Vol. 241 No. 10
asked the Minister for Finance if he is aware of the serious effects of the present credit squeeze on employment and the expansion of business projects whereby banks are refusing to advance money to those engaged in business; how long this position will continue; and if he will make a general statement on this matter giving details of how the necessity for the credit restrictions arose.
179.
asked the Minister for Finance if he is aware that the increase in the bank interest lending rate coupled with the difficulty of obtaining credit from banks for worthwhile projects is a serious blow to the Irish economy; and what steps the Government propose to take to remedy this situation.
180.
asked the Minister for Finance if he is aware that the provision of employment, drainage, road making, housing and other schemes of national development are all held up because the banks decided to restrict money for such development and employment; if discussions took place between the Government and the banks in the matter; and, if so, with what results.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 178, 179 and 180 together.
I do not agree that the credit situation or the increase in the banks' lending rates has resulted in an overall reduction in production or employment. Expenditure on schemes of national development financed through the public capital programme will be £25 million more in 1969-70 than in 1968-69. The banks' contribution to the financing of these schemes will be £50 million in the current year compared with £47 million last year and £25 million the previous year. Issues from the Road Fund, which are outside the public capital programme, are estimated at £11.5 million for 1969-70 as against £11.2 million in 1968-69. The Central Bank has asked for moderation in the provision of credit for consumption expenditure. This is essential in view of the pressures on the resources of the banks, stemming mainly from excessive consumer demand in relation to the growth of national output and savings. Thus businesses importing or selling consumer goods and also private persons may be unable to get all the credit they would like. I regret any difficulties that may be caused but the fact is that the pressures I have mentioned—which have been stimulated by the rapid rise in money incomes— would, if allowed to continue unchecked, do far more damage in a relatively short time to employment and employment prospects than can be attributed to a moderation in credit for consumer expenditure.
The basic aim of credit policy, in conjunction with budgetary and incomes policies, is to secure the largest and most rapid increase in production and employment compatible with the avoidance of excessive price increases and a tolerable external payments situation. I think that Deputies will accept that this is a sound policy. It is, however, inherent in it that, where the demand for credit is larger than the available resources, a choice must be made as to the way in which the resources are allocated. It is necessary that priority be given to productive projects, so that production can continue to grow.
The position with regard to credit generally and the effects of the policy which is being followed are kept under continuous review and suitable adjustments will be made as required by the circumstances.
Might I inquire from the Parliamentary Secretary why these things were not disclosed prior to the election instead of being related to the House today?
Does the Parliamentary Secretary not really understand what he is reading? I do not think he does.
The Deputy must not anyway.
I spent a long time learning it, whether I do or not. Are we to understand that the Government got the banks to write up £25 million in the bank books a few months ago, for which the Government paid the banks 7½ per cent, and that now no ordinary person can get credit? Are we also to understand from the Parliamentary Secretary's reply— and it was implicit in it—that the only productive work in this country is done by the Government?
Just for the peace of the Deputy's mind I want to say there have been very few, if any, complaints received by the Department of Finance as a result of the decision taken at the request of the Central Bank to make it more difficult for money to be available for consumer spending.
I do not want to say anything to belittle the Parliamentary Secretary, but I should like to enter a mild protest. Here has been a statement made——
A question would be in order.
I cannot ask the Minister for Finance because he is not here. Is the Parliamentary Secretary aware that he has made a statement of some significance on behalf of the Minister for Finance who issues the statement through the words of the Parliamentary Secretary in the first person, but he is not here to be subjected to questions in relation to it? I wonder where we are going. Are we to have some person other than the Minister for Finance sent into Dáil Éireann to answer questions of considerable significance to the future welfare of workers and business people? When will he be here to answer question of this kind?
I cannot answer that. He is due home this week.
Where is he? Why is he not here?
On a point of order. Is it not normal procedure for the Parliamentary Secretary, in the absence of the Minister, to answer the questions?
Yes.
The Parliamentary Secretary usually looks after the Board of Works.
That is common practice.
Order. Would Deputies allow questions to continue?
