Before Question Time I was discussing the general question of our sovereignty, our independence, in relation to our approach to the EEC. It is not unnatural to expect that this to us would be a more sensitive area than it would be to other communities by virtue of our size, by virtue of our history, the many years of struggle we had to secure the measure of independence we have at the present time.
Our independence is two-fold: it has a political angle and an economic angle. As I mentioned, in our present circumstances, while we have gained a degree of political independence we have lost out on the economic side. It is true to say that the standard of living in the United Kingdom is higher than it is here, and that all sections of society have had to pay the price of the political freedom we enjoy here. Our people in the 26-Counties have been prepared to pay that price and, as I stressed at the beginning, that has borne more heavily upon the agricultural community than on most other members of our society. Not alone is our sovereignty limited economically but also geographically. We have not succeeded in securing for ourselves a 32-County administration, which has been the ambition, I suppose, of all Irishmen who have down through the years endeavoured to secure independence here.
In 1920 the British Parliament passed the Government of Ireland Act which provided for a Southern and a Northern Parliament. These Parliaments would have restricted powers and be permitted to join later. On 21st June, 1921, King George V opened that Northern Parliament and the speech he made, in which he deplored the conditions which obtained, culminated in the Truce which has declared a month later, in July, 1921. In October, 1921, our Treaty negotiations began and on 6th December, 1921, the Treaty was signed. However at the time the Treaty was being negotiated in London the Northern Parliament was already an operating Parliament, was, so to speak, a fait accompli. Under the Treaty signed at that time a 32-County administration was provided, but in article 12 it was also provided that the Northern Ireland Parliament would have power to opt out within a month. They did not wait for the full month. On 7th December, 1922, two days after the ratification of the Treaty here and the acceptance of the London agreement, the Northern Parliament did in effect opt out.
That is the history of our independence here and the sovereignty which we fought so long to obtain and which Irish people cherish so much. Previous rebellions and so on had failed to secure that sovereignty for us. Even long before that an effort was made, again unsuccessfully, to establish Home Rule and it was rejected by the British House of Commons as far back as 1893 and rejected by the House of Lords in 1912. It eventually reached the Statute Book in 1914 and on the same day an Act was passed by the British House of Commons suspending the operation of Home rule until the war was over. Of course, after that we had the Curragh, Mutiny, Larne Gun Running, Carsonism in the north and the threat to bring over the Kaiser if they did not get their way. We had our own Rising in 1916 and eventually we had the First Dáil Assembly in 1918 of which we celebrated the 50th Anniversary a couple of years ago. I dare say these events probably led to the passing of the Government of Ireland Act by the British House of Commons in 1920. There was the situation of a great empire with Lloyd George, the Welsh wizard, as head of the powerful Liberal Party. He had just won a world war.
Those were the circumstances which our people had to face and to fight in order to secure a degree of political independence down here. We had a very small population and were faced with a powerful neighbour. The difficulty is that this degree of political independence we obtained did not bring us that degree of economic independence which was hoped for at the time. I think the people in those days, the founding fathers of the Sinn Féin movement, those who were engaged in the political agitation of those days probably felt they would on the morrow of securing political independence be able to secure economic independence.
With the passage of the years it is obvious that this has not come about. In fact it is becoming increasingly difficult because we are now faced with a more integrating world and it would seem that local communities are tending to be blurred out, that nationalism is being overtaken by a degree of supra-nationalism. This European Economic Community is not purely a trade association; the ultimate purpose is to secure political union. Any of the Members here who have been over at some of the continental meetings can bear me out that time and again leaders of various countries in Europe in speaking advert to the economic aspects of integration, but they all end up speaking about the political aspects and particularly the defence aspects of the continent of Europe. They point out that they are in a very unhappy position having to depend upon American atomic weapons and American occupational forces to defend their frontiers. That is regarded by many Europeans as a humiliating circumstance for 250,000,000 people who as yet have been unable to resolve their whole standing, their national difficulties—you could almost say tribal difficulties in the context of a modern world—and to provide for themselves the atomic type of defence which is necessary for the preservation of their independence and for national safety.
It is in that long-term context that we have to view this application for membership of the EEC. It is not alone an economic aspect, which, of course, is important to us, but a political aspect also. I find it difficult to see how we could hope to survive economically and politically outside such a large European bloc—a small island floating in an ocean of free trade and completely without help in the event of a world conflagration. If there did happen to be a world conflagration in the future I do not know what country could opt out or what country could say geographically that they were in a position to opt out. In the last war we chose a policy of neutrality but I doubt if it would be such a simple matter in a future world war. A future war would be of such dimensions that a decision to opt out would not really matter because it would be annihilation of whole continents. When we speak of being involved politically, that it would be a dangerous thing to become involved politically, that we might be pulled into a war into which we did not want to go, without having a choice, I doubt if in the realm of practical politics it would really matter. We only hope that wars in the future will not arise but if they do they will be so terrible that there will be no opting in or out for anybody.
The original economic policy here has changed over the years. When the State was founded there was a policy based on the principle of Sinn Féin. It was from Sinn Féin that both major political parties in this House stemmed. Griffith's idea was to go it alone. His policy and the policy pursued was to boycott Westminster and as a follow-up to try to generate economic self-sufficiency. That was very ambitious policy for such a small country unless one was prepared to accept a subsistence-level economy. However, this was the policy on which Sinn Féin was founded and which was pursued by the first Government. It was a policy of protection and as far as I can gather the first policy of Cumann na nGaedheal was to have selective protectionism in that if protection was to be given they wanted industry to use native raw materials, that it would produce a commonly used product and that it would give good employment. Those were the basic criteria used by that Government. At that time the rule was that 51 per cent of the capital we used would have to be from native sources. In 1932 when a Fianna Fáil Government came into office there was an intensification of that type of Sinn Féin approach and the protectionism was more complete. It was, if you like, non-selective. The idea of the 51 per cent Irish capital was maintained.
The philosophy then was to produce everything you could, use as few imports as you could, get a licence and you would be given protection to proceed. I can recall a product with which I was familiar, namely, catgut. At that time our imports of catgut were small. It is quite a refined product which requires a fairly specialised technique. The home market was quite small and it was doubtful if it was worth-while setting up the whole machinery of protection to supply catgut yet the whole paraphernalia of protection was introduced and in the event the product was bad. As the House is aware, catgut is produced from the lining of sheep's intestines. We were even importing the raw material from Scotland in barrels of brine because it was found more economic to use our sheep's intestines to make sausages than to make catgut. The amount of employment provided was nil and the whole set-up was extremely unsophisticated.
This was one example of wholesale protectionism being quite unsatisfactory. That position continued to a varying degree and then came the war. Then we were in a seller's market and, again, there was no stimulus to our industrialists to improve their techniques, to do a better job, because it was virtually a question of producing something and anything you produced you could sell at that time. That probably was a factor in not stimulating our industrialists to adapt themselves to the more competitive society which is now upon us.
Then came 1956 when the late Deputy Sweetman altered the system and there was a more liberal approach to investment in the economy here. At that time all these attractions were introduced for industrialists and particularly for those who produced for export. These attractions were not alone for foreign industrialists but also for Irish industrialists. The idea was to encourage foreign investment to come here. Interest-free loans were introduced, which will still be operative up to 1990. That development was in conformity with what obtained in most undeveloped countries. They had all departed from the idea of self-sufficiency and had moved towards a more liberal attitude to foreign investment. In 1960 there was the idea that we should make application for admission to the Common Market. My own belief is that the excessive protection which lasted too long, plus the war, prevented the development of a more competitive type of industrial approach here. Our industrialists were probably "feather-bedded" for too long. It is also possibly true that after 1961 when our first application for membership of the Common Market was rejected many of our people thought it was finished with and they began to slack again.
Were it not for that type of background I believe our industrial arm would be better geared for competition. Australia had its difficulties in industrialisation but they set a strict headline. They provided protection for a specified number of years and said that if industrialists did not make themselves competitive quickly the protection would be removed and they would have to compete in free trade conditions. In our case we probably had not to face the competition as soon as we should have had. In this respect the Anglo-Irish Free Trade Area Agreement, however one may fault its specific working—and I fault it and I fault the unilateral action of the United Kingdom in that regard—whatever one may say for or against that agreement, it did alert the people to a degree of competition which they would have to face anyway. It was good to force them into this position at an early stage and to give them a few years before facing competition as they must now when we enter the Common Market.
By and large, our industrialists have had a fair warning. They have got fairly reasonable help from Government sources. If they are unable to meet the competition which will face them in the future they cannot complain about what Irish society did for them. They got fair warning and fairly generous help as regards adaptation. Money, in so far as a relatively poor community could provide it, was not spared. If some of them fail now, as some will, they must admit that it is their own fault.
As regards our application for membership, I think it is a question of Hobson's choice. I cannot feel that we have any realistic choice of remaining outside the Common Market if Britain goes in. The trade figures would suggest that we are facing an impossible position otherwise. Why is Britain going in? She, too, is sacrificing some of her sovereignty. Britain is the head of the Commonwealth and has much more sovereignty than we ever had. Britain will sacrifice some of this sovereignty. Why does Britain choose to go in? Perhaps Britain is, as Deputy Dr. FitzGerald said the "sick man of Europe". The trade figures in Britain were pretty bad until a year ago. Looking at Britain's exports over the past decade one will get an answer to the question of why Britain decided to go into the Common Market.
Britain's exports to Western Europe in 1958 were 27 per cent of her exports. In 1968 that figure had increased to 37 per cent. That shows a change of trade pattern which would not be lost upon the British. In the same period exports to the sterling area had decreased from 43 per cent to 28 per cent. This is a complete reversal of the picture. Britain is still regarded as the third largest trading nation in the world. There is the pattern which has been noticeable in her trade over the past decade. The sterling area is the British Commonwealth, excluding Canada and Rhodesia, and about 30 other small States around Africa and the East. That is the sterling area and the exports to that area have decreased from 43 per cent to 28 per cent in a decade while exports to European countries have increased from 27 per cent to 37 per cent. That is a complete reversal. It is not a question of trade following the flag any more in so far as Britain is concerned. It is a question of the flag following the trade. This must have been a very important factor in the reasoning of the British economists and politicians in moving towards entry into Europe. They had seen this development. I believe this development will increase.
There has always been difficulty about the question of food. While Britain was a large trading nation she imported about half her food, or may be more. Britain imported all her raw materials. She was a manufacturing country and there was unrestricted entry of food into Britain. That always proved difficult for our farmers. We have been selling food to Britain at unrealistic prices. Britain also protected her own farming community, including Northern Ireland farmers. Were it not for the fact that our cattle prices were tied to the English cattle prices by the agreement made by Deputy Dillon some years ago our store cattle trade might have suffered severely. But for that, our difficulties would have been greater. Our people have been exporting to a country to which every other country in the world producing food had access. Many of them were undeveloped countries. We had to fight, not only New Zealand and Australia, but the Argentine and countries sending food from the four corners of the world.