Committee on Finance. - Resolution No. 5—General (Resumed).

Wednesday, 22 May 1957

Dáil Éireann Debate
Vol. 161 No. 13

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Debate resumed on the following motion:—

[1698] That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.—(Minister for Finance.)

Mr. Wycherley: Information on Florence Wycherley  Zoom on Florence Wycherley  I was dealing last night with the importance of marketing our produce. We have allocated in this Budget £250,000 for the development of markets and I emphasised the importance of spending the first pound in the development of the home market. I realised the importance of that development to-day when we were told that we are importing thousands of pounds worth of cheese. Cheese is a product of milk of which we have a surplus at the present time and there can be no justification for such a wanton waste of public moneys. It is wasteful to import anything which can be produced as economically at home and, I have no doubt, better than anything we can import. It is very important then that the home market should be developed. I would not like to give more protection to any home industry than it deserves and last night I said that I would not like to protect an industry and subsidise it for over 20 years if it could not stand on its own feet after that length of time.

Having dealt with the home market and given as much employment as we can at home, which is the all important factor in the running of our own affairs, we can turn our eyes to the Continent. There is a very wide market there indeed for our produce. The most important market of all for our produce, next to the home market, of course, is the English, Scottish and Welsh markets. It was stated during the debate on the Budget that between the years 1932 and 1948 500,000 people left this country. It was also stated that in the year 1956 48,000 people left this country. I have no doubt that in the intervening years possibly another 500,000 left.

I think that those boys and girls who have emigrated to the English speaking countries could be of the greatest benefit and assistance to our people at home by consuming our goods abroad. It would be a great help if we could utilise that market. I have spoken to a large number of these [1699] emigrants and they have great difficulty in getting butter, bacon and fresh eggs from this country and various other commodities produced in rural Ireland. This Irish produce should be available to every Irish boy and girl who has emigrated over the past 30 years. I have no hesitation in saying that our emigrants would give first preference to Irish produce because they have a deep interest in the people at home who are producing it. They also know that the Irish produce is possibly the best in the world and they would even pay more for it if they could get it.

The Irish people never realised how good Irish butter was until they were forced to eat foreign butter, from New Zealand and Denmark, a few years ago. The same applies to our emigrants. I feel that we could develop a great export trade abroad for our Irish produce with these emigrants. This £250,000 should be used to the best advantage to develop markets in London, Liverpool, Glasgow and Birmingham and in other big industrial centres in Britain where the Irish population is so great. The Minister for Lands mentioned the neglect of the fishery industry. He also mentioned that there was no fishery school to develop modern fishing as it should be developed on the high seas. There was a fishing school in my constituency, in the village of Baltimore. It was established under a foreign Government and was closed down under a native Government. I sincerely hope that the Minister's wishes and hopes will be put into operation in this regard. Along the seaboard in the area I come from, from Kinsale to Castletownbere and beyond it, fishermen consider we have the best fishing grounds in the world.

Fishermen come from France, Spain and various other countries to take away the wealth of our fishing grounds. Our inshore fishermen do not get the protection that should be afforded to them. I suggest that the Department should get a helicopter to fly around the coasts, spotting for our protection vessels. The present pilfering from our fishing grounds should be stopped. I sincerely hope that the Minister for [1700] Lands will put his words into practice and do something for the fisheries. He need not go so far as to have a fishery school built, as he suggested, at a probable cost of £100,000, because there is a building in my area which would suit the purpose admirably. It is important to work as much capital as we possibly can into the two industries that have proved themselves over the years—agriculture and fisheries. I would also couple with them forestry. They are the wealth-producing industries of this country.

At the moment, £64 per person is collected in this State in revenue. I often wonder how much of that goes back to the rural community in public services. I mentioned last night that the Government would be doing a good job for this country if they could prevent the further growth of Dublin because the city has become a millstone around the necks of the people of rural Ireland. It has become a serious headache for successive Governments to try and provide employment for the thousands in the city. At the same time people in the country are boarding up their windows, locking their doors and fleeing either to Dublin or abroad.

Any capital invested in this country should be put into really productive industries. As I have said, agriculture has stood the test of time, being responsible for 75 per cent. of our exports. Without it this country would be in a sorry plight, because we have ceased relying on those industries which have been developed at great expense and at heavy losses to rural Ireland.

Greater investment in agriculture and fisheries would help to offset our balance of payments problem. Our external assets have been dwindling in recent times so that the industries which have been tested by time must be given all possible incentives in order that greater exports will be available from them. Our young men in rural Ireland must be given opportunities to prove their worth at home as they have done abroad for other countries.

I hope the Minister will indicate when he is replying that he proposes to devote much more money to agriculture, [1701] to the cleaning of rivers and streams, thus providing greater employment on roads leading to farms because in many cases at the moment these roads are unable to cope with modern machinery. Accordingly, farmers are under a very serious handicap, particularly in the autumn when they find they cannot get combine harvesters into their holdings.

It is strange that, while 20 years ago over £1,000,000 annually was devoted to emergency schemes, we can now allocate only £250,000, most of which is given over to schemes in Dublin City where unemployment is greatest. A greater proportion of this money should go to schemes in rural areas in order that our population in those areas may be induced to stay at home. It is no use tearing up good roads in Dublin in order to provide employment for short periods while the roads serving the farmers are impassable. I would ask the Minister now to take particular note of that.

Miss Hogan: Information on Patrick Hogan  Zoom on Patrick Hogan  So much has been said already on these Budget proposals that one finds oneself at a loss, on the one hand, to find something new or, on the other hand, to reiterate the more potent points. I shall strive to combine both. Underlying all my remarks will be the factors that may be regarded as of some importance, namely, that I represent a rural area and that I am a woman.

It is the housewife who will have to balance the budget of the home, and nobody will deny that this Budget will not make her job any easier. In the first place, the money at her disposal, whether it comes by way of salary or wages or, as in farming, by way of buying or selling, remains the same, because I regard as miserably inadequate the alleged compensatory allowances to certain social assistance recipients. Faced with such a prospect, what can a housewife do—go on as before and, having exhausted her capital and credit, seek other means? What can these other means be? I see only one solution—that her husband, or some other member of the family, emigrate and thus supplement the inadequate amount of money she now has.

[1702] We have been told by Government speakers that we must do with less. Doing with less points the road to lower standards, and with lower standards come dangers to production and health. How can a man work harder to produce more on a diet reduced in size and, consequently, reduced nutritionally? How can a child thrive and move to healthy manhood or woman-hood under such conditions? I do not think the housewife can now hope to have a contented household. I can foresee the spectacle of the younger people emigrating due to the instability caused by this Budget.

All this is, of course, beside the fact that the people were deceived. Deception on trivialities can be forgotten, but deception on vital things cannot be forgiven. I believe the people would have acted otherwise had they been told that the food subsidies were to be removed. I will not comment on whether the subsidies should be a permanent feature of our economy, whether they should be removed in whole or gradually. However, I do want to say that if there is a case to be made for subsidising production, then there is also a case for subsidising consumption.

In my constituency there are commercial hotels and tourist hotels, each of which had to furnish to An Bord Fáilte their tariff rates for this year last September. With these increased costs how can they now manage to work within the framework of a budget prepared last September? This is true also of educational and other institutions. Did the Government advert to these problems with which all sections of the community have to grapple? I do not think they did. I think they took the easy way to rule after using a dishonest road to power. Their action in the recent campaign proves that conscience makes cowards of us all. That would be all right if this only affected ourselves, but is it fair to ask the public to pay the price for the failure of the Government conscience? It is not, but the public will have to pay and, the longer they have to pay, the greater will be their vengeance.

[1703]Liam Mac Cuinneagáin: Information on Liam Cunningham  Zoom on Liam Cunningham  Is mian liom cúpla focal a rá ar an dtairiscint seo.

It is clear from the speeches from the Opposition benches over the last fortnight that there has been a change of policy, a change of attitude. In the first instance, the Budget was taken by the earlier Opposition speakers as something that was necessary, as something that they themselves would have had to do had they been over here. Then, there was a hurried consultation among the various Parties of the Opposition, or what is left of those Parties, and it was decided that what worked before might work again; that, if all the people over there started crying out, started agitation here and, above all, got the public outside to agitate in groups, or otherwise, it might be that they would create a feeling of dissatisfaction, of unrest and unsteadiness amongst the public.

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  Sir, may I intervene to challenge the Deputy who says that the Opposition Parties met together after the Budget was introduced for the purpose of taking steps to stir up agitation outside in groups? I ask the Deputy to either withdraw that or substantiate it in some way.

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  I did not say “after the Budget”. I said some time afterwards. There was a change of attitude on the other side; there was a different tone running through the debates and everything was done to try to create the things I have said.

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  Perhaps the Deputy will bear with me, because I think this is important. I understood the Deputy to say that the Opposition Parties met together after the Budget, or some time after the Budget, and that the intention was to stir up agitation outside this House arising out of the Budget. In the first place, I say that is utterly untrue and, in the second place, I challenge the Deputy to show any scintilla of evidence in support of such a statement. I think the statement is a shameful one and it ought to be withdrawn.

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  I must admit I [1704] have no evidence at all. I indicated I was judging on what could be heard on this side of the House from the Opposition benches. I was judging from the tenor of the debates and the tone of the discussion on the other side. We had a change here in regard to the attitude which should be adopted and that change was reflected in the speeches we have had so far from the other side of the House. Whether my view is right or wrong can be judged by reading through the recorded debates of the House.

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  But the Deputy definitely implied that action was taken by the various Parties in consultation here to stir up agitation outside.

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  I suggested that the attitude towards the Budget here was the result of a “get together”. That may be wrong. It is an opinion of mine.

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  The Deputy is exercising his imagination and his irresponsibility.

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  It is an opinion of mine and I am expressing that opinion for what it is worth.

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  It is wholly irresponsible.

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  It is not the first time we had conspiracies among the inter-Party groups.

Mr. Everett: Information on James Everett  Zoom on James Everett  Would the Deputy read what he said last year?

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  I think he ought to get the Oxford Dictionary.

An Ceann Comhairle: Information on Patrick Hogan  Zoom on Patrick Hogan  The debate is confined to the Financial Resolution. Deputy Cunningham on the Financial Resolution.

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  Anyhow there is an attitude which is not helpful. We, as a Government, set out to take action to remedy some of the problems we found on coming back into office. They were problems which necessitated certain action. We have heard from various speakers on the other side that it is necessary to spend money here, [1705] there and elsewhere. The last speaker indicated some avenues along which it would be profitable for the Government to spend money. We tried to find money by the impositions in the Budget, to find money for balancing our expenditure in the coming year.

We had here the spectacle of the unemployed representative, or the person who claims he represents the unemployed here in this House, advocating that something should be done in the City of Dublin to create employment. At the same time he knows that ten days ago he voted against all impositions in the Budget. That means that the unemployed Deputy voted against the tax on petrol. I do not know whether he is interested in having money available for the various projects he mentioned earlier, but the tax on petrol is a tax which does not affect unemployment. It may be argued that it would shove up prices in some respects.

The fact that our main industry, agriculture, has been exempted from the provisions of the petrol tax leaves very little ground for the line the unemployed Deputy has taken. That line is clearly an indication on his part that, no matter what the Fianna Fáil Government try to do, he will be against it. No matter what method they adopt to find money to finance schemes to relieve and reduce the unemployment figure and lower the incidence of emigration, he will be against it. He just cannot have it both ways. He must make up his mind that certain steps are necessary. Other Deputies, too, must make up their minds that it is necessary to get schemes going, schemes which will do a number of things, schemes which will create employment, schemes which will reduce emigration and schemes which, at the same time, will produce wealth for the nation. Money must be found for that purpose and Deputies just cannot vote against the means for finding that money and, at the same time, advocate the expenditure of more and more money.

We have very many problems which must be faced in the next five years. Our first aim should be to bring about stability so that our farmers and industrialists [1706] will know that, if they embark on projects, there will be no great upheavals and no great changes to upset the projects they may implement. It is only by creating stability both in industry and agriculture that we can give confidence to producers in these fields of endeavour.

That, above all, is the first essential because during the last ten years due to frequent changes of Government— I want to make this clear: through nobody's fault—and frequent changes in policy, together with frequent changes in regulations and the discontinuance of this and the imposition of that, the people are wondering whether a certain policy would be followed for more than a year or two at most. It is necessary to make it clear now which way we are going, what lines of action the Government will sponsor for the next five years and to get our business people, our farmers and industrialists to settle down to invest and to start producing.

We hear the argument: what is the use in producing more if prices are inclined to drop? In the fields of industry and agriculture we have a long way to go yet to cater for our own needs. We have imported grains and other human foodstuffs. We have imported animal feeding stuffs, imported machinery and other manufactured goods. We still have a good way to go and it is not right to say we cannot find a market for further production. We have a ready market at home for increased production from many different industries and from the agricultural industry as well.

One of the major difficulties of the last Government was finding money to proceed with productive works, works of a capital nature. That difficulty is still with us. People who have money to invest must be persuaded and encouraged to invest here. It must be made clear to them that it is profitable for them to do so. Unfortunately we have a good deal of private investment in enterprises abroad. A good deal of money is going into investments in industries in Britain. For the last five or six years there has been a boom in the smaller and newer industries in Great Britain. That boom has [1707] created higher interest rates and higher dividends in those British industries and there is the temptation for Irish people to invest in them. Therefore, some action will have to be taken by the Government by way of encouragement or putting some embargo on the export of capital for investment abroad. It is true we do not want to interfere too much with private enterprise, and so on, but if people will insist on investing abroad there should be some sort of tax imposed.

We have demands and suggestions by most of the speakers from the Opposition that schemes of one kind or another should be proceeded with, that more money should be available for the fishing industry. That is so. Fishing is an industry in which money can be invested with good results. If we develop the fishing industry we can produce for our own needs and for export. It would not take very much to improve that industry. We have the fishermen and if we can facilitate them by providing more boats and better gear, they will pay back the money so spent. We will not be giving them free grants. We will be giving them something they will pay back, and in the meantime they will have provided fish for both home consumption and for export.

Forestry is a different matter. It is a long-term business, but it has this advantage, that it will create continuous employment. All Governments have been expending money on relief schemes of one kind or another, schemes which are mainly aimed at reducing the unemployment figure over a short period. When the unemployment figure gets out of hand as it did recently, it is necessary to take short-term steps to remedy that. However, the money put into forestry will have the effect of creating a reduction in the number of unemployed, and any reduction which is absorbed by forestry will be a reduction which will operate for a good number of years.

We must consider also that in spending money we must ensure that we do not end up the year on the wrong side, that we must end up the year by breaking [1708] even or as near to it as possible. The household can be run for a short time by ending up the year in debt, but if we start a second year by increasing that debt then we are heading for somewhere that nobody wants to see this country going. We ended up last year £6,000,000 on the wrong side as far as current expenditure and income went. Over and above that the Government found itself in the position that that £6,000,000 is only part of the commitments which the Government must look after. They found that the various county councils throughout the country had somewhere in the region of £1,000,000 of supplementary housing grants for new and reconstructed houses to pay for. These county councils were morally bound to pay these grants. In the case of my own county these grants had been paid for since April, 1956.

The Government could have allowed the county councils to find the money wherever they wished and the county councils could have been left in the position in which they might welsh on the payment of those housing grants. If the public were to have any confidence at all in Government Departments that could not be allowed to happen with the result that we have to find the money to enable those grants to be paid.

In the Department of Local Government there are some millions of pounds worth of housing schemes submitted by various county councils in connection with which sanction for tenders has been given, but the work was not allowed to commence until money was available. Those schemes must be proceeded with as well as a number of other housing schemes, sewerage and water works which are at various stages of planning and which have cost the county councils quite large sums up to the present stage.

The same thing applies to agriculture. There have been arrears of land reclamation grants; work has been sanctioned by the Department and I know many cases where the work has been completed for quite some time past. Again the Department is morally bound to pay those people and it must find the money to pay them, so that [1709] the overall picture is not just that of £6,000,000; it is much more than that. I think that most of the people in the country understand the position and sympathise with the Government, and they were prepared for many of the taxes imposed in this Budget. In the case of some items, they were prepared for even higher taxes because they knew what the Government was up against and understood the position clearly.

They listened to both sides in the general election, and if we did not tell them something there was a very active and energetic Coalition group that left nothing untold. Having had experience before of promises made during a general election campaign, the public was not prepared to have the same experience again.

These remedies are necessary and the public so regard them. Nobody will say that the Government would have imposed these taxes just for the fun of playing with taxes. The public understand that. I am sure the unemployed understand it also and that those who look to the Government to provide schemes of work know that the Government is making an effort to find the wherewithal. It is rather peculiar to see unemployed marches at a time when the unemployment figure is 20,000 lower than it was four or five months ago when there were no marches. However, it is a free country and everyone has a right to voice his own or her own opinion.

In that connection, Deputy Miss Hogan said she did not know what line to take on this Budget. Evidently she had not consulted the Party headquarters and did not get the Party handout as some of the other speakers did. They came in well armed with supplies of literature of one kind or another, and when they finished, they went back and handed it over to the next in line for an attack on the Fianna Fáil Party, the Government or the Budget.

There is another matter of interest on which people have commented. When the Dáil reassembled after the election, and after the appointment of the Taoiseach, the first statement [1710] made by the Opposition, I think, apart from the agreement of the former Taoiseach to certain proposals, was made by Deputy Norton, the former Minister for Industry and Commerce, who got up and asked a question dealing with food subsidies. He did that at a time when it was well known that his Party was having a fight, or had just had a fight, with the Fine Gael Party on the very same question.

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  May I also deny that, as I denied the Deputy's allegation about collusion some time after the Budget in regard to agitation outside?

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  The Deputy may. Whether Deputy Norton lost the fight or not, we do not know, but it would appear he was trying to place the incoming Government in the position that he and his colleagues in the inter-Party Government might have occupied at Budget time, had they been over here. He may have won the fight: we do not know, but——

Mr. Everett: Information on James Everett  Zoom on James Everett  But you state it all the same.

Mr. Cunningham: Information on Liam Cunningham  Zoom on Liam Cunningham  ——that was the only sore toe he had that day. Perhaps in getting through the ammunition he now has piled up in front of him he will indicate—I am sure he will— whether he, as a member of the inter-Party Government, and his Party had considered this matter at all and whether they had reached agreement on it and whether they had decided for or against the abolition of subsidies in whole or in part.

Mr. Norton: Information on William Norton  Zoom on William Norton  Before I deal with the Budget proper I want to refer to a statement made in this House by the Minister for Defence. My attention was drawn to the statement by some of my colleagues and I must say it is a most amazing statement. It appears at column 1288 of the Dáil Report of the 15th May. The Minister is reported as stating:

“It is all right for Deputy Norton to speak, as he did when he was Minister for Industry and Commerce, of the advantage of having ‘the [1711] safety valve of emigration’. It is all right for him to ask, as he asked the deputation from the representatives of trade unions here in Dublin, why should they worry about unemployment in the categories they cater for, when the people were leaving the country and not remaining as a liability to them?”

At the outset I want to characterise that statement as a contemptible falsehood. Anybody who has heard me speak, in this House or outside it, knows that I regard emigration, not as a safety valve but as a national scourge, and in all my speeches I have urged Governments—whether I was a member of the Government or otherwise—to adopt a policy which I felt was calculated to stop the haemmorhage of emigration which was having such appalling consequences for the nation and the people.

When the Minister for Defence says I made a statement of that kind I say he is uttering a falsehood. I never saw a deputation from the trade unions or from anybody else to whom I made these comments about emigration, and that statement also is a contemptible falsehood.

It is an affront to the dignity and traditions of this House that a new Deputy, catapulted into the position of Minister almost overnight, should give utterance in his maiden speech to statements of that kind which cannot be justified on any ground whatever, because these statements were never made by me and an attempt even to distort a summary of my views could not possibly produce an accurate report which could represent me as saying what the Minister for Defence tried to represent me as saying. I hope that that was some kind of aberration on the part of the Minister for Defence and that the House will not be compelled to regard that untruthful statement as the standard of the Minister's veracity in this House as a Minister of State.

I want to deal now with this Budget and to say at the outset that, as the days and hours pass, this Budget is being seen more clearly by the people, [1712] particularly by the ordinary people who are separated from hardship and poverty by their ability to earn a week's wage or a month's salary, as the savage and vicious Budget that it undoubtedly is. This Budget represents a ruthless attack on the standard of living of the ordinary men and women throughout the country but it is a particularly callous and vicious Budget when one considers its impact on the weak and most helpless sections of our community, those who are living on small pensions or who have to depend, either because of economic adversity, physical or mental illness, on the small sums which they receive for sustenance under the social welfare code.

Deputy Cunningham must have some iron-clad supporters in his constituency because he said that the people were expecting higher taxes—presumably they were willing to shoulder cheerfully and gleefully a higher code of taxation than that imposed upon them in this vicious Budget.

What were the people told was the policy of the Fianna Fáil Party in respect of the food subsidies at the recent election? In the Irish Press on 1st March, the present Minister for Justice, Deputy Traynor, is reported as having described at a meeting at Doyle's Corner, as

“a bloodcurdling story a warning by Mr. Norton that a Fianna Fáil Government would withdraw the food subsidies”.

The paper goes on to say that Mr. Traynor said:—

“The Coalition groups, having no further promises to make for themselves, have switched to making sinister promises on behalf of Fianna Fáil.”

Was there anything bloodcurdling in what I then said when contrasted with the Budget which has been presented to this House by the Fianna Fáil Government? Is there anything sinister in the promise or the forecast which I made when we get a Budget of this kind which at one fell swoop abolishes entirely the food subsidies which in one form or another had remained part and parcel of our domestic life since 1947?

[1713] The Minister for Justice was not the only person who spoke to the people on the subsidisation of food. At Belmullet, the present Taoiseach said:—

“The Coalition Parties were changing their tactics in this election. The opponents of Fianna Fáil were wondering what new dodge they could try to prevent the people from seeing the real issue in the election.”

He went on to say:—

“You know the record of Fianna Fáil in the past. You know that we have never done the things they said we would do. They have also told you that you would be paying more for your bread.”

That statement that the people would pay more for their bread does not seem to have been very far off the mark when, under this Budget, the people now have the privilege of paying 1/1 for a 2-lb. loaf which cost 8¾d. when that statement was made by the present Taoiseach.

Deputy Lemass put the thing in much more definite language. He said:—

“Some Coalition leaders were threatening the country with all sorts of unpleasant things if Fianna Fáil becomes the Government— compulsory tillage, wage control, cuts in civil servants' salaries, higher food prices and a lot more besides.”

He went on to say:—

“The Fianna Fáil Government does not intend to do any of these things because we do not believe in them.”

He added by way of clinching the argument:—

“How definite can we make our denial of these stupid allegations? They are all falsehoods.”

That is a pretty definite promise to the people before they had marked their ballot papers.

Even earlier, Deputy Lemass, as he then was, speaking at Mallow, gave utterance to this view:—

“Food subsidies must be accepted as likely to remain a permanent [1714] feature in the Estimates unless a very steep fall in the cost of living should take place and that is not very likely, to put it mildly.”

He added:—

“I should like to express a personal viewpoint which I hold strongly, that the maximum advantage can be obtained by concentrating all the money which can be voted for food subsidies on flour and bread alone.”

All the concentration of the money on subsidisation of bread and flour is an operation which has completely vanished and, instead, the subsidy on bread has gone, the subsidy on flour has gone, the subsidy on butter has gone, notwithstanding the promises which were made as late as the month of February, notwithstanding this personal preference of the present Tánaiste for concentration of subsidies on bread and flour.

That is what the people were told before the election. That is what the people were promised if they voted for the Fianna Fáil Party. That is what they were told would constitute the concept of life which Fianna Fáil had in store for them if they voted for Fianna Fáil in the recent election. They voted for Fianna Fáil and they now know the consequences.

Let us consider them for a moment. Has any Government in Europe, indeed, any Government in the world, a reputation of this kind? They have been in office only two months and in that period the price of sugar has been increased, the price of bread, flour, butter, petrol, motor car insurance, cigarettes, tobacco and beer, has been increased. Of course, a goodly number of other commodities, of which some of the items I have mentioned are the ingredients, will also take a jump upwards in due course.

Does anybody imagine that if the people had been told two months ago that a vote for Fianna Fáil would mean 7d. more on butter, 4¼d. on a 2-lb. loaf and that sugar would go up as well as cigarettes and tobacco, that they would have been so simple as to vote for the Fianna Fáil candidates in the recent election? People [1715] were deceived in that election. They had positive and emphatic denials by Fianna Fáil speakers that they did not intend to increase prices, that they did not intend to abolish the food subsidies and that the warnings that Fianna Fáil would abolish the food subsidies were only bloodcurdling statements made for the purpose of frightening old ladies of both sexes.

People now have an opportunity of judging the extent to which the Fianna Fáil Party have dishonoured the promises which they then made. I must say that the abolition of the food subsidies caused me no surprise. When I broadcast on the 27th April, about a week before the election, I said to those who were listening: “You remember the Budget of 1952 when Fianna Fáil slashed subsidies and as a result increased the prices of bread, butter, tea, sugar and flour. That crazy decision dislocated the entire economy, led understandably to demands for increased wages to meet the increased cost of living, but even the increases then secured did not provide adequate compensation for the increases in prices brought about by the Fianna Fáil Party. In 1952 Fianna Fáil said that they believed the food subsidies should be abolished entirely and that is still the aim of Fianna Fáil.”

I added “I am satisfied that if by any irresponsible vote Fianna Fáil should get back to office they will abolish the food subsidies.” That was my view then. That has been my view since 1952. That was my view before the election. What I said to the people has been fully justified and fully borne out by the character of the Budget which the people have been asked to shoulder by this Government.

Let us see what the effect of this is, particularly in the light of efforts being made to say that the trivial and miserable increases provided under the Social Welfare Acts will provide compensation for these savage price increases on essential foodstuffs, in the ordinary working class homes. Let us quote Deputy Beegan, now the Parliamentary Secretary to the Minister for [1716] Finance. Speaking in this House on the 15th May, 1956, as reported at column 425 of the Official Reports, Deputy Beegan referred to the fact that we had reduced the price of butter by 5d. a lb. when we were in office. He went on to say that a reduction of ½d. in the price of the 2-lb. loaf was a greater advantage to people than reducing butter by 5d. a lb. Let me give his words in order to get the statistics right and so that it will not be alleged that I went to a tainted source for my quotation. Deputy Beegan said:—

“Each member of the same family, if physically fit, and if depending on bread as many people in the cities have to, would consume a 2-lb. loaf in the day.”

That is Deputy Beegan's appraisal of the situation, that every member of a physically fit family would consume a 2-lb. loaf per day so that a family of five would consume one loaf each per day. That is five loaves per day. Now they are going to have the privilege of paying 4¼d. extra for each of the loaves and the five loaves will cost five times that per day, which works out at 1/9¼ per day.

An unemployed man with a wife and three children, or a sick man with a wife and three children will get no increase whatever in the ordinary social welfare benefits. It is true that he will get 9/– per month additional children's allowances. That works out at less than 4d. per day. If we deal with bread only and forget about flour, sugar, butter, tobacco and the other commodities which have been increased and concentrate only on the compensation provided in respect of the increase in the bread prices, we find that the compensation for a man with a wife and three children is 9/–per month. Less than 4d. per day is to compensate him for an increased expenditure on bread alone of 1/9¼ per day. Yet we have been told, and I suppose we will continue to be told, that provision has been made in legislation to compensate those whose standard of living has been so viciously and so callously attacked.

So far as the social assistance [1717] recipients are concerned they are to get compensation in the form of 1/–per week. When one thinks of how trivial is the buying power of 1/– and the return one gets for it in a grocer's or a draper's shop, one gets some picture of the great inadequacy of it. That increase will apply only to people drawing unemployment assistance benefit; it will apply only to those drawing old age pensions; to those receiving non-contributory widows' pensions. The 40,000 odd people who are signing at the unemployment exchanges for unemployment insurance benefit will get no 1/– whatever. The thousands receiving sickness and disablement benefit under the Social Welfare Act will get no 1/–. The widows and orphans who are dependent on contributory widows' pensions will get no 1/– but all those have to bear the increases on all the commodities to which I have referred.

Is it any wonder this Budget can be correctly described as a lopsided Budget, the heaviest burdens being reserved for those least able to bear them, the weakest and most destitute sections of our community having the greatest burdens put on their backs? It is absurd to say that, when you abolish the subsidies on bread, everybody fares the same because the loaf is the same price to everybody now. Can anybody imagine that the loaf represents the same factor in the domestic budget of people in Merrion Square and Fitzwilliam Street as in the budget of those in Marlboro Street, in Gardiner Street or in any other working-class area in the cities and towns of this country?

Of course it does not. The consumption of increasing quantities of bread and butter denotes a lowering of the standard of living. Where there is a high standard of living, bread and butter represent diminishing factors in the budget of a consuming family. It is because bread, butter and flour represent the main elements of diet of an ordinary working-class family that this Budget imposes such severe burdens on those who consume these commodities, much more so than on those whose sources and means of income are such that they can quite easily cushion themselves against the effect [1718] of these increases in prices, even if, in fact, they cannot entirely bypass the increases by adding much more delectable articles to their diet.

However, my main complaint against this Budget is the way in which the people have been deceived by it. They were never told voting for Fianna Fáil would mean that these blisters would be raised on their backs. They were never told that voting for Fianna Fáil would mean a Budget of such crippling effects on their kitchen tables and kitchen dressers. They were allowed to believe that if they voted for Fianna Fáil they would be brought along into a much better life than they had experienced under the last inter-Party Government.

Let this be said for the last inter-Party Government: during its three years in office the price of bread had not increased, the price of sugar had not increased, the price of flour had not increased. As Minister for Industry and Commerce, I was pressed many times to allow an increase in the prices of these commodities, but these prices stood there rocklike during those years. There were no increases in the prices of bread, flour or sugar. We reduced the price of butter by 5d. a lb. No other Government in Western Europe has been able to achieve that record.

People now have an opportunity of comparing how well we served them and how steadily we helped along prices with what they have now got after only two months of Fianna Fáil Government. Somebody has said: “Experience is a hard school but fools can learn in no other”. That person may not have been wrong. The people now have the opportunity of judging who served them best. They know now who protected their standard of living.

I came across a quotation the other day and in the light of developments it is a pretty prophetic one. Speaking in County Limerick at a Fianna Fáil convention in Rathkeale and reported in the Irish Times of December 10th, 1951, Deputy Childers, having spoken at usual length on the economic ills, finally came down to a prophecy: “What the country needed was 20 [1719] years of resilient Government”. The person who said that before him was Arthur Balfour. In 1952, Deputy Childers' prophecy was realised to the extent that we had the Fianna Fáil blistering Budget of 1952.

Now, apparently, we are getting another instalment of resilient Government in 1957. I say the Government has no mandate whatever for this Budget—no mandate from the people. They told the people they would not do these things as regards prices. They have done them deliberately and behind the backs of the people and against the will of the people, having a sufficient majority to fortify them for the next five years.

Speaking in this debate, the Minister for Industry and Commerce said the Government was not asking anybody to share responsibility for balancing the Budget. What is the Government doing then? The Minister takes his responsibility lightly if he does not realise that this Budget has been balanced by a raid on every kitchen table and every kitchen dresser up and down the country. They talk about not asking anybody to share the responsibility for balancing the Budget in the light of the fact that nearly £9,000,000 is being raised from the pockets of the consumers of bread and butter. I am afraid the Minister is presuming too much on the credulity of decent Deputies in this House.

The plain fact of the matter is that this Budget is imposing its worst and most vicious burdens on the weakest backs in the country. To pretend otherwise is to falsify the facts as they must be known to every Deputy. Not even the health services have escaped the marauding hands of the Government. To increase the hospital charges, to make special charges for X-ray and specialist services, is a particularly mean and shabby economy. In future hospital treatment will cost the ordinary working man 70/– per week for every week he spends in hospital instead of the 42/– a week it costs him to-day. That will be a grave hardship on ordinary working-class people who, up to a few years ago, if they were insured for three years under the [1720] Social Welfare Acts, were eligible for hospital treatment free of charge.

Under the Health Act these people were charged 42/– per week if in hospitals. That was bad enough, but to increase the charge now to 70/– per week and to charge extra for X-ray and specialist services is again making a vicious attack on a section of the community ill-equipped to bear the burden which the Government proposes to impose on their shoulders under this aspect of the Budget. Increasing the hospital charges from 42/–to 70/– per week is an increase of 66 per cent. at the first go and to pretend that this is an equitable Budget, imposing similar burdens on all, is, I think, something which will not stand comparison with realities and truth.

Everybody, except really destitute persons, will be liable to pay that 70/– per week; and the physically weakest, because they are more likely to be in need of hospitalisation more frequently than others, will pay more than the physically strong. Because these treatments in hospital and the extra fees for X-ray and specialist services will impose a heavy burden on ordinary working-class people dependent on a week's wages or a modest salary, many of them, I fear, will forgo hospital treatment and endeavour to carry on because of the impact which the new charge for hospital treatment will make on their domestic budgets.

I notice that since he spoke in this House the Minister for Industry and Commerce paid a visit to Bettystown where he engaged in a review of the present economic difficulties and foretold the methods by which Fianna Fáil were to solve them. On the occasion of his Bettystown visit, the Minister said: “No doubt there are people who are even now meeting and calculating to foment discontent for ulterior motives out of our difficulties and to weaken our will to tackle them. But they are not going to succeed.”

I should like to ask the Minister for Industry and Commerce what exactly do these words mean? It is quite clear, reading the words and knowing the Minister, that they were intended to [1721] be intimidatory and they were intended to be a warning to anybody who did not like the Minister's methods of solving economic problems to beware lest they would take any line with which the Minister himself did not agree. I want to say now that, in my view, these speeches represent the jackboot mentality of the Government in relation to wages. This is a short step away, but only a short step away, from the wage-freeze policy of the last emergency. This is a close relation of the Bill which was drafted by the present Minister for Industry and Commerce away back in 1947 and which is still in the Department of Industry and Commerce, a Bill in which he proposed to freeze wages because he did not want wages to rise to compensate workers for the increase in the cost of living.

The Minister for Industry and Commerce, when he was speaking here on the Budget, made what I think was intended to be an appeal to the Provisional United Organisation of Trade Unions and, if his speech meant anything, it means that he wanted these organisations to swallow the medicine prescribed for them in this Budget and to keep quiet about it. I should like to ask the Minister for Industry and Commerce, the Government and anybody who is going to speak for it, do they pretend to believe that this Budget will not lower the standard of living of those who work for wages and modest salaries? Of course it must do that.

If prices rise higher, as they have done under this Budget, while wages and salaries remain static, then there is only one thing for the ordinary man to do and that is to buy a lesser quantity of goods than he bought heretofore, to cut down on his consumption, or, if he wants to maintain the same standard of consumption, to have the same standard, but then he must let his bills go into arrears. He must do without the many other articles which up to now he was able to buy because of the lower prices of the articles in question.

Every trader who has to pay more for goods under this Budget will sell the goods at a higher price. They have done it. They are doing it. They have [1722] no alternative but to do it. But, if they have to pay a higher price for their goods, they must sell the goods at a higher level than that at which they were previously selling them. That is an inexorable economic fact.

I should like to ask the Government: do they imagine that workers' wages provide a margin to cushion them against the steep rise in prices which this Budget has inflicted upon the ordinary people? Is it accepted by the Government that workers will sell their labour and their skill at the old price although the cost of living for the workers, with the skill and the labour to sell, has been increased substantially under this Budget? If they are expected to sell their skill and their labour at the old price, although the cost of living has substantially increased, then they can do that in only one way, and that is by tolerating a substantial decrease in their standard of living.

They were told by Fianna Fáil that there would be no decrease in their standard of living. They were not told that these burdens would be inflicted on them. What the Minister for Industry and Commerce and the Government should do is to ask the trade unions to-day, the trade union leaders and the trade union members, the kind of atmosphere that is now permeating the movement, in so far as the workers concerned feel that they are legitimately entitled to an increase in wages when an increase in prices has been forced upon them by the deliberate action of this Government.

Deputy Briscoe speaking in this House on 9th May, 1956, as reported at column 393, of Volume 157 of the Official Report said that, in his view, workers were entitled to get an increase in wages if the price of cigarettes or tobacco went up. I hope we shall have the Deputy here now telling us what recipe he has to offer the workers when not only tobacco and cigarettes go up but bread, butter, sugar, flour, beer and a variety of other commodities. Fianna Fáil apparently believed when in Opposition that, even if the price of cigarettes went up, the workers must get an increase in wages but, when all these other commodities go up under the Fianna Fáil Budget, [1723] Fianna Fáil, in office, says: “No. Everybody should be quite content to work for their old rates of pay and they should get out of these domestic economic difficulties as best they can but, at all events, they should not trouble the Government and they should not rock the boat and their own suffering is a private matter for themselves to settle between themselves and the community in which they live”.

I think the most ruinous feature of this Budget is the fact that it makes war in a deliberate and obviously planned way on price stability, which offered so much hope for co-operation and understanding between all sections of the community in the matter of finding a solution for our economic problems. We endeavoured to keep prices as low as we could during our period in office in spite of inflationary pressures generated outside, in spite of international tension throughout the world, in spite of increases in freight rates and many other pressures which it was impossible for a small country such as this to resist. As I said, the measure of our success is to be found in the fact that articles like bread, butter, flour and sugar did not increase during our three years in office. The Government had everything to gain no matter what the cost in keeping prices stable, in keeping prices at a level which would not give rise to disputations about price levels and about wages. However, confronted with the difficulty which could be met in a variety of other ways the Government in 1957 completed the programme on which they embarked in 1952, that is, they made up their minds then to abolish the food subsidies. They did some of the job in 1952 and they have done the remainder of the job in 1957.

The Government's new policy—this may as well be told to the people—is complete decontrol of prices. It was bad enough to abolish the food subsidies on flour and on butter but it was worse to decontrol the prices of these commodities. Butter might have gone up by 5d. a lb. with the subsidy abolished; by decontrol butter has gone up by 7d. per lb. The members of the Government Party sit there [1724] apparently gleefully happy at the contemplation that the ordinary people who voted for them recently will now have to pay 7d. per lb. more for butter than they paid before. Deputy Cunningham says that he knows constituents who were expecting to pay still more than 7d. per lb. for butter. Well, there is still an heroic race in Deputy Cunningham's constituency if he represents their view in the Dáil, but I have a profound suspicion that he is talking through his hat in interpreting the viewpoint of his constituents in this manner.

This Budget has brought suffering on a large section of the community. It has brought frustration to many people who thought that a period of price and wage stability would create the climate for an advance towards the solution of other problems. Now people are embittered by the character of this Budget. They feel a sense of frustration, a genuine loss of faith in the conditions of life in this country. As I said when I heard the Budget first, this Budget will be an order for more railway tickets and boat tickets to England. It will do nothing whatever to deal with the problems which are facing the nation to-day.

The Tánaiste, in the course of this debate, made reference to the proposal to give the master bakers a gift of approximately £250,000 in the same Budget as the food subsidies were abolished. He gave what he regarded as his side of the story, so far as he knew it, but I want to put into juxta-position with his statement my account of the situation. In 1955 the bakery trade unions decided that they would seek an increase in wages. They made a claim on the master bakers, and the master bakers said: “We cannot pay”. The trade unions and the master bakers came to me and they said: “This is a question in which we have to see you because it may be a matter of increasing the price of bread or increasing the price of the subsidy”. Both sides wanted to get from me an assurance that I would consent either to increase the price of bread or that I would ask the Government to increase the subsidy by an amount which was then estimated to be about £500,000.

[1725] I refused to give them any such assurance. I told them that this was an ordinary industrial dispute between the workers, on the one hand, and the employers, on the other hand, and they could settle it any way they liked. The State had provided the Labour Court for them and, if they wanted to have it settled peacefully, maybe they would go to the Labour Court.

They went to the Labour Court and the Labour Court gave an award to the bakery workers. Then the question was: who would pay the award? The master bakers and the bakery trade unions, I think quite frankly, wanted the public to pay the award. I did not feel that the public employed the bakers. I felt the workers were employed by the master bakers and the master bakers should pay the increased wages to their workers in the same way as other employers have to pay increased wages on the basis of the Labour Court recommendations. I, therefore, took the matter to the Government and told the Government that, in my view, an increase in the price of bread was not warranted and that an increase in the subsidy was likewise not justified. I was reinforced in that view by looking at the balance sheets of some of these companies who are making very substantial profits per sack of the flour which is milled or which is baked by them. On an examination of their profits, so far as we could see their accounts, I came to the conclusion that a case for giving them an increase in the price of the loaf or an increased subsidy was not justified.

The master bakers then took the case to the Prices Advisory Body. They made their case for an increase in the price of bread or an increase in the subsidy. After the matter was considered by the Prices Advisory Body, which has six members, three members voted against an increase of the kind proposed and three members voted for. Therefore, the decision which reached me was a decision arrived at on the casting vote of the chairman. I was disturbed that a matter of this importance to the whole community should be decided on the casting vote of a chairman. It would seem to me to indicate that the merits in this case were not all on one side and that it was a [1726] bit unfair that the whole community would be expected to pay an increased price for bread merely on the casting vote of the chairman of the Prices Advisory Body.

It was not a case of the chairman exercising just one vote, a casting vote. He had voted once for a proposal to increase the price of bread to increase the subsidy, and then used his casting vote in order to influence the decision in favour of his point of view. I am not questioning his right to do that. A matter of that kind has, perhaps, to be determined in some way or another, but when, as Minister for Industry and Commerce, you have to remember that a casting vote of that kind—one person voting twice in six— may cause 2,500,000 people to pay more for the price of bread, you have to think twice as to whether the evidence is overwhelmingly convincing to justify your authorising an increase in the price of bread. I did not think it justified me in asking everybody in the country who eats bread to pay a higher price. I did not think a casting vote was enough to solve that situation.

The result was that I took the matter to the Government and the Government took the same view as I did on the matter. They subsequently decided that they would set up a body to inquire into the whole question of bread prices and the statement then issued by the Government, explaining its decision to do so, contained this statement:—

“The Advisory Body took the view that notwithstanding the lack of full information it was their duty to make a firm recommendation. They were, however, equally divided as to the recommendation they should make, all six members being present, and the chairman found it necessary with reluctance to use his casting vote.”

The statement went on to say:—

“The Government have accepted the view of the Prices Advisory Body that a full-scale investigation into costs in the bakery trade would be necessary before a final conclusion could be reached regarding the investigation.”

[1727] Then the Government went on to announce the appointment of a Committee to examine the whole matter. That Committee subsequently met and made a recommendation that the master bakers should be given an increase of 3/2 per sack. I considered the recommendation they made. I took counsel with the Government and, as a result, we decided that we would reduce the price of flour to the master bakers by 1/5 a sack, and by eliminating the arrangement whereby they over-weighted the bread at baking time, they would save 1/9 per sack, and the total of these gave the master bakers the 3/2 which had been recommended by the Special Committee appointed by the Government. They got the 3/2: therefore, so far as the Government was concerned, they were paid on the recommendation which was made by the Special Committee.

In fact, they got slightly more than they would have got through the Prices Advisory Body recommendation. In my view, the master bakers were fairly dealt with; anything that was due to them has been paid, and there is nothing more due to them, and I know of no set of circumstances which justifies this generous gift of nearly £250,000 which is now to be handed over to the master bakers. It is quite clear that there is plenty of money for some people even though others may have to make do with substantially less.

In all the efforts of the Government to justify the Budget, sufficient attention has not been paid to an acknowledgment of what was done during the past 12 months by the inter-Party Government. In 1955 there was a slump in cattle exports, due very largely to the fact that the Argentine had depreciated its currency and, in order to get British currency, had flooded the British market at prices which made their cattle attractive to English purchasers and consumers. Not only did that restrict the demand for our cattle on the one hand, but it forced down prices of Irish cattle at the same time. Simultaneously, the terms of trade went against us; we were paying more for what we had, of [1728] necessity, to import, and we were getting less for what we exported. There was also an excess of consumer goods imported largely because of the fact that the people whose wages had increased naturally, and I suppose normally and inevitably, looked for an improved standard of living.

The result of the joint pressure of these agencies was to give us a deficit in our balance of payments to the extent of £35,000,000 in 1955. When we saw that that was not merely a tendency but looked like being converted into a permanent trend unless action was taken, the Government without hesitation decided that that situation must be dealt with immediately and vigorously. Governments do not impose levies to make themselves popular; Governments do not do things which inevitably affect adversely the flow of trade in the country. We found however, that if we were to safeguard the economic position one of the ways in which we would have to do it would be to shut out as far as possible the luxury or unnecessary goods, the non-essential goods, for which we could not pay except at the price of running down our external assets.

We imposed levies in March, 1956, on a whole variety of goods believing that these should be kept out, that it should be a hardship on people to import them until such time as we were able to pay for them in the normal way. About June, when it seemed to us that the first levies were not yielding the results we had hoped for and that people were still paying the levies and importing the goods, we increased the levies still further. As a result of the imposition of levies in March and July of 1956, we were able to bring about equilibrium, if not in the calendar year ended December, 1956, certainly in the 12 months from March, 1956, to February, 1957.

I believe that in March, before we left office, we were again building up external assets in Britain. At all events we had closed the gap in the balance of payments; we had brought back equilibrium and we had brought it back in a definite and positive way, and when the Government came into office on 20th March they knew at that [1729] stage that our balance of payments problem had been brought under control and that there was no leakage which would involve a running down of our external assets and that they had no problem on that front except to arrange for disciplined buying in the future by Irish consumers, to get those who wanted to import luxury or non-essential goods to hold back until such time as we were able to pay for these goods in a way that would not involve a repatriation of external assets merely for the purpose of financing the consumption of luxury and embroidery goods.

Therefore I think that the Government was presented, in that respect, with an accomplishment, the significance of which it was not possible to over-emphasise. We did a good job in bringing our payments into balance; in stopping the drain on our external assets for luxury and non-essential goods, and we did a good job, also— psychologically—in putting our people through the exercise, painful though it might be, of having to pay more for the import of certain commodities if it was necessary to do that, in order to get what was most important of all —equilibrium in our balance of payments.

We got that equilibrium in our balance of payments. In fact, we could have got more. The levies were imposed only on commodities not affected by the Trade Agreement of 1938 or the Trade Agreement of 1948. We would have liked to impose levies, perhaps, on the articles controlled by the Trade Agreements of 1938 and 1948 but, knowing that those agreements were a mutually advantageous bargain between ourselves and the British Government, we said to the British: “We may find it necessary for balance of payments reasons to impose levies even on commodities which, under the 1938 and 1948 Trade Agreements, should not have any further imposition on them,” and the British, understanding our position, said to us at the time: “We understand your difficulties. We know the efforts you are making to meet the problem which confronts you and, so far as we are concerned, we shall concede in principle [1730] the right to impose those levies on the list of articles which you have catalogued, for a certain period”.

The Minister for Industry and Commerce, speaking here the other day, said that we had no regard to the Trade Agreements of 1938 or 1948 when we imposed the levies. Not only had we regard to them but we had a most scrupulous regard to them, such a scrupulous regard that the British Chancellor of the Exchequer was acquainted with our intentions and the Ambassador in London discussed these matters with the British Government. To pretend that we had overlooked these two Trade Agreements when imposing the levies is something that does not bear a moment's examination.

What I cannot understand is the lazy approach to this problem by members of the Government. The Tánaiste could have found all the documents dealing with that problem in his own Department. The Minister for Finance knows he has got them because the former Minister was the initiating authority for the correspondence. Yet, the Tánaiste, in the customary “chance-my-arm” fashion, came into the House the other day, thinking nobody could contradict him, and said that we had overlooked consulting the British about the 1938 and the 1948 Agreements and that we had made a mess of the whole thing.

The truth is the opposite. We did consult and the British agreed in principle that we could impose levies on articles caught by the 1938 and 1948 Trade Agreements, but we had dealt with the position so effectively by imposing the levies on the other commodities that we did not find it necessary to impose any levy on an article which was caught by the Trade Agreements, that is, we did not find it necessary to impose a levy on the long list of articles affected by the Trade Agreements, which list of articles was supplied to the British. Our effectiveness in imposing the levies at two levels rendered it unnecessary to travel further than that and, therefore, no levies were imposed on the other articles which were caught by the Trade Agreement but in respect of which the British gave consent for the [1731] imposition of a levy if that were necessary for the purpose of restoring our balance of payments.

One of the most significant features of this debate, from the Government's point of view, is the mystery which surrounds what I will describe colloquially as the Lemass millions. When Fianna Fáil were in Opposition, Deputy Lemass, as he then was, apparently went into a huddle with some folk and produced a plan under which he would find £100,000,000 and 100,000 jobs in five years and all that was needed was a Fianna Fáil Government in office to make sure that this plan would work miraculously. Now Fianna Fáil are back in office and there has not been a whisper about the £100,000,000 in the last fortnight in this House. There was not a whisper about the £100,000,000 during the election and, so far, nobody has attempted to break the graveyard silence on what has happened the Lemass £100,000,000 plan. I have no doubt that there are many financial wiseacres on the Government Benches. I have no doubt that, given the necessary hint, they would burst to explain how this plan would work. Surely this is the time to tell us how it would work, to tell us when it will work and what has become of the plan, what has become of the policy and what the Government will do about it.

In a Budget of this kind I imagine the Government could have found room for a plan under which £100,000,000 was to be raised. Bear in mind, it was to be raised, not by taxation. Although the method of raising it was not disclosed, it was to be raised, not by taxation. Anybody who can find £100,000,000 which he can raise, not by taxation, should be regarded as a pretty benevolent gentleman these days. Therefore, I cannot understand the reluctance of the Government to adopt and implement the Lemass £100,000,000 plan and to give this Budget an air of hope and happiness, which is so sadly absent from it to-day.

My complaint against this Budget is that it makes no serious plans for expanding capital development or for large-scale industrial and agricultural [1732] development or for any development of any kind likely to arrest, and ultimately to stop, the flow of emigration from this land. Under this Budget, crushing burdens are imposed on the weakest sections of the community, those whose backs are not able to bear them, and we leave all our old problems unsolved.

In fact, far from this Budget stimulating industrial and agricultural development, we may now well be on the eve of a very serious recession so far as our whole dairying industry is concerned. The catastrophic increase of 7d. a lb. in the price of butter clearly will result in a fall in the consumption of butter but, if milk is going into the creameries and being converted into butter and if butter is not being consumed at the old rate, it only remains to be seen that the Government is immediately confronted with the problem of getting rid of the surplus of unconsumed butter which will lie in cold storage. If milk yields continue to increase and if a year of the kind we are now experiencing continues, there will be more milk at the creameries, more butter made at the creameries, more butter going into cold storage, more butter that is not consumed and which must be exported and the Government will pay £10 on every 1 cwt. of butter that is exported.

The subsidy on butter for our own people has been abolished but we will pay 1/10 a lb. on butter that we sell in the Six Counties or Great Britain. We cannot subsidise butter by one penny at home but we will subsidise it by 1/10 a lb. on export to the Six Counties or to Great Britain. That will bring about a serious situation in the dairying industry for which this Budget makes no plan whatever. The farmers who were looking for 3d. a gallon for their milk some months ago and who were expecting the Costings Commission to give them a higher rate for their milk will, I am afraid, have other problems confronting them before they are many months older.

This Budget, by cutting back the consumption of butter, will mean that more butter will be left on the hands of the creameries who, in turn, may find that [1733] they are not able to pay the existing price for milk. One has only to consider the position for a few moments to realise what the reactions will be on the dairy farmers of this country.

All this could have been avoided if the Government had left the subsidy on butter, left the price stability alone and tried to weld together all sections of the community to apply their energies and talents to the solutions of the problems in those areas in which we could get agreement on what was the best course to adopt, the best policy to follow. No matter on what bench one sits in this House, or from what angle one views the economic situation, I think everybody, some perhaps after a long period in the wilderness and after many instances of frustration, will inevitably come back to the point that national development —and its concomitant, full employment—require as an absolute essential the provision of capital. There is no plan in this Budget to secure the capital so vital to the development of our national economy, so vital to industrial development, so vital to agricultural development, so vital to a building up of the whole national estate in the realm of electricity development, turf development, afforestation, shipping development and air development.

This Budget, in that respect, has a most pedestrian approach to the vital problems confronting the whole nation. While we have substantial foreign investments, we make the least advantageous use of them. Over £400,000,000 gross is held by the Government, by the banks and by the ordinary people in sterling securities overseas. Yet while we have that vast sum of money held by the Government, banks and the ordinary people, we experience here a shortage of capital to provide useful and profitable investment at home. Continued emigration must mean fewer people to produce and fewer people as well to bear the inevitable national overheads.

Large scale unemployment means unused wealth-creating possibilities and involves the nation too in the expenditure of very large sums of money to provide for unemployed citizens.

[1734] Even then the best we give them is a low standard of living. They do not want that low standard of living. They do not want the low benefits which they receive under Social Welfare Acts and which are not adequate to their needs. What they want is work. The artificial shortage of money denies them work which would create wealth at home and make for better living standards, not merely for the unemployed thus put to work but for every citizen in the community.

I want to put this question to the Government for consideration. Is it not time that we reviewed the financcial methods by which we refuse to use our own wealth and our own savings to finance national developments and fruitful investment for our people? I want, for a few moments, just to survey the position in that respect. Under the 1927 Currency Act it was mandatory on the members of the commission to invest the proceeds of the currency fund in British securities. In 1930 the law was changed to enable the Currency Commission to invest in Irish securities if the members of that body were unanimous that the funds should be invested in Ireland. But although they were given that power in 1930 for the first time, they did not avail of the power to invest our holdings in the currency fund in Irish securities. In 1942 the law was again amended to give power to the Central Bank to invest in Irish securities if a majority of the members so decided. Since 1942 that power has been invested in the Central Bank to invest in Irish securities.

While I was a member of the Government I was in a minority on this matter. I cannot understand why we decline to utilise the powers which we have, even under the limited Central Bank Act, to invest the moneys of the Central Bank in Irish securities. I have asked that question in this House. I have asked that question of Ministers for Finance and I can get no intelligent answer. I believe they can be invested in Irish securities and that the Legislature expected that they would be invested in Irish securities when they amended the Act in 1948. Yet we proceed on the assumption that, so far as the 1942 amendment is concerned, [1735] nothing in fact has been really done to ensure the investment of the Central Bank assets in Irish securities.

I know of course that one will be met with the old fluidity argument, that it is necessary that the Central Bank should have, in its portfolios as securities for the Treasury Note funds, assets which can be cashed at once. The argument proceeds on the theory that everyone holding an Irish currency note or an Irish coin might, at the same time, desire to change that note or coin into some other currency. That is a fantastic basis of assumption. It has never been necessary in any other country in the world where notes are issued by the banks. The general acceptance has been that a 10 per cent. fluidity for note issues is sufficient for the purpose of providing against the possibility that, from time to time, there might be abnormal demands by the holders of notes who would say: “Give me money in another currency as I want to carry out certain transactions with it.”

A 10 per cent. fluidity which has worked elsewhere would work adequately, in my opinion, in the Central Bank. In any case there is something wrong in a situation in which, while every country in the world backs its own currency with the Government securities of that country, we, alone amongst these countries, back our securities by the currency of another Government. I wanted to ask what is there to prevent us from backing our note issue by Irish securities? Why can every country back its own note issue with the securities of its own Government while we have got to get the securities of another Government to back our note issue here?

In the first place, it seems to me that a continuance of this policy indicates a lack of national self-respect. Even apart from that, it seems to me particularly bad housekeeping at the present time, when a revision and even a revolution in our housekeeping methods would be all to the national advantage. To-day, through the Central Bank, we buy foreign securities as [1736] a backing for our note issues and refuse to take Irish securities as a backing for these issues. The money which is so used could, in many ways, be used to buy Irish securities as well, as profitably and to a much greater extent in the national interest than the procedure adopted to-day.

I am not asking the Central Bank to utilise its securities for investment in schemes of doubtful value. We have got to-day three first-class State sponsored bodies—the E.S.B., which has never defaulted on a single payment, which is a thriving, profitable business; Aer Lingus, which has never defaulted on a payment; Irish Shipping, which has an equally thriving record; and Bord na Móna, which pays what it owes, keeps its head high and is doing very valuable work for the nation as a whole in the development of its peat resources.

Is there any reason why the Central Bank, with the power given to it in 1942, should not lend money as security for a note issue to four thriving, progressive companies of this kind? Surely the guarantee of the E.S.B., which is now in existence for over 30 years, is as good a backing for a note issue as securities of another country, particularly as we have experienced three devaluations of the currency of that country? Surely nobody would suggest the securities of these companies are not first-class securities for any note issue? In any other country the money required by these bodies, which would be State guaranteed, would be accepted by the Central Bank. But we spurn the securities which these companies offer and instead go to Britain to buy British securities backed by another Government.

I have never heard any answer to that question. I ask again to-day for an answer to the suggestion that the Central Bank could make capital available to these four bodies on a repayable basis, by accepting the share certificates of these bodies as securities for note issues, instead of lending, as they do, large sums in Britain at lower rates of interest. If they did that, then the State could look forward to finding the necessary capital to develop [1737] these four first-class bodies without the annual agonising scramble to find money to satisfy the capital requirements of the E.S.B., Aer Lingus, Irish Shipping and Bord na Móna.

If these undertakings and their securities were utilised as guarantees for the note issues of the Central Bank, then much more capital would be available by public subscription, by public savings and by the repayment of old loans and accordingly, local authorities and State sponsored bodies would be able to embark on more comprehensive schemes of national development. I have had the tantalising experience of sitting with my colleagues trying to see where money could be got, from the public or the banks, to finance the excellent activities of these excellent undertakings. These undertakings endeavoured to go ahead and do this and that, but in the main they wanted to develop Ireland, to provide more employment. Their past record has been one that would inspire everybody to give them all the help they could.

There were times when we could not get money while, at the same time, the private banks, the Central Bank and the entire community have at their disposal not less than £400,000,000 of foreign assets invested outside the State. So far as this Budget takes notice—it does so only in an academic way—of the necessity for encouraging investment in this country, I want to say that any legislation towards that end will have our wholehearted support. As long as we have under-development here we will have large scale unemployment and mass emigration. Neither one nor the other will be cured by pious sentiments expressed in Budgets.

We must provide full employment, we must eliminate emigration and unemployment. That can be done only by capital investment and by our ability to find such capital for that vital investment. I see no reason why we cannot do what other countries in the world do—use our own securities to back our own development schemes instead of our tardy, miserable, halting approach to a financial policy which has given us the results we experience to-day.

[1738] I would say to the Minister that, in the situation in which he finds himself and in the still grimmer stage which must be faced by the whole nation by reason of the formation of a common market in Europe, we have time, but only a short time, in which to take stock and reappraise the entire economic situation. I think the time has come for a reappraisement of the situation, for an examination of how best we can utilise the credit of the nation, the credit-creating capabilities of our people and the foreign assets which are being used to promote development in every part of the world except the part to which these external assets properly belong.

If we fail to have that reappraisal with a view to improving our assets for our own national development, then we will continue to have under-investment, emigration, unemployment and all these frustrating features of our economic life which have been with us now for more than 30 years. Having seen the situation inside and outside, I come down firmly on the viewpoint that unless we attempt to employ all the resources of our people, to exploit all their wealth-creating capabilities and our foreign investments in the development of the Irish economy, then, 20 years hence, other Deputies in this House will be talking about the same problems we are discussing to-day.

If the Government is willing to make a bold break from the laissez-faire of the past, to face up to a recognition that capital is our most vital need and that its employment in Ireland is possible if we utilise the resources which are within the control of the State, then I believe the Government can get a very substantial volume of support, and certainly get it from this Party, for any policy which gives us greater development, full employment and the fullest utilisation of the nation's resources.

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  At the outset I should like to congratulate the Deputy for South Galway, Deputy Miss Hogan, on her maiden speech this evening. Everybody in the House has been very highly impressed by her speech. [1739] She brought a new look and, as I might say, the woman's point of view to this Budget.

We all recognise that the Government had a problem to face in balancing the Budget for the current year. That problem was created for them by revenue receipts not coming up to expectations. That caused a slight excess in expenditure, giving them a sum of £8,000,000 to be bridged in the present Budget. The inter-Party Government, had they been in power, would have also had the same problem to face but I am certain that they would not have taken the measures which the present Government have taken to solve that problem. Last March the inter-Party Government had a much greater and more serious problem to face in the balance of payments position at that time. They went very closely into that problem and saw that to bring confidence to the country that balance had to be put right, and as we all know, they brought in the measures which they considered ample to put that problem right.

The Tánaiste, who seems to be the power in the Government behind this Budget, said at that time that those measures were too little and too late. It has been proved since that they were neither too little nor too late, and that, taking the financial year up to the 31st March, the balance of payments position was completely rectified and, if anything, we had a balance of external assets to our credit.

I wonder, when the present Tánaiste felt at that time that it was too little and too late, what measures he would have brought in? Would he have brought in measures comparable to the measures brought in to meet the present situation? I wonder could any elector have believed that we could have such a great change in such a short time. The Government are in office a mere two months. If I had told my constituents in Carlow-Kilkenny that if they put in Fianna Fáil they would get half the changes that have been brought about by the present Government in the past two months, would they not have said: “That is just Fine Gael propaganda.

[1740] We cannot believe you. We could not think of these things”. But they have put in the Fianna Fáil Government. That was their business and they are entitled to do that.

Likewise, they are entitled to put them out again when the time comes, but could any of those people realise that there could have been such great changes in such a short time? Could they realise that the price of the 10-stone bag of flour would be increased by deliberate Government action by 30/– and that the price of bread would be increased by 4¼d. per 2-lb loaf or by 8½d. per 4-lb. loaf? Could they realise that butter would be increased not alone by 5d. of the subsidy but still further increased by another 2d. by a deliberate action of the present Government, putting it up 7d. and putting the lb. of butter up to 4/4? Beer has also been increased, and sugar has been increased by the action of the present Government within the past two months again by 7d. a stone. Motor car insurance has been increased by 20 per cent. Petrol has been increased by 6d. per gallon. Could anybody who went to vote for Fianna Fáil have felt that his voice was going to bring that scourge on our people to-day?

When the Budget was introduced the people understood that the subsidy on flour was 50/– per sack or 25/– a bag and that when the subsidy would be removed the increase would be 25/–, but instead of that they find the increase to the normal consumer is 30/–. As regards butter, as I said before, people felt that if the subsidy was removed it would increase by 5d., but it shows the confused thought in the present Cabinet that the Minister on the 8th May when introducing his Budget said that while they were removing the subsidy on butter, the Butter Marketing Board would still support the price of butter to cover the cost of cold storage, which is 9/4 per cwt. Nevertheless, on the following day he changed all that; he turned completely round and ordered the Marketing Board not to support the price of butter to cover cold storage. Is that not confusion of thought?

If the Minister had his mind made up when coming into the Dáil with his [1741] Budget, surely he did not intend to deceive the people by that statement? If so, he should have announced not alone that he intended to remove the subsidy from butter but that he intended to remove the cold storage allowance which the creameries up to then enjoyed. Why did he not come honestly and straightforwardly and tell the people that? Then the people would have known when the price of butter was put up a day or two afterwards that the increase would be 7d. a lb.

People came to me and asked me why they were charged 4/4 instead of 4/2 and I was not able to tell them. I did learn here when the question was asked the following week in the House and the Minister then had to admit that he was cancelling the cold storage allowance.

Dr. Ryan: Information on James Ryan  Zoom on James Ryan  I said that all the time.

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  The Minister did not.

Dr. Ryan: Information on James Ryan  Zoom on James Ryan  I did.

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  The Minister said in his Budget speech: “The price to creameries for butter will, however, be supported by the Butter Marketing Committee at a level sufficient to continue the existing price position for milk supplied to creameries and to meet the cost of cold storing butter for winter requirements.”

An Ceann Comhairle: Information on Patrick Hogan  Zoom on Patrick Hogan  Would the Deputy give the reference?

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  Column 948, Volume 161, 8th May, 1957.

Dr. Ryan: Information on James Ryan  Zoom on James Ryan  What does that statement mean?

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  It means that the Butter Marketing Committee were to continue to support the price of butter to enable the creameries to pay the cold storage charges on butter for winter requirements.

Dr. Ryan: Information on James Ryan  Zoom on James Ryan  It does not mean that.

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  It does not mean what the Minister is trying to say now.

Dr. Ryan: Information on James Ryan  Zoom on James Ryan  It does.

[1742]Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  It does not mean that to any normal man.

Dr. Ryan: Information on James Ryan  Zoom on James Ryan  It does. I cannot help stupidity, I am afraid.

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  It is not stupidity. I am afraid most of the stupidity is on that side of the House.

Dr. Ryan: Information on James Ryan  Zoom on James Ryan  It is either stupidity or naïveté.

Mr. Crotty: Information on Patrick J. Crotty  Zoom on Patrick J. Crotty  It is neither. We have heard a good deal of talk from the Government about agricultural production but, when it comes to assisting agricultural production, what do we find? We find an increase in the price of petrol and no provision made for a rebate to owners of petrol driven tractors. I know that the number of these tractors is very small but these tractors are used by farmers who are not in a financial position to change over to diesel oil tractors, or any other type of tractor. Indeed, that is all the more reason why these farmers should be facilitated by the Government in this matter. There is already a system of rebate in existence and the Government would not be under the necessity, therefore, of setting up any new machinery. The policy of the Government has been shortsighted to say the least of it. These farmers are disappointed because they will not qualify for rebate.

Deputy N. Lemass said the other day that the Independents voted against the increase in the tax on petrol. He asked: “Is that not a luxury tax?” Who in this House, outside of Deputy N. Lemass, regards petrol as a luxury or a tax on petrol as a tax on luxury? Does he not realise that the heavy end of transport in this country operates on petrol? Does he not know that the cost of transporting goods by lorry will increase because of this increased tax on petrol? Nevertheless he says that this is a luxury tax.

The Minister for Industry and Commerce said they had to increase taxation somewhere. But he did not say anything about restricting expenditure. He did make some reference to the £45,000 saved on the News Agency, the miserable £80,000 on the [1743] Land Commission and the £100,000 on the Army. These are trifling sums in the background of the Budget as a whole. There has been no definite searching-out in order to reduce expenditure.

There are many members of this House who are also members of local authorities. The impact of this Budget will not be fully felt, perhaps, by the ordinary man-in-the-street until next week. As far as local authorities are concerned there will be repercussions from this Budget over the next ten months. There is evidence of both confused thought and lack of thought in the framing of this Budget. Deputy T. F. O'Higgins asked the Minister for Health last week what would the removal of the subsidies mean in so far as the institutions under his care are concerned and the Minister said that he could not tell him. It is obvious from that reply that the Government had not even considered what the impact of this Budget would be on local authorities.

The Minister for Finance can say that I am stupid, naïve, or that I have the wrong idea about these things. But I am a member of a local authority and I know that there will be repercussions on local authorities because of the removal of the food subsidies under this Budget. The Minister of Defence gave an estimate of what the increased cost in the Army would be. The Minister for Social Welfare gave an estimate that the increased cost to schools means £11,000.

I made inquiry of an official in my local authority as to the likely effect on the rates in Kilkenny of the removal of the food subsidies. He pointed out that at our last rates meeting we estimated for foodstuffs only at the prices prevailing before the Budget was introduced and we shall, therefore, have to meet ten and a half months' excess expenditure next March. Added to that, we shall have to estimate then for a full year's expenditure for the following year. The Kilkenny County Council, therefore, will have to meet one year and ten and a half months' excess expenditure over and above estimation. He said that at the very [1744] least that increased expenditure would involve another 3d. or 4d. in the £. Every member of every local authority went out this year to keep the rates at their existing level. They felt the rates had gone too high and every member made every effort, by paring and cutting down as far as possible without causing unemployment, to keep the rates as low as possible.

Here, the Government, by bringing in a Budget and at one stroke increasing expenditure on essential commodities, are driving up the rates on the people and increasing costs thereby on farmers, business people and others who fall within the ratepaying category. There has, too, been a reduction of 10 per cent. in the grants to secondary schools. I have no doubt that reduction will considerably embarrass school managements. The result of this Budget will be to increase their expenditure by anything from £1,000 to £2,000 each per year. The only way in which they can find this money will be by increasing school fees. That, again, will hit the ordinary middle-class individual who has to send his children to a boarding school. He will now be called upon, due to the action of this Government, to find another £5 or £10 to cover school fees for his children.

The Government have asked the people to make sacrifices. The Minister, in his Budget statement, asked them to make sacrifices. The Irish people will willingly make sacrifices when sacrifices are necessary, but one must put a reasonable proposition before them when one asks them to make sacrifices. Can the Government seriously ask the people to make sacrifices where the price of bread, butter, sugar and flour is concerned while, at the same time, reducing the tax on motor cars by half, removing the levies completely from British manufactured motor cars, costing up to £1,300 or more, and removing the levies completely from television sets, gramophones and all these other luxuries?

These levies last year brought in £4,500,000. The amount the Government intend to take in by the abolition of the subsidies is £5,000,000. If they have to give increased grants to cover increased costs to local authorities I [1745] doubt very much if they will make £5,000,000. Nevertheless, here is £4,500,000 and the Government throw away £2,000,000 of that immediately they come into office. You have increased taxation on the one hand and the removal of taxation on luxuries on the other hand. It is not fair to ask the people to make sacrifices when the Government do not face up to their responsibilities in a direct way.

If the Government had left on those levies, there would have been no necessity for abolishing subsidies. The Minister in the previous Government had promised that he would devote the money which was raised on the levies to capital purposes. That promise did not bind the present Government nor the present Minister. The present Minister was at liberty, if he felt inclined to do so, to use the money from these levies for current expenditure and to balance the current Budget. I am fully convinced that, if he had done so, he would have balanced the Budget in a much simpler way and with very little upset to the economy, which has been put completely out of line by this Budget.

People may say that it is time to do away with the subsidies, but these subsidies did give stability to the country and to the wage earner. They reduced production costs in various industries and enabled them to be more competitive on the foreign market. The Government did give compensatory allowances such as children's allowances and other allowances to the lower income group. However, those increased allowances would not seem to the ordinary person to be adequate to cover the increases which have been brought about by the Budget.

I have been listening to the debate here for the past few days. I listened to Deputy Faulkner who, as a member of the Fianna Fáil Party, represents County Louth. Deputy Faulkner stated here that it was a harsh and a tough Budget. He said he would not vote for this Budget were it not that he felt that it was a direct way to bring us into full employment. Deputy Faulkner has been in this House only since the last election, but there are plenty of Deputies on the Fianna Fáil [1746] Benches who tried to justify themselves in the same way when they voted for the 1952 Budget. They said this was a short and direct way to increased employment. I wonder was it? I sincerely hope the present Budget will lead to full employment. He would be a very poor member of the House who would hope otherwise, but I wonder will it? The 1952 Budget led to unemployment in 1953 and 1954, even higher unemployment than we had during the recent months. Notwithstanding that, a Fianna Fáil Deputy now tries to justify himself before his constituents by saying that he is voting for this Budget because it is the direct way to full employment.

The Minister for Defence used the same argument. He said that it was a realistic Budget. I think it is very far from realistic. The members of the Government do not realise the effects of this Budget on the country. They did not give it thought enough to realise how unrealistic it is. Does realism mean piling taxation on the people? “We have five years to work it off”. That is the cant I hear now. “They will have forgotten all about it in five years”. If that is realism, I cannot agree with it.

Since the Government came into Office they have been looking for savings. Notwithstanding that, they have removed completely the hire purchase restrictions. In answer to a question in the House the Minister for Finance stated that there was £9,000,000 due on hire purchase transactions last December and it was £10,000,000 the December before; yet these restrictions are being removed.

The Minister in his statement also said, as reported at column 946, Volume 161, of the Official Debates of 8th May, 1957:—

“The Government have not yet considered all the implications of the recommendations regarding the agricultural grants. The report raises questions of fundamental importance to agriculturists and it will take time to examine them fully. In any case, the finances of local authorities for 1957-58 have already been settled on the basis of the continuance of the present statutory grants.”

[1747] My opinion about that is that the Government will leave these agricultural grants for the relief of rates in cold storage so that, should any crisis arise in the world during the coming year and there should be a reduction in receipts or an increase in expenditure due to that crisis, that money can be used. “We have the subsidies this year to balance the Budget. We will have the agricultural grants next year and when we grab the agricultural grants we will give the people a sop of 2/6 a ton reduction, or some such amount, on fertilisers.”

Deputy Lemass mentioned in his speech that the only cure for this country's position was increased production. He mentioned it as if it was something new that he had thought up overnight. Has the inter-Party Government not done everything possible to get increased production for the last three years? We all realise that it is through increased production and hard work that this country will succeed but I doubt if this Budget will afford any help towards either increased production or hard work.

Dr. Browne: Information on Noel C. Browne  Zoom on Noel C. Browne  There have been many speakers in this debate and quite a few of them have been in politics since the beginning of the State. The major political Parties have been in office for 35 years, during which time they have fairly evenly divided responsibility for the control of our society in the proportion of about 18 to 17 years. I cannot help feeling that the more sincere of their members, those with consciences and with memories of what they wanted to do, must have been particularly distressed and despondent at the statement of the Minister in relation to this Budget. The remarkable thing is that we have heard so many speeches from the older generation of politicians which still seem to bear the mark of complete confidence in their own ability to remedy a situation which each of the Parties had between 17 and 18 years to put right in the last 35 years.

The Opposition is taken at some disadvantage, it appears, by the harshness of the Budget. If politics were a sort of parlour game, in which the two [1748] contestants were the Opposition and the Government, one could not but feel slightly amused at the confusion of the Opposition in finding themselves caught in what was really their own trap, in so far as they had spent a very long time, coming up to the dissolution, assuring the people that the position of the country was particularly serious. Because it was so serious they took very severe action in relation to levies and the consequences were to be seen in the astronomical unemployment figures and the—since the Famine—unprecedented emigration. They had created an atmosphere of despair among the people, despair that any hope of prosperity was likely to be fulfilled in the time of that Government, and despair in the methods used by that Government to create any measure of prosperity for the majority of the people.

The position, of course, now is that the Government having changed, the new Government is freewheeling on the atmosphere of depression and foreboding created by the former Government and the result is that the people to some extent felt that a very severe Budget was inevitable. The former Government created that feeling or belief and consequently the present Government is benefiting by that propaganda of the last nine or 12 months of the previous Government's life. Unfortunately, politics is not just a simple parlour game; it is a very much more serious thing and especially serious for the people who suffer in consequence of the failure—practically complete failure—of the different Parties throughout the years to create prosperity in Ireland.

One of the impressions that one gets listening to different speakers is that there is an extraordinary obsession with figures as if our functions as politicians were to go and add up sums put before us by the Department of Finance and, having studied the amount of cash on hands, then to try to spend it wisely in the following year, and that we had no function other than that. I think that is very far from the truth. We seem to overlook the fact that, in politics, we have a very much more important function and that is to try to increase the [1749] national wealth in order to increase and improve the national welfare.

The main comment of the Opposition could, I think, be summed up in the statement of the former Taoiseach—I am not quoting him exactly—when he said: “We are leaving a clean sheet.” He seemed to be fairly pleased with that fact, satisfied that he had added up the figures and got the right answer and that everything was fairly satisfactory on the whole on handing over to the present Government. Other speakers more or less supported that point of view and generally, I think, there is a feeling of satisfaction in the Opposition benches with the job that they did during their period of office.

It depends on what their ambitions were. If their ambitions were as limited as their achievements, of course they have a right to be satisfied, but the shortest answer to their case, the simplest and clearest answer and the greatest rejection of their contention that they did create anything like prosperity during their term of office, is the fact that unemployment figures are in the region of 94,000 and that emigration is about the level of 46,000. While some remedial action was taken in relation to the levies, that action was more like the effort of a book-keeper than a politician to solve the problems of unemployment and consequent emigration. It seems to me that the public had no alternative but to reject the Opposition and put in the present Government or some alternative Government.

The present Budget is a remarkable one in very many ways. It is remarkable because it is the unexpected product of a Party which, in the past, has not allowed the principles underlying this Budget to dominate its actions. It seems to me that there has been a complete reversal of the fundamental policy or attitude that this Party had adopted in the past. Everybody has said this is a very severe Budget and it is a severe Budget. In the context of the present severe conditions and the dangerously unbalanced state of our economy, I think it is a very stupid Budget. It is an unimaginative Budget, and it makes little or no [1750] attempt to do anything except, as I said at the beginning, add up the sums on one side and try to balance it on the other. It makes no attempt whatsoever to tackle the real problem which is at the source of all our troubles—the high level of unemployment and emigration. In its brutal and sadistic severity, it seems that it must rank with the Budgets of the 30's introduced by the man in charge at the time and responsible for the reduction in the old age pensions. In its insensitiveness, I think it must rank with the infamous Budget of Mr. Blythe.

In addition, it seems to me that it is a directors' Budget. It is a Budget designed by company directors for the benefit of company directors and in that way it seems to me to show its most radical departure from the great tradition of the Fianna Fáil Party in its greatest years of office, between 1932 and 1939, when the underlying philosophy appeared to be all the time the attempt to protect at all costs the welfare and the well-being of the mass of the people even at the expense of the wealthier sections of our society. Housebuilding, children's allowances, social welfare schemes of one kind or another were included in their policy.

The Budget is also a departure from the tradition initiated by Fianna Fáil of the State company or the semi-State company, the magnificent socialist industries of which Fianna Fáil used to be so very proud and which were part of its tradition. This Budget is again a departure from that in its putting of all its eggs in the one private enterprise basket, which has so dismally failed our economy up to the present.

This Budget has shown this very radical departure from the great progressive radical days of the Fianna Fáil Party to the present conservatism and it is quite clear that the conservative element in the organisation or Party has taken over and has insisted upon the drafting of this cruel, insensitive and, in the ultimate analysis, stupid Budget.

The question of subsidies, the removal of subsidies, the merits of subsidies, the reasons for subsidies, has been argued backwards and forwards [1751] here. There is no doubt at all that a case can be made both for removing and for retaining subsidies but I do not think a case can be made at all for the proposition that subsidies should be removed and that there should be any form of wage-standstill Order or wage restraint by the workers. Any sacrifice of that kind that is asked of the workers, salary earners or wage earners, is completely unrealistic and if the Minister based his Budget on the assumption that there should be or would be that restraint, then, I am quite certain from developments which one can see in the trade unions, he will be very severely surprised.

Some speakers on the Government side make some play of the fact that subsidies are wasteful, that they turn up year after year. The Taoiseach called subsidisation robbing Peter to pay Peter. The Minister for Health has described it as masking the cost of commodities, masking the cost of living. Various descriptions of that kind have been used to illustrate the undesirability of retaining subsidies. Yet, these arguments, it appears, apply only to the food subsidies because, as the Minister pointed out to-day when I asked a question about subsidies, in effect, practically all expenditure of a social nature, whether it is on education, children's allowances or housing grants or, indeed, agriculture, is subsidisation of one kind or another and if there are disadvantages in subsidies, such as being wasteful, such as being paid to people who can well afford to buy and such as robbing Peter to pay Peter and masking the cost of commodities and all these other arguments which have been related to food subsidies, they relate equally to any other form of subsidy, hidden subsidy or declared subsidy, which I have mentioned.

The farmers are subsidised in a very remarkable way. I am not saying whether I agree or disagree with it but, if there is an argument against food subsidies, it seems to me that that argument refers to all the other subsidies in the Book of Estimates, which the Minister said was something [1752] in the region of 75 per cent. The subsidy on lime, on fertilisers, the land reclamation scheme, the help given to the dairy industry, the remission of rates, are all one or other form of subsidy and if it is considered necessary to remove the subsidies in relation to bread and butter it seems to me that the argument holds for their removal in respect of these other things.

There is the other subsidy referred to by Deputy Norton, the subsidy on butter for export. The clear idiocy of that policy is that our people from now on will eat less butter in order to have it exported, subsidised from taxation, to be consumed in Britain. The quantity of butter for export will increase and, of course, the size of the subsidy must increase with it.

It is clear that considerable hardships will be imposed on the large family group in particular by this Budget. As the Household Budget Survey showed, the lower the income, the higher the expenditure on bread in a family. Consequently, there is one section of the community, the large family, whether in the middle or lower income group, that will bear the major part of the burden of the removal of the subsidies. With all the alternatives that there were, alternatives in the Department of Local Government, in education, in agriculture and in industry as well—because tariffs and quotas are a form of subsidy in so far as the industrialist is not asked to compete in the open market and find what the economic price for his product is—why was it necessary for the Government to turn to this section of the people rather than any other section in deciding to make the economies which they appear to feel were needed?

When the proposition for the total removal of subsidies was mooted previously, in 1952, the Taoiseach said, as reported at column 223, Volume 131, of the Official Debates:—

“We should have saved ourselves all that odium simply by wiping out the food subsidies—and we should have balanced our Budget. But we did not do it. Why? We did not do it because we felt that the sudden change would be a very great hardship on certain sections of the community.... [1753] Therefore, it will be seen that, deliberately, we did not go the whole way....we had regard to the poorer elements in the community.”

So it is quite clear that certainly the Taoiseach had his eyes open when he decided on the total removal of the subsidies and that he knew he would, by a sudden change, bring about a very great hardship on the people.

That is an extraordinary admission for the Leader of the Government to make, even in present economic circumstances. It seems to me that if the Government really believed the Budget was a weapon for directing financial policy, for increasing the national well-being, then they would have been able to say as a result of budgetary policy over the years: “We will so increase the national wealth in the second, third, fourth and fifth year that we will create prosperity as outlined by the Minister for Industry and Commerce, some months ago.” They would have been able to say that they would be able to get such prosperity that they could carry a deficit in the Budget, to some extent, and save the imposition of this heavy taxation on the people.

There is another point about the removal of these subsidies and the homily to the trade unions and the workers on the question of making sacrifices and restricting wage demands in order to restore the purchasing power of their wages. It means increased taxation on the section of the community least able to bear it. It is taxation which, apparently, is imposed deliberately because the Taoiseach has admitted that he knew it would impose very great hardship on the people. I was relieved to-day, and I am sure many people will be relieved, to have received an answer from the Minister for Industry and Commerce on this question of restriction of wage demands. The Minister says that he is quite certain that he does not intend to introduce any form of wages standstill Order or any other similar device designed to frustrate the demands of wage earners for increases which must inevitably follow from the decrease in purchasing power of their wages, [1754] brought about by this Budget. It is quite clear that the suggestion made by the Minister for Finance that there should be wage restriction can go unheeded. He could not, surely, have been serious when he suggested that this imposition of £5,000,000, £6,000,000 or £7,000,000 on the workers would go on without their demanding increases in their wages.

I believe that one concession which should be conceded by the Government in regard to these wage demands, and which should be encouraged by the Government, is that the new principle, initiated by the Minister in his Budget statement, of retrospective payments to the date of impact of increased prices—which he has initiated in relation to the pay claims or profit claims of the master bakers — should be adopted, and adapted, by the trade unions for their own use. In this way, any wage increases should be made retrospective to the date of the coming into operation of the Budget. It seems to me that only in that way can the full impact of the Budget on wage and salary earners be offset. It seems to me, too, that the Government are depending on the fact that there will be a time lag between the making of demands for wage increases and the granting of those damands to the workers. Consequently, they should concede the same principle to the workers as that which they conceded in respect of the master bakers.

I was particularly interested to hear Deputy Norton's comments, as the person largely involved, on this award to the master bakers. This is one of the most astonishing and, I believe, indefensible awards in present economic circumstances. One puts the master bakers as a group on one side and those upon whom taxation has been imposed, the workers, the people with large families, the old age pensioners and the unemployed on the other and one sees that the Government decided to make this concession which, it now appears, was completely unnecessary. It appears that there was no need for this gratuitous grant of nearly £250,000 to the master bakers.

The suggestion that the Government [1755] was bound by any committee's recommendation or that we, the people, were bound in honour, or in any other way, to make this so-called restitution for a Labour Court award is completely indefensible. It is outrageous that the Government should take upon itself to underwrite the consequence of any Labour Court award which may mean increases in wages or a reduction in the profits of large concerns like the master bakers. This matter was considered by the Labour Court and the demand by the unions was granted. That we should now, whilst in a position of national financial stringency, pay out £250,000 to a group in our society is a remarkable departure in public finances.

However, in so far as the Minister has been so generous with the master bakers, it can only be hoped that, if the same retrospective principle is adopted by the unions in their wage demands, he will understand it.

Dealing with this Budget, the Taoiseach has made a few comments, both in the House and outside it. Generally, his attitude to Budgets may be summed up as of the fireside chat type. In his statement in the House, he is quoted at column 1432 of the Official Debates for May 16th last as follows:—

“As I have said on many occasions on which we have been dealing with these accounts, the position in regard to the State differs very little—in this matter, anyhow—from the position of a family looking forward to its year's expenditure and to the means by which that expenditure is to be met. If earnings or revenue or income—whatever term you like to use—is not sufficient to meet outgoings, a position will arise for the ordinary family in which it will be run into debt or use up whatever savings have been accumulated.”

That is the general trend of comments which seem to epitomise the attitude of the Taoiseach to national Budgets. According to him, the Government is like a family or a thrifty housewife. I think the Taoiseach is in a much too elevated position to speak like that. He [1756] carries too high a responsibility to carry on with this kind of over-simplified, misleading, political baby talk about financial matters of this kind. It is misleading.

If he believes this kind of thing, it is not surprising that we get these kinds of budgets; but I think it is wrong that he should try to impose it as a matter of fact in major economic matters. The fact is that while it is possible for an individual, the father of a family, the bread earner, to lose his power to earn his living and in that way lose his ability to pay his debts, that cannot happen with the State because the State always has its resources. It has the raw materials for the creation of wealth, the know-how and the manpower. Therefore, the State is not in the same position as the family or the thrifty housewife. It always retains its power to earn its living.

Consequently, it is about time the Taoiseach gave up this kind of thing. It misleads the public. It gives the public the impression this is good common sense and they tend to believe it. If he had said the State is like a public company, a corporation, which has its current budget and its capital budget, he would have been nearer the mark. He would then have been able to carry on and say that when a public company wants to increase its wealth, it expands its capital. Having expanded its capital, it is then able to expand its output and in that way increase its wealth. There is some analogy between the State and a big company or corporation, but it is wrong for the Taoiseach to mislead, to create the impression that the family budget and the national Budget are one and the same thing. I believe the Taoiseach really thinks this simple analogy covers the position because he made hardly any reference at all to the need for capital expenditure.

Practically all of his statement dealt with the deficit of £6,000,000 or £12,000,000 which had to be found. He made little or no reference to the fact that the capital Budget for this year is practically the same capital Budget as was provided by his predecessors. That, to me, is easily the most serious [1757] part of this Budget. The removal of the subsidies and the hardships it will cause will give rise to an all-round demand for increases in wages, because the impact of the withdrawal of the subsidies will be all round.

The other day Deputy Lemass seemed to wonder why these demands for increased wages might arise all round. The all-round removal of the subsidies has an all-round effect and must create an all-round demand for increased wages. However, the removal of the subsidies, the imposition of taxes of various kinds on cigarettes, stout and petrol, are not really the most depressing part of this Budget. The most depressing part I see is the failure of the Government to accept the advice of the numerous authorities who have told them that there must be a considerable increase in capital expenditure, if we are to make any hand at all of the job of increasing the national wealth, and of increasing employment.

One of the most important recommendations of the Economist in its references to this country was the need for considerable capital expenditure. The trade union movement, in its draft solution for the problem of unemployment, speaks of the backward state of social and economic development. We also have the report of the Capital Investment Advisory Committee and there is a magnificent dissertation by the present Tánaiste. He foresaw that, after five years, we would have 100,000 new jobs.

That gave great hope to the country. It gave great hope to people who began to believe that it was possible for a Government to create full employment by expansion on the capital side. The trade union movement recommended the expenditure of something in the region of £15,000,000 a year additional on capital programmes. Deputy Lemass recommended the expenditure of £13,000,000 in the first year, rising to a total of £100,000,000 altogether.

I believe the Tánaiste really wanted to do all these things, that he really intended to do them. I do not think he was putting on an act when he gave a lecture on this whole question of unemployment; [1758] I do not think he intended to mislead. What has happened to him? Why is it that we have got this Budget in which there is no attempt at all to develop on the capital side, no attempt at all to create the slightest hope that this Government has a solution for the problem of unemployment, and no intention at all of moving towards the creation of a state of society in which we will have full employment and redeem the pledges given?

The Tánaiste suggested, as well, the sources from which the money could come. I do not want to misinterpret him in any way, but his general idea was—this is from the Irish Press of Wednesday, October 12th—that “the existing external resources of the commercial banks appear to be more than adequate to cover any situation which may arise, as well as to meet the requirements of the Government's programme, even if it should be decided or found necessary to finance it entirely from that source.”

The Provisional United Trade Union Organisation suggested other approaches—the setting up of a capital investment board in order to study and advise on the investment of capital over a number of years and to determine the need for further extended employment. I asked the Tánaiste whether he agreed with the suggestion in this trade union scheme that the private capital in Ireland, private savings in the country, could not finance a full employment policy, and he seemed to hesitate and give the impression that he was not so sure now that private savings, private investment and the capital raised at home would provide some source of capital for expanded investment in industry of one kind or another.

That throws us back to the system which we have operated for 35 years with such singular unsuccess, in spite of the fact that every body and every authority tells us that there is no hope of finding money for capital investment in the ordinary way. The Provisional United Trade Union Organisation says: “It is clear that the ordinary machinery for securing money for investment by way of Government [1759] loan and the savings movement is likely to prove incapable of providing the amounts required each year.” Similarly, the Capital Investment Advisory Committee came to the same conclusion. It said: “The Committee could not escape the conclusion that the community has been unwilling to sustain by its own current efforts the public capital outlay at the level reached in recent years.”

It appears that we intend to carry on drifting on, clearly, economically, quite out of control, in the hope that something may turn up. Even the Minister himself in opening his Budget statement told us that the policies which we have pursued up to the present have not been so far successful, or words to that effect; but then he produces a Budget which is effectively, in its policy, at any rate, completely unchanged from that of his predecessor, Deputy Sweetman, and Deputy Sweetman's predecessor, the Minister for Health. Each of them, one after the other—he should learn something from that—had created only one thing—the high unemployment and high emigration figures. What I suppose could be called the MacSweetmanish economic policies can only continue, if they are continued to be used, to give us the same results.

The hope now is apparently that the considerable remissions of taxation that have been given are going to supply the answer to our needs from private industry. These remissions of taxation in a widespread way to the exporting companies on profits from increased exports, tax remissions on unearned income, for the person who does not work for his living but merely has money to work for him, and the tax remission from the concessions to the shipowners, the flour millers, the master bakers and all those others, already very wealthy people, have been made at the same time as sacrifices are asked from the workers. How can these be reconciled—an increase in taxation on the broad mass of the people and a reduction in taxation on the wealthy minority, with homilies to the mass of the people to make sacrifices and to carry this burden uncomplainingly?

[1760] The Government ask them to make no attempt at compensation for the reduction in the purchasing power of their wages, and, at the same time, make no attempt at all to ask for a profits standstill on the part of the wealthy minority. Why should we be so offensive about the wealthy minority, the industrialist, the big businessman, especially the master bakers or the flour merchants, and assume that they are not prepared to make sacrifices for Cathleen Ní Houlihan like the worker is asked to do? Why should we not ask them to increase output, modernise their equipment and machinery, raise capital themselves and invest in their own industries in order to create employment by making some sacrifices? Why should the industrialist be feather-bedded in the way that he is at the expense of the salaried and wage-earning worker?

It is quite clear that the private businessman has been given a very fair crack of the whip over the years by all Governments, and the net result has been one way or another that, for the 70,000 or 80,000 people who at any time over the last 30 years want jobs, we are creating work for between only 800 and 1,000 a year. Is it any wonder that there are unemployed marching on Leinster House, unemployed people in their thousands, and most depressing and saddening sights in the city? We find those unfortunate men standing around, anxious and willing to work, but they are gradually deteriorating morally and physically, as they cannot find the work we promised to give them. For the 80,000 people we have 800 to 1,000 jobs—and, of course, the 80,000 figure is entirely a fiction. The real figure is that figure, together with that for the emigrants.

We have the great failure of the successive policies of the different Governments shown in the increasing emigration—16,000, 18,000 and 24,000 in three decennial periods—16,000 annual emigration in the first decennial period, 18,000 in the second and 24,000 in the third. We have the last figure, something in the region of 200,000 in five years, with a grand [1761] total of something in the region of 750,000 people, who have had to get out of this country, not because they wanted to go but because we have so organised or disorganised our society that we cannot find them work.

That is why I say—in spite of my feelings on subsidies, on taxation and on one thing or another and the outrageous concession to this well-off minority which the present Government has made—that the most saddening and the most depressing point about this Budget—and I call it a stupid Budget because it sees the problem there, recognises the problem of unemployment and emigration, tied together with the complete failure of this private enterprise capitalist system over the years—is that it makes no attempt, no suggestion, no hint at all that it intends to change all that in any way.

It is clear that, with the exception of the subsidies—I do not know what the previous Government would have done —there is no difference between one side of the House and the other. Politics has become a game of musical chairs—when the music stops they change sides and there is no difference —the unemployed still walk the cities, the emigrant still walks the gang-planks. Governments refuse to face the fact that a radical and fundamental change is imperative if the country is to be saved at all as a unit of society. For the first time since the Famine, we are losing people more rapidly than we can reproduce them. Yet, after that continued failure, that continued series of successive failures, we get much the same propositions, much the same governmental policies, much the same social and economic policies.

The tragedy about this is that, unfortunately, the mass of the people will see only the subsidies, will see only the serious increases; the only real impact they will feel will be the impact of the increases in prices. It seems a strange thing to say—and I do not want to underestimate that impact at all—but very much the more serious thing for our people is the fact that the Government is making no attempt whatsoever to cope with the unemployment problem. The Minister's examination of capital expenditure shows that [1762] the money goes out on much the same projects as it did last year. There is no proposition there for increased employment in any significant way at all.

We put our faith in private enterprise and the increase in profits; we dangle the carrot in front of their heads; we do not ask them for loyalty; we do not ask them to try to help fellow-Irishmen to get employment, but we dangle the pounds, shillings and pence before them and hope that they will put more capital into business, that they will go looking for more markets, that they will increase exports and in that way provide jobs for our people.

The absurdity of the proposition is shown when you think that if, from the whole employment sector of our economy, you were to take away the employment content of the E.S.B., Irish Shipping, Bord na Móna, C.I.E., the air companies, the Civil Service and local authorities, taking them out of the total employment content of the State, you would be left with what private enterprise has done to create full employment in the country—a negligible thing, a relatively unimportant job. The suggestion that they are going to increase production, to get new markets, to increase exports to the extent that they will create work in factories and expand them, of course, again, is fallacious. It is based on the assumption that most of our industries are primarily Irish-based industries.

We all know that the majority of them are merely subsidiaries of British companies and because of that they cannot expand. The parent British company will expand from its British base, in order to bring in any profit it can get into the British national Exchequer or the British national income. The subsidiary company will merely continue to operate behind the tariff and quota protections which we give them in order to carry on the relatively negligible employment content of these industries.

The Government must know all this very well; they must be well aware that there is no policy, that this holding out of the prospect of remission [1763] incentives in taxation will not expand industry. They know quite well that is not so and they are completely bereft, bankrupt of any policy, in this time of perhaps the greatest seriousness which any Government has gone through.

The Government has got a strong, overall majority, the tremendous majority which it has at the moment. It did not get it to carry on Deputy Sweetman's policy, nor did it get it to carry on Deputy MacEntee's policy of the past, the deflationary policy. It was tried and it did not work. The people rejected that policy, they rejected the policy again and they are getting it a third time. Surely that is insanity to return to the people the same ideas, the same theories, the same out-of-date antediluvian economic theories pursued by the Government at the moment. Surely it is time we realised that, in a time of strength, when the Government has a good majority and it can change the policy radically and fundamentally, the Government should say clearly: “Let us put an end to this type of thing which has gone on over the years and make a change which will create prosperity in Ireland, full employment in Ireland, which will give the people jobs and a reasonable standard of living, something on a par with that enjoyed by other similarly situated nations.” Instead of that, we come back with exactly the same tried and failed policy. There is no harm in trying—but this is the policy which has failed and failed and failed again.

Now, it is very unlikely that it will be possible to change the attitude of the Government, in view of the fact that the Government is dominated by minds which are gone beyond changing —too far gone to change. They are either very old men or prematurely aged young men who have lost their dynamism, who have lost their revolutionary fervour, who have lost the radicalism of the great days of the Fianna Fáil Party. We have the Taoiseach asking what the Opposition would do. I remember the Taoiseach asking the Government what they would do. That goes on continually and each is satisfied [1764] that the other will not propose any sort of radical or fundamental change, or suggest any in our society. Practically the entire discussion hinged on the question of the food subsidies when everybody must know that the really important problem facing the country is the problem of unemployment and emigration.

I would say this were I asked what would I do. Our abject failure must be quite clear to all of us, and particularly to those who believe in the social and economic theories passed across from one side of the House here over the years, who believe in private enterprise, in the capitalist economic system, in profit-making incentives and in the fact that the worker is merely some form of machinery to create capital for some industrialist who chooses to employ him. That must now be clear because of the fact that after 35 years of dedicated devotion and because of the fact that 35 years later, we are on the edge of bankruptcy in this country, our people are leaving faster than they have ever left since the Famine and our standard of living is one of the lowest.

We have been able to give our people little or nothing, except the choice of unemployment at home or emigration to Great Britain or elsewhere. I believe it is about time we should accept that we have tried sincerely to operate a system which is inoperable, a system which the better part of the world is beginning to reject because it is inoperable. We should give some consideration to the ideas of democratic socialism of Sir Stafford Cripps and the British Labour Party and other similar bodies. We should give some thought to the proposition that a nation must have a planned economy.

There must be planning over five, ten or 15 years to increase our national wealth and expand our economy by the injection of vast capital sums into the economy, in the faith and belief that we have in our society a community which is as intelligent, as hardworking, as ingenious and as able as the people of any society and that we have the land and material. It is only necessary for the capital to be injected to [1765] enable us to increase our national wealth and in that way expand opportunities in every direction for our people.

It is quite clear that Deputies on both sides of the House have hesitated even to discuss the proposition of the socialist planned economy of Great Britain or of other societies where it has been tried and found successful. Why not discuss it? Why not consider it? Something we have tried has failed and failed again; something they have tried has succeeded. Why are we afraid to discuss its possibilities as a probable solution of the unemployment problem which we face to-day and which they faced in the 1930's and post-war years and which they solved as a result of the magnificent policy of Sir Stafford Cripps' tremendous capital investment programme?

Deputy Sweetman was right to the extent that he believed in austerity, but he did not pursue the matter to the extent of finding the capital in one of the many ways suggested by the economists in order to inject it into our economy and so create employment over the years. The fact of the matter is that, in spite of all our sneers at the socialist planned economy, if it was not that there was full employment as a result of that socialist planned economy in Great Britain, we would have something like 750,000 unemployed here at the moment.

The fact that there is a welfare State; the fact that there is full employment and the fact that our unfortunate men break up their homes, leave their children and families, walk up the gangway and wave goodbye make us forget them because we know they will get jobs in a planned economy carried out in the years of the British Socialist Party. That is the only policy of employment the present Government have. That is the only thing Deputy Murphy can tell his unfortunate unemployed, some 60,000, 70,000 or 80,000 of them, depending on the time of the year. They get a few shillings on the dole and what a demoralising, degrading and humiliating experience must the dole be for men who are willing and able to work, [1766] and yet we sit here year after year refusing to face the fact that our policies have failed.

We have betrayed the whole idea of the democratic Republic which was intended to be established here by the brave soldiers who fought and some of whom gave their lives for it 35 years ago. Instead of having the democratic, egalitarian Republic which they looked and fought for, we have this destitute, near-bankrupt State in which there is privilege on all sides in education, health, care of the aged and in which the unemployed walk around in their thousands and emigrants walk up the gang-planks in their thousands every year. Yet we still spit across at one another here asking why was this or that not done or what would you do?

It is the same in regard to our health services. We watch the success of one particular scheme—the free for all benefits with no means test and we know it works, but we refuse to accept it. We know a planned economy works and that the welfare State gives social justice and full employment, but we will not accept it and we will not work it. I hoped that, since the Government had this magnificent overall majority, there was no need for radical changes and that they would go back to the great days of the Fianna Fáil Party when they believed in socialism and private enterprise and when they believed that the Government had a right to go into private enterprise and organise industry. These industries are there, to their credit. It is quite clear that private industry cannot provide the opportunities for work in Ireland. Even if it wanted to, I doubt if the capital is there to the extent needed. It is quite clear that the Government is the only Party who can provide the money as in Bord na Móna, the E.S.B., Aer Lingus, Irish Shipping, Irish Steel Holdings and Comhlucht Siúicre Eireann. There is not enough private capital in this country. Endless reputable authorities have repeated that we have not enough capital to establish industries which are needed, so that we may compete in modern times on world markets.

[1767] It is quite clear that the only hope is for the Government to go into business, to create enterprises of the kind suggested here in the trade union booklet, based on agricultural industry—the processing of food produced from agriculture and the breaking away as much as we can from our dependence on the British market. An attempt ought to be made to break into markets in other parts of the world, in the Middle East, the Far East and various parts of Africa, in order to find markets for the products of our factories.

It is quite clear that we are, as a nation, continuing through our Gethsemane and there is very little relief or hope offered in this Budget for anybody except the privileged, the master bakers, the flour millers, the unearned income group, the company directors, the shipping magnates and all these other businessmen and industrialists of one kind or another who are finding tax reliefs. On the other hand, the mass of the people, men, women and children, are being taxed to the extent of impoverishment in order to make life easier for this minority.

I think one thing is certain. This Budget will do an awful lot of damage. It may do some good. It must show the people once and for all that, under the social and economic system which we have practised down the years, there is this fundamental conflict of interests between the wealthy minority and the mass of the people. Where a Government is tied to the wealthy director type or section of society, then that section must be privileged at the expense of the mass of the people. The profits must come first. Even the bread and butter and the simple necessaries of men, women and their children will be subordinated to the interests of the other class.

As I said at the beginning, this Budget is the product of senile, stupid, insensitive minds. In my view, there is no end to the damage it must do in our society in the years ahead. It has struck me that now is the time, above all, in which this Government, a strong Government, with the welfare of the mass of the people at heart, could [1768] have taken the necessary steps, as practically never before, to turn out all the old ideas, to learn from the achievements of neighbouring societies and to take those steps which they must know are necessary towards the creation of a democratic, egalitarian socialist republic which they promised in the First Dáil, in the democratic programme of the 1919 Dáil, which they had hoped to achieve in our society.

Major de Valera:  In the course of this debate, the thought which I think would strike a casual listener is that there is a great deal of evasion of the real issues. There is a good deal of escapism in some of the speeches on this Budget, in declarations of aims and intentions. We would all love to see heaven on this earth, if we could have it, but declarations that sometimes descended even to the level of platitudes are what we have heard. The speakers, particularly from the opposite benches, who have indulged in that, are people who may be expected to have as close a knowledge as, or even a closer knowledge than, the present Government, of the present affairs of the State—seeing they were the Government in the past three years—and they sit down at the point where one would have imagined they would have clinched the problem. I do not want to be guilty of the same type of thing but I do think I am justified in saying that this debate has been characterised by an evasion of what are the issues.

The fact of the matter is, and everybody will agree with this, that there has been a serious economic situation in this country which has got to be grappled with and that some positive action is called for. You have a simple choice, and there is no escape from it, namely, that you take some action or you take no action. I think every one of us is agreed that to take no action will be more dangerous, more damaging, more pregnant with disaster than even the grossest mistakes.

Very well; what action was to be taken? To answer that question, we must ask ourselves what is the problem.

[1769] It may be part of my business before I finish to seek to find the nature of the problem by going into its history somewhat, but the nature of the problem is this: that, whatever the cause, within the past 12 months there was a serious disbalance of payments problem relating to our present internal situation. Costs were rising and there was serious unemployment and emigration—serious and dangerous even by comparison with the chronic levels which have been there since the war emergency ended.

There were your problems. In what way were these to be dealt with? The alternatives, as I have said, were: drift along, do nothing or do something. We know where the drift went. We had two periods of drift under two different Coalitions. That sad lesson has been learned by all now and understood so much by all that it is hardly necessary to refer to it. It is this. The people who did nothing because of any unpopular consequences that might flow from their action found themselves faced with the same unpopular consequences in the end just as much as if they had done something.

People are talking about the cost of living in this connection. Mind you, we all deplore and feel the cost of living, and when I talk like this let me say to the House that it is not without the greatest realisation of the position—perhaps more than that of a lot of people who criticise—because I have been in some of these homes and talked to these people very intimately. I know what the increased cost of bread and butter means to the average housewife and to the average family in everything but the most comfortable strata of society.

To be more specific, these people who evaded taking action, particularly in certain regards, were deterred by three big bogies that paralysed the two Coalition Governments and that prevented Fine Gael and Labour from ever making a decision. The first bogy was that an economy might bring about unemployment. That was the paralysing fear that stopped two Coalition Governments from acting. It is an open secret that if Fine Gael [1770] wanted economies, Labour stalled because they feared unemployment.

The second bogy that faced the two Coalition Governments was that whenever Labour wanted to go ahead, to expand—I am cutting out now the two-way stuff because no reasonable person could subscribe to it, that is, to have it both ways—whenever there was talk of expansion and it was a question of finding money, Fine Gael or some other group in the Coalition Government said: “We cannot do that because we have not the money and we do not want taxation.”

I am dealing with drift now. Three bogies prevented two Coalition Governments from acting—the fear of unemployment resulting from any measure that could be taken, the fear of higher taxes and the fear of a rising cost of living. They did nothing. They let things drift. What happened? We had an economic catastrophe and the crisis with which this Government is now called upon to deal. You might even have something to say for a drift were it not that you not only had an economic catastrophe and a crisis but also unemployment, higher taxes, and a rising cost of living—the very things the Coalition Government sought to avoid. They are just as much there as if they had taken action. The country has to thank the policy of drift for that. I do not want to pursue it. This is not the time for going into the past.

I want to drive home the lesson we learned the hard way, that if you avoid taking action because of the disadvantages of the moment you are not only likely—indeed, it is inevitable— to get into a jam later but the odds are that you will have, as well, the unpleasant consequences you sought to avoid by evading action.

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  That is not an excuse.

Major de Valera:  If you do nothing you will find yourself in the same position as the previous Government. You will have the consequences of doing nothing and also the unpleasant consequences you sought to avoid by doing nothing. I think that is a [1771] sufficient dismissal of the policy of doing nothing.

Now let us ask ourselves about this matter. We want to do something. What are the problems? I think it was agreed on all hands that the really critical problem as it developed was the contraction of economic activity and the consequent unemployment as a result of a growing depression. That was the problem that had to be faced. It became quite clear, in the unpleasant prospective of present reality, that at the root of all the trouble was a failure to take time by the forelock, to have a growing and developing economy, to have a continuing and expanding economic activity in business, industrial and general activity within the community. If you have such a situation, then we know that the others, by and large, will look after themselves if people are realistic. In such a situation, true enough, measured in terms of cash, costs may go up but other things go up to balance. There are compensations and the general standard of living is increasing in these situations.

The fundamental problem at the present moment, whether you look at it from the long-term point of view or from any other point of view, is to restore the economy, to get activity going, to try and restore the level of employment and to get industrial, business and other productive activities, in particular, going within the community. Then one can hope for adjustment and an amelioration of the other problems that are there.

Lest anybody should think I am still preaching alone doctrines that have been preached only by members of this Party, doctrines at which occasionally some people sneer as being out of date, it is a very peculiar and a very interesting fact that Ministers in successive and different Governments in 30 years, no matter what views they have expressed, particularly Ministers for Finance, have found themselves pretty well stating the same fundamental truths at the end of their term of office, if not at the beginning— fundamental statements such as that we have got to keep control of our [1772] external balances because, if we do not, then, in the long run, internal chaos will result. That proposition was argued. There was the most extravagant talk about the repatriation of our external assets, of investing our capital, of spending our external assets. At the end, take any Minister for Finance who ever sat there, whether he was Deputy McGilligan or Deputy Sweetman or any Taoiseach whether he was Deputy Costello or Deputy de Valera. It is an extra-ordinary thing that you will get a unanimity about the importance of such balances. You will also get a certain unanimity about the importance and the inescapability of certain problems that can arise such as the balance of payments problem.

Is it not a convincing argument in itself to hear Deputy Costello in his second term of office here—having in his first term of office talked and talked about the repatriation and investment of our external assets and all these facile, shallow and I will say, nebulous, theories about these matters —reduced to realistic talk and to the warnings he had to offer about the necessity for conserving what was there and deploring the improvident spending of what was gone? Is that in itself a convincing argument for what I have to say? Is it not significant that Deputy Sweetman, towards the end of his term of office, should have to warn in very much the same terms as the Minister for Finance has warned, that the external position would have to be watched? He was forced to take action; the trouble was that it was left so late——

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  Is it not a fact that during that period the adverse balance of payments went down?

Major de Valera:  I can take it as proof, as an equation between opponents, that such a problem is inescapable. It must be kept in control or ultimately there will be internal disaster. I would invite the House, especially when listening to another type of speech, to consider that there are at least certain propositions that are proved, tested and accepted by [1773] those on all sides of the House who have had experience in practice and have had responsibility.

Now I come to the next one, on which I think we are all agreed at last. Hard realities and hard facts in a worsening situation have compelled those in the former Government to see the importance of capital development. I almost hesitate to use the phrase, it has been so much bandied about. Phrases like “production and capital development” have been so much thrown around as almost to lose their meaning, but they still have a very fundamental, real and practical meaning for the economy of this country.

It is significant that Deputy Sweetman at the Fine Gael Árd Fheis should have emphasised the importance of that aspect of our economy. On it depends also these other symptoms of which we complain to-day. It is also significant that that is to be found in the policies and examinations of his predecessors and his successor in office as Minister for Finance. These are inescapable problems and realities. Whatever we do, whatever action must be taken, it must be taken under the compulsion, under the shadow, so to speak, of these two realities. One of these is the necessity for the community to have the wherewithal to live as a unit in relation to its neighbours. That is the first hard fact that cannot be lost sight of. It is the first compelling fact in the present situation. The other is the need for a sufficient level of activity at home.

Just as all of us have to make the effort to do certain things in the day, or else we will not live, so too must a community make a certain effort and achieve certain things. The need then is that development which was inhibited in this country when it should have been there—the provision of the proper means for developing within the system we have to-day. These are two hard facts. The last hard fact is also admitted. It does not matter whether people see it or not; you cannot escape it. We have a system working. Even a revolution will take time. You have to keep the first factor in control. I am dismissing the whole balance of payments problem——

[1774]Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  So well you might.

Major de Valera:  It is fundamental in it and cannot be lost sight of. After that, you have the internal problem. I think the Deputy misunderstands me if he thinks I am attacking Deputy Sweetman. I am using Deputy Sweetman to prove my case. That cannot be avoided. This Government, the last Government and the House cannot ultimately avoid the issue of the external balance. Internally, there is the problem of beating the recession and expanding.

As I was about to say when I lost my track, due to the Deputy's remark Deputy Sweetman warned at the Fine Gael Árd Fheis about the necessity—I think I am putting it carefully—for getting the money to do that. I have not the actual quotation; I thought I had it, but I can easily get it. I think he did go so far as to warn that further taxation might be necessary to achieve that end. Deputy Sweetman did not say that for fun. In a sense, one rather admires the honesty of such a statement. I certainly do. However, the plain fact is this: nobody can go out and start a business, be it running a farm or something like that, without having the wherewithal to start the business or buy the farm. Neither can the State do what has to be done, unless it has the wherewithal to do it.

Maybe I have been a little long in getting to the point. It is this: having dismissed drift as no policy to be pursued, when it comes to taking action, you must do so in the light of three hard realities—the necessity for external balance and living as a community in your environment; the necessity for securing the proper level of economic activity at home to enable you to maintain your standard of living and to achieve what we all sometimes so platitudinously praise or subscribe to; and thirdly, the equally hard fact of the reality that to do that, particularly the second, you have got to have the capital, and, in plain language, that means money under present circumstances.

I see in this debate a considerable evasion of these issues and I am inclined to criticise those members of the Opposition, who have had experience [1775] of Government, for that. They should know what the problems are. If that money has to be found, where is it to be found? If we are agreed that a renewal of economic and industrial activity is necessary, employment should be the first aim. To secure that aim, funds are needed. At the very time funds are needed, a new Government takes over and finds itself with a deficit and in a straitened position for funds. Not only does it find itself with a very real problem of finding funds to achieve that expansion and deal with those problems, but it finds itself sorely put to find funds for the ordinary day-to-day living, and the capital problem becomes a very urgent and a very grave one indeed.

The question arises then as to what action can be taken? Now, there are two types of critics of this Budget. There is, first of all, what I shall describe as the orthodox. That type of criticism comes from the former Taoiseach and the former Minister for Finance. They evade the issue and they seize—I can understand them doing so and, politically, it is not a bad way of handling the problem from an Opposition point of view, but there is no element of constructive assistance in the situation—on such things as the food subsidies, and they say: “We would not have done that.” But they do not tell us what they would have done. Now that type of criticism is futile. I do not propose to follow them along that line. I do not know what they would have done. Let us deal with what has been done.

It is all very well to say that we should not have done this and that they would have done that, that they would have done it gradually or piecemeal, and so forth. The significant fact is that that report was in the hands of the former Government. I know many people have a very good idea and a very shrewd suspicion that a substantial proportion of the former Cabinet were inclined to take the action that the present Minister for Finance has taken. The fact is the money had to be got. The question was: where was it to come from? That was the hard fact. The Minister for [1776] Finance had to face this cold choice. He could not get away from it and anyone who might be sitting in his hot seat in the morning——

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  Hot is right. The emphasis is on the heat.

Major de Valera:  ——would find himself faced with the same problem. There is only so much money coming in by way of revenue and the question is as to where one will cut down. So much money is required and not sufficient is coming in in the ordinary way. The Minister then has only one choice. He must either cut down or he must find the money somewhere. The choice is simple: will one find the money or will one cut down? If one cuts down that means putting more people out of employment, having less money in circulation, plus a still further step in the direction of depression and a certain paralysis in Government with all the social consequences attendant thereon. The most dangerous consequence is that of a too rapid close down if one is effecting economies. I think we are all agreed on that. I have seen no sign of any Government since the war making the economies the first Coalition talked about. We take it then that we will not cut down. If any miracle worker would come along and tell us on this side of the House where the money can be got, without taking it from somewhere or off somebody, then let us by all means put him in the place of honour and let him solve our problems.

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  The problem is the Government's and not ours.

Major de Valera:  I suspect that miracle worker will not appear.

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  The problems are the Deputy's to solve now. They are not ours. We solved them last year.

Major de Valera:  Indeed, you did not.

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  And we solved them without removing the food subsidies.

Major de Valera:  Deputy Murphy says they solved the problems last year.

[1777]Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  Without removing the subsidies.

Major de Valera:  Then what is he doing on that side of the House if he solved the problems last year?

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  I will let the Deputy know when I come to speak.

Acting-Chairman (Mr. MacCarthy): Information on Seán McCarthy  Zoom on Seán McCarthy  Interruptions must cease.

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  The debate would be no good if we did not have some little interruption because it is by interruptions that we learn.

Major de Valera:  I appreciate the Deputy's good intentions but I shall be shorter if the Deputy will leave me alone. Having got thus far, we can now come to grips with the problem. I have no objection to someone coming along and saying to me that this is not the right way of doing it; I am quite willing to argue that. I know there is matter for argument particularly in connection with the food subsidies. I will not dismiss anyone peremptorily who says that the Minister should not have cut the food subsidies. But let us be reasonable in our approach and let us be reasonable in the arguments we adduce for and against. Let us be clear, above all, on our premises first.

Am I off beam when I say that we have got this measure of agreement; the Minister had either to cut down or to find the money? We are all agreed that there is no question of cutting down. We are left then with the problem of finding the money. The figures have been put before the House. They are on the records of the House and I do not intend to go over them again. The fact was that the money could only be found in one of three ways, by imposing further taxation or effecting economies like the food subsidies since we have ruled out major economies in those things that have an employment content. We are barred from economies where there is an employment content —certainly from economies at a too rapid rate because we shall thereby aggravate depression and bring about more unemployment.

On the question of economies, therefore, [1778] we are confined to saving in those places where we will not affect the employment content or the activity content of the community. We were left then with a decision to either save on things like the food subsidies, or impose more taxation, or operate a combination of both. The Minister chose a combination. It is inevitable that people should say: why not put more on cigarettes and on petrol and things like that? That question has been asked. That argument has been propounded. Only this evening I met some people who came on a deputation here; they said more could have been put on cigarettes and on beer. The concrete suggestion was made by people who have nothing to do with politics that more should have been put on beer, on cigarettes, on cinemas and on petrol.

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  Did they suggest the retention of the levies?

Major de Valera:  They did not.

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  That is surprising.

Major de Valera:  Retain the food subsidies—that was the argument. The trouble is that one reaches ultimately the point of diminishing returns, as the Minister has so rightly pointed out. There is none of us in a position to do the necessary calculations or form the necessary opinion and so we have to be guided by the officers of the Department of Finance in these matters. The officers of the Department of Finance, like ourselves, are citizens. They know the facts. They know what living is like and they are just as reasonable men in these matters as any of the rest of us.

Looking at the problem and trying to find the best solution they came to the conclusion that revenue has reached the limit from the point of view of taxation. The law of diminishing returns operates and one reaches the point where one fails to get the essential revenue. I understand there was, in fact, a marked tendency in that direction last year. In that situation I am convinced by the Minister's arguments—I am perfectly prepared to be critical of them—that, unfortunate, unpleasant and difficult as it is, there [1779] seems to be no alternative to finding the capital required other than taking the course he adopted. Any other action in the taxation line would have failed and any other action in the economy line would have brought further unemployment and would in effect have concentrated hardship on certain sectors which could not bear it, where to some extent there is an averaging out at the moment, particularly with the compensation that had to be given.

I make this charge against the present Opposition, particularly the Front Bench—and I will not exempt Deputy Norton and his Party from it, either— the charge of evading the issue, seeking to escape from reality in this present situation, the unpleasant reality that there is a problem there which has to be grappled with and from which we cannot run away. The reason for all this unpleasantness, if you like, is that in order to redress the present situation, to get employment and economic activity going, it is necessary first—and Deputy Sweetman has said this as forcibly as the present Minister—that the balance in the financial position be restored as quickly as possible, and that every single penny that can be got towards investment in capital projects and productive works be utilised to stimulate activity again and redress the serious unemployment situation.

I find some significant statements in the Budget speech, doubly significant because I am convinced that they would equally have been found had the Coalition Government remained in office and brought in a Budget. I am convinced that this applies to a statement of present facts, and there is one thing at paragraph 27 of the Budget speech which gives food for thought. I am quoting from column 955, Volume 161, of the Official Debates of 8th May, 1957:—

“Because of their consideration for employment the Government have decided to settle the public capital programme for the current financial year at a level which otherwise might seem insupportable.”

[1780] That is a very significant phrase: “at a level which otherwise might seem insupportable.” There is a phrase that gives you the background to the approach in this Budget. Every nerve has been strained, every effort is being made to bring about a position where the last penny will be secured that can reasonably be secured for investment in the nation for its present salvation and it future development, because incidentally the two things go hand in hand. The Minister for Finance and the Government have to find the money to do that, and in their general statements of policy in this regard, the Minister's opponent and his predecessor have not differed very radically in these matters.

I would indeed welcome the views of the Opposition in this regard. They must have concerned themselves with this Budget problem. They were very near to bringing in a Budget and they must have been close to grappling with these points and have a pretty good idea what they would have done. However, it is their privilege that they should not have to commit themselves to declaring that, and, of course, I would not expect them to do so. It is significant nevertheless that although the abolition of the food subsidies is criticised there is not a glimmer of a suggestion of an alternative. All they say is: “You have to deal with the problem of unemployment. That is all right, but you should not abolish the food subsidies.” In other words, have it both ways. We know the hard way that you cannot have it both ways. The two Coalitions know it and the country knows it.

Mr. Rooney: Information on Eamonn Rooney  Zoom on Eamonn Rooney  Does the Deputy remember his speech of last year?

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  Surely you do not expect the Opposition to tell you what to do?

Major de Valera:  No, I do not. I would be waiting a long time.

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  I would be surprised if you did.

Acting-Chairman (Mr. MacCarthy): Information on Seán McCarthy  Zoom on Seán McCarthy  I would ask the Deputy to refrain from these interruptions.

[1781]Mr. Rooney: Information on Eamonn Rooney  Zoom on Eamonn Rooney  Why was the Deputy saying the opposite last year?

Major de Valera:  I did not do any such thing. Will the Deputy quote me?

Mr. Rooney: Information on Eamonn Rooney  Zoom on Eamonn Rooney  I will.

Acting-Chairman:  We cannot have this cross-fire. If Deputies want to contribute to the debate they will get plenty of opportunities.

Major de Valera:  Let me get back to the Budget. I hope I am not hurting the feelings of Deputies too much by probing right down to the facts. It is rather important.

Mr. Rooney: Information on Eamonn Rooney  Zoom on Eamonn Rooney  By twisting.

Major de Valera:  They are needed when anyone tries to analyse the real problem. Do you think that the Minister, Deputy Dr. Ryan, or anybody on this side of the House would enjoy having to take off subsidies with the consequences that come out of it? Do you think that any Government would do that just for the fun of it, or, as Deputy Costello on one occasion tried to suggest, for the sadistic enjoyment of it? Does any reasonable person think that anyone would do that?

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  Deputy Dr. Browne says so.

Major de Valera:  The Opposition has completely evaded the issues in this debate. In relation to the finding of the capital, the Opposition know as well as we do that it is vitally important to have a revival of our internal trade. We all realise now that it is also vitally important to have a balance in our external trade. It is a pity that this was not realised years ago and a proper policy pursued instead of waiting for the last moment to clap on the levies with all the consequences that have been brought about, to postpone action for so long and bring about consequences which need not have occurred if the problem had been dealt with in time.

That problem was there, yet there was squandering under two Coalitions, particularly the squandering of our assets. I must confess that it makes [1782] me a little sad when I think of all the irresponsible talk about repatriating assets and all the things that happened in regard to that.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  What about repatriating the emigrants?

Major de Valera:  One of the reasons the emigrants were not repatriated was that in the first Coalition Government —which certain people put in and supported—there was a policy in action that set the whole emigration stream running to this day, and it is for that that we are paying now. There are already on the records of this House facts and figures to prove this. It was pointed out after the war that it was a period which was designed for expansion and projects were mooted to take advantage of the circumstances in which the country found itself in 1945, 1946 and 1947. The Government had, as I say, a policy of expansion, and a number of activities were undertaken and various factories proposed or started. People talk about factories, and a factory was to be erected in Inchicore and what happened to it? This is important, because it all goes back to that period, and proves that it was a period of expansion. I have been challenged in this matter. The situation was such at that time, as the figures prove, that the adverse trend in emigration and unemployment were being corrected. That can be proved on the figures as I have proved it on the records of this House. But the Coalition Government came into office and in three short years reversed these trends into opposite trends which have more or less continued since, and it is for the reversal of these trends that the country is paying to-day. The factory at Inchicore was killed; the air service was killed.

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  The new Parliament building was killed.

Major de Valera:  Yes, and if we were building a new Parliament at the moment, we would have workers employed in the City of Dublin, and, stemming from that, we would have further employment in other directions.

Mr. Rooney: Information on Eamonn Rooney  Zoom on Eamonn Rooney  Productive investment?

[1783]Major de Valera:  The items I have mentioned were productive. The trends in unemployment and in emigration were reversed; the productive schemes were stopped and there was a lot of ballyhoo about reducing taxation, reducing the cost of living, which was never reduced but went up instead, and about economies in the State service which never took place. There was more spending than ever; there was a general spree, and it is for these things, and a Coalition of incompatibles, that we are paying to-day, aggravated by a second Coalition.

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  What about Store Street?

Major de Valera:  Store Street bus station is giving a good deal of employment now and, thank goodness, the buses are running. If Store Street were not there and if the buses were not running as they are, the position of C.I.E. would be worse than it is, notwithstanding the Milne Report or anything else. You can take your medicine if you want it, because I can give you “the whole works”. The “works” are there.

Let me get back to the problem of the day, because it is too urgent to be side-tracked. We have heard talk about capital development. The acute problem of the Government at the moment is to find capital for development. I was about to take Dr. Browne to task because of his analogy but, instead, perhaps I shall continue it. He did not quite see that the analogy between the community and a household was a good one. All analogies are defective, I admit, but in so far as external things are concerned it holds, because if one has not got the money to pay his way he must drop down to the level where he has the money to pay his way. The same thing holds in the case of a community.

But let me move on to consider further the analogy that I thought Dr. Browne was disposed to accept, that is, the analogy in regard to corporation. He said the analogy between the State and a company might be better. When a company has problems, he said that company had only to expand its capital and its activities. It was [1784] very good up to that point but I am sorry to say that Dr. Browne stopped there, and that was the key point. It is all very well if capital is available. A company can only expand if the capital is available, but what happens if the company goes for capital and does not get it? It cannot expand.

Following that analogy further one comes up against a problem. The State is like a company and a company can expand its business and make itself stronger within limits if it is carrying out a prudent policy by expanding, but the capital must be there to be obtained and it must be obtained.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  Is the capital not there?

Major de Valera:  We all know that when the capital is not available there is a completely different problem. Pushing the analogy further, the problem for the Government now, in the light of the circumstances that exist, is the problem of finding where the capital exists and that is proving extremely difficult. It is hard enough in the present circumstances—desperately hard—to find what one might call day-to-day housekeeping money, or taking the business analogy to find the returns to enable you to bring in a favourable trading account, but when you tackle the problem of finding capital in a market where, so to speak, there is no capital readily available, how can there be any expansion of the company, or corporation, or the State? I want to deal with this matter logically and reasonably and one just cannot create capital straight away. Furthermore, I am assuming the present system operates. Of course, if you argue about that, and you may want to change the system, that is fair enough, but that is a different argument——

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  And was not that the line that Dr. Browne took? Be fair to him now.

Major de Valera:  I will be fair, but I will come to that in a moment. I am dealing with the present situation, and I am asking where can you get that money?

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  Get it where the master bakers got it.

[1785]Major de Valera:  I shall come to the master bakers in a moment. There is a problem for the Government as a whole. The last remark prompts me to mention another matter that I wish to deal with. It is this: there has been a good deal of severe criticism by a number of people about concessions given to business, to private enterprise, they say, to expand and to induce a businessman to modernise and re-equip. These have been the subject of criticism. Let me put the case the other way round. I am trying to look at this—and I think it is right that we should so look at it—from the point of view of the worker or individual in the community who is most likely to be seriously hit in his own person or family. I want to make it quite clear that that is how I am trying to look at it.

What has happened? We have a situation in Dublin City at the moment on which I am competent to speak, where towards the end of the life of the last Government, the cost of living went up significantly. The rising living costs had consequences. The levies were designed to deal with another very urgent and difficult problem and I am not trying to have it both ways with Deputy Sweetman: he had an urgent problem and we give him full credit for what he achieved with regard to the balance of payments. But there is no denying the fact that, arising out of that situation, we had increased costs to certain industries and firms. Not only were there direct increases in costs but there were incidental increases also coming from that situation plus less business and less trade. Then building started to collapse and you had more unemployment, less money going around, more depression.

Inevitably, where a business firm finds its returns going down, it tends to contract. In that situation, you had people laid off here and there because firms were trimming their sails, forced to do so because, remember, a business has to live on the hard facts of its balance sheet and there were trimmings to try to keep the balance sheet right. All that was adding up and has been adding up to the present [1786] moment. In what way can one get over that? There is an outside situation also that is not helpful. There are outside factors that affect us, through no fault of any Government. Deputy Costello said that. I say it. We will agree on that and not waste time losing ourselves in a wood of that sort.

Let us consider what happens in good times. In times when business is brisk and things are moving and when firms are making more money, it is inevitable that they expand their activities. Most of the money goes back somehow. It is ploughed back in some form, directly or indirectly. It goes back, in the last analysis, even if it is not ploughed back directly, because it is spent and keeps the wheels moving. In that situation you find people being taken on. You find that the normal thing is that people get more remuneration. If any modern firm does very well in a temporary period, it shares out bonuses.

The point I am trying to make is that from the point of view of the worker and employee in the category for which that business caters a time of depression is a time of threat for him. It is vitally important for him that the business should survive. Any contraction will be visited on him and, if it goes far enough, will mean unemployment for some. On the other hand, any expansion in prosperity inevitably is shared by him.

That is the real reason for the concessions in the Budget. We want to try to get firms and businesses more prosperous so that there will be more business and more economic activity, more industrial production. That will go back to the workers. It is very misleading, and not helpful to people who do not understand these problems as well as they should, to suggest, when the word “profit” is used, that that is personal profit to some wealthy class or wealthy group of businessmen or company directors, as is the phrase sometimes sneeringly used.

I have no objection at all to taking first from those who can afford to give. It is the right thing to do. But what I want to point out objectively, without [1787] taking sides in any class argument, is that when profits are made in corporations they inure for the benefit of the employees to a very large percentage and even where the profits are ploughed back in modernisation of machinery and purchase of new machinery it is for the benefit of the so-called working section of the community because it means either a guarantee of their future, at least, or, perhaps, a bigger employment content and better conditions. Inevitably, any progressive business that makes a profit always has an eye to the future.

The next thing is that certain reserves are necessary. We as a State, again following the corporation analogy, have good reason to know what the values of reserves are. If the Minister for Finance, Deputy Dr. Ryan, only had to-day the reserves that were dissipated during the past 11 years, our capital problem would be easier although even then, I hasten to add, we should be logical and say that they would not be things to be squandered or even lightly spent, that one should watch the productive capital end in spending.

Therefore, it is unfair to suggest that these concessions in the Budget are concessions to the wealthy. Their aim and purpose and, indeed, their justification, is that they will tend to expand activity, by making the living problem of these firms easier, that they will promote a further employment content, and secure, if not expansion, recovery from the recession in trade, business and industry and bring about stability from which we can build, at the very least and, in its most optimistic view, bring about a turn where we can come to expansion and where these profits in some form or another may go back to the community by investment, as they will, as everybody knows nowadays.

I am leaving out the bigger problem of investment abroad. That is tied up with confidence at home. I am merely mentioning it to show that I am trying to keep the completeness of the argument in mind.

I should like to stress that that is the reason for those provisions. It is [1788] vitally important that we should try to stimulate activity. I may also say that most of the workers nowadays are so educated and know so much about their own business that they will appreciate matters of that nature. It is my experience that they are very intelligent and understanding about such matters and about the necessity for their industry to prosper if ever their own interests are to be in any way secure. In other words it is not a question of class against class. That would be a fatal approach. We are all together in this and we have all got to help each other where we can and the design of this provision is just that.

Deputy McQuillan raised a point here which I am prepared to pursue but I do not think I need pursue it beyond this: yes, it has been quite clearly stated here by the Deputy to whom he referred that he sees no hope in the present system. What did he call it? I think it was the Cripps-Bevan Socialism of England that is to be the only remedy. That is an argument for another day. As far as I am concerned, I do not believe that. I do not believe it as sincerely as the Deputy believes it, and, when we understand that, we can probably start to argue reasonably about it. In any event, whatever ideas one may entertain about socialism or any other ism, or, indeed, about the ideal set-up which we would like to see, or the method of approach to it, we cannot get away from the immediate transition problems, no matter what our purpose is, if our purpose is to effect change. When we start on the task, we cannot get away from the realities of the time and place of starting.

To my mind, you cannot cure the present position by a revolution of the whole financial and economic structure. It is not practical politics. Therefore, finding the present structure imposed upon you, while being always ready to mould and change that structure, you must nevertheless use that structure as your starting point and try to make the best of it. In other words, the problems before us are very much more like those of the doctor rather than those of the engineer.

When the patient goes to the doctor [1789] with some serious illness the doctor, even though he may be a specialist, must take into account that the person is an organic whole and that he will have to deal with him in that way, much as he might like to deal with the affected part alone. He must take into account the general health of the patient, the general condition of the rest of the body apart from the affected part. It is on that basis that he is constrained to apply his remedy. In the case of the engineer, he is in a much happier position. If he wants to build something and there is a rock in the way, a half ton of dynamite will fix that. He can blow the obstruction out of his way and build. We are like the doctor. We must do what he does.

Captain Giles: Information on Captain Patrick Giles  Zoom on Captain Patrick Giles  What does the lawyer do?

Major de Valera:  The Deputy has enough of them over there. Surely he does not have to go outside his Party to get an answer to that one. Might I tell the Deputy a story about the lawyers? I am very fond of lawyers. The only trouble about a lawyer in politics——

Captain Giles: Information on Captain Patrick Giles  Zoom on Captain Patrick Giles  He is a liar.

Major de Valera:  That is a libel. Let me get my law right—it is a slander. The trouble about the lawyer in politics is that he regards everything as a case. Supposing I took a case of Deputy Giles before a judge. I would argue that black was white and I might succeed. Then I could leave the court and take a case of Deputy W. Murphy before another judge in another court. I could there argue that white was black and use the same books and put up the same case as my opponent in the case of Deputy Giles. In politics a lawyer would get tied up in knots. However, the Deputy asked me a question.

Mr. W. Murphy: Information on William Murphy  Zoom on William Murphy  In view of that statement can we believe any damn thing the Deputy has said here to-night?

Major de Valera:  I must end the story there. I do say seriously that the legal mentality has certain difficulties [1790] in politics. In other directions I think they are estimable people.

An Ceann Comhairle: Information on Patrick Hogan  Zoom on Patrick Hogan  I suggest that we come back to the matter under discussion.

Major de Valera:  I was making the analogy between the Government's position now and the doctor patient relationship. As I said, the engineer can blow the obstruction out of his way but the doctor must take his patient as he finds him. We, as a Government, must take the patient as we find it— the economic whole of the community. The Government must deal with that and even though Deputy W. Murphy might not believe me, I would seriously ask for the co-operation of Deputy Murphy and every other Deputy in our endeavours to solve the task confronting us. We know only too well all the last Government was up against. They must know what we are up against now.

In my contribution to this debate, I have tried, except when provoked, to avoid recriminations. We have this serious problem to fight and we cannot fight it in the way an engineer might fight an obstruction. I make an honest plea to everybody to avoid evading the issues. The issues cannot be evaded if we are to succeed. I do not doubt the sincerity of any Deputy who states that he wants to see the situation remedied.

The question of the food subsidies was the main point in the debate. I gave the answer as I saw it: there was no alternative but a further contraction which at present would be disastrous. I do not think that Deputy Sweetman, if he were in our position now, would have evaded the issues. Of course I do not pretend to know what he would have done in similar circumstances. We hope that due to the proposals of this Budget we will get renewed activity which will bring about, as soon as possible, a restoration of the employment position. We can build on from that.

If I did bring in some references to the past I hope I will be excused. I did so only on provocation. I would prefer to look seriously at this problem. If we all look seriously at it and [1791] co-operate we need not despair. There is every reason to have hope in the future of the country if the problem now facing us is grappled with. I think we can all see a bright future. All of us can learn lessons from the past, no matter how they came.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  I am sorry if I provoked Deputy Major de Valera. He put a question in the course of his contribution. I think Deputy Major de Valera likes an occasional interruption to his speech if it helps him to clarify certain aspects which he might otherwise overlook or which he might forget in the absence of a reminder. When Deputy Major de Valera refers to a query by me in this House and quotes the inter Party régime as being responsible for a particular problem, then, as Deputy Dillon says, that cock will not fight because I simply put Deputy Major de Valera and the inter-Party Government into the same pot.

There is no difference in the world between the people who in the course of the roundabout, the circus of the election, replace each other here. Fianna Fáil replace the inter-Party Government, or Fine Gael if it is preferred to call them that. That has been the position since I came into this House in 1948 and I have never seen any reason for changing my views in the slightest in that regard. The more I listen to debates the more confirmed I am in the belief that not only until the system is changed here, as Deputy Dr. Browne said, but until there is a complete re-alignment of the political groups will we see the beginning of any worthwhile improvement. The danger is that the day may be gone too far. We may have reached the point of no return. I do not want to sound too pessimistic but all the signs point towards that sinister fact. The line of approach in the Budget speeches so far has been rather a routine one.

One thing very noticeable in the course of the debate is the sanctimonious suggestion by all Deputies that it is absolutely essential that we balance the books first. That is the main contribution to this debate from [1792] both sides of the House. If I might put it in the form of a quotatioi: “To Hell with the people, let us balance the books”, that would sum up the attitude to this Budget in my opinion. That quotation is taken from the gospel of the Central Bank and the Department of Finance. That gospel has been swallowed completely by both the inter-Party Government since 1948 and by Fianna Fáil Governments prior to that and up to the present. This Budget is a sound victory for the reactionary, stone-age advisers who inhabit the financial jungle of the Central Bank and the Department of Finance and who have been trained in a system which is long outmoded and discarded in other countries.

I might add that the last notable victory of these reactionaries was in 1952. Deputies do not need any reminder from me that in 1952 the then Taoiseach, Deputy de Valera, was worried here in this House that we were going to have a deficit of £15,000,000 and how, on that particular occasion, the previous Government was blamed for this deficit that Fianna Fáil would have to meet by, perhaps, the introduction of further taxation or some other means. That deficit was, it was claimed, remedied by Fianna Fáil with the 1952 Budget and it cleaned up the mess, or the so-called mess, which Deputy de Valera said he found.

In the course of cleaning up that mess, the Budget also cleaned up the countryside of young people; in balancing the books our unemployment figures reached an astronomical height and the stream of emigrants increased. That cannot be denied in spite of Deputy de Valera's contribution to this debate that all things evil occur under the inter-Party Government. I am not speaking on behalf of the inter-Party, and I am sure that they do not want me to speak for them, but I want to make it quite clear that the evils which are abroad to-day are not the making of the inter-Party alone. They are the responsibility of all Governments in this State since 1922. The 1952 Budget balanced the books——

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  It did not.

[1793]Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  If Deputy Haughey will not accept my word I hope he will accept the words of his own Leader, the Taoiseach. Does Deputy Haughey not accept the words of his Leader that the 1952 Budget balanced the books? Some Deputies do not always accept the words of his Leader in this House. I am glad to find that Deputy Haughey and others do not accept it now on the question that the 1952 Budget did balance the books.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Give the quotation.

Mr. Allen: Information on Denis Allen  Zoom on Denis Allen  It was £3,000,000 short.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  The whole trouble in 1952 was the hardship he would have to impose in order to balance the books. Why did he go to all this trouble if we find now, as Deputy Haughey says, that he did not succeed in doing it? On this occasion, there is a sum of approximately £9,000,000 to be found by the abolition of the food subsidies and the imposition of fresh taxes.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Correct, for once.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  The Tánaiste came in here to tell us the methods by which the Government proposed to make up this amount. He was very sorrowful and very subdued in his discourse on this occasion. He said here that there was no other way to make it up; I shall quote him if Deputy Haughey desires. He said that the Government had accepted the advice of their experts and that there was no other system of taxation which could be devised which would increase the revenue by £9,000,000; there was no alternative but to abolish the food subsidies. That was the statement of the Tánaiste, speaking in this House a fortnight ago.

It was a big change from the view of the man who spoke at the Fianna Fáil Comh-Chomhairle some three months ago; the man who spoke about a dynamic approach to our difficulties, a new approach and an intelligent approach, and who gave the impression, in the course of a number of speeches—which I thought were excellent—that if he was returned to office he would show a new approach instead [1794] of following the old, stagnant line taken by all his predecessors and all Ministers for Finance in the past. In the course of those speeches—I do not intend to quote him ad nauseam because other Deputies have already done so—he spoke about red tape and the control that should be exercised over all finances by the State. He cast a loving eye at investments by our banks outside this country and suggested there was money available for capital development from an untapped source.

When he came into this House as a member of the Government, and as Tánaiste, he gave a different display to what he gave when he was addressing the supporters of this Party. I suppose the opinions of some Deputies depend on which side of the House they are sitting. The speech on this occasion was tame and docile; all he could say was that the Government had to accept the advice of these experts. He did not tell us that those experts in finance were the very same people who advised Governments in the past to invest the people's money in British Government securities, tied to the balloon of sterling. He did not tell us that the advice of those gentlemen had proved anything but good for the finances of the country over the past 25 to 30 years.

There were other advisers on other occasions in the past who said that, instead of investing our money in sterling or in practically useless paper currency, we should have bought gold reserves at £7 an ounce. Gold to-day is up to £40 an ounce in the free market. If our assets were invested in the purchase of gold, to-day we would have our capital value intact and the interest on that investment would be of immense value to us for other revenue purposes; for day to day expenses or capital development. Instead of that, our money was put into British Government securities and, whenever devaluation came in Britain, the value of those investments went down accordingly. Every time the British £ suffered from a slight chill, the Irish £ suffered from double pneumonia.

Mr. N. Lemass: Information on Noel T. Lemass  Zoom on Noel T. Lemass  How would we get the interest on gold nuggets?

[1795]Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  If the Deputy likes to draw me on the Russian jewels, I will talk about those, too. Instead of doing that, the Minister, the Tánaiste and the Government took the advice of the Government advisers, those gentlemen who can see no further than British Government securities.

The Minister for Lands who, I understand, is now one of the leading lights of Fianna Fáil, has time and time again adverted to the “standing army” we have in Britain, our external assets. That “standing army” is standing side by side with the standing army of emigrants. The assets which our people, our banks, our Government, and even our Central Bank, have invested in British Government securities have helped over the years to employ our Irish people in Britain, in British factories making British goods. The money we saw fit to invest in Britain should be, and, in my opinion, will have to be, invested here in Ireland in exploiting our resources, with special reference to agriculture. That is a fundamental change it is necessary to make.

There is no sign in the Budget speech of any approach towards making a change with regard to our investments, although the Tánaiste trotted all round the possibility in his lectures outside the House. He hinted at the desirability of a change when he came in. I am not saying this in any personal criticism of the Tánaiste. I feel that what has happened is that when he put up those ideas of his to the other members of the Cabinet, he was squeezed out by the conservative elements we know of in that Cabinet.

The attitude here always has been that we must balance the books; we must show that the figure on the left-hand side of the column corresponds with the figure on the right-hand side. It does not matter what happens to human beings or anything else; that does not count. The immediate aim, it is said, is to balance the books and from there we can get on to resume the onward march of the nation.

Mr. N. Lemass: Information on Noel T. Lemass  Zoom on Noel T. Lemass  Does the Deputy not accept that?

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  Would the Deputy [1796] allow me to continue? Whenever any member of the Government—this Government or the previous Government—makes that assertion, that it is necessary to balance the books, there are “hears, hears” from all sides of the House. Everybody agrees with the idea of balancing the books, but when it comes down to the actual balancing of the books, there is absolute disagreement as to whether they have been balanced or not. Is that not correct? Fianna Fáil maintain that they balanced the books, but the inter-Party Government did not—and the inter-Party members put it the other way. To sum up, this is the position —the balancing of the books is a controversy—although all agree that they should be balanced, the two sides disagree as to whether they have been balanced or not. As far as I can see, the Budget is balanced or otherwise according to the side of the House on which the Deputy sits.

On some matters, it is possible for Deputies to have their own interpretation. In other words, there may be a difference of opinion as to whether money can be taken for capital projects or ordinary expenditure. On that, you have a certain amount of scope to play about on the question of balancing the books, as long as there is no question of the Minister for Finance running away with the swag.

I think it is dishonest on the part of political Parties to make so much play about this sacred duty of balancing books and then hurl abuse at each other about the balance. How many countries in the world have taken a system of having a complete balance in their books each year, on the question of expenditure, whether it is capital or otherwise?

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Every single one of them has.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  Do not be ridiculous.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Quote me one.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  In most countries where any advance was made, the good year was taken with the bad.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Not one of them.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  Instead of a year to year basis, seeing no further than [1797] the length of our noses, a Budget should be planned or a programme should be planned on a long-term basis. When we reach certain targets, we can look back and reassess our balance and so on.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Quote one country which has not balanced them?

An Ceann Comhairle: Information on Patrick Hogan  Zoom on Patrick Hogan  Deputy McQuillan should be allowed to make his statement in his own way.

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  Deputies are wedded to this question of balancing the left-hand column against the right-hand one. How many times have the Budgets not been over-estimated, when it was not a question of balance at all? In this present Budget, I do not suggest that the Minister hopes to bring in a bigger amount of revenue than he has estimated for. I certainly hope he does. It has happened in other countries that, when an election is coming off, provision is made that there will be a surplus of revenue which will be dished out before the election in the form of some kind of sop to buy the electorate. I can assure the present Government that there is no hope of any extra money coming into the “kitty” here, to be dished out later to help this Government ease the burden this year or next year, so that they might say: “We hit them hard the first year; their memories are short and by the time the next election comes off, they will have forgotten all about the impositions.”

This Budget is too serious for a little bit of play-acting like that for political advantage. On this question of over-estimation, we even have provision made in the Estimates for it. We have the extraordinary position that there is one section of every Budget devoted to over-estimation, where the Departments proceed to give their estimate for expenditure and then they give an idea of what they over-estimate in all the various Estimates likely to be made for the year or even inside the Budget statement itself. The question of balance to that extent is not such a sacred matter as Deputy Haughey seems to [1798] think. I want to make it clear that I am not saying that the ordinary day-to-day expenditure should be on the Kathleen Mavourneen system, that the everyday accounts should not be met. I want to be clear on that, and if Deputy Haughey intervenes in the debate, I hope he will not set out to misrepresent my remarks.

The Minister may have it in his mind that he will get a substantial amount of money in the coming year as a result of the incentives offered to certain sections of the community in this Budget. The possibility is there but, in my opinion, he will not get it and, even if he did get it, it would be at very heavy cost to the rest of the community—at the cost of emigration and unemployment. I should like to quote what Deputy J. A. Costello and Deputy D. Costello said in connection with one means by which the current Budget could be balanced and how the deficit of £6,000,000 could be met. Deputy J. A. Costello said that the money which came from the import levies could, in an emergency situation, be diverted towards balancing the Budget. That, in itself, is a concrete suggestion that should have received— I do not know whether it did or not— serious consideration, because we are not bound by any specific regulations or agreement in this House to utilise the money from those import levies for the capital part of the Budget and there is nothing in the world wrong with using the money from those levies to ease the situation rather than do so by increasing taxation on tobacco and cigarettes and by removing the subsidies.

Flexibility in a matter like that is essential and more desirable than just taking the way out of slashing all round at what is in the immediate vicinity. With regard to industrial expansion and increased agricultural output, I should expect, particularly from the industrial end of it, that we should have a tremendous increase in the export section, having regard to the incentives offered in the Budget. The measures mentioned in the course of the Budget statement are such that they give no excuse to any industrialist or any group in a commercial undertaking not to get into the export [1799] market. They have every reason to do so now and show their sincerity. The final test as far as these people are concerned will come, I believe, within the next 18 months or two years as a result of the provisions of this Budget. The final test will be whether these people are prepared to take things easy as they have been doing, in my opinion, for years past, under the shelter of tariff walls.

Their sincerity will be tested as a result of the further incentives offered in the Budget. If the expansion which the Minister expects to get does not come as a result of those incentives, then I think there is very little we can do. It will be too late to do anything after that. It is tragic that all we can do is hope for the best and depend upon those people in industrial undertakings to do their part as far as increasing employment is concerned and increasing the wealth of the country by getting into the export market.

Neither this Government, the previous Government nor any other Government have had any target in front of them that they could aim at and say that, in 1960, they aimed to have industrial output at such a point and when they reached that point, they could then plan ahead and get up to a higher level. No such target or plan of development has been made in this country since 1922. Usually, what we hear from the different Ministers for Finance is that they are giving certain incentives in a particular year to certain sections of the community and they express the hope that these sections of the community will carry out suggestions as a result of the incentives, but that is as far as it goes.

That goes on year after year, but the necessary development does not come and, at the same time, there is the ever increasing rate of emigration. In order to have any hope for the future, there should be, I believe, Government planning on the basis of fixed targets. Many people here are suspicious when mention is made of a five-year plan, but for the benefit of those Deputies who are worried about five-year plans, I should point out that there is such a thing as a five-year plan outside the [1800] Iron Curtain, on this side of the curtain. Nowadays, Governments will plan not for 12 months ahead but for a period; then they reassess what advances are made and decide what industrial expansion should be planned for at least five years.

We should be able to have an idea of where we are going over that period in contrast with the higgledy-piggledy, haphazard industrial development which has taken place over years past of shoving up a little factory and then finding that there is pressure from a development group in the country to give them a factory. I remember, when the Undeveloped Areas Bill was passed, a committee was formed in every small town in the West of Ireland in order to get industry. These unfortunate people had not a clue in many cases how to go about setting up an industry and they haunted the Department of Industry and Commerce in Dublin looking for a factory. If they did not come to the Department of Industry and Commerce, they were tripping over themselves going to the German and other Legations asking them to bring in some foreign industrialist to set up a factory. There was no planning there and that type of haphazard development should never be allowed.

The whole trouble about that type of development is that it is still allowed and, what is worse, is being subsidised by State funds. Let us not think for one moment that this sacred business which is private enterprise gives tuppence about development in any of these towns away from a good centre like Dublin or any area which has special facilities in the way of transport, water and so on. No private enterprise gentleman will move outside an area that suits himself. Nobody blames him, but if we give money to any private group to expand, to set up a new industry or to replace an existing industry, we should only do it on the basis of being able to say in five or seven years' time: “How is this going to dovetail into the industrial picture; and how is this new factory going to work out, as far as exports are concerned?” Will the overall picture be the subsidising of another white elephant?

[1801] I can only repeat my statement of what is happening, and what is causing dissatisfaction all over the country, because people have the idea that all these factories are allocated by the particular influences that can be wielded by Deputies or by certain influential people. I suggest at any rate, for what my suggestion is worth, that they should plan and arrive at some scheme for themselves, seeing that they are going to work, within the present financial system, the machine that is there. They should prepare a plan for industrial development and work it over a period of years. If they go out of office let the next Government carry on with it and make what-ever changes may be necessary. Some Government will have to do it. We cannot have the present situation continuing indefinitely.

The trouble in most Governments is that any development which is planned and any new scheme which comes up with a big blow of trumpets, is launched with an eye by the Party in power to the most support they can get from the public for such a new scheme. Very often due time has not been given to the consideration of the new scheme. In a very recent period a new scheme was launched for the farming community, with a great flourish of trumpets. I shall not deal with it in any great detail but a very serious flaw became apparent afterwards, when the measure was put into operation in connection with loans for increased agricultural production. A very serious snag became apparent all because the scheme was rushed.

The present Government, like the last one, have decided to adhere to the old time methods in so far as this Budget is concerned. As I said, the figures on both sides of the column must be balanced and the decision has been taken to balance the Budget by removing food subsidies. I heard a lot of talk outside this House before the Budget was introduced. It was said that it would be a harsh Budget. An odd person to whom I spoke would tentatively suggest: “They might go for some of the food subsidies.” Very often people with whom I discussed this matter were Fianna Fáil supporters [1802] or Fine Gael supporters. The idea was that they were tentatively preparing themselves, believing that there would be a reduction in the food subsidies and wondering what the general impression of other people was in that regard. I met nobody outside this House who thought that the entire subsidies would be wiped out in one blow, and I must confess to a terrible shock when I found that the Government decided to take that drastic step.

It may be unparliamentary to say it but I felt that, if the Cabinet were composed of lunatics, such a decision might come as a surprise, but composed, as the Cabinet is, of sensible, sane men, who know the situation over a number of years, as they do, I did not expect it. They took that drastic step at a time when they were telling us that we must expand agricultural and industrial production. When they took that step they jolted the very spirit out of the people who were supposed to produce more. I would say that if I had taken a bet on it I would have lost any money I had to spare. I would have said that the Government would not have taken off any food subsidies.

To reinforce my reasons for believing that I should like to quote the statement of the Taoiseach himself, when he spoke on this question of food subsidies on the previous notorious Budget to which I referred, the 1952 Budget. I quote from column 223, Volume 131:—

“We did not do it because we felt that the sudden change would be a very great hardship on certain sections of the community and that the greatest hardship would be in relation to bread.”

That was the statement made by the Taoiseach in 1952 in connection with food subsidies. I ask this House has the position changed; is the hardship any less in 1957? It was not unfair for me to assume that, if it was considered such a severe hardship then, Fianna Fáil would have taken the very same action on this occasion and, if there was to be a removal of the subsidies at some date, that they would be removed only in stages at least.

[1803] On that same Budget in 1952, the Taoiseach pointed out that the necessary steps were taken by the Government to see to the needs of the old age pensioners and to ensure that it would have the minimum effect on them and on other classes. He dealt with the people he described as having modest incomes. I think this House knows what type of people these are. The Taoiseach then said: “We tried to come to their aid by reliefs in income-tax.” These were the salaried groups and people in receipt of small incomes and he felt it was necessary to come to their aid. I do not think there is any relief or help given to that section in this Budget. I agree that 1/– was given to the old age pensioners but the least said about that the better.

The Government decided, in my opinion, foolishly, that they would in one fell swoop get rid of the food subsidies. I listened carefully to the arguments put forward to justify that decision. The fallacious argument was put forward: why should the rich people have bread at the same price as the poorer sections of the community? Why should the bread for rich people be subsidised on the same scale as bread for the poorer sections? If people accept that view—that rich people should not have bread subsidised at the same rate as poorer people—what happens when you take off that subsidy? You let the poorer people pay the same price for bread as the rich and, instead of the poorer people having the bread at a reasonable price, which perhaps they can barely meet, it is put up to the same price as the rich have to pay and the poor person's resources are stretched to the limit in order to meet it. We know they cannot pay for it, and the benevolent Government decided that these people, who cannot afford to pay for bread with their present incomes, will be dealt with as social assistance classes and that the Government will make special provision for them.

That is what I would call gross class distinction. It is the creation of more class distinction. They say to the poorer sections: “If you cannot exist on what you have now, we will look [1804] after you through the poor house or through home assistance, or, if you are an old age pensioner, we will give you 1/– extra and, in the giving of these extra social assistance benefits, we will make sure that you, the poorer sections of the community, will know and realise that you are getting them because the rich people have decided in their benevolence to give them to you.” That is what it amounts to.

I could not over-emphasise that the removal of the food subsidies, taken in its proper context, is aimed, whether the Minister realises it or not, at creating further class distinction in this country, small and all as it is. The position will preoccupy a certain section. The wealthy section will be in a position to point out clearly: “We pay high taxes in order to give you people and other groups social assistance. You should be thankful for what you are getting. Why are we not entitled to higher profits? Let us rake in as much as we can provided we pay into social assistance funds and keep the other sections of the community awaiting our bounty.” That type of mentality can have serious repercussions. It can create wider differences amongst the sections of the community.

Then again, when an election comes along, the Party that has control over social amenities, can wield great influence because people who are being kept and nurtured on the assistance will then be told from the hustings: “We will increase such-and-such an allowance if we get back to power.” The tussle then begins between the Parties as to which side, when in Government, can offer the best attraction, thereby trying to degrade a certain section of our people in that regard. That type of action was never envisaged in the Constitution and it was never envisaged by the people who helped to set up this State.

The Minister has asked for suggestions as to what other methods might be found for getting the necessary money. I remember when, some years ago, Deputy McGilligan was Minister for Finance. He came here and threatened right, left and centre a certain section of the community. He [1805] said: “I will give them a certain length of time and, if they do not do it, I will reimpose the excess profits tax. I will deal with these gentlemen.” The amount of money involved, if the excess profits tax had been imposed, was between £4,000,000 and £5,000,000. That was said between 1948 and 1951 in reference to the industrial group, the progressive group, who are now getting the incentive.

Every year, the threat was issued to those people: “You had better come across with increased production or else we will take these profits you have already made and force you to give up a portion of them.” That threat was held over the heads of these people for years but nothing happened. I even remember Deputy Lemass himself, in a gentlemanly way, suggesting that a complete overhaul was necessary of certain industrial undertakings to see whether or not, over the years, the protection they had got by way of tariffs, and so forth, was justified and whether these industries had made any effort to stand on their own feet without the protection given by the State. That was his way of delicately telling these hot-house gentlemen: “You will have to produce the goods or I will do the same as Deputy McGilligan threatened to do.”

A statement was made by the Taoiseach and by the members of the Government to the effect that: “We must all equally bear this burden. It is a harsh Budget but it will be spread equally over all.” Let us see in the Budget how it was spread over the sections of the community to whom I have just been referring, namely, the industrial group and the company directors. If everybody were to bear this burden, surely it would not be too much to expect some of these people to help. There was no question of anybody, at this stage, threatening to reimpose severe taxes or to take more profits. Surely, without having all these extra incentives, they might have seen the light and heard the plea of the Taoiseach and the Government just the same as the rest of the community have heard the plea. The trade unions, the small farmer, the worker, the shop assistant, the small [1806] shopkeeper—they have all heard this plea: “Bear with this burden”— that is, the Budget. “It is in your interest. We have to impose this hardship on you all in order that the country will not sink.”

Why was that plea not directed at these other people? Instead, we have, in the course of the Budget statement, provisions to help these people in industrial development to expand. At least three incentives are offered to these people to go into the export market. Before I deal with that particular aspect of the matter, I should like to deal with one particular section of the industrial group, that is, the milling interests.

Other Deputies have pointed out that the master bakers got some “back money”, as it was described here, from the Government. It is alleged that the inter-Party Government, before leaving office, gave a promise of some description to the master bakers that they would pay this money as a result of some agreement made some time ago. I am not concerned about that aspect at all. I am concerned about the over-all picture in this country in relation to the milling groups. Instead of paying a subsidy over the years, especially over the past few years, to the milling groups I believe the Government should have taken the necessary steps to bring the production of bread under the control of the State.

We had the extraordinary position, time after time, of Deputies talking here about the merits of private enterprise and saying that the more freedom that was given to private enterprise the more industrial expansion we would have, the more work we would have and the more wealth there would be in the State. Deputy Dr. Browne and others pointed out here, quite correctly, that were it not for the State and semi-State companies that are working and flourishing in the country you could forget about employment, that the real employment content is given by the State directly or indirectly through its semi-State organisations. They are the biggest employers—the real employers—of the State.

[1807] We have seen fit to give the production of a number of commodities to State bodies. It is accepted that one of the most essential items in any country is food, and bread is the most essential food item. Is it not an extraordinary position that the production of bread in Ireland is subject to greater exploitation by profiteers and racketeers than anything else produced in the State? There are more profits made out of the production of bread than any other commodity. The production of bread for the poor and the rich is left in the hands of private enterprise to plunder the public and that plunder is allowed to be taken out and invested outside the State. Having given very long consideration to this, I say that these people—the milling interests—have fattened on the Irish people since the State was set up, have shamefully exploited this country and have taken profits out of it to be invested elsewhere.

The biggest combines working in the British Isles to-day have their tentacles here. We are only very small fry, so far as the milling interests are concerned. Every penny they can take out is taken out for investment in Britain. We have tolerated that position over the years in the sacred name of private enterprise. Worse than that, we have refused to touch the flour milling industry. We could not do it because it would be State interference, and we know that certain gentlemen in this country would put horns on you, if you suggested that the State interfere in matters of this nature. But look at the contradiction. Although we would not interfere with these milling interests, we set up a State body, called Grain Importers Ltd., in order to help private enterprise reap its profits. Every bit of wheat imported here over the years was brought in by this State company. It was then handed over to these groups of millers. For every sack of flour, they were paid 4/6 profit. Some of them made a lot more than 4/6; some of them went up to 10/– per sack, at least, but that is not disclosed.

This question of the milling interests was raised in the Dáil recently by [1808] Deputy Casey. He asked the Minister for Industry and Commerce:—

“If he is aware that a certain milling group has acquired several bakeries, flour mills, oatmeal mills and garages with a resultant loss of employment for baking trade operatives and a tendency towards centralisation of mills and bakeries, and, if so, whether he proposes to take any steps to limit the activities of such monopolies.”

The Minister for Industry and Commerce replied:—

“I am aware of recent developments involving the acquisition of some bakeries and other businesses by certain milling groups....”

I am quoting, Sir, from Volume 161, column 107. I asked the following supplementary question:—

“Does the Minister think it is in the public interest that a great measure of control over our food supplies should be exercised by a group outside this State?

Mr. S. Lemass: If the Deputy is urging that legislation to prevent it should be enacted here, it is up to him to show that it is against the public interest.

Mr. McQuillan: Does the Minister consider that, in a matter of this nature, it is desirable that control should be left in the hands of a limited group?

Mr. S. Lemass: It is not the policy of this Government to prevent the owners of businesses from selling them unless it can be shown that the taking of the very drastic powers which would be involved is necessary in the interests of the general public.”

Is it not a fact that, the other night, the Minister had to impose control over the retail price of bread, three days after he gave us this answer in the House? He believed that, by removing all control on essential foodstuffs, they would reach a low price level for the public. Instead of that, a section of the community sat down in solemn silence and planned out what they believed the price of bread should [1809] be. The position was so serious that the Minister for Industry and Commerce, with the greatest urgency, had to issue immediately a directive to these gentlemen, saying: “You cannot fix the price of bread to the public like that. You will fix it at a ½ less.”

Is there any limit to the patience of the Irish people, even when it comes to the exploitation of foodstuffs? We have allowed these miller-bakers to reap profits of millions of pounds over the past ten years. I know there is one miller-baker in this State to-day who can afford to sell the loaf, that now costs 1/1, at 10d. and still make a profit. I want to see a complete inquiry held into this question of milling and flour and bread. I think the time has gone when the public should be exploited by a group of profiteers in this essential foodstuff.

How is it that, when it comes to the production of sugar, we consider that the most desirable way of producing it and of controlling it is by a State body? Is there any finer body set up here to-day than the Irish Sugar Company? Does it not give a fair chance to the farming community? Now and again, Deputy Corry will have an argument, but they can fight their differences and agree. The public are satisfied they are getting a fair crack of the whip. The question of private profits and greed does not enter into the work of the Irish Sugar Company. It is being worked primarily in the interests of the State and of the people. The very same should be in operation so far as the production of bread is concerned and until we see it taken out of the hands of this group of profiteers and racketeers, there will be no justice.

An attempt has been made over the years to suggest that the high price of bread is due to the fact that we had to utilise home-grown wheat and to try to suggest that the Irish farmer is subsidised. Let there be no mistake about it. The Irish farmer is not subsidised to that extent. In the past 15 years, the price given for wheat to the farmers here in Ireland is not as high as the cost of the imported commodity over the same period. The cost of imported wheat has been as [1810] high as the price paid to the Irish farmers and, consequently, it is no use saying that the Irish farmer is getting the best of the stick. It is the man in between, the bandit on the high-road, who deals with this produce on its way from the farmer to the consumer—the highway bandit and the exploiter—who rakes in the profits. Is it wise to allow this control to be exercised by a combine which has its headquarters outside the State?

In the United States where big business flourishes, anti-price laws have been brought in to deal with the large combines, making it an offence against the law to combine in one section the various interests involved under that section. For instance, in the United States it is impossible for the milling and bakery interests respectively to combine in one cartel or ring. That aspect should be examined forthwith here and the necessary legislation introduced to smash any such combines or rings. It is no good telling us that private enterprise must be allowed to reap its profits, profits at the expense of the community. We cannot tolerate the continuation of this policy of “dog eat dog”.

I do not wish to develop that much further except to say that the profits in this particular instance, where flour is concerned at any rate, go to the man in between. We know that the milling interests here hate the sight of Irish wheat and they have done their best on every occasion to decry its merits; there is always something wrong with it. They prefer the imported article. They prefer it because these gentlemen do not themselves belong here. They are from outside. Wheat production should be on the same basis as sugar production. So, too, should bread production.

Consider for a moment our lighting and heating system. That is run by a State body. Is there any objection to that? That body puts light into every house and power into every factory. All that is done by a State body—an excellent State body in my opinion. Is there anything wrong in having a similar body in charge of the other aspects of our life?

[1811] One item in particular got the rap so far as this Budget is concerned. It is, again, another essential foodstuff. I refer to butter. Butter has gone up in price. I do not know how many years it is since it was an economic proposition to export butter to Britain. As long as I can remember we have had to put a cheque in with every 1 cwt. of butter sent across to Britain. I think it worked out at about £8 per cwt. to the British for buying butter from us. I expect that we shall have an increased output of butter this year. What shall we do with it? Have we made any plans? Shall we continue the present arrangement?

One of the first Estimates which had to be dealt with by the incoming Government was an Estimate asking this House to provide money to subsidise the export of butter to Britain—to pay the British to buy our butter. We are paying a subsidy to John Bull and the British housewife of ? per lb. to take our butter from us. We have thousands of people here in Dublin who do not know what the taste of butter is. Surely it cannot be suggested that by persisting in selling subsidised butter to Britain we will thereby some day develop a market for our butter in Britain and the British will increase the price and render the subsidy no longer necessary. If that does eventuate, then let us face the position when it comes. First things first. If we are prepared to subsidise butter to the tune of ? per lb. then I think the value of that subsidy should be given to our own people. Subsidise our butter for our own people and let our own people eat it.

What will they eat now? Those who used a certain amount of butter up to this will be compelled to go over to using margarine. I do not wish to be uncharitable to some members of the present Government when I mention margarine, but I would prefer to see our Irish people eating the butter which is produced off our own land. That would be more economic and a better proposition. It would be more economic to use butter produced at home rather than use margarine, for which the raw material must be [1812] imported. Under this Budget we shall shove up the import of the raw material to manufacture margarine for consumption by the Irish people while, at the same time, we shall pay the British ?½ per lb. to take our Irish butter from us. In what other country in the world would one find that policy in operation?

It is an historical fact that 1847 was a black year in Irish history. In '47 the people were dying of starvation and the ships in the ports were full of foodstuffs produced in Ireland, being exported elsewhere. In 1957 we are depriving the Irish people of butter produced in their own country. The ships leaving the ports to-day will carry that butter across to England. I have nothing in the world against the English people; I can assure the House of that. But it is the British people who will derive the benefit from our butter and our own people will have to eat margarine.

I do not wish to suggest to people outside the House a way out of this situation. I should prefer the Government to take the necessary steps. I should prefer the Government to put back the subsidy on butter for our own people. But, if they do not do that, then the dockers will do their duty. The stage will be reached at which the Irish dockers will not load ships in our ports, ships bringing foodstuffs out of the country that should be consumed here. That day will come, please God, if the Government does not change its tune because the different sections of the community will combine on this to ensure fair play for all.

No one in this House, or outside it, can justify for one moment the payment of a subsidy of ? per lb. to the British to enable them to consume Irish butter when thousands of our people here in Dublin and elsewhere never see butter except in the shop windows. We talk about reducing imports from abroad? Are we helping to reduce imports and ease the balance of payments position by importing still more of the raw material required for the manufacture of margarine. Is that what we want?

Bread and butter are essential items. This Budget will hit the people of [1813] Dublin harder than it will hit those in rural areas. I say that as a rural Deputy but I think people in rural Ireland will, in conscience, rally behind the people of Dublin and the other cities, the people who are now expected to bear the brunt of this unjust and harsh measure. This is where the organised sections of the community can come to the assistance of the unorganised sections, and I have no doubt that they will.

The Minister for Industry and Commerce, in his contribution to this Budget debate, lectured the trade unions. He advised the trade unions not to look for more wages; the country could not contemplate any increase in wage content at this stage and, if such a demand were made, it would upset the economic applecart. The plea was made: keep on as you are and everything will be all right. That type of smug, self-righteous appeal will convince nobody, least of all the trade unionists. All this talk of social stability is sheer hypocrisy in the light of the impositions imposed under this Budget, impositions placed on the shoulders of the community in such an unfair manner.

The stability aimed at and the stability necessary to secure an increased output from industry and agriculture will not come if the community as a whole is not reasonably contented. If one wants to increase output one must have contentment, not resentment. One will not get increased output by appealing to the worker: “Take off your coat there and work twice as hard.” One will not get increased output by telling the boss: “All right. We will give you a wear-and-tear allowance this year. We will also assure you that whatever you export this year will not be subject to income-tax. You can buy another big car as long as a bus. You can buy a yacht and keep it out in Dun Laoghaire.” The worker must take off his coat to do all this, but the worker is no fool.

The Government is very foolish because, as I pointed out, the very stability it aims at and the very expansion it needs will not come with dissatisfied workers. You are bound [1814] to have a demand for wage increases all round, and justifiably so, to meet the increase in the cost of living. When these demands come, an excuse will once more be given to the industrial section, that protected group, and it will be said: “It is the worker's fault. He is not giving us the output. He is looking for an increased wage instead of working hard as he was told.” Consequently they will be given a further excuse for not getting the output which is so desirable.

The most important sections of the Budget provisions are those relating to unemployment and emigration. It is always very advisable for Deputies, after the Budget statement has been read out, to read it carefully and with these specific points in mind: how will this Budget deal with unemployment, emigration, and increased output? They are the three most important aspects from which to examine the Budget.

This Government has maintained, through Deputy Lemass and through other speakers, that we will get nowhere, unless we have an expanded capital development programme. The number of jobs being created each year is insufficient to absorb the number that come on the labour market each year, not to mind to deal with the overflow or the lag that has been created through 78,000 or 80,000 unemployed and the number that emigrate. In order to create the huge number of jobs necessary each year, a dynamic capital development programme will have to be undertaken.

This Government has maintained that one of the real reasons why it was necessary at this stage to bring in such a cruel and harsh Budget was that from it would flow the capital that would give this extra employment, give us the extra money which would in turn create the new jobs which are so essential. I ask any Deputy to show me where, in that Budget statement, the increased provision is made that will result in that increased employment in two or even three years' time, not this year.

One of the great criticisms I always levelled at the Government over the past three years, and at the previous [1815] Fianna Fáil and the inter-Party Governments, was the miserable amount of money provided for capital development. That is the real key to our success, to any hope we have of holding economic independence, the creation of more jobs, the right type of jobs. To do that, you need an expenditure of money on a large development programme. This Government has not made any more provision than the last Government to tackle what I describe as the twin evils of emigration and unemployment.

We have set up here in the last couple of years a body whose duty it is to publicise the necessity for savings. The chairman of that body and a number of others have spoken on the wireless on this subject and have even produced—I see in to-day's newspapers—a film dealing with the desirability of people saving their money so that it can be invested in Irish industries. Evidently this Savings Committee has the responsibility of inculcating into the public the necessity of saving their spare cash so that this spare cash can, in turn, be utilised for a suitable development programme.

How can you expect people who are being put to the pin of their collar to keep going to save money for further investment in Irish industry? How can you do that when you rake in any spare cash they have through the Budget impositions, either by means of the removal of the food subsidies or the further increases in the minor luxuries of petrol, tobacco and cigarettes? You cannot get the savings from them both ways. Over the years, it seems to have been the general conviction that you can finance or can hope to finance the capital development programme out of savings, especially out of current savings. It cannot be done. This country one might say, is completely under-developed, and it will take a vast expenditure to get the proper production and the necessary expansion. If it is to be left on the basis that current savings will produce the necessary capital, you might as well forget all about freedom and independence in Ireland, because we will never have it and we will never be in a position to [1816] deal with unemployment and emigration. We will be doing some good, if we can get home to the public that once you base your capital programme, as it is being based at the moment, upon savings in so far as they are available, you are wasting your time in regard to expansion in agriculture and industry.

In 1952, after the harsh Budget of that year had been introduced, I said that if the people knew that the purpose of imposing such a Budget was to gear the country for a great dynamic development programme, they would have accepted the burdens then imposed. I maintain that if such was the case to-day the Irish people would rally, but 1952 taught them a lesson in that regard. A warning was given by many of us at that time, not because we did not support Fianna Fáil, or anything like that, but because we saw the way the Budget was planned and saw that that Budget was planned on the very same orthodox basis as every other Budget in this State since 1922. The 1957 Budget is as orthodox or as rigid in its set-up and in its conformation as any other Budget in the past 35 years, and we all know what little hope any of those Budgets gave of the development of a stable economy.

I do not want to spend too long talking about the Tánaiste, but, in my opinion, he is or should be, the keyman in the Government. He has always shown an energetic apporach, and as far as I am concerned he will get all the credit for some of the first-class things he has done in the past. I only hope that, even at this stage, he will be able to break free from the conservative bonds that are tying him and the comrades who surround him.

In the course of his remarks on the Budget—and this is significant—he referred to what he described as the abnormal number of unemployed and the abnormal emigration. That is a significant change in his approach. I had always looked upon these things, and I think most Deputies and, indeed, most people, had looked on them as the twin problems of emigration and unemployment; but there has been a change as far as Fianna Fáil [1817] are concerned. It would appear now that we should have unemployment and emigration, but that, perhaps, at times these things reach abnormal levels.

I should like to know what is considered to be the normal position. Once you go back from the original position with regard to a matter like emigration or unemployment, once you accept the fact that you will have a large amount of emigration, once you give way on that, you are no longer entitled to the confidence of the people as a person who will solve that problem, because you no longer look upon it as a major problem. You look upon it as inevitable and all you are worried about is the degree of unemployment or emigration that is desirable.

In my opinion, any emigration is undesirable—that is the best way to put it—but if people wish to go, even though they have jobs here, then I deplore their going. That needs a bit of clarification. An effort is being made at the moment to play down the problems of unemployment and emigration. The Tánaiste mentioned “the abnormal” problem that exists, and the Minister for Education, in the course of his remarks here, and again a few days ago in opening a school in Cork, referred to emigration, and he pointed out that it was an extra-ordinary thing to see so many people going who had good jobs. To my mind, he repeated in Cork what he said here, that these people had a responsibility to the State. I agree that they have such a responsibility, but there is no use in trying to cloak the fact that the majority of the people who emigrate—95 per cent. of them— go because they must. There is no use in trying to pretend that many people who are going are people who have jobs and should stay here. A few of that type are going and we accept that but, in my view, it is a wrong thing to take up the attitude that a large percentage of those who leave Ireland go, despite the fact that they have good jobs.

I believe the previous Government —or certain members of it—had a similar view, and they believed that we had, or should have, a large emigration [1818] and, perhaps, a rather large reservoir of unemployed. The former Parliamentary Secretary to the Government, when he replied to me in the course of a debate on a motion some time ago, made the foolish admission that emigration was a safely valve, as far as the Government was concerned. The then Deputy O'Donovan was new to this House at the time and what he said was something the Fianna Fáil Party would not say because they are too cute to say it; but it has been a safely valve to Fianna Fáil just as much as for the inter-Party Government, and that is the tragedy of the position.

If things were not so good in Britain for the past ten years, let us say, that safety valve would not have worked as well as it did. It is a big change to find the Minister for Industry and Commerce talking at this stage about abnormal unemployment and emigration when one recalls his remarks some years ago in this House. On 11th May, 1949, at column 939, Volume 115, he referred to some of the evils that existed and I ask the House to note the manner in which he referred to unemployment and emigration— there was no word such as “abnormal”. He said:—

“The persistence of unemployment and emigration over a long number of years is evidence that the illness of the Irish economy is deep-rooted and of so fundamental a character that it is quite ridiculous to talk about a short-term cure.”

That is what Deputy Lemass said in 1949. Now, let us go back to the roots and see what Deputy Lemass had to say about the roots of it:—

“When the Free State Government decided to tie up its currency and to permit Irish banks to maintain their English entanglements, it destroyed at one blow the greatest benefits secured by the Treaty. Poverty persisted and to-day that position continued because, in financial matters, the same conditions prevailed now as before the Treaty.”

An Leas-Cheann Comhairle: Information on Cormac Breslin  Zoom on Cormac Breslin  Would the Deputy give the reference?

[1819]Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  That was Deputy Lemass speaking in September, 1931.

General Mulcahy: Information on Richard James Mulcahy  Zoom on Richard James Mulcahy  What is the volume number?

Mr. McQuillan: Information on John McQuillan  Zoom on John McQuillan  It was not a Dáil debate; it was in the course of the discussion, but I think you will find it as a quotation in the Dáil debate on the 1952 Budget. Deputy Lemass believed in 1931 that unemployment and emigration were caused by our entanglements with the British banking system. In 1949, he believed that the illness of the Irish economy, unemployment and emigration, was deep rooted and that takes us back to 1931. Now, we find that in 1957, he is talking about “abnormal” unemployment and emigration.

We must clearly understand that the [1820] illness to which he refers, and to which Deputy Major de Valera referred earlier to-night, is a serious illness and has been serious for the last 25 years, that it has been treated by quacks and that it has now become a serious malady. In fact, I would almost say it is a fatal malady because the quacks made it so.

Progress reported; Committee to sit again.

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