I was saying that probably the main point on which the discussion develops in regard to the present Bill is price control machinery. Again we have an opportunity of reviewing the operation of that machinery during the past 12 months. In the course of Deputy Childers' speech at the opening of this debate he expressed the view that there should be permanent character given to this legislation. I expressed that view last year and, despite the remarks made by the Minister for Industry and Commerce in regard to the difficulties of trying to provide permanent price control machinery in the present circumstances of fluctuating economic conditions, I am still an unrepentant believer that we should have by this a permanent prices policy and permanent price machinery. The machinery still requires to be improved.
One of the factors we seem to have lost sight of in considering price control machinery is that many members of the House seem to think of it only in relation to what we would regard as emergency or fluctuating conditions such as we have had for a number of years since the war, but I believe that, in the economic and fiscal conditions that we have created in this country in respect of a protectionist policy, even in normal times there is need for price control machinery. We seem to lose sight of the fact that the basis of our protection for industry, and such protection or such assistance as we give to agriculture, is not provided out of the air but out of the pockets of the consumers, and, whether it be in the form of a direct loan to an industry or a guarantee of a trade loan or a substantial grant or merely the imposition of a customs duty, ultimately the cost of that goes back to the general mass of consumers.
It is quite farcical for people to think of price control in terms of orthodox operation of the capitalist system and free competition. We have not got free competition in this country and I am not one of those who believe in it, but I am sometimes amazed, particularly at people of the type of Deputy Childers and Deputy Lemass, who, on the one hand, deprecate some of the more extreme views they say those of us on this bench hold, especially in regard to price control, and, on the other hand, suggest to us that the answer to the problem of price levels is the operation of the ordinary laws of competition when they know themselves that they claim the credit through their policy as a Government and the policy operated by their Party over the years of having introduced measures here which are designed to prevent free competition.
Competition is not confined to a city or a county or a country. When speaking of competition we must consider the general economic situation both in this country and outside it, and when we decide—as we can rightfully decide —in the interests of Irish industry or of developing our own economic resources or of providing employment that we are going to stop foreign competition, at that time, free competition is no longer possible and let us forget about free competition.
If we decide on that policy — with which I agree—and provide those facilities for Irish manufacturers, is there anything wrong in insisting that in the interests of the consumers, who are the people who pay the cost of that interference with free competition, there should be some control machinery to exercise supervision and control over prices paid for those protected commodities as sold to Irish consumers? That is the problem we are faced with in regard to price control and that problem remains with us whether we have emergency conditions or have the normal conditions such as prevailed prior to 1939.
But more than merely the question of price is involved because there are certain economic factors that can be taken as the testing point in regard to economic development. One must add the question of prices because prices represent the relationship between the manufacturer and distributor, on the one hand, and the consumer on the other. Prices are also a social factor. Equally the problem of wages is not merely a direct transaction between an employer and a worker, but involves the wage fund out of which the worker, when he leaves the factory and becomes a consumer, is going to pay the price for the actual product made by himself or by other workers. Unless there is a proper relationship between that wage fund and the volume of the commodities available there are going to be economic difficulties.
Because of these factors, the question of price control becomes not merely the problem of the mechanical operation of the Prices Advisory Body, but also involves the question of the formulation of a policy in respect of such items as price levels, profits margins, wage levels and the general extent of protection of the overall national economy that we are prepared to pay in order to bring up our industrial facilities. That is why I believe that time should have been spent on giving consideration to the ways and means of evolving a permanent price policy and of price control machinery suited to the carrying out of that policy. Here let me say Deputy Lemass raised the question as to whether everybody is satisfied with the progress of this Government.
I think if everybody were satisfied with any Government, no matter what the Parties were, there is something wrong because I cannot see how any Government can do everything so completely, efficiently and so rapidly as to satisfy everybody with critical views. I am critical of the present Government because I feel that, in respect of many basic problems, they are not able or they have not yet devised machinery to make it possible to give attention to urgent problems. One of those is the question of this price control machinery. Last year in this debate we considered the question of whether prices, which were then on a rising level, would go on rising, whether the powers available to the Government would be effective in keeping down that rise and if they failed what would happen. I said in that debate that if price levels were to rise, workers would look for increased incomes. That viewpoint was subsequently accepted by spokesmen of the Government, not in direct form but in the form of declaring that, if factors outside the control of the Government or of the country gave rise to an increase in price levels, there would be justification for workers to seek adjustments in their incomes.
That has been done to a very wide extent both by direct actions of organised workers and through the form of Government decision in regard to State and local authority employees. It has still to be carried a stage further in regard to the very large section of people who have no direct organised power of their own because they are the wards of Government offices. I am talking about the great mass of people dependent upon the goodwill of the community as expressed and conveyed through our social service system. That particular blank is one that has got to be filled in.
We now meet again after 12 months to review what has happened since and we are still to some extent facing the problem of rising price levels. It is still necessary to realise that if these rising price levels continue we will have continued difficulties in the country. It is too much to expect that, unless there is evolved a complete national policy to deal with the situation, you will get one section of the community, those dependent on salaries and wages, voluntarily to sacrifice their standards because action is not taken to adjust the burden to the ability of all sections to bear it.
That is a problem with which we are faced at the moment. There is no doubt that, if our prices continue to rise, there will be pressure for adjustment of wages and salaries and even though discussions have been opened between the organised workers and the employers, they are only in their initial stages and developments can take place that will create difficulties with which neither organised workers nor employers will be able to deal. It is here that probably the most marked difference occurs between the policy carried out by the present Government and that which would be followed if Fianna Fáil were in office. Were Fianna Fáil on these benches, we would be expecting that by the end of May Government decisions would have been taken that would have a drastic effect on the standard of living. We would expect that food subsidies would disappear, that inevitably — you can almost hear it coming from the Deputies opposite; there would be a rise in the bank rate and various other deflationary measures would be taken —there would be a repetition of the 1951-52 policy.
I trust that, whatever measures this Government may decide to take to deal with the present situation, one thing they will bear in mind will be that while it may be difficult to deal with the situation there are certain elements of inflation that could be worsened by the pursuit of wrong policies. That situation would change from inflation to deflation if Fianna Fáil were in office. It is relatively easy to curb an inflationary situation by proper policy but it is almost impossible, particularly within a short space of time, to change deflation back into a normal, progressive and expanding economy again.
For that reason, such measures as those adopted in 1952 would, in my opinion, be disastrous for this country. In regard to the question of price control machinery, I expressed the view last year — I am still of that view and it is now necessary to repeat it— that nobody expects that any system of price control can of itself prevent prices in all cases increasing or in all cases reducing. We have, however, a responsibility to the mass of consumers, who, by various direct or indirect means, provide very large subsidies for the establishment and maintenance of Irish manufacturing industries. Purely as a question of right we are entitled to be in a position to have the representations of that Irish manufacturing industry examined. If we go through the Revenue Commissioners' list of import duties it is surprising to see the great number of commodities that are subject to restriction. To each and every one of these commodities, even if they are not imported, the home market contributes in that form of subsidy.
That is the case of price control machinery, to assure the public that, when an application is made for a price increase, it will be widely examined, not merely in a neutral attitude but with a definite bias on the side of the consumer, in other words that the Prices Advisory Body will not sit in a calm, judicial atmosphere, in a neutral way, hear all the arguments and then hold a nice balance on the case made as between the consumer and the applicant for an increase in price.
In my opinion price control machinery should be openly and officially declared to be on the side of the consumer and the attitude to any application should be that we have got to be shown that the case is sound. There is need for that. It is only a matter of some months since the Government officially had to decide that they could not repeal a recommendation of the Prices Advisory Body, that the case for an application had not been supported by satisfactory costings. Trade unions are in the habit of making claims for wages before the Labour Court but, even when they have a completely documented and well supported case for an increase, they never have any assurance that their claim is going to be granted.
The idea that a group of manufacturers, producing an essential commodity, could believe that they could go before a public body, and make a case without presenting adequate information and expert costings indicates to my mind the opinion that these manufacturers have of the Prices Advisory Body. I cannot conceive a serious body of manufacturers going before the Prices Advisory Body, if they thought that body was going to be difficult to convince and was on the side of the consumer and if that body had the expert staff available to check and counter-check the case put before them, if they did not have complete and adequate information to present to the body. That seems to be the case according to the Government's own official statement.
It has happened repeatedly that claims have been made to the body and some of the most elementary facts in regard to the costings of the article have not been available to support that application for an increase. If the manufacturer of an essential commodity such as bread can go before a public body and submit an inadequate case in support of an application for an increase in price of that essential commodity one can quite easily imagine what would happen if the manufacturer was free to put on the increase on the price without reference to anybody. That is the problem that faces us in regard to this question of price control machinery and that is why I say that the body should not be neutral in its approach to the matter.
It should quite definitely be a body that requires to be convinced that there is a case for an increase in price in the present day conditions in this country.
Secondly, I think it highly desirable that while there is quite a number of expert gentlemen on that body, it still requires expert staff, cost accountants in particular, who will have the responsibility of gathering together all the available information in regard to a particular application. We want to bear in mind that, in this country, a great deal of information is not available. Our company law is backward and, when applications are made by private companies, no access is possible to their accounts. Now is the time to rectify this particular defect. In 1948, Deputy McGilligan, who was then Minister for Finance, indicated his intention of rectifying that situation in regard to company accounts. That rectification is now long overdue, particularly in the light of the need for more detailed knowledge.
That expert staff to which I have referred should be available not merely for the private information of the body, but also for that of other parties interested. We should bear in mind that, when manufacturers approach the Prices Advisory Body, they have got at their service information of all their own manufacturing processes. They have their expert accountants and cost accountants and have every opportunity of making up their case in a most convincing way to the body. Against them at the most are a number of voluntary representatives of the consumers who have no expert staff at their service and who have got no access to confidential information. They are required to stand up in public and represent the consumers.
I submit that such information as could be gathered together by an expert staff attached to the body should be made available in public, to all parties, then all parties would be enabled to make their case on the basis of the information available to them and then allow the Prices Advisory Body to make the final recommendation. In that way we will have equality between the two interested parties and the body can deal with the application bearing in mind its bias towards the interest of the consumer before making its final decision.
It is important that when we deal with a situation where prices cannot be kept down and where increases may have to be granted the consuming public should be as widely informed as possible of the reasons why particular increases have been granted. Again I stress that the Press reports of the proceedings are not always fair to members of the body and to the parties appearing before the body. Consumers are often left in the dark as to the big factors influencing the Prices Advisory Body or the responsible Minister in finally agreeing to increase a particular price.
I consider that in the interests of establishing and mainaining confidence, even to a limited degree, on the part of the consuming public in this prices control machinery, it would be desirable, even though it might mean buying space in the newspapers, to publish a short summary of the main points in the particular application and the main reasons on which the recommendations of the body were formulated, either for or against the increase in price. Prices control machinery has two functions. It has a disciplinary function in relation to manufacturers and distributors and those who may be seeking to increase prices; it should also have an educational function in relation to consumers generally because, quite clearly, in our particular type of economy and despite the particular type of industrial policy we are operating, it is necessary to try to educate the public, consumers and workers, in regard to many of the factors constituting our economy.
Even if we are only going to pursue our present policy of industrial protection, it is important that we should carry with us the general mass of the consuming public by convincing them that such a policy is in their best interests, even though it may require from them a sacrifice in the form of a relatively high price level in respect of certain commodities, a higher level than might otherwise obtain if there was free competition on an international market. The balance of employment has to be set against slightly higher prices, security for our own people at home and the building up and strengthening of our overall economy. These are factors which must be taken into consideration, factors which come under the general heading of prices.
Deputy Childers referred to one aspect, namely, the question of the need to increase production and increase productivity. He also made certain references in relation to the problem of the wage factor in prices. Now I think it is very important that we should have some balanced view not only in regard to prices but also in regard to wages. I have recently been in conference and have heard the statement made by responsible employers that an increase in wages must be reflected in prices. I am not one of those who take the view that, no matter what wage increases we get, they will not affect prices; but there has to be a little closer analysis than that, and that is why these sweeping statements are so dangerous. On the one hand, we probably on our side say we can get an increase in wages and there need be no increase in prices as a result of that; the employers say that, if we get an increase in wages, the whole of that increase must be reflected in prices. That is one of the difficulties in which we find ourselves at the moment.
I would like to point out that the effect of, say, a 10 per cent. increase in wages in so far as prices are concerned varies very considerably from industry to industry. Taking industry as a whole in 1952, if there had been a 10 per cent. increase in the total wage in that year the final effect on the value of the gross output of that industry would be a little over 1 per cent. Yet, when we talk to many employers, a 10 per cent. increase in wages means a 10 per cent. increase in prices. If one examines that 10 per cent. increase in, say, the biscuit trade, one finds that it reflects a 2 per cent. increase in the gross value of the output. If one takes mines and quarries, the final figure becomes 5 per cent. Quite clearly, we cannot accept the position then that, when there is, as there has been in the past 12 months, a justifiable adjustment in wages and salaries to meet a higher price level automatically employers, manufacturers and distributors are entitled, without question, to apply the same amount of percentage increase on their prices as they have given in wages.
I had the experience of sitting on a statutory body with employers where agreement was reached to increase wages. One of our requirements was that they should set down what would be the result and the effect of that increase on prices. In a period of about 18 months we had three increases in wages. On the first occasion when we came to the point of answering that question the employers said: "It is not worth bothering about; it is very small." On the second occasion they were a little bit more careful and they said: "We cannot exactly say what it will be; we should say it will have some effect." Those of us who were concerned to be clear on the position replied: "If we cannot prove what the effect is, it is better to say nothing." That passed. On the third occasion, and by that time there had been fairly considerable increases in wages, we got a statement from the employers' representatives to the effect that we should say, in reply to the question, that "the increase in wages will have a very considerable effect on prices, and they must be increased." We said: "No; we cannot agree to put that answer down until you bring your accounts in and prove it." We fought that issue for a whole afternoon and finally, although the employers had insisted they could not in any circumstances carry the increased cost of the wage increase without an increase in prices, rather than prove the point they let the question go; they agreed that it would have no effect on prices.
Now when those of us who are active in the trade union movement have this particular doubting attitude to the formulation of prices and costings, as expressed by typical employers, we have got very good reason for it for we have had experience of dealing with this problem across the table with the employers and we know from practical experience that the direct effect of any increase in wages varies from industry to industry and is, in certain cases, inappreciable and incapable of measurement; in others it may be appreciable and have to be taken into account. But we object to the theory that because wages have been increased prices must be increased also. That is not true and that is the reason why all these applications have to be examined carefully and minutely by such a body as the Prices Advisory Body, which does not grant an increase merely because it is applied for but solely on the basis that the case is proven, and proven against the weight of their quite natural bias in favour of protecting the consumer.
On the question of production, I want to make one or two general remarks. We have been told that the main way out of our present difficulty is by increasing production. Nobody on the trade union side disputes that. We are in agreement with increasing production and increasing productivity in the interests of the nation. But we want to ask two questions: What contribution are the employers making? If we increase production and productivity to where do the benefits flow? Will the workers get any share?
Last year a special body was set up to try to deal with this problem of increasing productivity. It was set up officially under the aegis of the Government. To it were invited representatives of a large number of organisations. It may not be known generally that, although that body has had a number of meetings, the only section that so far has apparently decided that they will not co-operate is the section representative of the employers. The workers' representatives are there. Where the employers' representatives are at the moment nobody knows.
It is all very well to have the employers patting themselves on the back, saying they are the only body concerned with the economy of the nation. The real test is that in the world to-day more and more it is becoming accepted that the workers have not only a contribution to make but have a right to make that contribution, and a right also to be heard in relation to the problem of production. In this country, up to the present, the main spokesmen of the employers have not yet advanced to that view and we are still being told that the place for the worker is outside the door of the boardroom and, when a decision is taken by the directors, he will be told what he must do. We will never get increased production on that basis. Even where we have secured co-operation between the two sides we are still entitled to ask to where will the fruits of such increased production flow?
Are the workers to get any share or is it it all going to be taken by the employers, or if it is not, in what form, whether direct or indirect, will it benefit those for whom the workers have a concern, that is, the mass of the people of the country? We still have not got answers to those questions. We are told the workers are too pressing in their claims for an improved standard of living.
Recently, a paper was read by a gentleman, not as a spokesman for employers, but largely from the point of view of the employer. He made the statement that on calculations he made, the real wages of workers had gone up about 10 per cent. since 1939. We are prepared to accept that figure. That is not a very great advance for the working class to have gained after 17 years, including the emergency, because in that period the national income has gone up nearly three times. The profits of private and public companies have increased over three times. I grant that the real wages have increased also nearly three times in terms of money. But the interesting fact is that in industry, where the main bulk of wage workers are employed, up to 1952 production had increased by 75 per cent. and the output per head had gone up by 21 per cent. In other words every worker employed in industry to-day or in 1952 was contributing 21 per cent. more than he did in 1939. Nevertheless, his return is only 10 per cent. more than what he got in 1939. Nobody can cavil when the workers feel that somewhere along the line something has been taken from their reasonable share in this increased wealth they have made. That is why, when we are dealing with this problem of production and productivity, it is not sufficient to exhort workers; there has got to be a practical balance made, a practical prospect of the future taken and there has got to be some indication of the social objectivity for which we are seeking to increase production.
My criticism, to some extent, of the present system revolves around the statement made by Deputy Childers. He said one of the weaknesses of the present Government was that they would not make up their mind whether this country was going to be a completely socialist economy or a completely private enterprise economy. Of course, Deputy Childers, by putting that question, is just showing, to put it very brutally, how stupid he is because Deputy Childers for quite a long time has been fairly closely associated with the manufacturing and employing class in this country — I am not saying that in any derogatory way — and he does know that the idea of a completely private enterprise economy has gone for the last 30 or 40 years in this and every other country, that the industrial policy of protection for Irish industries and for Irish agriculture that Fianna Fáil claims to have devised and practised, is a negation of private enterprise and open competition, and that if Irish industry was to be asked tomorrow morning to depend completely on private enterprise and on open competition, probably there would be a collapse in 24 hours and the first to complain would be the Irish manufacturers.
There is mixed economy here as there is a mixed economy in the home of enterprise, in the United States of America. We are living in changing times and the old-style capitalism is changing. Even business people and employers realise that they have to depend on the State and on the community and, if you like, on social concepts of economy to help them in carrying through their responsibilities in the domain of private industry. For a Deputy, with the knowledge which Deputy Childers has, to put a question like that is foolish and misleading. My criticism is that the Government, having a national responsibility in regard to the development of the economy of this country, is not exercising its national leadership sufficiently. I personally believe that, whether it is this Government or Fianna Fáil, within the Cabinet, there should be one, or possibly two, Ministers who have no other responsibility whatever, no administrative or departmental responsibility but to deal with the problem of examining the broad features of our economy, in co-operation naturally with the other Ministers in the Cabinet as a whole, and to try to lay down and secure agreement on the line of our economic development both in regard to industry and agriculture and our general national economy. I believe it is a physical impossibility for a Minister in charge of such major Departments as Agriculture, Finance, Industry and Commerce, to be at the same time in a position where he can sit down and immediately think and ponder on major economic problems, try to relate the various factors that have to be dealt with and evolve a policy that can be pursued over a period of years. Until that is done we will meet all the difficulties that we are facing at the present time.
I want to close on one note that seems to me to indicate the need of that. I have on a number of occasions here said that probably all I know about agriculture will never do me or any farmer any harm, but I have at least sufficient simple understanding to be able to see a stone wall when I walk up against it. In the course of the last few days' debate in regard to the balance of payments, there has been continuous emphasis on one aspect of the problem and that is our inability to expand our exports. We have had a small expansion in regard to industrial exports. We have had the difficulty of the fall back in our agricultural exports and that is quite clearly the basic problem.
Nobody in this House would be the slightest bit concerned even if we spent a considerably larger sum of money on importing consumer goods if we were well able to balance them by our exports. The problem is that the balance is not there and, equally clearly, the balance, if it is to be secured, must come from agriculture. Yesterday in the newspapers there was a report of a discussion among a number of experts as to what they would do to deal with the present agricultural problem. I think the title was: "How I would plan for increased agricultural production". I am merely going to quote one sentence, and again I am not doing it in any critical fashion, but because it is helpful to me in making the point I have in mind.
Senator Cogan who was a member of this House for many years and is now in the Seanad, in the course of that symposium, is reported as making the following statement. He said that:—
"With regard to the real cause of our relatively low agricultural output, in his opinion it lies in the simple fact that the keen, hardheaded farmer here finds from experience that it pays just as well to farm for a low output as to farm for a higher output."
Whether that is true or not I do not pretend to know, but I do realise that if that is the case we have a very difficult problem to face and to overcome. It seems to me that there is a great deal of truth in it, in view of the fact that year after year the State has been pouring into agriculture very large sums of money to which I personally have no objection, and I think the majority of people do not object to that aid being given to agriculture.
I recall in 1949 Deputy McGilligan, then Minister for Finance, giving an estimate that in his opinion, in that year or the year before, the direct financial contribution being made to the farming community to assist them in reducing the cost of production was of the order of not less than £10,000,000. No doubt since that year, with the land reclamation project and the additional assistance being given by successive Governments, that figure has become much greater. With all due deference to the Minister for Agriculture, who is in the House, it seems to me that we have got into the position where the more money we put into agriculture the less production we get and, therefore, the less exports. Until we find the solution to that problem our whole difficulty in regard to price levels, in regard to production, in regard to improving our industrial economy and the whole standard of life of our people is at stake.
I will close on the plea that I made a moment ago that my criticism, such as it is, of this Government — and I would make it of the Fianna Fáil Government if they were in power to-day, because there would probably be no change in regard to the structure of the Cabinet—is that there is a requirement for making an analysis, for the working out of plans in advance as any careful businessman or any artisan who decides to make an article of furniture, would do. He would sit down and having determined what he was going to make, he would take the measurements, draw his blue-print and work according to that. That is just as necessary in regard to the economic life of a nation and a people as it is in regard to individual business. I do not believe we are doing it. I do not believe, as I say, the responsible Ministers in the Cabinet have got the physical possibility of doing it and I do not believe that the Cabinet collectively are doing it.
Personally, I feel, while we have a Cabinet, whether it be inter-Party Government or Fianna Fáil, composed of men of ability, men of understanding of public affairs, that because of the Cabinet structure, with its emphasis on the administrative and departmental responsibility, we are denying to that national leadership the possibility of calm and careful consideration of the economic problems that arise and the possibility of an overall review and an overall plan in the light of what is required. Granted, Ministers must have departmental responsibility. Departments have to carry on their work. But it should be possible to relieve one or two of the leading members of a Government or a Cabinet of this quite clearly routine and soul-killing departmental administrative work which makes it impossible for them to do any creative thinking, any forecasting or any considering of the basic problems. Let them have expert staff and set them to work on this problem and let us try to produce something in the way of a forecast and a plan of what we are trying to do.
As it is, it seems to me we are going around in circles and, clearly, if there is any substance in Senator Cogan's remarks the other day with regard to the attitude of Irish farmers, then we have a very serious problem on our hands. I am not blaming the farmers. If a farmer believes that by increasing production he will decrease prices and his ultimate position will be no better than previously he has got the same right as the businessman to keep back production in order to keep up prices. That is part of the economy we live in. I am not blaming the farmer.
I am not blaming the Irish farmer for what I feel is part of the explanation of our difficulty that, to the Irish farmer, land is more a question of security, personal and family security, than a means of production. That is all part of our historical background. But, if we are facing the kind of problem we have to-day in regard to our external trade, our balance of payments, if we are thinking in terms of trying to produce a greater measure of national wealth both in industry and agriculture, quite clearly, if that attitude of mind exists among the Irish farmers, we will not cure it by pouring more and more money into farms. We have to try to get a change of mind and understanding that the land of Ireland, while it has been won for the farmers by the joint efforts of the farming community and the Irish people as a whole, is a question of trust, that they have an obligation to use that land, not only in their own interest, but in the best interest of the Irish people and that, if they do it, they will get a fair and proper return.
Equally, they are not entitled, if such be the case, and it does appear to be at the moment, to contribute to an economic problem which is becoming increasingly serious and which finally can only be mended by a very great improvement in agricultural production, which can make its contribution to national wealth and in relation to which we can secure a better balance in our payments and provide a wider economic basis for the development of Irish industries on the basis of raw materials produced in Irish fields.
