Committee on Finance. - Vote 16: Miscellaneous Expenses. – Dáil Éireann (19th Dáil) – Tuesday, 8 Jul 1969

Minister for Finance (Mr. Haughey)

I move:

That a sum not exceeding £2,200,500 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1970, for certain Miscellaneous Expenses, including certain grants-in-aid.

The bulk of the main Estimate is made up of the costs of the special import deposit scheme. The Supplementary Estimate is for a sum of £1,500, of which £1,000 is required to pay a balance due to the Olympic Council for the cost of participating in the equestrian events in the Olympic Games. We made two grants to the Olympic Council last year, one for the ordinary track and field events, and the other for participating in the equestrian events. This is a balance due to the Council for the equestrian end. In addition, an amount of £500 is being provided to meet the cost of the increased bounty payable to mothers in respect of multiple births.

Mr. Corish

This covers triplets and centenarians? It is £200?

Mr. Haughey

It was £200 and we have increased it to £700. In the Supplementary Estimate it is £500 to bring it up to £700.

Mr. Corish

Can the Minister tell me under subhead D if it is proposed to increase the contribution to the Society for the Prevention of Cruelty to Children? It seems to be a pretty small amount in view of the work they do.

Mr. Haughey

It is on a £ for £ basis.

Mr. Corish

The Minister appreciates that some of the local authorities do not contribute very generously. Some of them are pretty mean, indeed, while others are as generous as they can. I think there was a recent application from the society for an increase from the Exchequer and would the Minister consider this?

Mr. Haughey

I do not think we had any recent application for an increase, but certainly if we had any such application I would consider it most favourably. The situation is that the State makes a grant to this body on a £ for £ basis. The grant began at a maximum of £5,000 and we have increased it to £12,000, so it is going up all the time.

Mr. Corish

Could the Minister say when was the most recent increase?

Mr. Haughey

I am afraid I have not got that.

Mr. Corish

A couple of years ago?

Mr. Haughey

In 1968-69 it was doubled.

Mr. Corish

The Minister still says he will consider a further application in view of their difficulties?

Mr. Haughey

If we can spend £11,500 on the Secret Service, I suppose we can spend a few extra shillings on the prevention of cruelty to children.

Dr. FitzGerald

Can the Minister say whether this £3,000 for the Commemoration of the Easter Rising is an annual recurrent expenditure or the remains of expenditure in 1966?

Mr. Haughey

It is something of a hang-over. It is for printing a book of essays on the 1916 Rising.

Dr. FitzGerald

It is a continuing expenditure not related to the 1966 celebration?

Mr. Haughey

It is for the printing cost of a book of essays. It remained outstanding at the beginning of this financial year.

Dr. FitzGerald

I see.

Mr. Haughey

We repeated the same amount as last year to cover it.

Dr. FitzGerald

On subhead G, is there any prospect of recovering any of this £2 million which we gave as a free present to penurious Britain? Are there any discussions pending with Britain on this matter or is the Minister seeking to recover this sum?

Mr. Corish

It is quite an amount, is it not?

Mr. Haughey

No.

Mr. Corish

It was, in fact, a breach of the agreement by the British Government, is that not so?

Mr. Haughey

Legally, I think not.

Mr. Corish

The Taoiseach had another description for it.

Mr. Haughey

They could, perhaps, do it legally.

Dr. FitzGerald

The Minister signed an agreement with this loophole in it?

Mr. Haughey

No.

Mr. O'Higgins

The Minister is saying they did not break the agreement?

Mr. Haughey

That is their view.

Mr. O'Higgins

Is it the Minister's view?

Mr. Haughey

We have to be realistic about this.

Mr. O'Higgins

I am being realistic. Did they break the agreement or did they not?

Mr. Haughey

The British Government were in very real difficulties. They had to take certain action. The particular action they took was much less injurious to us than other action they could have taken.

Mr. O'Higgins

The Minister means it was a small breach instead of a big breach.

Mr. Haughey

The Deputy can put his own words on it.

Mr. Corish

These two countries concluded this agreement with a view to having free trade between the two countries and, in the process, we lose £2 million per year.

Mr. Haughey

It is not as simple as that.

Mr. Corish

It is £2 million.

Mr. Haughey

Any agreement of this nature must have regard to the special circumstances arising in the case of either of the contracting parties. We all know the British have had enormous balance of payments difficulties. They have gone to great lengths to put their balance of payments situation right and to protect sterling. We have a vital interest in this matter too. When they take some action of this sort, we have to look on what they are doing with sympathy, which we did in this case. We brought in this particular scheme with a view to alleviating the effects of the special import deposit scheme on our exports, very successfully, indeed, as it happened, and the outcome of the whole affair from our point of view was not unsatisfactory.

Dr. FitzGerald

This is a red herring. The position is that the agreement as concluded either precluded them from doing this or did not. If it precluded them from taking this action, then they are acting illegally and we are paying £2 million for their breach of the agreement. If it entitled them to take this action, the agreement was seriously defective as, judging from the tone of the debate at the time, the Government felt that no such action could be taken. So, we should like to know whether it is the Minister's view that this is or is not a breach of the agreement.

Mr. Haughey

Technically it may have been a breach of the agreement but it is something that was done with our sympathy and understanding, and the outcome of which was not at all unsatisfactory from our point of view.

Dr. FitzGerald

The Irish taxpayers pay £2 million for the benefit of Great Britain which is a somewhat wealthier country than we are and the Minister's complacency in the matter is extremely disturbing.

Mr. Haughey

We also subsidise very considerably a large number of agricultural exports to the British market.

Mr. O'Higgins

Surely this is the ultimate in absurdity. The Minister says——

Mr. Haughey

The Deputy is welcome. I am glad he has arrived.

Mr. O'Higgins

I hope the Minister will continue to be glad I did.

Mr. J. Lenehan

The Canadian Bay——

Mr. O'Higgins

We usually keep our lunatics at home——

Dr. FitzGerald

We did in the Seanad.

Mr. O'Higgins

——or put up a little sign, "Not Welcome." This is the ultimate in absurdity. The Minister says the British may be technically in breach of the free trade agreement. For the benefit of new Deputies in the House, it is worth recalling that in the British Parliament the question of the breach by the British Government of the free trade agreement was raised. It is a long time since we had the experience of seeing the Tory Opposition proceeding to accuse the British Labour Government of having broken their agreement with this country while at the same time the Conservative Government of Ireland were saying: "Oh, there is no breach of the agreement."

There was a breach of the agreement, and the Minister knows there was. The regrettable fact is that we had not a Government strong enough in their own views to stand up to the British. We raised this matter in this House before. The plain fact is that the result is now known. The taxpayer will be asked to pay for this breach. The Minister says it worked out well but I do not know whether it did.

Mr. Haughey

Look at the figures.

Mr. FitzGerald

£2 million.

Mr. O'Higgins

A sum of £2 million has to be found by the people of this country.

Mr. Haughey

That is not a real figure.

Mr. O'Higgins

That is of no importance?

Mr. Haughey

I did not say that.

Mr. O'Higgins

The Minister should speak up.

Mr. Haughey

The Deputy has come from the courts but he is not going to cross-examine me.

Mr. O'Higgins

Maybe that will arise some day.

Mr. J. Lenehan

The Deputy got his answer from the people the last time.

Mr. O'Higgins

In the interests of civil debate I wonder would the Minister do something about the Deputy.

Mr. J. Lenehan

He will do nothing about me and less about you.

Dr. FitzGerald

He indicated his view of the Deputy in his absence.

Mr. O'Higgins

I have great sympathy for the Minister but I feel that this cannot be passed over. A technical breach by the British but a breach nevertheless. To what extent do we continue to tolerate a breach of an agreement in respect of which many people have doubts? This was one agreement about which there was supposed to be no doubt that the British were not entitled because of balance of payments difficulties or anything else to do precisely what they did. The Minister says it has worked out all right. I do not know whether it has. Certainly it will cost the taxpayer this sum of money. If, in six months time, the British Government decide to do something else, merely because they conceive it to be in the interests of sterling, are we to tolerate that? There must be an end. The agreement has got to be observed, and the Government have been unduly weak in this regard.

Mr. Haughey

It is all very well for Deputy O'Higgins to talk big and say what we should and should not do, but we have to deal with the realities of the situation. The recent discussions we have had with the British Government on various aspects of the free trade agreement have worked out very satisfactorily from our point of view. This item should not be looked at alone. It must be looked at in the context of the whole result of the agreement and of the discussions which we have had with the British Government on this and other matters. I want the House to advert closely to what I am saying.

Mr. O'Higgins

What are the other matters?

Mr. Haughey

Various other matters. If the Deputy will cast his mind back to the earlier part of this year, we had far-reaching discussions with the British Government on a number of aspects of the relations between the two countries which have worked out quite satisfactorily from our point of view. I must say we have been met with great understanding by British Ministers when we have discussed these matters with them. We have to be realistic about this. The British Government have enormous difficulties to contend with and they are taking, to my mind, very courageous action to try to protect their balance of payments situation and restore the strength of sterling. We must have regard to all this and look at the agreement and the workings of the agreement in the light of all these circumstances.

I am quite satisfied that if we were to get into serious difficulties this year or next year we would meet with full understanding and co-operation from the British Government with regard to the agreement. This is my belief and, in fact, when Irish industries have got into difficulties the reaction of the British Government demonstrated that they are prepared to look at the agreement in the round. I think both sides to this agreement want it to work to their mutual benefit and if it does not do so, then neither party will be satisfied. As far as this matter or any other matter is concerned I think we can be satisfied that the agreement is working overall to our advantage, and the outcome of this particular matter was very much to our advantage.

Mr. Corish

The Minister says he appreciates the difficulties of the British Government in their balance of payments problem and more or less suggests that they had to introduce the import deposit scheme which is costing us £2 million a year. Might I remind the Minister that on the 18th March last he grimly forecast a big deficit in our balance of payments? At that time he did not say, for example, we should postpone the reduction of our tariffs on 1st July. His only suggestion was that wage and salary earners should look for a little less.

Dr. FitzGerald

The Minister's defence of Britain was very moving. It is a pity the British Ambassador has left and did not hear him. It is not the Minister's job to defend the actions of the British Government. It is his job to defend the actions of the Irish Government to the Irish people. The words "realism" and "realistic" kept recurring in his remarks. The only interpretation one can put on the word "realistic" is that when we sign an agreement with Britain, because they are bigger than we are, they can break it and we must be realistic in accepting that, but we are not in a position to do likewise. The Minister spoke of the benefits we have been getting. What benefits have been got outside the terms of the agreement from which Britain agreed to depart for our benefit?

Mr. Haughey

Tyres, cheese, butter.

Dr. FitzGerald

In the case of cheese and butter the position is entirely different. The British breached the agreement on cheese. We were given free access for various commodities, for instance, potatoes and sugar. This list included cheese. Although there was a guarantee in regard to cheese as soon as the British made a fuss we had to give ground. The only case mentioned where there has been any concession is in the case of tyres, but that concession was not outside the terms of the agreement but within it.

The agreement made provision for cases where an Irish industry got into difficulties and where protection could be reimposed for a period in relation to the industry. That is the action we took. However, I do not think the Minister can reasonably equate that concession within the agreement with the British decision in respect of the clause to protect their balance of payments, the clause that was written in to enable them to take certain action to protect their balance of payments. The British decision to depart from that breached the agreement and we had to pay the cost. We are not the richer of the two parties but by far the poorer. There is no case whatsoever for this procedure, and the Minister is merely drawing a red herring across the trail in order to distract attention from it. The case of the tyres, which is within the agreement, is not an adequate justification for the fact that Britain has breached the agreement on three occasions and there has been no compensation of any kind.

Mr. Briscoe

Is it not a fact that through the quick action of the Government in asking for this concession this country was saved from considerable disruption of exports? If the British economy collapsed this country would be far worse off; in fact, I think we got the best deal of any country. We were the first country to think of this idea of paying the interest on the deposits necessary to enable our goods to go into the British market. This was the only country the British allowed to operate this system; other countries applied for it and were refused.

Mr. M. O'Leary

This is no small matter. It is really putting logic on its head to suggest the agreement permitted us to pay for the mistakes of the British and that we should actually thank the British for permitting us to pay for their mistakes.

Mr. Briscoe

We would have been a lot worse off.

Mr. M. O'Leary

I do not understand that kind of logic.

Mr. Haughey

They were the Deputy's friends. He sent them a telegram of congratulation when they were elected.

Mr. M. O'Leary

That is another red herring. If the Minister wants to go back in time let me remind him that we in this Party had a certain viewpoint on the Anglo-Irish Free Trade Area Agreement and expressed that viewpoint here in 1966. The defence of the agreement so far is that the balance of trade has been in our favour and will be in our favour up to 1970, but that after that period the advantage will apparently go to Britain in their exports to this country. In fact, what has been happening in the period in which we should supposedly benefit most from the operation of the agreement is that the British themselves have unilaterally breached the agreement on several occasions and I should like to ask the Minister whether, in fact, in any of the discussions held with the British over the past year the possibility of our being compensated for their breaches of the agreement, breaches for which we have had to pay, was raised or whether the money paid to us earlier this year, amidst a great fanfare of trumpets, was in lieu of any settlement of the moneys we would look for because of their breaches of the agreement. If the Minister thinks £2 million a small sum, how explain the fanfare that accompanied the payment back to us of a quarter of a million?

Mr. Haughey

Two million.

Mr. M. O'Leary

Was this in lieu or was it considered as compensation?

Mr. Haughey

No. The two matters are totally unrelated. The amounts just happen to be the same.

Mr. M. O'Leary

At no stage, therefore, in our discussions with the British have we approached the idea of any repayment from British sources of the moneys we have been forced to pay because of their breaches of the agreement. It is not a sufficient defence to say, because of the different effects felt in other parts of our trade, this can be compared to——

Mr. Haughey

There are two ways of looking at it.

Dr. FitzGerald

Indeed, there are.

Mr. Haughey

What the British did on this occasion applied to practically every country in the world and cut across numerous agreements which they had with other countries. Indeed, I do not know if this action of their did not cut across GATT. It may have. They had no alternative and their trading partners understood that and accepted the situation. In order to avert a serious economic collapse the British had to take this action and, from our point of view, it was the least injurious action they could take. As Deputy Briscoe pointed out, we moved very vigorously immediately to introduce this particular scheme in order to counteract the worst effects of the special import deposit scheme on our exports. That scheme worked very satisfactorily. Remembering what other countries have had to put up with in the British market, the outcome from our point of view was not unsatisfactory.

Deputy FitzGerald rose.

An Leas-Cheann Comhairle

The Chair must draw attention to the fact that this is not a Committee Stage and Estimates may not be dealt with in the same way as amendments on Committee Stage of a Bill. The usual procedure on Estimates is for a Deputy to speak once and, when all Deputies have made their contributions, the Minister is called upon to reply. The Chair has allowed interventions, but the point has now come when interventions will no longer be in order.

Mr. J. Lenehan

I have not spoken at all while other Deputies have spoken several times. I should like to point out that the cause of all this trouble was due entirely to the fact that there was a Labour Government in Britain. Had there not been a Labour Government in Britain it is perfectly obvious this problem would never have arisen at all and we would not be here this evening debating this matter. God knows, the Irish people had some bit of commonsense; they took the necessary steps to ensure there would not be a Labour Government in this country. I think that was the first bit of commonsense I have seen.

Dr. FitzGerald

From the Irish people.

Mr. Lenehan

Had there not been a Labour Government in Britain this would never have arisen. The Labour Party come along here this evening and blackguard the Minister for Finance just because their pals, to whom they sent telegrams of congratulation, made "mickies" out of themselves and ruined the British economy, putting us in a position in which we had to uphold our own manufacturers and workers, particularly our workers, because, if we had not paid what was paid, our industries would have had to close down probably and the workers, the people who pay their subscriptions, or who have their subscriptions confiscated for the benefit of the Labour Party, would be out of work. Of course, had that happened, there would be no subscriptions and they would not have been able to fight the election. It is a public disgrace that these people should come in here and start blackguarding the Minister when the truth is that it is the Labour Government's policy in Britain which has been responsible for our having to take the action we did and we could expect nothing better from that crew over there if they got in here.

Mr. O'Higgins

I understand the Chair to say that, since there is no amendment——

An Leas-Cheann Comhairle

The normal procedure in Estimates is that Deputies speak once and, at the end of the debate, the Minister replies to the points raised. This afternoon a number of Deputies contributed more than once as if it were the Committee Stage of a Bill. If this were allowed to continue we would be departing from the normal procedure in regard to Estimates.

Dáil Éireann díospóireacht - Tuesday, 8 Jul 1969