I should like, as far as possible, to confine and to relate my remarks with strict relevancy to the Bill before us. This Bill, which is one of those hardy annuals that the Seanad is over-familiar with, and which has been coming before the Seanad for a great number of years, is comparatively unchanged this year, with the exception of one particular section to which I shall refer. In Dáil Eireann, the debate lasted about four weeks and it centred on the cost of living—on whether the cost of living had or had not gone up and, if it had gone up, on whether it had gone up prior or subsequent to August last. It was a very interesting and instructive debate but definitely it was not a debate on the Bill which we have before us to-day and which it is necessary to have passed into law by the 31st of this month. It was a discussion about very important matters, but, on moving up to the Division Lobby prior to the division on the Bill, an Opposition Deputy, with a droll sense of humour, remarked quite seriously that he really did not think the Bill was strictly relevant to the debate.
This Bill, which is before the Seanad this evening, is a continuation or a renewal of the powers contained in the Supplies and Services Act which has come before the Dáil and Seanad on numerous occasions. There is one additional section to it. It is an important section around which I think the main part of the discussion should take place. With regard to the general position, and to the necessity for having a Bill such as this, I think it is within the knowledge of the Seanad that the ambition of Governments, past and present, is to get back, as rapidly as possible, to normal conditions. Control or interference with trade and industry is normally undesirable. It may be necessary at times, but the outcrop of that necessity is not always good. Very frequently, it produces an outcrop that is evil and damaging in itself.
The last Government went out of office shortly after the war had ended. When the present Government took over, war appeared to be behind us. It was our desire that the State should, as rapidly as possible, pull out of interference with industry and with commerce. Such a pull-out could have been effected too rapidly. We were conscious of the arguments advanced that, in the long run, the best way of controlling prices, and of bringing about a reduction in prices, was to let the ordinary laws of supply and demand apply, and that, once they began to operate, the ordinary competitive spirit would result in reduced prices. From time to time, over the last two and a half years, we have decontrolled and we have pulled out the State to meet the arguments advanced in order to see to what extent the ordinary laws of supply and demand, and the competitive spirit, would effect satisfactory results.
It is within the experience of every single member of the Seanad that, in all cases, the results were not entirely happy. One of the normal effects of State control, State penetration and State interference was the organisation of bodies and communities, with a related interest, into a more solidified form, so that when controls, and the power of control over prices, were removed, and the ordinary laws of supply and demand were left to operate, and when the competitive spirit was left to pull down prices, in some respects, certainly, we found that the organised spirit was supreme over the competitive spirit and that the removal of control resulted in an increase in prices, even where the article was somewhat surplus to production. It is only fair to say that when I give that particular illustration, I am not applying it to the general organisation of commercial life. But, here and there, we did find that the removal of controls resulted in increased prices, even where the article was surplus, more or less, to requirement.
With regard to traders generally, we have gone through a couple of years in which there were certain increases in overhead charges: where rates increased and where wages increased. We had something like a national increase in wages and we had something approaching a national increase in rates. These added heavily to the overhead charges on industry and business generally. In addition, we had the devaluation of the £, which meant a certain increase in costs in certain directions. The quantity of goods that we bought from the Western Hemisphere, and, in fact, all the goods that we bought from the hard-currency countries—the extent to which we in this country purchased them either from the Western Hemisphere or the hard-currency countries—was rather big—that is, within the scope of our daily lives. Maize, which is the raw product of very much of our agricultural production; wheat, which enters, to a greater or a lesser extent, into every slice of bread eaten; petrol, fuel oil, tobacco, and, to a great extent, machinery, and, to a certain extent, other items which are more or less in daily use, all came either from the Western Hemisphere or from the hard-currency countries. Yet, with rate increases, with wage increases, with the increases flowing out from hard-currency and dollar purchases, we had not anything like a commensurate increase in the cost of living. In fact, up to some time at the end of the summer, in spite of all these factors, we had a cost of living remaining somewhat about stationary. It is due to the industrial and commercial classes of the country to state that as a matter of official opinion and as a matter of ascertainable fact. During the latter end of the period I refer to, in addition to the factors I mention which might contribute to an increase in prices, we had, to a very great extent, the world turning from normal, domestic or economic production back towards war production, and that turn in the world trend of production meant, in turn, shortages of certain lines of goods and, where the demand is greater than the article in production, normally you do get an increase in price. Nevertheless, up to the end of the summer you had all these factors operating and you had no tilt in the cost-of-living index figure.
In recent months we had a sudden very, very grave and completely unexpected turn in world events. You had the Korean War apparently being worked out to a standstill. Then, completely unexpectedly, you had the break-through of the Chinese armies and you had the whole of the western world and the whole of Europe suddenly changing their policy, changing their outlook, and deciding, not as so many individuals, but as so many people welded into a solid community to get back rapidly to war production. As a result of that sudden and unexpected turn in the world's economy, you had this country, the same as any other country, suddenly faced with a gigantic jump in the price of very, very many war materials and with shortages in very, very many directions.
With that state of affairs staring us in the face and with a crisis that may be just around the corner, it was clear that the procedure of decontrol, in fact that the deliberate policy of gradual but progressive decontrol, had got to be abandoned; that we had got to turn right about and face a regrettable but, nevertheless, real and new emergency. In an emergency when prices might sky-rocket and supplies decline beyond normal visibility, it was necessary to re-enact every one of the previous emergency controls and, acting in the light of experience, to add to them further controls where experience would direct those charged with responsibility to feel that there was a deficiency in the pre-existing machine.
Controls are imposed in the public interest, in the interest of the general consumer. So far as the general consumer goes, controls operate (1) in order to get as fair and reasonable distribution of goods as it is possible to effect; and (2) to have those goods supplied at the most reasonable price taking into account all the conditions that operate on the level of prices. We were confronted with a position in which the whole situation changed quite suddenly and we found certain raw materials going up with an unexpected jump and to a very considerable height. We found industrialists keeping pace with the jump in raw material long before that raw material went into the make-up of the goods. We had a situation a couple of months ago where the prices of wool sky-rocketed, and immediately afterwards the price of every sock in Ireland jumped higher than the wool when it was well within the knowledge of everyone that that highly expensive wool would not go into the Irish sock for a considerable number of months. Retailers were blamed for that by some; manufacturers were blamed for that by many. Some are blameless; some are blameworthy. It is in the public interest and in the interest of those who are playing the game in a straightforward manner by the public to ascertain accurately exactly where the blame rests.
We have different commodities going up because world prices are rising. We have producers and retailers in this country being blamed for every single increase in the price of any article. Yet, when a proposal is made to publicise fully the reasons for every increase, to show that this article increased because of factors completely outside the control of anybody in this country and that the price of another article increased because the raw material from abroad going into it has increased; to show clearly and fairly to the public where the cause originates and where the blame, if any, rests, we have a panic in industrial circles and, to an extent, a panic in commercial circles that is difficult to understand. It is difficult to understand why any industrialist, where the price of his raw material from an outside source goes up, and his finished product must go up in proportion, should get into a tail-spin because the public are going to be told that the product of his industry goes up because rubber or something else goes up in price abroad. You have that planning and you have every evidence of opposition to the proposals made; and you have that opposition progressing along two lines of attack, each line being directly contradictory and in conflict with the other line of attack. We had evidence of both approaches in the debates on this measure in the Dáil.
One line of attack to the proposal to establish an advisory prices committee is that such a committee, in so far as it is outlined in this Bill, will be quite powerless and will prove wholly impotent and inoperative from the very beginning because it has not sufficient powers. It was said that it was, after all, only an advisory committee and, in so far as it is only an advisory committee, it will be quite surplus to requirements and will serve no useful function. That is one line of attack. The other line of attack was that this is the most brutal and ruthless proposal ever made in the history of a democratic State; that this proposal will ride roughshod over the interests of industrialists and those engaged in commerce. In matters of this kind, irrespective of what Government happens to be in power, the body most concerned with the progress, development and expansion of industry is that group of men who form the Government. They are more concerned than any chambers of commerce or federations of industry. There is no tendency apparent in any of our organisations or in any of our political Parties to commit sudden political suicide or completely ruin ourselves in so far as the desired national expansion in the fields of industry, agriculture, commerce and everything else is concerned. The Government as a government has as great a sense of responsibility as any group of citizens in the State or as any group that one could get together anywhere. When a proposal is tabled before both the Dáil and the Seanad, after full and mature consideration and in the light of experience over years of emergency and post-emergency, that proposal is not put down in any spirit of reckless folly or in order to make more trouble for some particular Minister in piloting such a measure through the Oireachtas. That proposal is put down because, in the considered opinion of the people who are charged in the last analysis with full responsibility, it is desirable in the public interest, in the interests of the consumer, in the interests of the producer and in the interests of the retailer. It is desirable to have a new body such as that outlined in this Bill to take over the work of control and to ensure that the work of price fixing will be done as far as possible in such manner as will not militate against normal trading operations or desirable industrial expansion and production. As far as reasonable, it is desirable to have it done in the broad light of day.
It is a very, very simple matter for any one of us to put ourselves up as a prophet. Some people have presumed to be prophets who take greater pleasure in prophesying gloom rather than bliss. Amongst the people who constitute themselves prophets in relation to this proposal, there have been those who framed their prophecies in the most gloomy terms. It is presumed and prophesied that the Government will establish a price-fixing committee and that that committee will consist of a group of irresponsible lunatics who have no sense of proportion and who do not place any value on the normal development and expansion of industry. It is presumed and prophesied that that committee will fix prices at such a level that one industry after another will be put out of business. Furthermore, it is prophesied that the Government will act on the advice of that committee and then lean back happily to watch the doors of one industry after another close up and down the country, and watch the miserable men put out of work through the lunacy of this advisory committee.
When we come into the Dáil and Seanad, we are supposed to have reached a certain age and, in reaching that age, we are presumed to have reached the use of reason. All reason would have long since departed from this institution as an institution of the State, and from the Government as a Government, if such a lunatic proposal was within the bounds of consideration. It must be presumed, and I am entitled to ask the Seanad to assume that, before the Government considered the establishment of an advisory body to advise the Minister in relation to prices, that body will consist of people with a responsible outlook and of people, in so far as they can be found, with considerable experience of the particular type of business upon which they are asked to advise; that body will be as conscious as any body would be of the necessity for keeping industry going in difficult times and of the fact that, if any death blow is struck at an industrialist, the industrialist may be the first to fall but he will be only one; the casualties behind the industrialist will be every single worker with a vested interest in the particular line of business.
I have to ask the Seanad in dealing with this particular section of the Bill to have a certain amount of trust. Obviously before a Bill becomes law no Minister is in a position to announce the names of those people who will constitute a tribunal or committee of this kind. The Government has under consideration a panel of names. From that panel a suitable selection will be made. When the names are ultimately published I am inclined to guarantee that that committee or tribunal will not only have the confidence of the consumer but will have at the same time the confidence of every honest industrialist and of every individual engaged in trade up and down the country. Judgment on the suitability of the personnel of a committee of this kind must naturally be reserved until the names are available.
I would merely ask the Seanad at this stage to accept it as a fact that any Government constituting such a body would naturally aim at constituting a body that would have the maximum confidence of the people as a whole.
In the work which will fall on this particular body you have three interests—the producer, the retailer and the consumer. It would be a tragic mistake for the Government to constitute a body of this kind where the dice would be heavily loaded in the interests of one section of these three to the prejudice of any other section. There has been a certain amount of discussion and a certain amount of uneasiness with regard to the public nature of the work which will be done by this particular body. The purpose behind having such a body as this operating in public is, firstly, that where the price of any commodity is increased, the public will be told the reason for the increase. If the reason is because of increased prices of the raw material outside this country, then is it not in the interest of the industrialist or in the interest of the trader in this country that his customers should not blame him, that his customers should know and have published that that increase was due to the fact that there was an increase in the price of the raw material from some foreign source? If the increase is due to increased wages, to increased rates, to increased overhead charges within the country, then is it not unfair to have the trader blamed for the increased prices? Is it not in his interests to publicise the fact that this increase is because the cost of printing went up, the cost of rates went up or wages went up? What we are aiming at in this is not only to have public confidence in the price-fixing authority but to have public confidence in the honesty, reliability and national outlook of industrialists, retailers and others concerned in the supply of commodities to the people.
So far, I take it, there is no objection to publicity. No industrialist will object, where his products increase in price, to having a body that will say in the public Press: "That increased because of the price of the raw material," or to having a representative committee putting their stamp on the increased price rather than the producer's own stamp. No retailer would object to it so far. The next question —there is a lot of uneasiness with regard to this—is to what extent information secured from industrialists and traders, which must be made available to the committee, will be made public. Obviously any of us can see that, in so far as there is competitive business in any country, if you publish all the intimate details of the work of any particular industry or business and give competitors the advantage of the closest and most confidential information as to the inner workings of a competitive firm, that would completely deprive the business supplying the information of any advantage acquired through ability, organisation or initiative and would, in fact, so much undermine the confidence of business men in dealing with the Department of Industry and Commerce or through any advisory committee, that business men would keep their money in their pockets rather than speculate it in a business where every trade secret was to be published to the whole world. I would suggest that these fears are as groundless and unreal as the fears I referred to with regard to the type of person we shall put on this body.
Obviously the Minister for Industry and Commerce has got to have a sense of responsibility. Obviously he has got to consider whether the publication of any information would militate against or be damaging to industry as a whole. The chairman of this particular body has got to be selected with much greater care than we sometimes take when selecting the Minister for Industry and Commerce. The chairman of that body, in consultation with the Minister, is the person who is going to decide what exactly will be made public and what will not. The terms of reference of this body have got to be drafted if and when the Bill becomes law. The procedure has got to be defined if and when this Bill becomes law. Representations that are in the public interest and in the interest of the community generally can be made and will be considered fully and reasonably after this Bill becomes law and before any body such as is outlined here begins to operate. I do not know, within the limits of reason, what there is to fear in these proposals. Every Senator knows that the old method of fixing prices within the Department was resisted, condemned and criticised by industrialists and business people. It was challenged in the very beginning. It was consistently challenged up to the time that new proposals were made. It was challenged by consumers generally. Their line of approach was: "What do civil servants know about prices? What do they know about business?" So long as any work affecting the lives of many people is done behind closed doors, then you never get the degree of confidence which we should get as a community possibly facing a really grave emergency. It is public confidence in the machine, public confidence in our business men, public confidence in our industrialists, that is the object of the suggestions made here.
We had price control based on controlling prices via the margin of profits and prices have been controlled, whether effectively or otherwise, via the margin of profits ever since price control started. Consistently, that was challenged by the producer and by the man engaged in business from the very beginning. It was challenged by the consumer from the very beginning. The consumer's challenge to that system of price control was that in effect and in practice what you are doing—there is a certain amount of truth in this—was that you were guaranteeing the profit of every individual that handled or saw the article from the raw material until it was passed to the consumer across a retailer's counter. Every single intermediate profit was guaranteed and everyone was insured against loss or hardship, except the consumer at the other end of the spout.
That criticism was a fair criticism. It was true, at least, to the extent that you guaranteed against loss or hardship everybody that touched the article from the raw material to the finished article on the retailer's counter, except the purchaser. There was a certain amount of justice in that criticism but, in so far as it was not abused, there was also a sound and reasonable defence of that system of price control. But when, under a system such as that, you see group profits in certain groups, not just increasing, but going up by 400 or 500 per cent. in two or three years, and, commensurate with the increase in group profits by 400 or 500 per cent. in two or three years, you see the price of the article to the consumer increasing, then any Minister with a broad sense of justice would say to himself, "Something has to be done."
In the face of those facts and those figures, and if those facts prove to be facts reliably demonstrated and those figures prove to be correct and authentic, then surely there is nobody in Seanad Eireann or elsewhere that would say: "Jog along happily; that is the ideal arrangement; profits quadruple, prices go up, the consumer pays more." Surely industrialists or people concerned with commerce as a whole, seeing that graph—steeply bounding profits, progressively rising prices— would say to themselves, in the interest of the industry and in the interest of commerce as a whole, that some of these profits should be plugged back towards reducing prices. That is the picture. It is a picture that everyone will read in the published revenue returns. A Minister gets no more information than is available to the general public. We do not know the concerns of any particular industry. We do not know the position of any individual businessman. The returns are laid out by groups, by classifications, and the picture that I have given the House is a real picture based on real figures. Could anyone, in face of those figures, contemplate a real Government carrying on, being perfectly content and sitting placidly over that state of affairs?
There is in this Bill a proposal to have advice, to have a liaison group between the Government centre, where prices are fixed, the business people, the industrialists and the consumer outside, an organisation that will sift certain information, that will give certain advice to the Minister. The Minister is free either to act or not on that advice. It is a body calculated to throw a certain amount of light on the mystery of price fixation.
Some people criticise this by saying that there is an expert body inside the Department of Industry and Commerce, experienced in its work, having studied trade, prices and produce over a great number of years and they ask, why discard all those experts, why throw them aside and begin to lean on a group of completely inexperienced people who do not understand trade, produce or price fixation? Of course, that is more of the imaginary bogies that people are mentally producing. The hard core of the centre staff operating in conjunction with and behind this advisory committee will be that prices staff that have been experienced over a great number of years.
I have taken a considerable length of time to deal with that particular section of the Bill. I have endeavoured to confine my remarks to the Bill. I believe that I would be wasting time in referring to portions of the Bill that have been before the House time and again, that have had approval from various geographical seats in this Assembly down through the years. Therefore, I have related my remarks exclusively to the one portion of the Bill which is new and have explained to the Seanad as best I could the proposals contained here, the meaning of those proposals, the intentions behind them and the spirit in which they will be carried out.
