be an evil that would be very serious from the public interest point of view. But there were clauses there to meet objections and one of these was that the award would be one which would relate to the future, which the Government could act on. The other was regarding the amount to be paid in a particular financial year and what we did was, that we looked at our accounts and said we feel we cannot pay this particular portion of it relating to this current year but we will take measures in the new Budget to provide the money that will be necessary for the coming year. That is the truth of the position.

As far as arbitration is concerned, I do not think if the present Government were going to enter into an arbitration agreement that they would leave out these claúses on which we operated. I do not think they would and if they did, I would say from this side of the House—as we said from the other—that they would be wrong, that they would not be doing their duty. The present Minister for Agriculture adverted to this situation apparently, according to Volume 103, an extract from which was read out here to-day of a speech of his, that they would be abrogating their functions, giving up their position as the body that was going to determine what was going to be the taxation—at least as far as the controlling majority would determine it. Well, then, arbitration has been accepted. I do not know what the present position is, whether the present Government is going to alter these terms. We acted within the terms, and we believe we acted in the best interests of the country. We would like to be as generous as we could, and, as far as the present Vote is concerned, I think the present Government is entitled to do what they propose to do because they can claim, whether rightly or wrongly, that it was part of their published policy and that they got a majority in this House.

Mr. McGilligan

The speech we have just listened to was marked by two things. The first was a return on the part of the Deputy to the old arrogance which he displayed in dealing with the civil servants during the war years but which one would have thought would have since gone. The second was a complete misconception of the financial aspects of the whole matter. The Deputy's main argument was an attempt to explain away his own failure to meet the award while indicating that he was not going to object to it now being met by us. He said that we accepted it and were within our rights in doing so. The Deputy could say that with regard to the shockingly immoral treatment of the civil servants during the war years. The Deputy knows that during the war years when the standstill Orders were being put on they were put in the later stages on the working classes in the main, but were put on earlier on the civil servants and kept on later and any little bit of slackness that there was to be paid out was paid out most grudgingly to the civil servants. Of course the Deputy acted within his rights in doing that. What was his right? His right was that with regard to the State personnel, everybody held his post or employment at the will and pleasure of the Government. If they did not like what the Government gave them they could leave. That is the right that he has boasted of until this year. Under that right the Government conducted themselves in a way that was characterised by many people responsible for the ethical education of this community as being grossly immoral. There was no case on the merits to have civil servants "stood still" earlier, and kept at a standstill longer than other people only this one—that the civil servants, members of the Army, the teachers and the civil servants as a whole were under the thumb of the Government and could be treated whatever way the Government liked. This is the claim that the Deputy takes pride in elevating.

The Deputy says this is within the Government's rights and that it was within their rights not to make this back payment. It was within the rights of what they forced on the civil servants. The civil servants were told: "Accept this agreement." They accepted because they could not get one better. There was no such reservation in the agreement I made with the civil servants with regard to arbitration. Let the Deputy remember its history. He was against any type of arbitration for State personnel up to 1948 when one of his Ministers for Finance offered the civil servants terms which were rejected by them because while they pretended to be arbitration they were not really arbitration at all. The Deputy was against arbitration and when we gave arbitration to the Civil Service, it was one of the proudest achievements——

Mr. Aiken

We gave it for one year.

Mr. McGilligan

We will argue about that at another time. The scheme was made for a year for a trial period and when that trial period ended, I myself minuted the file, to the effect that I could not see any reason why—some changes were required because certain flaws had been discovered—it would take more than a few weeks to amend. Of course, I was not allowed to amend it and the Deputies who succeeded me as Ministers took time to amend it and then said to the civil servants: "You have that, or you will have no arbitration." Does the ex-Minister for Finance, the present Deputy Aiken, think that civil servants believed that that was only for one year? Let him go and ask the Civil Service associations. They never knew where they stood with the people who are facing me here to-night.

May I resume? The Deputies opposite were against arbitration. Arbitration was a bone of contention during most of the years in which they were in Government. They refused it right along the line. Then we brought it in. Then limitations and reservations were brought in, and one of the reservations is the matter under which Deputy de Valera now claims he is acting within his rights: that was that if the arbitration award was brought in in the course of a financial year, there were certain limitations; the Government might accept it; the Government might reject it; the Government might accept it with modifications. Do not forget there was a special clause in it, and I am sure it is one in which Deputy de Valera would claim he acted within his rights. That reservation was that the Government guaranteed they would honour the award and pay the moneys unless there were exceptional circumstances.

What were the exceptional circumstances in the year in which this award was made, this award in relation to which we are now making this back payment? The exceptional circumstances were these. In the old days there was a certain sum of money carried forward from year to year because it was felt that at the start of any financial year revenue might not be running strongly and expenditure might be running very heavily and there was, therefore, the necessity to cover in the beginning of any financial year certain expenditure and there had to be for that purpose a certain carry-over. During my first period as a member of the Government in one year only, I think, that carry-over went to £300,000. It generally was roughly about £200,000. It was at £200,000 in the year 1932. In 1938-39 it never went above £200,000. When I went back into office I found that the carry-over was in the region of £2,000,000 and in the year in which the last Government refused to make this back payment the carry-over had swollen by about £200,000 and was somewhere in the region of £2,250,000, and the exceptional circumstances were not that the Government had not any money but that they had more money in the carry-over than they ever had in their whole previous existence.

Mr. de Valera

What about the deficit?

Mr. McGilligan

That is what I call the financial mistake into which the Deputy is falling. Surely the Deputy will agree with me that, as a canon of finance, the Minister does not in any ordinary years count in his annual revenue anything that is clearly in the nature of a windfall. Is it not equally the situation that he will not count against himself in his ordinary expenditure something that is of the windfall nature in relation to expenditure? Why does the Deputy want to mix up ordinary revenue with a back payment that has to be made once and for all and for which there was plenty of money at the time when the Deputies now in opposition refused to make this payment to the civil servants? I may say again that the reservation was that the Government was to pay and guaranteed they would pay unless there were exceptional circumstances to prevent such payment. I could imagine such an exceptional circumstance being that they had not got the money.

Mr. de Valera

That was the position.

Mr. McGilligan

It was not the position.

Mr. de Valera

Of course, it was.

Mr. McGilligan

Does the Deputy deny the accuracy of what I am saying?

Mr. de Valera

I say there was a deficit.

Mr. McGilligan

The Deputy is speaking in terms of ordinary revenue and ordinary expenditure.

Mr. de Valera

I am.

Mr. McGilligan

Does the Deputy agree this is a single payment?

Mr. de Valera

One cannot know that one will not have arbitrations at any time. How does the Deputy know one will not have arbitrations every year?

Mr. McGilligan

We will deal with that. We are dealing now with the failure to make a payment on a particular arbitration in a year when there was money in the carry-over, more money than was ever there.

Mr. de Valera

There was not money. There was a deficit of £2,000,000.

Mr. Morrissey

Deputy McGilligan should not be interrupted like this.

An Leas-Cheann Comhairle

Order!

Mr. McGilligan

The carry-over had actually increased. I cannot imagine any business firm announcing it had a deficit and then revealing that it had over £2,000,000 cash in the till.

Mr. de Valera

That is, it has to be there every year.

Mr. McGilligan

It has not to be there every year. I am right in my figures.

Mr. de Valera

I know the Deputy is right.

Mr. McGilligan

In the year 1938-39 that carry-over was in the region of £250,000.

Mr. de Valera

Because it was regarded as necessary.

Mr. McGilligan

And then it rose to £2,250,000.

Mr. de Valera

Because it was regarded as necessary, and had been necessary the previous year.

Mr. McGilligan

It was so necessary that the Deputy and his Party could not pay a single back payment to State personnel; but in that year they did take from that fund to the extent of £500,000 in order to buy guns for the Army.

Mr. de Valera

Yes, a very important thing to do.

Mr. McGilligan

As important as paying State personnel what in justice was due to them?

Mr. de Valera

The safety of the State was involved. It was a capital expense so far as I know.

Mr. McGilligan

And this was the year in which, I am reminded, the Deputies opposite gave back I think it was about £200,000, to the dance-hall proprietors.

Mr. Aiken

Ah!

Mr. McGilligan

That is a yearly tribute to the dance-hall proprietors. That was not a back payment. I was dealing with this question of ordinary revenue and ordinary expenditure. Am I not stating financial canons correctly when I say that, on the one hand, one should not include windfalls and, on the other hand, should not equate in any part of ordinary expenditure against ordinary revenue some exceptional payment, particularly if that payment has to be made once and for all?

Mr. de Valera

Where is the exception?

Mr. McGilligan

That is the case we are dealing with. The Deputy has said that his Minister was courageous, so courageous as to put £10,000,000 or £12,000,000 on to the people and found himself also having to find £2.4 millions for State personnel. Now we are not dealing with civil servants only in this. I am very glad we are dealing with all civil servants, including the higher grade civil servants. But we are also dealing with the Army, the Gardaí, the teachers and all those who staked their claim before an arbitration, the chairman of which was proposed by the Government and accepted by the Civil Service associations. The result of that award was a certain payment, this being the arrears of pay over certain months.

The Deputy talked about the courage of his Minister in putting on taxes and then says that in the end they had to pay, and the community had to pay, £2.4 millions over and above the previous year's sum; and they will have to pay that in perpetuity in respect of State personnel. So they will. That is one of the best criticisms that could be made of that courageous Budget. That Budget increased taxes; the taxes increased the cost of living; the cost of living index figure accordingly rose. The civil servants went before an arbitration board and there made their case on that increase in the cost of living, and that increase in the cost of living was brought about in the main by the increased taxes for which the Deputies opposite were responsible.

Mr. Aiken

Nothing about Australian wool.

Mr. McGilligan

Having given compensatory benefits to old age pensioners and so forth, the Deputy opposite had to pay nearly £2,500,000 to State personnel because of the fatuity of that Budget; and because of the terrific taxation in that Budget and because of the terrific increase in the cost of living civil servants appeared before this tribunal and got this award. If the Deputy is going back to the old days and claiming that he is within his rights, he can, of course, on that claim abolish arbitration. He made his claim against arbitration here to-night as far as State personnel is concerned. What was it? The Government is in a different position from anybody else. That is the exceptional matter in relation to State personnel and the Government. If State personnel get a right to arbitration and go before a tribunal, the Deputy is not questioning the bona fides of that arbitration. Civil servants may get an award but then the Deputy says that the exceptional thing is that the Government must put its hands into other people's pockets to get the money to pay that award. Suppose there is arbitration in relation to some group who are not State servants. Suppose employees outside ask for increased wages and suppose they go before the Labour Court or some arbitration board and get an award, is the Deputy so simple as to believe that the employers pay that award out of their own pockets? Is it not their customers who will pay in the end?

Mr. Davin

Of course it is.

Mr. McGilligan

What is the difference between the State and others in that respect? What is the difference between an ordinary body of traders and the State in that respect? The State, of course, has to find the money and that is one of the matters that an arbitration body takes into consideration. Another matter that such a body takes into consideration is the wages and salaries paid to civil servants of different types and State personnel of different types and people in comparable occupations outside. Having taken all that into consideration, they make their award and when people put their hand to an award or any system of arbitration and agree that they will have an arbitration board set up, they certainly are bound in the eyes of the public to meet that award. They did not think that it reserved to themselves the right not to pay if they could elevate for the public clarification and for the public education certain exceptional circumstances which might prevent payment. They could perhaps make a good case under that heading if such circumstances arose, but how could they try to make a case under that heading when the only exceptional circumstance was that they had more money in the carry-over than a Government ever had in the history of this State?

This money is due. It is the carrying out of an arbitration and I am very glad to be able, as I promised and as I backed my faith in that promise, to assist in seeing that this arbitration award is met in full. We want this House to honour that statement of ours. We want the House to back the honourable pledge we gave and not to take the dishonourable course of refusing to give effect to the award in full.

Donnchadh Ó Briain

Tar éis bheith agéisteacht leis an óráid a rinne an tArd-Aighne níl ach an t-aon rud amháin agamsa le rá. Ba mhaith liom a fháil amach ón Ard-Aighne nó ón Aire Airgeadais cad ba chúis leis an moill mhóir a tharla i dtaobh an airgead seo a íoc leis na Stát-Sheirbhíseacha i bhfad roimhe seo? Chomh fada is is cuimhin liom, dúirt an Teachta Mac Giollagáin, sa litir a scríobh sé i bpáipéar áirithe an lá roimh an toghchán ag geallúint do na Stát-Sheirbhísigh go n-íocfaí an t-airgead seo leo, dá n-éiríodh le Fine Gael a bheith páirteach sa Rialtas de thoradh an toghcháin, dúirt sé go raibh fuílleach airgid sa Stát-Chiste chuige.

Má bhí an flúirse mór sin airgid ann, do réir mar adúirt an Teachta sin, cén fáth nár comhlíonadh an gheallúinta thug sé seachtain nó mí tar éis don Rialtas nua a theacht i réim? Cad é an muga magadh i nganfhios a bhí ar siúl ó shoin idir na páirtithe sa Rialtas faoin scéal seo? Is rí-dheacair an mhoill mhór a deineadh maidir le comhlíonadh na geallúna seo a thuiscint agus tá súil agam go míneoidh an tAire Airgeadais an scéal, tharla nár mhínigh an tArd-Aighne é.

Mr. Sweetman

Having regard to the speech of Deputy de Valera, Leader of the Opposition, who agreed that the Government were entitled to make this payment, I do not think it is necessary for me to go into as much detail as I had intended. I want to make it perfectly clear that our view in respect to the non-payment of this arbitration award was that it was wrong not to pay in the circumstances rather than that we were charging the previous Government with any breach of the letter of the agreement. That was not the case and if anything I said on that point was misinterpreted by the Deputy, I desire to repeat that that was not my intention. My view was that the circumstances were such that it should have been paid at the time. We made it clear then that that was our view. For the purposes of the record, and in view of the challenge made by the Leader of the Opposition of the figures mentioned by Deputy McGilligan, I should like to say that for the year in question the revenue balance at the 31st March was £2.926 million and at the beginning it had been £221,000.

Mr. de Valera

That is the carry-over.

Mr. Sweetman

The balance, the carry-over.

Mr. Aiken

There was a deficit as well.

Mr. Sweetman

The carry-over I am talking about. They had an increased carry-over. There is not a shadow of doubt about it.

Mr. de Valera

Was there not a net deficit?

Mr. Sweetman

I know quite well that the Deputy's Government had in respect of that year a Supplementary Estimate. I should love to have an opportunity of going into it for the benefit of the Deputy but I am afraid the Chair would tell me that I was entirely out of order.

Mr. de Valera

I suggest that the Deputy stood up to say that he was going to make clear certain figures of expenditure. I am asking the simple question was there not a net deficit that year? The Minister said he stood up to put the figures in respect of the revenue balance on the records of the House. He has not done so.

Mr. Sweetman

The Deputy is not going to put words or figures into my mouth that I do not accept.

Mr. de Valera

May I ask this for the information of everybody? It is a question of truth. Was there not a net deficit on the current payments of that year?

Mr. Sweetman

I know the Minister in the Deputy's Government made certain calculations. One phase of the calculations he did not give to the House when he put these figures before us to-day was the fact that in May, 1953 there was £221,000 that had accumulated during this year and that he took over £1,000,000 out of the carry-over for another purpose.

Mr. de Valera

I shall give you all the credit you want but was there not a net deficit?

Mr. Sweetman

I know the Deputy's Minister stated there was.

Mr. de Valera

The finance accounts, the audited accounts by now will prove it.

Mr. Sweetman

I know that we could argue what should be above and below the line but it is a long argument. That reminds me of the statement made by Deputy Aiken. I shall be only five or six minutes over the time if the Deputy would allow me to go beyond six o'clock. Deputy Aiken came back with the allegation that was made by members of the Fianna Fáil Party very frequently at the time on the subject of spending sprees by the inter-Party Government. I want Deputy Aiken to assimilate these facts, that between the 1st April, 1948 and the 31st March, 1951, there was a period of three years, the only three completed years in which the inter-Party Government was in office. The period between the 1st April, 1951 and the 31st March, 1954 was the nearest comparable three years of the last administration. I admit that the Fianna Fáil Party were not in power during the brief period from the 1st April, to the 13th May or thereabouts. In the first period of three years, when the inter-Party Government were in office, the gross capital liability of the State increased by £76.3 million. In the last three years, in which the Fianna Fáil Party were in office, the gross capital liability increased by £81.6 millions.

Mr. Aiken

What about the carry-over?

Mr. de Valera

The sacred cow of sterling was being sacrified during that time.

Mr. Sweetman

Would the Leader of the Opposition in spite of his apparent good humour exercise a little patience? That is an increase in the gross liability in the second period of £5.3 million. If we take the assets, in the period 1948-1951 the increase in assets that were built up on every side was £68,000,000. If we take the second period, the period of the Fianna Fáil Government, the increase in assets was only £57.3 million-a decrease of £10.7 million in the assets built up in the equivalent period of three years. £5.3 millions increase in the gross liability built up during those three years.

Mr. de Valera

And you accused us during all that time of over-taxing.

Mr. Lemass

You used to accuse us of over-taxing during that period.

Mr. O'Donovan

You destroyed the economy, very nearly.

Mr. Sweetman

What you succeeded in doing was wasting money on harebrained schemes, as I said on many other occasions.

Mr. Aiken

That is what you used to say. You have forgotten.

Mr. Sweetman

Deputy Aiken, when he was speaking, also complained that the letter from Deputy McGilligan was only included in the city editions of, I think, the Sunday Independent—of the Sunday newspapers. I cannot remember whether he actually said the one paper.

Mr. Aiken

The Sunday Independent.

Mr. Sweetman

The city editions alone. Well now, if Deputy Aiken is correct in that, bearing in mind the fact, as I disclosed to this House somewhat earlier, that of this total sum £550,000 will be distributed to officers outside Dublin City, I am afraid that it appears then that it was a bad thing, it would be a bad argument, to select only city newspapers and it does not altogether bear the implication that Deputy Aiken was trying to make that this was purely a city issue.

The fact, as I said already, is that of this sum, £550,000 will be paid to employees outside the City of Dublin— postmen, postal officials of all sorts, privates in the Army, ordinary members of the Guards, people who are all down the country, and it is entirely fallacious for Deputy Aiken to try to make the case, as he was trying to do, that the money was to be disbursed in Dublin and, so to speak, that it was only a Dublin problem.

Deputy O'Malley asked me for further elucidation in respect of the last item, sub-head No. 5, in the Vote. That subhead is in respect of remuneration which may be payable by certain local authorities who employ vocational teachers and health authorities. It is not a payment to the employees as such. It is a payment that will be made to the local authorities concerned. I think the Deputy, when he was speaking, had the impression that the effect of this Vote meant a general increase or general payment to all local authority employees——

Mr. de Valera

I think if Deputy McGilligan's speech is read in reference to it——

Mr. Sweetman

And that the payment that was brought in here was intended as a general payment. That is not so. It was purely in respect of certain employees of health authorities and the vocational teachers, in respect of which there are certain statutory obligations under which the Exchequer reimburses the local authority concerned if those arrears are paid by them.

As I said a minute ago, Deputy Aiken tried to make this out to be a Dublin question. He went on and suggested that it was entirely a civil servant problem alone. It is not. I made that perfectly clear, that they are commitments to be met over a wide part of the country, more in the country than in fact in Dublin.

I believe that in the circumstances that there were at that time, circumstances which had arisen because of the deliberate policy of the then Government, the cost of living had increased in such a way and that the other surrounding circumstances were such that it would have been right and proper, not necessarily to decide immediately the arbitrator's report was received, but that it would have been right and proper in those circumstances that existed and that were seen to exist at a later date, that the award should have been then as from 1st November, 1952. It is because we felt that that was so that we made it perfectly clear in 1953 in the Budget debate and in the Civil Service arbitration award debate at that time. The Fine Gael Party, the Labour Party and other Parties who were on this side of the House made it perfectly clear that if we were co-operating again in any Government they would ask the people for a mandate to make these payments and, as Deputy de Valera has very fairly said, we did ask the people for a mandate to pay it, we received it and we are accordingly doing so.

Vote put and agreed to.

Vote reported and agreed to.