Supplies and Services (Temporary Provisions) Act, 1946 (Continuance) Bill, 1953—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Industry and Commerce (Mr. Lemass)

The Seanad is no doubt aware that the Supplies and Services Act, which was enacted by the Oireachtas in 1946 on the repeal of the war-time Emergency Powers Act, gave the Government certain powers exercisable by Order of the Government or by a Minister to whom the powers of the Government had been delegated, to regulate and control supplies and services essential to the community, to control exports, to maintain restrictions upon foreign exchange transactions, to regulate the cultivation of land and empower local authorities to do certain things, to guarantee the principal and interest of borrowings of State companies and suspend certain customs duties. That Act was expressed to operate for one year only, but in fact in each year since 1946 up to date the Act has been renewed by amending legislation for a further period of one year. The Act is due to expire at the end of December. The purpose of this Bill is to continue it in force for a further period of 15 months, that is, up to the 31st March, 1955.

As I informed the Dáil when moving the Second Reading there, the Government has decided that this will be the last extension of the Act. Every Minister has been directed by the Government to consider which, if any, of the powers now exercised by him under the authority of the Supplies and Services Act are likely to be required after 31st March, 1955, and, if there are such, to have them made the subject of separate legislation to be submitted to the Oireachtas next year.

It is necessary that the Supplies and Services Act should be continued for a further period because there are powers at present being exercised under it which are not available to the Government in permanent legislation and which could not be relinquished without adverse public reactions. There are five Departments interested in the operation of Orders made under the authority of the Act. The Department of Agriculture still controls certain aspects of the dairying industry and the marketing and distribution of certain agricultural produce. The Department of Finance is still operating its exchange control regulations under the authority of a supplies and services Order and is also guaranteeing the borrowings of certain statutory bodies. The Department of Local Government is maintaining certain regulations relating to road traffic and has also used this Act to authorise local authorities to acquire boglands for turf production purposes. The Department of Social Welfare initiated certain social services—the cheap fuel schemes, the footwear schemes and the food centres—by means of supplies and services Orders and requires to have these Orders in force yet until proposals for permanent legislation have been prepared. The Department of Industry and Commerce is still operating its price control arrangements under this Act and Orders have also been made, which are still in force, suspending the operation of certain customs duties, and control of exports is exercised to the extent that it is still necessary to do so.

Some progress has been made in the preparation of permanent legislation to replace these supplies and services Orders. There is a Bill before the Dáil dealing with State guarantees of the borrowings of public authorities and other proposals of that kind are going forward. It may be that a number of these Orders will no longer be required, nor will permanent legislation be needed to replace them, by March, 1955, but it is to be assumed that on that date we will still need to maintain powers of controlling foreign exchange transactions.

Presumably it will be desired to continue in some form these social welfare schemes to which I have referred, or some of them, and I think it will be agreed that price control powers will need to be available on some permanent basis. There is, of course, the Control of Prices Act which was passed by the Oireachtas away back in 1937. It would be possible to bring it back into operation —to re-establish the controller and the commission for which that Act provided. I think the general view now is that it did not deal adequately with the problem of price regulation and that legislation of a different type is required. I hope to have available for the consideration of the Oireachtas, by next year, certain proposals for legislation in that regard. A number of customs duties and quotas which have been suspended are, I think, no longer necessary. Their permanent repeal will probably be proposed. Some of the duties which have been suspended were brought into operation by means of normal finance legislation and their permanent repeal will be proposed in the Finance Bill of next year. In other cases, the rate of these duties and quotas can be determined by means of Orders made under the Emergency Powers (Imposition of Duties) Act. So far as the control of exports is concerned, that is being operated now, in most cases, for the purpose of complying with certain international requirements relating to the export of strategic materials. I think, however, that it will be desirable to have permanent legislation providing powers for control of exports in certain circumstances. I contemplate bringing to the Oireachtas proposals of that character also.

The number of Orders in operation under the authority of the Supplies and Services Act has been very considerably reduced during the course of the past year. Some dozens of these Orders have been revoked because they have no longer been required. The process of shedding powers which are no longer needed will not be suspended merely because the whole Act is to cease to operate in 15 months' time. If it should prove to be practicable, without public inconvenience, to repeal any of the remaining Orders between now and March, 1955, then that will be done. It is, in fact, almost true to say that, apart from Orders suspending the operation of certain customs duties and quotas, there are none now being maintained which will not be required permanently, and powers to enforce them will be secured either by new legislation or by proposals for the amendment of existing legislation.

I am sure Senators will agree that, however much we might like to see these temporary Emergency Powers Acts finally disappear, we just cannot get rid of this one yet and that it is desirable to give the time proposed in it—that is, a period of 15 months from the end of December next—to make all the changes necessary to enable it to be put into the pigeon-holes of the Government until the next war.

Professor Hayes

I should just like to get this point clear. Am I correct in understanding from the Minister that he intends to substitute for this system of Orders a system of legislation whereby each Department will operate under an Act and each Minister will, therefore, bring in a Bill dealing with his own Department?

Mr. Lemass

Yes, but the legislation will not, of course, necessarily be similar to the Supplies and Services Act. For example, if the Minister for Social Welfare is proposing to maintain in operation the cheap fuel scheme and the footwear scheme, he will bring in legislation relating to these particular schemes.

Professor Hayes

The position, then, is that each Department will bring in its own legislation and the operations will be under an Act instead of an Order in an omnibus Bill. If that can be achieved within the next 15 months it certainly will be an immense improvement.

Professor O'Brien

Everybody concerned with public administration in this country must welcome the early disappearance of the Supplies and Services Act from the Statute Book. It was an emergency measure introduced for war purposes, and, like many other of the hang-overs from the last war, it survived the war for too long. It gave the Government considerable powers to govern the country by decree. Those of us who have served on the Committee on Statutory Instruments in this House are aware of the very large number of Orders which were made under this Bill, many of which were complicated, obscure and potentially dangerous. Therefore, it is welcome news that the Bill is to be re-enacted for a period of not more than 15 months.

At the same time, I think it necessary to draw attention to the fact that the new proposals designed to take the place of the Bill contain certain dangers of their own, in that the Orders made under this Bill are at least subject to parliamentary revision and parliamentary control. I think it very important for us to ensure that the new Bill which will be brought to the House will not give to Ministers too much uncontrolled power to legislate inside a wide field. Each of these Bills, I take it, will come before the House. Every Department will have its own Bill. I think it will be a very peculiarly suitable function of the Seanad to try to safeguard the rights of the individual when these Bills are going through. The Restrictive Trade Practices Bill was, I think, improved in the Seanad and I hope these Bills will also be improved.

The Minister made particular reference to the control of prices and perhaps there is no field inside which the Supplies and Services Act has operated with more effect than in regard to the control of prices. It is interesting to hear that the principles of the 1947 Act are being scrapped, that that particular experiment is not regarded as a success and that a new Bill is to be introduced in its place. In regard to the control of prices, there are certain general observations which ought to be made—that the control of prices is something which ought to be restrained to the absolutely bare minimum scope, that prices in the economic system are rather like the movements of a barometer, that the movements of prices indicate the coming changes in the climate, that they show changes in demand, in supply and in costs and that an artificial interference with the free play of prices is rather like trying to nail down the hand of the barometer to prevent observers from seeing certain useful indicators.

The movements of the hand of the barometer are very useful to people trying to forecast the weather, and, if you attempt to keep it nailed down at one particular point, people trying to forecast the weather are deprived of a very valuable aid to their observations. Nailing the hand of the barometer in that way has no effect on the weather and also keeping prices fixed at a certain point by law very often has no effect on the real underlying price structure. Simply keeping prices, by means of subsidies and so on, at an artificial level, merely has the result of distorting the whole price structure, driving goods under the counter, blinding people, both consumers and businessmen, to the realities of the situation and depriving the Government, businessmen and people generally of very valuable business indicators.

The very important part played by the free movement of prices in this society is shown in a striking manner in the figures published in to-day's newspapers of the change in the balance of trade. There are two lots of prices which are really quite outside the control of anybody in the country, import and export prices, and no measure of price control, however well devised, can do more than make a very small impression on the general movement of import and export prices. Changes in the relative movements of import and export prices have a vital effect on the welfare of the community and the recent change for the better in the balance of payments, to which the Minister referred in the Dáil and to which I wish to address a few observations to-day, is almost entirely the result of a favourable movement in the terms of trade.

The figures given on page 11 of the Central Bank Report refer to the first half of the present year, but the figures in to-day's newspapers, giving the trade for the first nine months of the present year, show the almost spectacular way in which a change in the relations between import and export prices can alter the whole external trading position of the country, without any material alteration in the volume of goods, either imported or exported. The recent improvement in the balance of payments is, of course, a matter of congratulation, but, at the same time, it must be emphasised that it is very largely the result of changes in price movements for which nobody in this country can really claim any great merit or has any reason to be praised. It must also be remembered that a reversal of this movement, a change in the terms of trade in the other direction, could very easily produce a very bad effect on the balance of payments again. The balance of payments, although it has improved, has not yet got into equilibrium and, therefore, the change, although it is in the right direction, has not yet gone to a sufficiently great extent.

I think the Minister himself is prepared to agree with that. It is owing to the great importance of the balance of payments, especially in relation to price control, that I am tempted to say a few words regarding some of the observations made by the Minister when this Bill was being debated in the Dáil a couple of weeks ago. Some of the remarks made by the Minister are such as to commend one's complete agreement, but there are other remarks which, to my mind, are slightly obscure and which I should like to have clarified, because one or two of them, as they read, do not appear to me to be completely valid.

In the first place, I should like to congratulate the Minister on his insistence on the importance of our external assets to the whole position of the country. At column 1753 of the Dáil Debates of 10th November last, he said that it was a good thing to realise that external assets are of very great value to the country, and he went on:—

"Other countries are making substantial sacrifices at present in order to get into the position we are in, of having external reserves to call upon in times of difficulty. If the terms of trade should turn to our disadvantage, or if the policies of other Governments should make it impossible for us to expand our exports in sufficient degree, it will be a good thing to have these reserves of foreign currency with which to finance imports of essential materials required to keep the level of industrial activity going in this country."

It is most important that the value of these external assets should be widely proclaimed and understood. There has been a certain misrepresentation regarding their volume, their importance and their rôle in recent discussions, and it is most important that public opinion should be educated up to realising that they are part of the main constituents of our national, economic, financial and political strength. I am, therefore, very glad that the Minister made such a strong statement as the statement I have quoted.

He also said at column 1754:—

"If we can, by utilising them, secure release from the necessity for imports by expanding production here, it will be something worth doing and something the doing of which we will encourage; but to dissipate these external assets, merely to get rid of them, on the importation of goods we do not need to import because we can produce them for ourselves, would be, as I have said, a policy fit for a madhouse."

At column 1751, he had said that the policy of planned repatriation of external assets by deliberately planned deficits in trade is the policy of a madhouse. I repeat that statement in order that it may appear with the authority of the Minister on the records of the Seanad as well as on the records of the Dáil, because I think it is an important statement, coming from the Minister.

There are other parts of the Minister's speech, however, which I think require a certain amount of clarification. At least, as it stands in the Official Report, I find it impossible to agree with the whole of what he said. I refer to column 1752. This is a matter which has been discussed in the Seanad before and I make no apology for referring to it shortly again. It is one of the central political problems of a country. I think it is a problem upon which it is most important that everybody should think clearly even if everybody does not entirely agree with everybody else. At column 1752 the Minister states:—

"... in case that observation of mine is misunderstood may I make it clear that, in using the expression ‘profitably employed at home', I do not confine their use to purposes which are profitable in the financial sense. I disagree with the view implied in the Central Bank Report that external assets should be repatriated for utilisation here only if they can earn more money here than they are at present earning abroad. We could be satisfied with a much smaller financial return if the general economic or social consequences were sufficient to justify the change, but the aim of the Government is to induce people to bring back for use in this country any external funds they may control for the purpose of their productive investment here."

On this matter I have no hesitation at all in stating that I agree with the report of the Central Bank and I disagree with the Minister. I think that the utilisation of external assets to bridge gaps in the balance of payments can only be justified in three cases.

The first is the one to which the Minister refers in the passage from which I have already quoted, that there may be a period of emergency, a depression in our export trade caused by such a thing, let us say, as Government import quotas in other countries, an outbreak of cattle disease or something of that kind and that it is most important to preserve our external trade in those circumstances. It may be quite legitimate to use a certain amount of our external assets to tie up an emergency of that kind. That can be paralleled in the case of an individual who lives on capital during a period of illness. I think that is a matter upon which everybody will agree.

The second justification for the utilisation of external assets is, in my opinion, different from the one which the Minister describes in his speech. Unless there is some pressing military, social or political need, having a high and agreed priority, external assets should not be utilised except for investment in the production of capital in this country which produces at least as high a yield as those external assets do in the foreign country from which they are being repatriated. I quite agree that it is very hard to draw the line between what is productive and what is not productive. In the debate in the Dáil a great deal of capital was made about the road operations and the road labour. The Minister, at column 1749, stated:—

"I resent most strongly the suggestion that workers employed on road improvements are on relief work. Twenty-three thousand workers are employed on road operations at the present time, and they are doing a job which I think is essential to the development of the country. Their work will not merely save lives; it will save costs and it will increase the over-all efficiency of the national organisation."

With that I entirely agree. It is obviously difficult to say that any particular work is productive or not. I think we must all agree that certain works are productive of an increase in the national income and, above all, are productive either of additional exports or of additional home produced products which will act as substitutes for imports which are now being brought in from abroad.

I certainly believe myself that the second justification for the repatriation of external assets is the production of capital investments yielding as high a return as the external assets yielded abroad, and, if possible, a return which will tend to build up the volume of exports in future.

The third justification is the one to which the Minister refers. That is to say, the investment in social, amenity or non-financially liquidating assets. I do not for one moment suggest that foreign investments should not be repatriated for this purpose, but I do suggest that they cannot be repatriated for this purpose unless the export industries in the country are otherwise building up a volume of exports to fill the gap created by the decline in the volume of external assets. If the agricultural industry and other export industries build up new exports, then and only then can foreign capital be repatriated for what you might call amenity investment—housing, hospitals, schools and things of that kind.

The Minister seems to suggest in the course of his speech that investment is an end in itself. That is an opinion against which I would most positively protest. Investment is a means to an end. Investments are simply meant to produce consumer goods. The Minister not only suggests but positively states very categorically what to my mind is even a greater fallacy, that employment is an end in itself. At column 1748 the Minister states:—

"I admit that unemployment is the biggest problem of all. This Government are prepared to take, as a test of the soundness of their policy, its effect on employment. If we put more people in employment, create more jobs, then the Government's policy is successful. If there is not that result, then its policy is a failure. We will accept that test and will stand by the results."

That, I say with respect, is to my mind a very fallacious statement, that work is an end in itself. Investment and employment are means to ends. The justification for the expenditure of public money is to build up investments and employment and to try to expand the productivity of the nation. If that productivity is expanded in the right direction—and by the right direction I mean a direction leading to exports—then it will be possible for the country to import more. If the country imports more it will be possible to raise the standard of living of the existing population or to raise the size of the population, to reduce emigration, or better still, raise the standard of living of a growing population.

These are the aims of policy. Investment and employment are simply means to these ends and, if the Minister's statement that the criterion of good economic policy is the giving of employment, then I do not see any logical answer to relief works of the worst old-fashioned kind. I do not see any answer to the famous statement of Keynes that it is better to have people digging holes and filling them up again than to have them unemployed. If the Minister means that I disagree very strongly with him. If he does not he might explain in his reply the statement I quoted. Perhaps the statement as reported was slightly bald and does not quite represent his meaning.

As I said, the improvement in the balance of payments position is satisfactory. I do not think that anybody in the country, public or private, can claim any very great credit for it. It is mainly the result of changes in the terms of trade which in their turn are mainly the result of world forces of demand and supply. It is satisfactory but it is not perfect. Equilibrium still remains to be restored and the only way to restore equilibrium without depressing the standard of living is a further expansion of exports. I do say that, instead of the giving of employment and putting men to work being the ultimate criterion of economic policy, success in building up exports is a much more proper object of policy in this country to-day.

That brings me to the question of whether there are any difficulties in the way of expanding exports. I think the answer to that is to be found in the tables on page 11 of the report of the Central Bank.

In these tables it is shown that the internal price level in this country, wholesale prices, agricultural prices, the cost of living and wages, have got out of gear with the import index price number; that, when import prices are falling, internal prices fall less; when import prices are rising internal prices rise more. In other words the Irish internal price level is tending to be higher than that of the outside world.

That is unquestionably a symptom of inflation. If the internal price level, however caused, is higher than outside prices, a country is suffering from an inflationary condition and a country suffering from an inflationary condition finds it difficult to export. In order to build up exports to restore equilibrium in the balance of payments at a high level and not at a now level, it is most important for us to try to restore a competitive level of prices into our export trade. It is well known that Irish exporters are finding it difficult at present to sell in the United States market. With the freeing of the agricultural markets in England, with the admission of more and more goods from the Continent, with the general freeing of English trade, the Irish exporters will find themselves faced with a growing volume of competition in Great Britain. It becomes a matter of great importance, not only to expand the gross output of our agricultural produce, but also to reduce costs to a competitive level so that we will be able to deal with the situation in the outside world.

The tendency for industrial exports to expand, to which the Minister has frequently referred, is of course a matter for congratulation. The Minister is entitled to be congratulated on the success of his industrial policy to the extent to which Irish industries are now able to export abroad. At the same time it is very important to expand those exports further and exports cannot be expanded further unless Irish costs are kept down to the bare minimum.

Anything in the nature of subsidies on production or subsidies on export will rob the country of the full advantage of improved industrial exports. Exports which cannot stand on their own feet, exports which require internal subsidies, are only a sort of facade. They are not really building up the trade of the country in the healthy way in which it could be built up if it could stand on its own feet.

I have referred to the high level of prices in the country. The price structure in Ireland is distorted at the moment by a whole group of subsidies in every direction. There is a very large number of things in this country not selling at their true price. A large number of imported industrial articles are still protected by tariffs and quotas and in that way their price is kept above the world price. The price of wheat is kept on a totally artificial level. The guaranteed price of wheat has recently been raised here at a time when the world price of wheat is falling. The result is that the subsidy on flour and bread is maintained in the region of something like £5,000,000 a year. The public transport company is only operated by means of heavy Government subsidies. The social services and the health services require heavy subsidies to-day and heavier subsidies in the future. The housing programme, the amenity investment for which the Minister is prepared to repatriate external assets, carries a large amount of subsidy from rates and taxes.

The whole price structure is distorted and made artificial by this series of subsidies. Who pays for these subsidies? Who meets the cost of this distortion? Let us be perfectly clear, the cost is met by somebody in this country. We are not in a position to dump our subsidies on the outside world. We are not in the position to export our subsidies on outside consumers. I do not wish to enter into this big question as to who pays all these subsidies, but I do suggest that the answer to that question in a few words might perhaps be worth giving an opinion on.

In the first place, in so far as articles are kept artificially high in price, the subsidies are paid by the consuming public. There is a wide range of articles which are unquestionably dearer here than in other countries. In regard to the range of articles which are kept artificially low by Government policy—the opposite of those which are protected and kept high, those which are subsidised and kept low—the price of the subsidies must be paid by the general taxpayer and is paid in particular by that very small group of taxpayers who bear the total burnt of the whole direct taxation of the country. Only about one taxpayer in 15 pays direct taxes and a very large part of the cost of these subsidies lies on that small section of the population. The people in the towns with fixed incomes who have no escape from the income-tax collector, who pay full rates, the people whose land does not enjoy subsidies—which is another subsidy to which I might have referred, the subsidised rates on agricultural land—bear a completely disproportionate part of the cost of these subsidies.

However, the whole community bears the cost of these subsidies in a more indirect and less obvious way. In so far as our exports are throttled and made difficult by these subsidies, our import capacity is reduced to the same amount. To the extent to which our imports are kept down the standard of living of the population is artificially kept down to the same extent. The only way in which the population is maintained at its present standard of living is by bridging the gap by the utilisation of old savings.

Ultimately—and this is the last point I want to make—the cost of these subsidies is going to be borne by future generations. In so far as we find it necessary to spend old savings to keep our balance of payments in equilibrium, and in so far as we refrain from taking the appropriate steps to correct that disequilibrium by building up exports which in turn require a restoration of reality into the price system, we are keeping the present generation afloat by living on the savings of the past.

Any person who keeps his own standard of living up by living on the capital that he has inherited from his forebears is doing a very poor service to the people who come after him. I am afraid that some future generations of Irish people, observing the events of recent years, may say that the people of the first 30 years after the Treaty maintained themselves at a higher standard of living than was justified by their own exertions or their activities; in other words, that the country has been on a sort of a spree lasting for a good many years—that it has been living on capital. The people who will ultimately pay for that are the unborn generations of our people.

Mr. O'Higgins

Most Senators will agree with the view put forward by Senator Hayes and Senator O'Brien that any form of permanent legislation on the matters set out in this Bill would be preferable to the present temporary Bill, particularly if, as the Minister seemed to indicate, the temporary legislation is to be such that the powers will be contained in the legislation and not through ministerial Orders. I hope I am interpreting the Minister correctly. The Minister's announcement of his intention to introduce permanent legislation does not absolve him from giving some satisfactory reason why the present temporary legislation should be continued. The only satisfactory way in which the Minister could make his case would be to let us have a review of the work done by himself and other members of the Government under this legislation over the last 12 months. He has carefully avoided doing that.

This Bill is the instrument which enables the Government to shape its entire economic policy. It gives the Government the power to direct that policy and the authority to implement it. I want to ask the Minister what evidence there is to put before this House or before the country that the Government has made any genuine effort over the past 12 months to maintain a proper system of price control. Remember, when the Minister and his Government contested a general election just over two years ago one of the main points of their programme was the exercise of a proper system of price control. Over the last 12 months—certainly over the last two years—there has been no evidence that any ordinary member of the public can see that the Government has made any effort whatever to fulfil that promise. There is no evidence that if they have made the effort they have succeeded in it.

It is true that the Taoiseach and other members of the Government, within the past 12 months, have expressed some concern at the high rate of Government spending and the high rate of taxation. The Taoiseach put himself on record as sympathising with the people, who were staggering under the burden of Government taxation. The general public would be more impressed by sentiments of that sort expressed by the Taoiseach, the Tánaiste and other Ministers if they could at the same time see some evidence that the Government intended doing anything about it; but instead of enforcing any system of price control, as far as visual evidence is concerned, at the same time as the Taoiseach sympathises with the taxpayers because of the staggering burden of taxation which he is calling on them to bear, we find that other Government Departments are imposing extra-budgetary taxation by increasing such things as the charges for wireless licences, driving licences and postage stamps. All this talk about sympathising with the people because of the taxation they are asked to bear seems to be merely "cod."

Senator O'Brien referred to statements made by the Tánaiste when he was replying to the discussion on this Bill in the other House, which the present Government accepted, as a test of the success or failure of Government policy, the effect of that policy on taxation. At column 1748 of the Dáil Debates for 10th November, the Minister is reported as follows:—

"I admit that unemployment is the biggest problem of all. This Government are prepared to take, as a test of the soundness of their policy, its effect on employment. If we put more people in employment, create more jobs, then the Government's policy is successful. If there is not that result; then its policy is a failure. We will accept that test and will stand by the results."

I propose accepting that the Minister meant what he said. Senator O'Brien seems to think the Minister might like to retract that statement. I am assuming that he intended what he said, as I have quoted it. I would ask Senators to consider the Government policy over the past 12 months according to the test set by the Minister himself.

I have here the unemployment figures—they were quoted in the same debate in the Dáil—since the present Government came to office. Most Senators are aware that there is always a difference between the summer and winter figures for unemployment, that the winter figures will always be higher because of the additions which take place when the period Orders cease to operate. Taking the figures for June of the three years, 1951, 1952 and 1953—the three years which cover the period of operation of the present Government policy—we find that in June, 1951, the unemployment figure stood at 35,000; in June, 1952, it was 45,900; in June, 1953, it was 63,900. According to the test which the Minister himself asks to have applied, to show the success or failure of Government policy, that policy is proved a failure over the period since the present Government went back to office.

Mr. Yeats

Has the Senator got the figures for this month?

Mr. O'Higgins

If the Senator has them, I would be glad to hear them.

Mr. Yeats

If the Senator is quoting, he should be up-to-date and should give the present figures.

Mr. O'Higgins

We turn now to the comparative winter figures over the three years. In February, 1951, the figures stood at 65,000; in February, 1952, it had risen to 74,000; and in March, 1953, it stood at 85,500. The Government policy was in operation for that period of something over two years.

According to the Minister, a fair test is whether they have put people into employment or knocked people out of employment. I do not know what Senator Yeats has in mind but every single one of us has been very well aware—those of us, anyhow, who live in Dublin City—of the appalling situation with regard to employment in this city over the past 12 months. We have seen the operation of Government policy resulting in marches throughout the streets of the city. We have seen marching and demonstrations by people who were unable to get employment or who were put out of employment because of the operation of Government policy. That is bad enough at any time but it is doubly to be deplored when, side by side with that, you have the cost of living increasing on these unfortunate people—increasing to an extent that even the Taoiseach deplores the weight of taxation.

I want to take this opportunity of reminding the Minister that he issued this document entitled de Valera's Men during the last general election and, over his signature and those of two other present members of the Dáil, he gives a number of promises to those whom, at that time, he was asking to elect him. The second promise, of the eight, was to exercise a practicable system of price control. I want to ask the Minister now, in relation to this Bill, where is the evidence that he or the Government have exercised any system of price control over the past 12 months. Can the Minister even tell us what has happened to the Prices Advisory Body? Has he driven the Prices Advisory Body completely underground? Has he silenced them? Where is that body now? Has he, over the past 12 months, asked them to continue their sittings and, if so, has he asked them to continue these sittings in private rather than in public? I should like some information with regard to that particular matter.

Another promise given by the Minister in this document—de Valera's Men—was to promote industrial peace and the workers' welfare by establishing industrial councils and by maintaining regular consultations with workers' organisations. Will the Minister tell us, when he is replying, if he considers marches by unemployed persons, marches by civil servants, the jailing of farmers during the milk strike matters which are likely to promote industrial peace? Does he consider the abolition of the food subsidies and the increase in the cost of essential foodstuffs as likely to promote the workers' welfare?

In the same document, the Minister criticised the work of his predecessors in relation to the maintenance of price control and the question of the cost of living. One of the statements appearing in this document which, as I have said, is over the signature of the Minister, is this: "At no time during the Coalition's period in office was the cost of living below the highest level reached during the war years. It is to-day an all-time record. Many food subsidies were abolished: all of them were reduced." Does the Minister recollect appending his signature to that charge and to the promise that was implied in that charge when he was seeking the votes of people in the centre of this city just over two years ago? Whatever may be said about the cost of living at that time, due to the ineffective leadership of the Minister in charge of industry and commerce and general ineffective leadership in the Government, any record that was created before this Government came into office with regard to the height of the cost of living has been smashed and shattered in the past 12 or 18 months. Let me read this sentence again: "Many food subsidies were abolished: all of them were reduced." What was the implication behind that a sentence? Was it not that if the Minister received sufficient confidence to enable him to take part in a Government again, not alone would food subsidies not be abolished but they would not even be reduced?

I do not suppose it would be particularly relevant, except in so far as it deals with the prices of these commodities, so I do not intend to go over the sorry history of the Government in relation to their promises and particularly in relation to their promises to maintain food subsidies. However, it is relevant to the question of prices and price control. I said at the outset, and I repeat it again now, that while none of us wants to withhold these powers from the Minister or the Government for the next 12 or 15 months, we are entitled to find out from the Minister during this discussion what he has to say for his operation of this Bill over the past 12 months and what evidence he has to put before this House that the Bill has been used for the purpose of controlling prices and regulating supplies.

I do not believe the Minister intentionally treated this House or the Dáil with any discourtesy in introducing the measure in the way in which he has introduced it but I believe that in the situation which exists in this country to-day it is not enough for the Minister merely to come in here and say: Because we are going to introduce permanent legislation to replace this measure and because we want a bit of time to do that, we are asking you to give us this measure for a period of 15 months. I think it is the duty of the Minister to review the manner in which the Act has been operated by the various Departments concerned. It affects prices and supplies and it affects the question of the employment to a very marked degree. The Minister has not given any information whatever to the House to satisfy us that he or his colleagues are competent to operate this Act further.

Mr. S.T. Ruane

I do not intend to speak at length on this Bill because, as a matter of fact, some of the points to which I wished to refer have already been dealt with by previous speakers in this debate. As was pointed out by Senator O'Brien, this was a measure which became necessary during the period of the Emergency. The war is over now for the past eight years and yet the Minister still considers it necessary to have the powers—the very autocratic powers—that this Bill gives the Government or to the several Departments of State concerned. The Minister wishes to have these powers continued for a further period of a year or 15 months.

It is quite true that many of the economic ills from which this country suffered are still in existence and any steps that the country could take, through its Government, to rectify these ills would be justified.

Any power the Government or any Departments need to correct these evils would be justified but notwithstanding the powers that have been given, and given, as has been pointed out, repeatedly for the past two years, the existence of these ills is still evident, and in many respects they have worsened. Legislation has been resorted to to correct them but, though some advance has been made, the country has not yet caught up with the very serious evil, the most serious of all that threaten it, the continued depopulation of the country.

This Bill provides powers for five Departments of State. Powers are given to the Department of Agriculture to regulate the marketing of agricultural produce. If that power has been responsible in any way for an increase in the price of an essential food—butter—it certainly has not been used to the advantage of a very large number of people because it has succeeded in shortening the supply of butter on the tables of many of the working class, not alone in the cities but in the towns and rural areas.

The Department of Finance derives certain powers from this Bill and in so far as these powers are concerned with borrowing by statutory bodies. If these powers include the power given to the Department to increase the interest on sums borrowed by local bodies for works of housing, they certainly have not brought any benefit to the country; quite the reverse. As Senator O'Higgins pointed out, if the powers given to the Minister's Department to control prices are included in this measure, we have seen no evidence during the past few years that prices have been controlled. As a matter of fact, controls have been removed and prices have rocketed as a result. No Party would deny the authority necessary for the correction of these evils. We are all agreed that they exist but what we are not agreed on is the nature of the remedies by which they can be brought to an end.

No later than last Monday evening our ambassador in England, speaking at a meeting in Cardiff, referred to the reduction of population in this country as a challenge to the State. As reported in the Press of yesterday, he said:—

"There are over 500,000 people in Britain who were born in the Twenty-Six Counties. There are many more thousands in the United States of America, Canada, New Zealand and other countries. I sometimes hear it suggested that our young people leave Ireland for choice. That, of course, is quite absurd. The problem remains a challenge, but I have no doubt that as time goes on, policies of national development in Ireland will be judged more and more by how far they present a solution of the problem."

I hold that the problem will never be solved by a competition in argument across the floor of either the Dáil or the Seanad. I hold that these problems can only be solved by all Parties bending their minds to a solution and not by one Party trying to score over the other as to the means to be adopted.

I submit that an experiment was made during the three and a half years of inter-Party Government which brought conflicting views together and the success of that experiment was evident to everybody. I know that the progress and prosperity brought about as a result of resorting to that experiment was referred to as having been due to extravagance, but the people by a majority do not believe that and there is no use in trying to get that argument over any longer. They do not believe it, and, if any Party tries to continue that line of argument, the people, in their own time, will have their revenge. We have had plenty of legislation, all tending towards rectifying these evils, but what we want is less legislation and more concentration by all sections on remedying them. Until that is done, I am afraid that the securing of the change we all look forward to will be a very difficult matter and will continue to remain very far away.

Mr. Summerfield

Whenever I address the House, I confine my remarks very strictly to the Bill before the House. Because of that, I find myself somewhat at a loss to follow some of the speakers who have preceded me. At the outset, I want to say that I personally welcome the way in which the Minister reintroduced what has now become rather an old Bill to most of us. As he explained, it is merely a continuance of the original Bill and, within the next 15 months, we are to have various Bills dealing with the powers now enshrined in this measure. We will then have an opportunity of debating at length the features of each of the Bills presented to us.

I think, however, that I should stress some of the things that have happened within the past year, even on this Supplies and Services Bill. I do not think we realise the extent to which industrial expansion in this country is progressing, and I say quite deliberately that that development is greater than most people would imagine it could be, in face of the many difficulties and criticisms which industrialists have to face. Industries are not created overnight. It is not enough to merely wish that an industry will go into this village or to that town, and not enough to find local citizens public spirited enough to put up whatever capital is necessary to create an industry. That is only the beginning of the problem, and those people who say that under this temporary measure there is no such thing as price control quite frankly do not know what they are talking about. They should be connected with a few industries to realise the degree to which the Government exercises price control, and many of us wish that this Government, or any other Government, would leave industry freer than it is to-day.

In saying that, I quite admit that there was a time when controls, other than price controls, were necessary in the national interest, but I will say also that I hope that, when we do get the Bills to enshrine permanent legislation, they will get rid of most, if not all, of the controls affecting industry to-day.

Men owning or creating, or intending to own or create, industries in this country have quite enough problems to handle without having to worry about external and, in many cases, unnecessary, restrictions, however benevolent, by Governments or otherwise.

Reference has been made by experts like Senator O'Brien, whose contributions always delight us—I was very glad to hear it, though I do not agree with all he said—to taxation on industry. That is one of the things that affects industry, both manufacturing and distributive, but particularly manufacturing industry. The incidence of direct taxation on industry is something which has to be experienced to be believed. Not one of us is allowed enough in his accounts to take care of the necessary replacement of machinery and buildings, and I mention that merely to answer the views expressed by people who, whatever they know about other things, have no intimate knowledge of the problems of industry.

I have no intention of making a long speech because we meet here in the realisation that this is merely a reenactment of a temporary measure which is to be replaced, within a comparatively short time, by permanent legislation.

What with the advance of social legislation in this country and, incidentally, the impact of the cost of that legislation on production, there is a disequilibrium, as Senator O'Brien said, between the various sections that make up our community. Since we invited experts from America to come over, prepare and give us that I.B.E.C. Report, with all its recommendations and criticisms, I feel we have in this country men competent, if appointed to do so, to make an exhaustive and impartial survey of our whole economic life and make a factual report indicating the changes in the relative positions of the various sections that make up the nation.

I think Senator O'Brien said that the burden of taxation is bearing quite unfairly on some of those sections of the community to which the nation looks for most of its progress. I am satisfied that is so. I could carry on at length but I intend carrying out the promise I made that I would be brief. I am going to defer detailed criticism of many of the things enshrined in this Bill until it is replaced by the permanent legislation on the Statute Book.

Mr. Hawkins

This is a very simple measure. It is an annual measure which has come before the House since 1946 as the Minister stated at the outset. I am one of those persons who do not agree with the statement that we should have permanent legislation to deal with many matters with which this Bill dealt for the past six or seven years. It is now to be replaced by permanent legislation. There was this in favour of the present arrangement that the Dáil and Seanad had an opportunity at least every 12 months of reviewing the activities of the various Departments. When permanent legislation is introduced and passed, the opportunity of having any discussion on these various matters will be done away with.

We had just a few speakers up to this on the Bill. I think the first was Senator George O'Brien. He expressed great pleasure at the present trend in regard to our export and import position. I think he also voiced the opinion that, while the Government was prepared to carry out their national policy given effect to for a number of years through subsidies for such things as wheat, beet and butter, there was very little hope of obtaining a market for our exports. He spoke in general terms and was very much opposed to subsidies. One must examine carefully a statement or a warning issued by a person of such a standing as Senator O'Brien. Immediately afterwards, however, we heard criticism from a Senator against the policy of reducing some of the subsidies. In those circumstances one would find it very difficult to discover what policy would be pursued by the other people.

In regard to the suggestion coming from many sources in recent months that prices paid to large farmers are too high and that while those prices are maintained there is very little hope of a reduction in the price of butter, milk and bread, we should bear in mind that Deputy Dillon suggested the farmers should accept a lesser price per gallon for their milk than they were receiving. The effect of that suggestion, even though there was no definite proposal made to put it into operation, was to create unrest among the farming community, particularly among the dairying community in the South of Ireland. The result was that there was a serious drop in our dairy stock and for the first time in a great many years we were compelled to import butter. When we see the figures published to-day showing the huge sum paid during the past few years for imported butter we can realise how difficult it will be to bring about any reduction in the prices that are offered for our farm produce.

Such a suggestion would not be put forward by any serious-minded person at a general election. What happens during a period of that kind is that there is a contest among the Parties to see which is going to give the farmers the most. When the election is over, suggestions such as were made in this House are given in relation to these matters. They have had serious consequences in the past. It is to avoid such a situation arising in the future that we should be careful. Those people who make suggestions in regard to high prices should examine the position very carefully before they offer a solution. There are other ways in which the matter can be met. We could have increased production.

Senator O'Higgins spoke about price control and the increased cost of living. At the outset, he suggested that the Government contested a general election on the question of price control. It may be no harm to remind Senator O'Higgins and the others how the general election came about. The last general election was brought about on the very point to which I referred, because the Dáil was not prepared to give the Minister for Agriculture his Estimate. Rather than face the consequences of a defeat in the Dáil on the policy of the Minister for Agriculture, the Dáil was dissolved and we had a general election. The election was not fought on price control or any other issue, but only on the agricultural policy then being given effect to by the Minister for Agriculture. That was what brought about the general election. The Dáil was not prepared to give approval to that policy.

We have had several attempts at price control. I think it was in 1950 when this Bill was before the House that the question of price control was raised. The then Parliamentary Secretary announced that prices had not increased. That statement was received so badly throughout the country and by members of the Dáil that a panic more or less followed and a suggestion was made by the then Tánaiste, Deputy Norton, that some system of price control should be devised. There then was an attempt made to stampede the country into a Standstill Order. All prices were expected to be controlled from a particular date in December. I forget the exact date.

Within a week of that Standstill Order being made, the great majority of articles and items over which it was expected control would be effective was removed from control. Where control was not removed, the articles were no longer produced. If they were produced, they were produced under a different name. Therefore, price control would have been evaded anyhow.

Senator O'Higgins also complained that no attempt was made in the case of the increase in wireless licences and postage to transfer the burden that should be borne by the taxpayer in general on to the other persons using these items. I think it is quite justifiable for any Government to do that. It is not right that the people, many of whom are not users of wireless sets or of the postal services to a great extent, should have to pay for any losses incurred in the operation of such services. I think it is quite right that the Post Office and the broadcasting service and many other services should be made pay for themselves.

The Senator also cited the Minister's statement that the Government would be judged in the last analysis by the number of persons put into employment. He made a reference to the number of persons registered as unemployed as against the numbers employed in corresponding periods last year and the year before.

Statements of this kind do very little to solve the unemployment problem and do very little in particular when the truth is not being told, when as is the case, the present figures bear no relation or cannot be compared in any way with those obtaining in those years because of the changes that have been brought about, changes in the unemployment order and in the numbers of people entitled to be brought under the general employment Acts that were in being at the time.

He also referred to the bad effect it had on the country of having unemployed persons marching through the streets of the city centre. It is not a very difficult thing to organise a march of any types of persons through the city. We have had marches through the city of various types of organisations in the past. I do not wish at the moment to make very many references to them but we had at one time no less than a march through the city by a drapers' association because something was being done which would seriously affect them. Therefore this question of marching through the city could be overrated as to its importance and as to whether the motives behind the organisation of such marches were in the best interests of the persons taking part in them or not.

The question of price control is a two-edged sword so to speak. There are people suggesting that there is no price control and with that suggestion goes the other: that the manufacturers, wholesalers and retail traders of this country are all people who are out to fleece the people in general and that were it not that there are one or two people always clamouring for price control something drastic would happen.

That is not the case at all. We know the most effective price control we could have is competition and it is only during an emergency or during war conditions that you have a necessity for price control. It is only fair to say here that we have already— I do not think it is completely brought about by competition—a large number of items for general household use and quite a number of foods which have been reduced considerably in recent months. That has not been done on the advice of the Prices Advisory Body or by any effective price control. It has been done in the first instance because the people manufacturing these items felt they could be produced cheaper and that the considerable drop in import prices enabled them to pass the benefits which occurred on to the consuming public. It is evident that if one firm is not prepared to do that there will be another who will do it. That is the most effective way to achieve the best interests of the consumer.

As I said at the outset, this is a measure that is only to be in operation for a further 15 months. As a member of a committee set up by this House to keep a close watch on Orders made by the Minister or by the Government under this measure, I think it is only right for me to say that this committee have had regular meetings; every Order has been examined and only on very rare occasions, if at all, has it been found necessary to bring the attention of this House or the Government to any Order violating the principles involved.

Professor Johnston

One of the principal points of Senator O'Higgins's speech was that the Government, in spite of the promises to the contrary, has failed to keep down the cost of living during the last three years. I think a possible answer by the Minister would be that the Government had run into an unforeseen and exceedingly difficult international situation and that it was because of that international situation, resulting in the high cost of materials which maintained the high cost of living, that it was impossible for any Government to reduce that excessive burden on our people.

That being so, I think it is entirely relevant to cast a brief glance on the international situation which imposed all these difficulties. In particular I would like the assurance of the Minister that his attitude to the general international position has not changed materially in the past few months. On January 7th, 1952, the Minister, speaking at Clonmel, was reported to have said:—

"Questions of economic and financial policy which must be decided this year will divide our people between those who are willing to see the nation kept as a pet of somebody dependent on foreign aid, and those who want to see it strong enough to stand alone, maintaining its freedom in all circumstances."

These are sentiments with which I thoroughly agree. On 29th April, 1953, Deputy S. Flanagan, speaking in Dáil Eireann, is reported to have said:—

"I hope that they (the Government) will not attempt to compromise the situation by saying that they will join any organisation, international or otherwise, if and when the independence of the 32-county Republic is established. I hope that, instead, they will declare that this country will be neutral, in accordance with the wishes of 90-odd per cent. of the people, in any conflict between great powers."

I have a cynical and disillusioned view about the whole international situation for the last few years and I thoroughly agree with those sentiments too. However, there is evidence that the Minister, and possibly the Government, appear to have changed their ground and the evidence is that there are reports of certain speeches made by the Minister on the other side of the Atlantic. May I quote from the Irish Times of 6th October, 1953:—

"His Government now considered that the time had come when its further progress could be advanced by permitting a limited investment of external capital, provided that it was directed to types of development which would increase Irish production capacity or bring with it needed new techniques. It was realised that the habit of external investment on private account was not very strong amongst Americans —notwithstanding their country's strong creditor position—but it was likely to grow and there were many reasons why it might be attracted to Ireland."

That seems slightly different from the sentiments expressed at Clonmel in which he seemed not to desire that we should be too much dependent on any kind of external foreign aid. Certain other speeches of his are even more significant, and from my point of view possibly more dangerous, because they seem to suggest a possible immoral transaction in which the ending of Partition would be closely associated with the joining of that so-called organisation for peace called N.A.T.O. May I quote from the Irish Times of 2nd October, 1953, in which the Minister is reported to have said at a lunchcon of the National Press Club in Washington:—

"wherever nations meet to work for the common well-being of all peoples and Ireland can make any contribution, however slight, to the success of their efforts, the representatives of Ireland will desire to be present, but we can never forget that we have some unfinished business of our own, that we hold strongly to the view that the cause of justice will never have been fully vindicated until Ireland's right to unity has been conceded."

In a speech reported in the Irish Times of the 26th September, 1953, he is reported to have said addressing the Ottawa Canadian Club:—

"Irish partition was often a real barrier for many reasons. In regional organisation, such as the Council of Europe and the O.E.E.C., Ireland played an active part; but when the N.A.T.O. was proposed, and when they found that membership implied acceptance of the existing territorial boundaries of other member-States, then it was clear to them that, with Britain claiming as an integral part of her territory six of the counties of Ulster—a claim which no Irish Government could admit or appear in any way to accept—they were not free to consider it."

The suggestion underlying those remarks is that the Minister, and possibly the Government, would be prepared to do a deal and to exchange the reunification of Ireland for membership of the N.A.T.O. pact. That is a policy which I should strongly oppose, and I hope most Irish people would also, even on both sides of the Border.

That leads me to consider quite briefly the N.A.T.O. on its merits. In the first place, it is quite inconsistent with the principles of the U.N.O.; when originally established it contained both Communist and anti-Communist countries and it was commonly said that it implied a willingness to live and let live in a common world and avoid treading on one another's toes. It was agreed that if the four major Powers which were victors in the second world war were agreed on a common world policy expressed through the organisation of U.N.O., then there could be no war; but equally if those four major Powers should quarrel, there could be no peace. The second circumstance has arisen and we have not peace but, instead, a condition of cold war. N.A.T.O. is closely linked with the so-called European Defence Community.

Mr. Baxter

I want to make a remark or two, not that I am hopeful that anything one says will enable the Minister to achieve his purpose of keeping prices under control. This Act has been in operation for some years. Unfortunately I was not able to be present for the Minister's opening remarks, but I understand the Act is to be replaced by something better to regulate and control prices. I am not any more optimistic about any other piece of legislation for controlling prices than I am about the present. I think it was Senator Hawkins who said that the availability of services, whether they are in abundance or in short supply, does far more to control prices than anything else. All sorts of services are calculated in considering whether the total budget for the family is high or low. How can you have cheap or abundant services and commodities unless people are prepared to work?

What troubles me about these debates about unemployment, emigration and the other weaknesses of our society, is that so few people are prepared to stand up and speak the truth and tell the people that standards cannot be raised and prices cannot be lowered and productivity cannot be increased unless the people are prepared to work harder in Ireland than they are working to-day. The prices of food are high. There has been complaint that they have not been kept properly under control. Some of my colleagues are not satisfied about the price they have to pay for butter in Connaught.

As I see things now, they will find more difficulty in buying butter in the years to come than there has been in years gone by. The problem of finding people to work on the farm is such that it is turning young farmers grey in the head. Wherever you turn, men do not want to work in Ireland. They want to live here and live very well here, they want plenty of money to spend, but they want someone else to earn the money and pass it on to them. If the Minister and his colleagues have erred, it is that they have taken on to the shoulders of the State the responsibility for providing too many services for the people. They have left too many people here under the impression that you just have not to work—that, somehow or other, the grand motherly State will pass it all on to you and that you have only to stand by and wait.

It is all very fine to talk about all the industries which we are establishing and about all the employment which will be given in these industries but what is the use of men investing capital in these industries and putting their brains and their energies into their management, if the employees are not prepared to work hard enough to produce commodities at a competitive price? The Minister should preach the gospel of hard work and it is necessary that he should get his colleagues to do the same thing. In addition, he should invoke the aid of the Opposition in this matter. Unless that gospel is preached, and the people take heed of it, I can see nothing around me to-day that offers any hope that this nation will be built up into a strong nation. No farm and no home can prosper unless the breadwinner is prepared for honest toil. Too many people in Ireland to-day are not prepared for honest toil and yet they expect their homes to be neat and tidy outside and inside.

You cannot get cheap food unless an abundance of food is produced from our own farms. That is not being done. Perhaps the Minister's colleague, Senator Quirke, will fly at me for saying so, but in my view the Government's policy on tillage, even this year, is a failure. To my amazement, I discovered over the week-end that with all our talk, efforts and high prices—the prices for some of our tillage crops are relatively high here— we have succeeded in getting only 32,000 acres more this year than last year. I think that that is dreadful. We are offering a price for wheat which, relative to our productive capacity, must be as high as any in the world. What have we done? We have increased the area under wheat by about 95,000 acres, but we have lost practically as much in the way of acreage from the production of oats and barley. Therefore, instead of importing wheat, as we did in the past, we will probably have to import oats. I do not know what the position is in regard to other animal foodstuffs. However, that indicates a trend. Why is it like that?

Senator Hawkins thinks that a great deal has been achieved in the matter of milk and butter production. Not at all. This year has been one of the best grass years that any of us has ever experienced and yet it has given us just about a fortnight's extra butter supply over what we produced last year—and we all know what was spent on the importation of butter last year. It is the same all round in every field of the agricultural industry to-day. From my contacts with farmers up and down the country, and from my own experience, I consider that the main trouble is our inability to find men who are ready to work on the land. I do not say that the people are working any harder in the towns and cities. I think the bad influence of some of the people engaged in industry— people who work short hours, give a low output and collect high wages—is making itself felt on the people who work on the land. They are all meeting in different places now. They congregate in Croke Park from the ends of the country to watch a match on a Sunday. They meet at dances, at cinemas and at various other functions which are held throughout the length and breadth of the country. They are well able to compare notes.

The influence of industrial workers and industrial conditions on rural life in Ireland to-day is truly alarming. I realise that the flight from the land is not something which is peculiar to our own economy. It is taking place in other countries too. The situation in the Argentine is astonishing. Somebody who came back from Denmark recently wrote a very interesting report on conditions there, as he saw them, and it appears that the same problem is confronting the Danes. They are wondering what the position will be like ten years hence and they do not know how they are going to carry on. Some of our instructors and executives visited Holland recently. They reported that the Dutch people go out to work on their fields at four o'clock in the morning and that they work hard all through the day.

The people in Ireland are not doing that. When our Irish people go out to work in our fields and factories their output is not anything like the output of the Dutch people. They have to work hard in Holland in order to survive. The natural resources of the country are limited and there is an immense population on a small area. The prices there are high, too. They have a social insurance plan which is far and away more extravagant than anything we have here. I sympathise with the Minister or any of his successors who believe that by a process of passing Bills through the Oireachtas we will control prices and keep them at a satisfactory level. It is not being done and it will not be done. Unless we have a greater productivity from the land, I do not see how our living standards can be raised. I do not see how our output, how our exports, how our capacity to buy from abroad can enable us to enjoy a higher standard of living unless we achieve greater productivity from the land. We are not getting that increased output.

There has been some increase in the physical volume of goods and in the value: that is very satisfactory. Our latest trade returns sounded a note that the position was more favourable because the price at which we bought the goods that came in had fallen, while the price which we received for the goods we exported had risen. That is a satisfactory position, but it will not continue much longer.

The Minister must be aware of that fact. In the main agricultural countries of the world, foodstuffs that cannot be sold are piling up. I was not in the House when Senator O'Brien was speaking and so I did not hear what he said, but might I point out that you can produce a product at a price that is too dear for somebody else to buy? I do not think we could sell our butter in Britain. If we are aiming to sell wheat in Britain, I do not think they will buy it at the price which we pay our farmers for it. I do not quarrel with that but it is a fact which must be borne in mind. American farmers are producing an abundance of wheat. The support price in America is so high that the Americans cannot sell their wheat to people outside their country at the price which they pay to their farmers.

I read recently that the Americans have so much dairy produce of their own that they have put an embargo on imports from Holland. The Dutch reciprocated by getting the authority of some of the international bodies not to buy wheat from America. It will be seen, therefore, that there is a vicious circle there. We are drawing close to the time when our agricultural prices must fall, must come back. We have seen it over this year in regard to our poultry products. There are some things that can be produced only by manpower. These products will be in short supply in the future and may command a higher price than, perhaps, their real value as food.

In the past we have not devoted anything like enough attention to the matter of raising the productivity per acre of our land. Any of us who know anything about it must accept that as true, but that can only be done by large capital investment, by knowledge, by training, by research and, above all, by labour and the employment of men and the preparedness of men to work and work hard. That is just what it is impossible to find on the land of this country to-day and that is going to be the real problem confronting the Minister and his successors. It may be unbecoming for a country man to speak like this about what is going on in rural Ireland, but I should be closing my eyes to the facts as I know them, as I see them every day and as I hear them from many men with whom I discuss our problems week after week, if I did not refer to it.

I very strongly suggest to the Minister that we may find ourselves in very rough water indeed sooner than we imagine, for a number of reasons, to all of which we are prepared to close our eyes. The first and most essential is that we are not getting the output from the people which the country requires. We all owe something to our country. There are not so many people alive now to whom the country owes a great deal, and we ought to expect of the people coming on that they will think of this as their land, which they are prepared to serve because, in serving it they are serving themselves, that they will be prepared to work on it and to work on it as hard as they would have to work if they left it.

That is not the spirit in the country to-day and that truth must be spoken and preached from the hilltops. When we see, as I said on a previous occasion, advertisements by Bord na Móna during the year asking for men to go to our bogs to produce power for the country, and when we know that in all the towns of the country men are marching around, signing the register in the employment exchange and getting money for doing so, who will not go to our bogs, one has to confess that there is something fundamentally wrong with us, either as a people or in our way of government.

I am convinced that, in passing through the Oireachtas measure after measure, we are merely scratching the surface in a most ineffective way and that, while we appear to fool ourselves into the belief that we are doing something for the Ireland we want to create, it is dying under our eyes, and responsible people in both houses of the Oireachtas will have a great deal to answer for to their generation and to other generations for failing to see the things they must see around them and to realise that they are the real canker eating into the heart of the nation, turning people away from their duty and responsibility, and not speaking more loudly about it. I suggest that all of us require to readjust our point of view and, instead of trying to delude ourselves that we are making all the proper plans to make life better here and to make goods, commodities and services more plentiful and cheaper, we are, in fact, doing the contrary by the negligence we are displaying towards the nation's fundamental problems.

Éamon Ó Cíosáin

Tar éis bheith ag éisteacht leis an gcainteoir eile a labhair ar an mBille seo, is ar éigin atá tuiscint níos fearr againn ar na cúrsaí a thagann fén mBille. Táim ar aon aigne leis an gcainteoir deireanach go mba mhaith an rud é go ndéanfadh na daoine seo, muintir na tíre, níos mó oibre, go n-oibreoidís níos déine, ach, nuair a chloisim daoine ag tagairt do dhaoine na tíre seo i gcomparáid le muintir tíortha eile nílim sásta go bhfuil an cheart ar fad acu. Is dóigh liomsa go n-oibreann muintir na tíre seo chomh dian agus chomh dícheallach le haon chine eile agus, go dtí go mbeidh fianaise dá mhalairt agam, nílim sásta glacadh leis an tuairim a chualamar anseo ón gcainteoir deireannach. Ach béidir ná fuil an chóir cheart acu maidir le maisínreadh agus modhanna ealadhanta. Im thuairimse, tá a mhalairt d'fhianaise againn le blianta, agus go mór mhór an bhliain seo atá caite, mar, ós na figiúirí, chímid go dtáinig níos mó barraí ón talamh—níos mó cruithnachtan agus níos mó biatais—agus ní mór an difríocht idir an méid acra a cuireadh fé na barraí seo i mbliana agus na blianta atá caite.

Níl fhios agam in aon chor cad a bhí i gceist ag an gcainteoir deireannach nuair dúirt sé gur dóigh leis ná seasfadh na praghsanna atá á fháil ag na feirmeoirí fé láthair, ná seasfadh an luach atá ar na barraí acu. Tá aon rud amháin cinnte, go bhfuil an t-am tagtha ná beidh feirmeoirí na tíre seo sásta níos mó oibre a dhéanamh, níos mó barraí a chur agus a bhaint as an talamh, gan luach dá réir d'fháil ar na barraí sin. Agus nach fearr i bhfad an t-airgead—pé breis airgid a bheadh ann—a thabhairt dár muintir féin, do luch saothruithe na talún anseo, ná é a thabhairt do dhaoine lasmuigh i dtíortha eile? Baineann sé sin le cruithneacht.

Mícheál Ó hAodha

Nach bhfuil an scéal i bhfad níos casta ná san?

Eamon Ó Cíosáin

Scéal casta is ea é, admhaím, ach deirim gur fearr luach ceart saothair a thabhairt d'fheirmeoirí na tíre seo ná bheith ag iarraidh na h-earraí seo atá i gceist agam, cruithneacht, siúicre agus im, a thabhairt isteach anseo ó thíortha i gcéin. Is mar sin a bhí an scéal cheana agus níl an scéal leigheasta fós i gceart. Tá tuilleadh le déanamh agus tá bearna fós ann le líonadh agus caithfimid, más féidir, an bhearna san a líonadh. Níl aon tslí chuige sin ach na feirmeoirí a spreagadh chun tuilleadh oibre. Tá dhá shlí chun é sin a dhéanamh—iachaill a chur ortha níos mó acraí a chur fén gcéacht nó luach ceart saothair a thabhairt dóibh. Fé mar a chímse agus mar a thuigimse an scéal, níl aon dream againn i bhfábhar an chéad ruda. Cé'n fáth a gcuirfimis d'fhiachaibh ar an feirmeoirí so súd a dhéanamh? Lig dóibh an obair a dhéanamh ach tugamis luach ceart saothair dóibh. Is dóigh liom gurab é sin an cuspóir atá againn inniu.

Cloisimíd a lán cur síos mar gheall ar an gcostas maireachtála agus, go deimhin, is rud fíor-thábhachtach é maidir le gnáth-mhuintir na tíre seo, agus go mór mhór na daoine a bhfuil cúram clainne ortha, ach cé go mbítear ag chaint mar gheall air sin agus mar gheall ar na praghsanna árda ní chloisimíd ó éinne cad is ceart a dhéanamh chun na praghsanna san a laghdú. Is breá bog a thagann an chaint chugainn nuair a bhímid ag caint mar gheall air sin. Ní cúrsaí polataíochta atá i gceist agam anois, mar dúirt mé an rud céana seo in áit áirithe eile cúpla bliain ó shoin.

Ní mór an smacht atá ag aon Rialtas ar na rudaí seo, nuair a dhéanfá machnamh ceart air. Tá dhá rud le thabhairt fé ndeara—na hearraí a tugtar isteach sa tír seo ó thíortha eile agus na hearraí a deintear sa bhaile, i dteannta torthaí, agus na barraí a gheibhtear ón talamh. Maidir leis na hearraí a thagann ísteach ón taobh amuigh tá siad go mór fé thionchar na rudaí a thiteann amach ar fud an domhain. Nuair atá an scéal amhlaidh is beag is féidir le haon Rialtas a dhéanamh chun an costas maireachtála a laghdú.

Ach má deintear iarracht ar chuid den na hearraí a choiméad amach beidh daoine ag gearán go bhfuil an Rialtas ag séanadh rudaí ar na daoine a ba chóir a bheith acu. Ansan, an dara rud, maidir leis na hearraí a deintear anseo agus i dtaobh na mbarraí a gheibhtear ón talamh d'fhéadfaimis an costas beatha a laghdú maidir leo súd. Ach an ceart san a dhéanamh? D'fhéadfadh Rialtas luach na cruithneachtan a laghdú, luach an bhiatais a laghdú agus luach an bhainne agus an ime a laghdú ar na feirmeoirí. Ach an cuspóir ceart é sin don tír? Ní dóigh liom é. Do dhéanfadh cuspóir dá shórt díabháil don tír sa deire mar d'éireodh na feirmeoirí as an deaobair atá ar siúl acu nuair nach bhfaighdis luach ceart saothair. Do b'oth liom go mór é sin.

Nach mar sin atá an scéal? Aon duine anseo nó sa Tigh eile a labhrann i dtaobh an chostais mhaireachtála a laghdú, an bhfuil sé sásta éirí agus a rá gur ceart luach na néarraí seo atá luaite agam a laghdú? Ní dóigh liom go mbeadh éinne, go mór mhór daoine a bheadh ag brath ar thoil na ndaoine, sásta é sin a dhéanamh.

Ní mian liom mórán eile a rá, a Leas-Chathaoirligh. D'fhéadfadh díospóireacht an-leathan a bheith againn ar an mBille seo—An Bille um an Acht Soláthairtí agus Seirbhísí—ach beidh am eile againn chuige sin. Is mór an rud é go bhfuil sé ar aigne ag an Rialtas deire a chur leis an saghas seo Bille agus na nithe a bhíonn sa mBille seo a thabhairt isteach i mbuan-Acht. Sábhálfaidh sé am na Dála agus na dTeachtaí. Beidh fhios ag na daoine cá mbeidh eolas cruinn le fáil i dtaobh na rudaí seo.

Mar fhocal scuir do b'oth liom go mór dá ndéantaí aon laghdú ar na praghasanna atá le fáil anois ag na feirmeoirí ar a mbarraí agus ar na torthaí talún -rl, praghas an bhainne, an ime, praghas cruithneachtan agus biatais, fiú amháin chun an costas maireachtainte do laghdú. Is fearr go mór an t-airgead a thabhairt dár bhfeirmeórí féin ná é leigint amach go tíortha i gcéin chun na hearraí sin a cheannach.

Mar dúras, aontuím gur maith an rud é dá ndéanadh ár muintir níos mó oibre, ach is dóigh liom go n-oibrigheann síad chomh dian le muintir mórán tíortha eile, ach ná fuil eolas ealadhanta acu ar a gcúrsaí ná maisínreadh go leor, ach tá an scéal san ag dul i bhfeabhas go maith.

Professor Stanford

First I should like to congratulate Senator O'Brien on a fine and valuable contribution to our debate this evening. I might describe it almost as the pivot or keystone of our debate. Later I should like to venture to offer some criticism of one point in it. But on the whole I would like to voice my agreement with its main conclusions.

He emphasised, and very rightly, as I think, that investment is not in itself a desirable aim. We must look beyond a mere policy of investment. He emphasised that economic policies aimed simply at creating employment can be ultimately harmful. I think it was very necessary to emphasise that. Here we see a conflict, perhaps, between the economist and the Party politician. To the economist this policy leads ultimately, he thinks, to the country's harm. On the other hand the Party politician must think in terms of those many floating votes. He thinks to some extent, at least, in terms of that. We must face that fact.

Here there is a clash between economics and Party politics. But that is where the statesman comes in. I believe that in all our main Parties in this country we have statesmen who are prepared to balance the two forces in that conflict. There may be a need for compromise. There may be a need for give and take. But I look to those statesmen—I could name them but I do not think it is necessary—to do their duty in this head-on collision, not to yield to the demands of the Party politicians for easy votes and not to forget the economists' warnings.

There is also the importance of Senator Professor O'Brien's warning that by keeping our protection and subsidies at too high a level we are endangering the present and future welfare of our country. Further, there was his emphasis on the fact that it is the income-tax payers—one-seventeenth of the total population of the country— who are bearing the main weight of our subsidies. I do not think that this can be emphasised too often. It is a source of grave discontent in a hardworking and important valuable element in our population. I would urge the Minister to bear it constantly in mind—the fact that the main burden is being carried by one-seventeenth of the community.

Again, we must pay the closest attention to his warning that posterity will have to pay for our present spree —I use his own word "spree"— which we are enjoying at the moment. We are living beyond our income in many ways and if we do not pay for it our successors will have to. Those are grave warnings, valuable warnings and predictions based on expert knowledge and I urge the Minister and the House to bear them carefully in mind when considering matters of policy such as are before us this evening.

There is one point on which I would with great deference venture to cross swords with Senator O'Brien on his own territory of economics. He said that the control of prices ought to be kept down to a minimum, that there should be as little control of prices as possible. He said that to control prices is like nailing down the hand of the barometer. I would ask him: Is that a fair analogy? The barometer operates in a free atmosphere. It records acts of God, the rise and fall of the atmospheric pressure. No one comes in and induces artificial pressure, artificial temperatures, artificial rainstorms and frosts, but I suggest that our Ministers of State are creating an artificial atmosphere to a certain degree. Sometimes we feel the cold which they have created; sometimes we feel the wind and the rain when they open certain doors; and we who have to buy things must reckon with that.

I would say that in a natural economic system we should have free competition. It is with great deference and great compunction I argue with Senator O'Brien on this. But surely in an unnatural economic atmosphere control must enter in. We, the buyers, feel that certain things are dearer than they would be if tariffs were removed. Senator O'Brien himself has told us that the internal price level is out of step with the external price level in many respects. We are afraid that there is some exploitation of this artificial atmosphere in our country. The barometer is not moving in a free atmosphere. The atmosphere is partly controlled by the Government and in such circumstances I would claim it is no more misleading to alter the scale on the barometer or even to hold the hand of the barometer than to control the atmosphere round us. Analogies are sometimes misleading and I challenge Senator O'Brien's analogy on that point.

To leave aside such metaphors, the facts are simply this: If our traders are given special advantages and special helps there will have to be careful scrutiny to prevent abuse of their special privileges. Let me emphasise this—because I fear the wrath of some members of the House if I am misunderstood—that there are many just traders who are gaining fair and just advantage under the present system of controls and are not making more than a fair profit as a result. But human nature is what we know it to be and I know there are various unjust traders who are exploiting this artificial atmosphere.

I speak for the people who have to buy the necessities of life, the people who, whether they have a barometer or not, have to go out into the wind and the rain and buy their bread, butter and clothes. I do not speak for scientists like Senator O'Brien who is interested in barometer readings and price fluctuations. I speak on a matter that is simply a question of bread and butter and I claim that we must have wise control of our prices. We have not got an environment at the moment for fair competition. It is a complete fallacy to suggest that free and open competition within our unnatural economic atmosphere will bring about fair prices. We have committed ourselves to an artificial atmosphere and the people who have made that atmosphere must control it wisely.

Let me give a specific example of what I have been talking about. I want to ask the Minister a question. I am relying on my memory but if I am not right I hope the Minister will correct me when I say that he was recently asked a question in the Dáil about wheat and cornflakes. As well as I remember, the facts are these: in Belfast at the moment you can buy a package of flakes—I am not sure whether it is wheat or cornflakes but it does not matter—for 1/4. In the Republic you will pay 1/10 for the same package of flakes. The Minister will correct me if I am not accurate in saying that he said he had no evidence to show that there was very great demand for these cornflakes and was not prepared to interfere on that account. Surely this is a case of flagrant excess of price, 6d. difference between our price and the price of the same package of flakes across the Border. The Minister said, I think, that the retailers in this country simply asked for 6d. more as their profit. I think that is outrageous and that it is a case for the prices control body to step in. I would like to assure him from my own personal experience that a great many people in this country rely on these flakes as a staple element in their diet. As a matter of fact I have heard most curious stories of the machinations of these manufacturers in flakes, stories of deals between overseas firms and local firms to charge various prices, and so on, with the result that whatever the details of the transactions are, the price of flakes has gone up sensationally.

I would like to hear what the Minister has to say about that. I can assure him that flakes are an important element in my diet and in the diet of a great many other people like me. We feel it is wrong that we should have to pay so very much more for them. I ask the Minister if he or his Department are prepared to do something about it. I have stated the case as an illustration of what I believe— that as long as we have an artificial economic system which I admit we may need at present, we must have careful and impartial price control.

Mr. O'Donnell

This is a slice of a very important Bill and in so far as it gives an opportunity of discussing certain aspects of economic policy, we have to welcome it. I was very glad indeed to hear the Minister in his introductory speech saying that this is possibly the last occasion on which such a Bill would be produced in this House because this matter of legislation by Order embodies the application of a very dangerous principle which negatives any kind of democratic Government. While it may be necessary to have such Orders and such legislation implemented during a time of crisis, certainly five or six years after that crisis has passed there should be no necessity for its continuance. However, if the Bill did nothing else than help to evoke that brilliant address of Senator O'Brien, with which I disagree to a very great extent, it has justified its introduction here.

I would like to congratulate the Minister on his speech when presenting the Bill. I agree more with him than I do with Senator O'Brien in his attitude on various aspects of our economic progress. Senator O'Brien spoke rather quickly, so he will forgive me if I misquote him. It seems to me that neither the Minister nor himself has decided whether external assets are a vice or a virtue. I think that under certain conditions, such as those we have been living under in the past, they have become a vice and have no virtuous qualities. Senator O'Brien gave as the second reason for repatriation of external assets that it would need a pressing need to justify repatriation unless they returned an equally high yield as that in the country in which they are presently invested. On the other hand, the Minister said—and I agree with him entirely—at column 1751 of the Dáil Debates for the 10th November:—

"There is obviously no sense in keeping abroad financial resources which could be more profitably employed at home, and, in case that observation of mine is misunderstood, may I make it clear that, in using the expression ‘profitably employed at home', I do not confine their use to purposes which are profitable in the financial sense. I disagree with the view implied in the Central Bank Report that external assets should be repatriated for utilisation here only if they can earn more money here than they are at present earning abroad. We could be satisfied with a much smaller financial return if the general economic or social consequences were sufficient to justify the change...."

Senator O'Brien argues that the Minister is wrong and the second reason he gives for repatriation is that they must give an equal yield to that of their external investment. Surely, in the light of our present conditions here agriculturally and industrially, that is an outmoded point of view?

I quote now from column 1739 of the Official Report of Dáil Éireann, Volume 142, number 11. In the course of his reply to the debate on the Second Stage of this Bill, the Minister said:—

"I have not the figure here for 1950. Traders dealing in clothing made profits in 1950 representing 5 per cent. of their turnover, and that had fallen to 3.1 per cent. in 1952. Other traders in miscellaneous goods made profits representing 5.2 per cent. of the value of their turnover in 1950, which had fallen to 4.1 per cent. in 1952. I can give similar figures for manufacturers, but I know that Deputies, having in mind the circumstances of 1952, would not be surprised to hear that manufacturers made lower profits in that year than they did in 1950. The fact is, however, that in the year 1952 many groups of manufacturers made profits which were altogether too low, profits which were disturbingly low because they held out prospects of future difficulties for these manufacturers."

Further on, at column 1740, the Minister, in reply to a point made by Deputy Norton, said:—

"Deputy Norton contended that by reason of defective price control traders and manufacturers are making more profits now than they were allowed to make when the Coalition Government was in office. The fact is they are making less profits now, and I think it is important for the future of industrial development that manufacturers as a whole should do better in 1953 than they did in 1952."

There is a refutation by the Minister of the suggestion that prices and profits had risen. One would assume, listening to some people, that there was no control of any sort and that every manufacturer and industrialist was out to do the consuming public in the eye as hard as he could. I wish some of the Senators here were under the control of the Minister's efficient Department. Our prices and our profits are controlled up to the hilt. Just because the Government has aided industrial development in this country, some people jump to the erroneous conclusion that every industrialist and every manufacturer is a racketeer and is out to exploit the public. I have heard general statements made to the effect that the people of the country are being robbed right, left and centre. Now, the House has heard me quote the figures which the Minister gave the Dáil.

This matter of price control is tied up with that of profit control. The Prices Section of the Department of Industry and Commerce is one of the most effective organisations that I know of and I should like to disabuse the mind of any Senator who might be under the impression that he is paying an unduly high price for goods. The labour element in the cost of goods is probably much higher here than elsewhere. As an industrialist, I feel I should say something about that matter. The feeling I got as a result of the speeches made here to-day was that there was a sort of dispraisal of the work of the Minister and his policy in connection with Irish industry. I know that the Minister can defend himself more adequately than I can but in fairness to the industrialists and to the Minister I feel that it is up to me to defend the Minister's whole policy in this matter.

I should like to congratulate Córas Tráchtála on their work in connection with exports to hard currency countries. I am aware that the Minister has a very effective section in his Department to deal with exports to soft currency countries but I might mention here that some of the smaller industries are anxious to export to soft currency countries. Many of the younger industries which are expanding are anxious to do so and a little assistance of one kind or another would be of great help to them in such an export trade.

I am anxious to hear the Minister's reply to a question which was put to him by Senator Johnston relative to his invitation to invest American capital here. I do not know whether it would be fair to quote a report of the speech made by the Minister on that matter because reports are sometimes liable to misinterpretation. However, if it is true that the Minister went to America and Canada and invited American capital to come in here, then I think we should like to hear what the Minister has to tell us about the matter. I am not trying to discover what was at the back of his mind when he made that statement but I rather think that what he was looking for was the "know how" for Irish industry, which is something which we lack at the moment. In so far as finance per se is concerned, I think we should like to hear the Minister's comment on the matter if it was invited.

Senator Stanford suggested that we have not free competition—that there are rings, cartels and monopolies. Only a short while ago a Restrictive Trades Practices Bill was passed by both Houses of the Oireachtas. So far I have not seen reports in the newspapers of any colossal scandal that was discovered as a result of the implementation of that Bill. This whole atmosphere of belittlement, as it were, of the Irish industrial drive is damaging to Irish industry and it is unfair to the people who have gone into Irish industry. Any suggestion of antagonism to the Irish manufactured article is a complete reversal of the attitude of mind of the Irish people in the early 1920s and it will negative the great work which has been done. I should like to pay a tribute to the Minister for the help he has given in the establishment of Irish industry.

Mr. Lemass

It was natural, I suppose, that the main topic discussed on the Second Reading of this Bill should be the level of prices and the effectiveness of the Government's system of price control. I have never attempted to exaggerate the possibilities of any system of Government control of prices in relation to the reduction of the level of prices. I think very little can be done by any official action to determine or influence in any degree the level of prices. It is, however, going too far, as Senator O'Brien argued, that there should be no interference at all by the Government in the regulation of prices. It may be true that interference with prices is undesirable, that it deprives us of a barometer which tells us the economic weather or of a policeman that might check economic errors. The conclusion, however, is not that the Government should cease price control but that everybody should cease interfering with prices in any way. That is impossible. Trade organisations, trade unions and other combinations will make rules and enforce procedures which are bound to affect prices one way or another.

My feeling about price control is that in normal times, when there are ample supplies, and assuming that the effects of the operations of the Fair Trade Commission will eliminate combinations of traders to exploit consumers, we can safely keep Government interference with trade through price control down to the minimum, but we must ensure some means by which the individual citizen can have a complaint heard and investigated if, prima facie, there appears to be a case for investigation.

When we have finally emerged from the emergency situation, when we have dealt, through the Fair Trade Commission, with the possibility of combinations exploiting the market, we can confine our price control arrangements within that limit—the establishment of some official organisation to which the individual citizen can go to complain that, in respect of some article, either prices generally are too high or that he, in a specific instance, was overcharged, knowing that there will be powers of investigation, if investigation appears to be necessary. But a great deal of this discussion upon prices has been completely unrealistic and that is true in respect of those who criticised the whole idea of price control and those who urged that it has been ineffective.

Senator O'Brien started off by saying he was glad I had said that the principles of the 1947 Bill had been dropped. I said nothing of the kind. I still think the principles of that Bill were fundamentally sound and any system of price control that does not recognise the soundness of these principles is bound to be a failure. What were the principles of that Bill? It was framed in the belief that efficiency of the productive methods employed in industry had a far more important effect on prices than the profits taken by manufacturers. I am certain that is true, and I am certain that any system of price control, such as we had before the war, which was concerned only with the margins of profits taken by manufacturers or traders, is bound to be ineffective.

Even Senator O'Donnell, speaking as a manufacturer, fell into the same error. He argued that manufacturers made less profits in 1952 than in 1950 and that proved that the level of prices in 1952 was justified. It proves nothing of the sort. Prices could have gone up and profits could have gone down, and that rise in prices could have been completely unjustifiable if it was due to the introduction of restrictions by trade unions, the maintenance of obsolete methods of production, or of some costly method of buying raw materials which could be eliminated, and towards the elimination of which some Government-investigating body might be able to give a powerful impetus. Whatever form our legislative proposals for the permanent supervision and investigation of prices may take, I would not advise Senators to assume that I have completely abandoned the principles and views I held in 1947.

Senator O'Higgins asked what evidence is there that a proper system of price control is operating. What evidence is there that there is not? No Senator or Deputy tried to suggest that there was evidence that excessive prices were being charged for anything. Senator Stanford spoke about cornflakes, but the Senator is probably not aware that he was talking about a particular brand of cornflakes.

Mr. O'Donnell

Which are not Irish manufactured, either.

Mr. Lemass

Nothing that happens in relation to that can upset his diet because it has become available on the Irish market for the first time in 20 years. The manufacturers of that particular brand of cornflakes came to me to discuss their project to manufacture them here. Their proposal seemed to involve a not inconsiderable increase in employment in a particular area and consequently I facilitated them by getting certain decisions taken by the Revenue Commissioners on which their project depended, but, from an overall supply point of view, I could not care less whether their particular cornflakes were on the market at all or not.

There are other firms in the country which could produce cornflakes— perhaps a different type of breakfast foods—which will suit Senator Stanford or any other Senator as well as these particular cornflakes. The fact that they are now being manufactured here and sold at a higher price than in Belfast is not a condemnation of the policy of protection. It means that the Dublin grocers decided that they would not sell them at the margin of profit the Belfast grocers were prepared to take, and, presumably, they would have taken that decision, even if they came in completely manufactured. They may have been right or wrong in that, but I am asked to investigate that position. I think the Prices Advisory Body and the officers of my Department have far more important work to do than to investigate the prices at which luxury foods of that kind are sold, foods which we did without for 20 years and can do without for another 20 years, if necessary.

My attitude to the retail grocers— and I should like the House to understand this—is: "I am going to control rigorously, so long as I have powers to do so, the prices you charge, the margins you have on essential foodstuffs, bread, butter, tea, sugar and other commodities in common use, and, beyond that, they can charge for non-essential supplies whatever the public are prepared to pay. I am not going to control the margins they have upon these non-essential foodstuffs, recognising, as I do, that the margins to which I am restricting them in respect of essential foodstuffs are in some cases less than the Prices Advisory Body recommended to be fair."

My point about cornflakes is that it has no bearing on the question as to whether the prices of Irish manufacturers are too high or too low, nor am I going to give a sweeping opinion on that question one way or the other. We have some industrial products produced here by very efficient firms and sold here as cheaply as similar commodities are sold in any other country. A number of industrial firms, because of the cheapness and quality of their products, are now developing into an export trade. We have some manufacturers who are not nearly as efficient and to whom we may have to talk in a fatherly way at some early date, but there is no justification for a general assumption that the protection of Irish industry means that the prices of industrial products are higher than they would otherwise be. In some cases—and I will give illustrations of this—the operation of protection here has meant that we have got our products cheaper than we would have got them from abroad. There are rings, cartels and similar organisations operating in other countries which have not hesitated to exploit this market whenever they were permitted to do so, and if I venture to mention cement as a case in point, some Senators will know what I am talking about.

Senator O'Higgins probably meant to suggest that, if there was an effective system of control, prices here would have come down, would now be lower than they are, that food prices would begin to fall and fall even as much as Senator Baxter fears they may fall. If Senator Baxter's fears are realised and if the price of farm produce declines and the price of foodstuffs in the shops falls in sympathy, I exhort Senator O'Higgins not to praise the Government for producing that result. We will not have aimed at it. I believe that the economic consequences to this country of a general fall in prices would be far more serious, far more disastrous, than the maintenance of the present level of prices. I have repeatedly pointed out to the Dáil, and on previous occasions to the Seanad, that, when prices begin to fall, trade stagnates. Even if there is a general anticipation that prices may fall, the temptation to every individual trader is to minimise his stocks. That reduces orders to factories and causes a trade slump which can often have very wide repercussions.

Rising prices may have an opposite effect in so far as the stimulation of trade is concerned but they can produce real hardship for the people affected by them. Price stability is the desirable situation. We have here now a fair prospect of prices remaining stable. Senator O'Brien mentioned that over the past two years import prices have fallen while internal prices have risen. You can prove anything with statistics provided you take the right times for the institution of comparisons. I do not think it is true to say that between the present time and before the war there is evidence to show that our internal price level has moved out of line with the general trend of prices throughout the world. It is true that during the past two years there was a slight fall in import prices while there was at the same time a rise in internal prices, due to the higher prices paid to farmers for agricultural produce and increases in wage rates during that period.

Mr. O'Higgins

Would the Minister give comparative figures between ourselves and other European countries as to the percentage increase in the cost of living since the end of the war?

Mr. Lemass

Some figures were published in the Press last week showing the general level of prices in some countries. These comparisons are often of a very doubtful validity. Most of us who have travelled abroad know that the level of prices here is not out of place with the level of prices anywhere else.

Mr. O'Higgins

Is it not true that the cost of living has increased more sharply here than in any other European country bar one?

Mr. Lemass

Since the end of the war we are roughly about middle so far as Europe is concerned. In ten European countries the cost of living rose by more than it rose here and in nine by less, so that we are just average. I am not claiming that we are more than that. It would be serious for the country if our internal price level went up in a different direction to the world price level because, as Senator O'Brien stated, we have got to get an increased volume of export if we are to improve our living standards and carry through the various social programmes to which we all appear to be committed.

I have urged on all sections of our people—manufacturers, traders and workers—to realise that we have reached a turning point in our economic development, a point at which attention must be concentrated in greater degree upon the development of our export trade and that all sectional policies should be reconsidered right across the whole board in relation to that national need. If any one section of our people decide that they are not going to co-operate in creating the conditions in which increased export business will be possible, then we will not get it and if we do not get it we will have continued unemployment and emigration and a lower standard of living for those left in the country.

It is true that we have some prices which are out of line. They were deliberately put out of line with world prices for reasons of national policy which may have been good or bad. We are paying our Irish farmers for wheat a price which on a properly comparable basis is about £6 per ton higher than the world price. As a result we are getting a considerably increased acreage of wheat, so rapidly increased that certain problems are being created and which will have to be dealt with in the near future, problems of drying, storage, transport, and even finance.

There may be a difference of opinion as to what acreage of wheat it would be desirable to maintain in normal times. A Government committee which sat shortly after the war decided that 250,000 acres would be ample to give us a reasonable security and to keep the tradition and knowledge of wheatgrowing alive thoughout the country. We got 350,000 acres of wheat last year and we may have 450,000 acres next year. There may be circumstances in which it may not be a bad thing to have that substantial increase, but there may also be circumstances under which it could be a financial burden.

I do not think it is true to say that our social welfare or health services are so out of line with other countries as to constitute an excessive burden on our production. I do not think that is true. So far as transport is concerned we are not the only country in the world where transport loses money and has to be subsidised by the State. There are very few countries in which that is not true. If our plans, which I hope to bring to the Oireachtas in the near future, operate to eliminate the loss and the need for a subsidy we will have achieved the position of which other countries will be jealous.

Senator O'Brien referred to certain remarks of mine regarding the repatriation of external assets. He said that the repatriation of external assets by engineered deficits in our balance of payments is justifiable only in circumstances of exceptional trade depression or some military, social or political crisis or to provide social amenities like houses and hospitals and then only if the export trade was expanding so as to hold out the promise of making good the gap in due course.

He then went on to refer to my observations on the report of the Central Bank to indicate his own personal agreement with the views expressed in that report. They seemed to me to suggest that it was undesirable that we should repatriate external assets by any deliberate policy unless we could hold out the prospect that they would earn here dividends or interest equivalent to those which they were earning abroad.

The sense of that argument I cannot see. It is based on the assumption that the only benefit which is derived from investment in this country is the interest earned on the investment, the dividends paid to those who made it. Surely it is impossible to invest any substantial sum of money in a productive activity here without distributing, in the process of earning the dividend, substantial sums in wages to workers, or in buying materials which will benefit other producers, without giving benefit to the nation far in excess of the amount of interest earned on the investment.

It seems to me to be taking a completely false view of the value of investment in productive activity to judge it solely by the interest earned by it in relation to the interest it could earn abroad. I am quite certain there is no country in the world which would utilise its resources in accordance with that principle, and there is no reason why we should do so. So far as the individual owners of external assets are concerned, I fully appreciate that they cannot be induced to realise them and use them for some productive purpose here unless they can be assured that they will get as much if not more than they would get by keeping them abroad, but so far as the national resources generally are concerned, and so far as Government policy can determine the use of these resources, there is every reason for encouraging the repatriation of these assets for investment here whether or not they earn a financial return equivalent to what they are earning abroad.

Senator O'Donnell's view in regard to external assets is akin to regarding the winning of a prize in the Hospitals' Trust sweep as a disaster. I am always very glad to find the balance in my bank book in black ink. That is precisely what I meant when I said that it is a good thing to have reserve resources. What are reserve resources? They are vouchers, or evidence of entitlement to supplies of goods from abroad. If the circumstances visualised by Senator O'Brien were to come to pass, and there was an outbreak of foot and mouth disease which made it impossible to export cattle, these are the reserve resources on which we could draw to buy raw materials and to keep up the level of industrial activity here. How the possession of such reserves could be regarded as an evil is beyond me.

They are assets. They are described as assets, and that is what they are. They are worth preserving as they are until we can find a better use for them.

Mr. O'Donnell

I said under certain conditions.

Mr. Lemass

I do not want Senators O'Brien and Stanford to misunderstand me when I said that the Government was prepared to accept the employment statistics as a test of the effectiveness of its policy. I agree that investment is not an end in itself or that employment is not an end in itself. What I meant to imply and what I now say is that in my view in the circumstances of this country with emigration continuing, with the unemployment problem still there, a fair rule of thumb test of the effectiveness of any economic policy is its effect on employment. Even though I recognise it as no more than a rule of thumb test it is one the Government is prepared to accept.

May I say to Senator Baxter that there is nothing in our national circumstances to justify the pessimism he showed to-day? We have many problems to solve but things are generally going in the right direction at the present time.

Question put and agreed to.

Committee Stage ordered for next sitting day.

Mr. Lemass

Normally I would have asked the Seanad for all stages of this Bill. I understand the Seanad desires to have something on its Order Paper to justify meeting next week to deal with the Appropriation Bill.

Business suspended at 6.15 p.m. and resumed at 7.15 p.m.

Seanad Éireann díospóireacht - Wednesday, 18 Nov 1953

Supplies and Services (Temporary Provisions) Act, 1946 (Continuance) Bill, 1953—Second Stage.

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Seanad Éireann díospóireacht -
Wednesday, 18 Nov 1953