Unionist concerns were obviously exacerbated by the Mother and Child Affair. More significant for the anti-partition campaign were the reverberations of the affair in Britain. The Unionist Party's publicity department produced 10,000 copies of a pamphlet, ‘Southern Ireland: Church or State?’, which was largely a reproduction of the correspondence between Browne, Costello and the hierarchy, together with extracts from the Dáil debate on the affair. Copies were sent to every member of the British Houses of Parliament, to US Senators and members of the House of Representatives, and to legislators in Canada, Australia and New Zealand.91 The pamphlet had been preceded by one on the Tilson case, and the propaganda offensive appears to have had some effects in Britain, where it undermined support for the anti-partitionist cause in the Labour Party. Boland, who was now Irish Ambassador in London, reported on one key Labour figure affected by it when he recorded a visit of Aneurin Bevan, the former Minister of Health in Attlee's government, to the Irish Embassy. Bevan was a member of the ‘Friends of Ireland’ group of Labour MPs and was accompanied by Hugh Delargy, the group's secretary. Bevan's criticism of the Stormont regime, Boland noted, was based not on the ‘moral aspects’ of the argument for Irish unity but on his anti-Toryism and ‘the rage he feels that partition gives the Tories nine seats in the House to which they are not entitled’. His attitude to Ireland was, the ambassador complained, those of a ‘typical Britisher’, particularly on the legitimacy of unionists' religious and economic concerns:
He is almost fanatically anti-Catholic. He has the idea that the Church exercises a constant and irresistible pressure on the government of the 26 Counties and he quotes the Dr Browne episode freely as proof of his belief, adding that he was on the point of sending a public message of support to Dr Browne at the height of the crisis when Hugh Delargy dissuaded him from the idea. He is also given to arguing with some vehemence that we ourselves have made the task of ending partition infinitely more difficult by our neutrality in the war and our subsequent repeal of the External Relations Act… he constantly harps on the comparison between the social services in the 6 Counties and in the rest of Ireland, asking how we expect, with our standards of welfare benefits, to attract a people already enjoying the best social services in the world.92
Boland attached a perhaps inflated role to the publication of a book on the Catholic Church in America by the anti-Catholic writer Paul Blanshard. Blanshard subsequently visited Ireland, and his book The Irish and Catholic Power was published in 1954 with a foreword by the Ulster Unionist MP H. Montgomery Hyde. Boland was also concerned by British newspapers' coverage of the intolerant treatment of Protestant Churches in Spain and Latin America. Suspicion of the Catholic Church was, he claimed, ‘the only point upon which the Tory outlook of the Church of England and the theoretical socialism of the New Statesman and the Tribune agree’.93 If the dormant embers of anti-Catholicism in British national identity were being rekindled, it could only damage the Irish state's ideological assault on the North.
When some of those frustrated by the evident failure of the official anti-partition campaign resorted to traditional physical-force methods, the result was the virtual collapse of the campaign in Britain. Delargy, whose loyalty to the Bevanite left was greater than his commitment to Irish nationalism, became increasingly alienated from his former allies. The nadir of traditional forms of anti-partitionism appeared to have been
reached with the launch of the IRA campaign in 1956. A few months later Delargy confessed to Brookeborough that he ‘was satisfied that we were right and he had told Eire that he would have nothing to do with them’.94 But before any shift in policy towards the North could take place, a fundamental reassessment of the economic direction of the Irish state would have to be forced on a reluctant political elite.
The Economics of National Survival
The 1950s have been described by the economic historian Cormac Ó Grada as ‘a miserable decade for the Irish economy’.95 Real national income stagnated between 1950 and 1958. Agriculture, which still employed 40 per cent of the workforce in 1951,96 experienced a decline of almost a quarter in the numbers employed during the decade.97 This reflected a sharp drop in the small-farm sector, which was drained by the opening up of employment opportunities in Britain and was not associated with any improvement in productivity. Net agricultural output rose by only 7 per cent in the periods 1950–52 and 1958–60, reflecting the continuing dominance of Irish agriculture by the demands of the British market.98 Britain was still taking almost 90 per cent of Irish agricultural exports at the end of the 1950s,99 but the advantages that Irish ministers believed the 1948 Trade Agreement would bring had not been realized. The dependence on Britain tied the Irish economy into what, at a time of unprecedented economic growth in the international economy, was the tortoise of Western Europe. The position was worsened by the British system of farm deficiency payments, which, depressed prices on the British market.
The record of Irish industry was equally depressing. Industrial output expanded at what Liam Kennedy refers to as a ‘miserable’ 1.3 per cent per annum.100 A large part of the blame for this can be attributed to an outdated protectionist regime. Brian Girvin has attempted a limited defence of the strategy, pointing out that the number of those employed in manufacturing industry expanded from 119,000 in 1950 to 134,000 in 1960.101 For all that unionists would boast of the economic superiority of Northern Ireland, growth in the manufacturing sector in the North during the 1950s was inferior to that of the South. But, as Tom Garvin has noted, ‘Ireland was the fastest of the slowcoaches, but also, fatally started at the lowest level of economic activity… to put it bluntly and sadly, Ireland started the period poor and ended it slightly less poor.’102
The problem of unemployment was concentrated on agriculture and the construction industry, which were hit by highly deflationary budgets in 1952 and 1956 and by the conservative policies followed by successive Ministers for Finance throughout the decade. The 15,000 job increase in manufacturing did little to compensate for the haemorrhage from agriculture, which employed 504,000 in 1951 and 376,000 in 1961, or for the loss of 25,000 construction jobs in the same period.103 Therefore, although the protected industrial sector did more than hold its own, it remains the case, as Girvin admits, that the Irish state lacked a ‘domestic engine of growth’ that would have allowed it to take advantage of the general buoyancy of the international economy. Stormont was able to ease the pain associated with the decline of traditional industries by policies geared to the attraction of foreign capital and by substantial increases in public expenditure, courtesy of assistance from the British Treasury. However, south of the border the issue of foreign capital raised the ideological hackles of many in Fianna Fáil, while the strong influence of pre-Keynesian thinking in the Department of Finance acted as a major deflationary influence for most of the decade.
Lemass's willingness to press for radical revisions of policy on protectionism and the possible use of foreign capital in the late 1940s vanished for most of the next decade as he concentrated on the immediate political task of attacking those who had replaced Fianna Fáil in government. When his successor as Minister for Industry and Commerce, the Fine Gael politician Daniel Morrissey, established the Industrial Development Authority (IDA) in 1948, it seemed a posthumous victory for the Lemass approach to industrial policy. The IDA was given authority to encourage new industry and to expand and modernize that already existing. It was also empowered to examine the effects of protection and applications for tariffs. However, Lemass was bitterly critical of the IDA and promised to abolish it when he returned to power. Although there were potential structural problems involved in the relationship between the IDA and the Department of Industry and Commerce, which had lost most industrial policy functions to the new body, his opposition to it stemmed primarily from a desire to mend his fences with Fianna Fáil's allies in the industrial bourgeoisie following their hostile reaction to his earlier Industrial Efficiency Bill.104 It also reflected the
broader Fianna Fáil concern to undermine the nationalist credentials of the inter-party government in the economic field as on the partition question.
Not only did Lemass have to forget his earlier critical approach to Irish industry, but his strong expansionist and Keynesian instincts were subordinated to Seán MacEntee's electioneering attacks on the profligacy of the inter-party government. Back in government as Minister for Finance in 1951, MacEntee was confronted by a major balance of payments crisis caused by the rapid increase in imported consumer goods after years of austerity, the deterioration in the terms of trade caused by the devaluation of sterling in 1949 and the general post-Korean War economic crisis. MacEntee, who later used the term ‘monetarist’ to describe his approach, responded with the harshest budget in the history of the state. He announced another shilling in the pound on income tax; increases in the price of petrol, tobacco, spirits and beer; and impending increases in the price of the working-class staples of butter, bread, tea and sugar.
The reaction was sharp. A Labour Party rally in Dublin, to protest against the severity of the budget, was followed by disturbances in which a number of people were injured. Unemployment, which had stood at 36,000 when the inter-party government left office in July 1951, had risen to 57,000 two years later.105 In the spring of that year a Dublin Unemployed Association was created and it embarrassed the government with sit-down protests in the city centre. Lemass, who had explained the increase in the Fianna Fail vote in the 1951 election by the party's winning over of a larger slice of the working class,106 was dismayed by such developments. The fervid anti-communism of the period undermined opposition to the government: the collapse of the Unemployed Association was in part brought about by a sustained campaign in the press emphasizing the alleged role of communists within it.107 But anti-communism was not a sufficient basis to compensate for MacEntee's slap in the face to Fianna Fáil's working-class supporters. Even de Valera's usual tendency to acquiesce in the conservative prescriptions of the Department of Finance went temporarily into abeyance, and he asked his cabinet for proposals to stimulate employment.108 This provided Lemass with the backing he needed to counter-attack and get support for some increase in state investment to stimulate the economy. A National Development Fund was created to finance road improvements and other infrastructural works; and an Undeveloped Areas Act, aimed at decentralizing industrial development away from the eastern seaboard towards the west in general and the Gaeltacht areas in particular, was passed in 1952.109
But the amount of resources involved was small and the attempt to get industries to establish in the west futile, given the major obstacles that the Control of Manufacturers legislation placed in the way of foreign investment anywhere in Ireland. Lemass's radicalism had not deserted him, but he still faced formidable resistance from fiscal conservatives in government and from a large sector of Irish industry that was opposed to any reconsideration of protectionism and to any hint that the state would adopt a more positive view of foreign capital. Yet the weakness of the Irish economy was starkly evident. A report by American experts, commissioned by the government in 1952 to investigate the export potential of existing industries, had confirmed that Irish industry was largely lethargic, inefficient and unready for competition in the world market. Lemass showed a willingness to discourage the more outrageous forms of protectionist feather-bedding in a Restrictive Practices Act of 1953 designed to eliminate price-fixing, and in January 1954 announced that he had asked the IDA to review the whole policy of protection. He also returned to a potentially explosive issue: the possibility of a break with the central tenet of Sinn Féin economic philosophy, namely Irish ownership of Irish resources.
On 1 May 1953 Lemass declared, ‘We welcome foreign capital coming into Irish industrial development when it brings with it new opportunities for expansion and new industrial techniques.’110 He attempted to counter the inevitable misgivings of party activists by emphasizing that foreign capital did not mean British capital. However, the fact remained that for republican ideologues foreign capital was a far more explosive issue than protectionism. Protectionism was only a means to an end: the building up of a native Irish industry. In theory at least it would be possible to abandon protectionism and maintain Irish control of Irish industry. The introduction of foreign capital on a large scale ended the dream once and for all. It was one thing to grumble about the inefficiency and low profit margins of protected industry; it was quite another to reject a fundamental thesis of Irish republicanism. At this time Lemass's embrace of foreign capital was only a very partial and, as it turned out, temporary one. It would take another election defeat and a subsequent economic and demographic crisis to force through an acceptance of foreign capital along with state investment as the twin growth engines that would lift the economy out of its mid-1950s slough.
Lemass's former good relations with the trade union movement had been damaged by MacEntee's deflationary policies, and as moves got under way in October 1953 to overcome the eight-year split in the trade union movement the importance of reconstructing his ‘special relationship’ with union leaders was underlined. Yet, rather than confront the forces of conservatism within his government, de Valera decided to mobilize the traditional rural and small-town support, particularly in the west and south-west. After by-election defeats in Cork city and Louth in March 1954 he dissolved the Dáil, and the campaign that followed was notable for the degree to which economic issues dominated the agenda. Costello succeeded in putting Fianna Fáil on the defensive by committing a Fine Gael-led government to a mildly inflationary programme of tax cuts, increased food subsidies and higher social benefits. Lemass's own expansionary instincts were submerged by MacEntee's traditionalist broadside against Fine Gael's ‘irresponsibility’, and he was reduced to lame attacks on Fine Gael's alleged lack of commitment to protecting Irish industry. The result was de Valera's second electoral defeat. Fianna Fail dropped from seventy-two to sixty-five seats, while Fine Gael continued its post-1948 rise, from forty-five to fifty seats. A beneficiary of MacEntee's economic dominance was the reunited Irish Labour Party, which moved from sixteen to nineteen seats. The lesson was clear: on the two occasions, 1948 and 1954, when Fianna Fail approached the electorate with an essentially orthodox economic record, it had been rejected. The failure of strategy in electoral terms would give Lemass a golden opportunity to identify Fianna Fáil with economic expansionism.
The second inter-party government was made up of Fine Gael, Labour and Clann na Talmhan, with Clann na Poblachta's three TDs supporting but not participating in government. Its first budget in May 1955 increased old-age pensions and other welfare benefits. However, the midly ameliorative effects of the budget were soon obliterated by increasing evidence that the economy was moving rapidly out of control. A balance of payments deficit of £5.5 million in 1954 had rocketed to £35.6 million by the end of 1955. This was in part fuelled by a consumer boom arising from a successful union campaign for a national wage increase but also by a drop in cattle and processed-food exports to the UK, where demand had been hit by a credit squeeze and a deflationary budget.111
Gerard Sweetman, McGilligan's replacement as Minister for Finance, reacted with a series of vigorous measures. In March 1956 he imposed special import levies on sixty-eight classes of commodities and introduced new taxes on a wide range of consumer goods. The screw was tightened further in July with a widening of the range of import levies and further increases in indirect taxation. Costello, aware of the stress that these measures were putting on Labour's participation in government, tried to lighten the gloom by important new departures in the area of foreign investment. In October 1956 he announced a plan for national development that had at its core a special incentive to encourage exports by a 50 per cent remission of tax on profits derived from increased exports. Already his government had incurred traditionalist criticism by accepting the proposal of an Anglo-American oil combine to build an oil refinery in Cork Harbour. And when the Labour leader and M
inister for Industry and Commerce, William Norton, toured Europe and the US to seek foreign capital, Lemass rediscovered the virtues of Sinn Féin economics and de Valera denounced the government for not ‘keeping Ireland for the Irish’.112
Given Lemass's own shifting views on protectionism and foreign capital, such criticisms were not in themselves particularly damaging. What destroyed the coalition was the increasing sense of national crisis generated by the publication of the preliminary report of the census of 1956. This disclosed that the population, at 2,894,822, was the lowest ever recorded for the state, having declined by 65,771 since 1951. Although the natural increase between 1951 and 1956 was greater than during any period since 1881, the net emigration, at 200,394, was also higher. The year of the fortieth anniversary of the foundational event of the Irish state, the Easter Rising, was one in which the Irish Times could editorialize, in response to the census figures, ‘If the trend disclosed… continues unchecked, Ireland will die – not in the remote unpredictable future, but quite soon.’
Fine Gael and the government as a whole were severely divided over how to respond to the crisis. Costello and Norton had not favoured Sweetman's strategy, and Norton was placed under particular pressure by the growing discontent in his party and in the trade union movement. But it was the withdrawal of support by Seán MacBride and the other two Clann na Poblachta representatives that brought the government down in January 1957. The motion of no confidence, although it was motivated in part by anger at the arrest of IRA men by the Irish police, focused on the government's failure to devise an effective long-term economic policy. There was some basis for the Fianna Fáil jibe that a multi-party government could not provide the coherence of principle and strategy necessary to respond to such a profound economic challenge. It was also the case that out of power it would have mercilessly harried the government if it had taken radical measures. Only Fianna Fáil, with its skill in portraying itself as the true inheritor of 1916, was in a position to revise fundamentally the economic nostrums of the national revolution.
Ireland Since 1939 Page 16