INDUSTRIAL LABOUR AND INCOMES POLICY IN THE REPUBLIC OF IRELAND1
| Author | M. H. Browne |
| DOI | http://doi.org/10.1111/j.1467-8543.1965.tb00886.x |
| Date | 01 March 1965 |
| Published date | 01 March 1965 |
INDUSTRIAL LABOUR AND INCOMES POLICY IN THE
REPUBLIC OF IRELAND1
M.
H.
BROWNE*
AT
the beginning of
1964,
the Irish Congress of Trade Unions and a Joint
Committee of Employer Organizations, including the state-sponsored
concerns, signed the fourth central framework agreement to have been
reached by them since
I
946.
Those preceding it were concluded in times of
economic difficulty that were recognized by labour, which was then chiefly
concerned to see that wages should at least keep pace with prices. The
last one, however, has been signed when
a
flourishing economy might
well have encouraged a crop of unco-ordinated wage claims, as in the
immediately preceding ‘wage round’. It may be asked why it has been
possible to take this step towards an incomes policy in the Irish Republic
when similar attempts in the United Kingdom have met with
so
1ittIe
success. This article attempts to sketch in the industrial and institutional
background to the agreement and to trace the course of the negotiations
that led up to it.
The
Economic
Background
In Southern Ireland between the wars,2 the development of industry
was heavily dependent on protection. Political unity with Britain and a
century of Free Trade had exterminated the smaller industries catering
for the home market
:
the government had to fill the gap somehow and ‘all
they had was a copy of the import At first, tariffs were granted only
selectively and after close scrutiny of the case for them; but after
1932,
when Fianna Fail took office with ‘avowedly protectionist’ intentions, and
in difficult economic conditions, tariffs were readily accorded and were
supplemented by import quotas. Moreover, by the Control of Manufactures
Acts of
1932
and
1934,
Irish industry was very largely reserved for Irish
citizens or those with a five-year residence qualification. Protection, how-
ever,
was
not enough by itself to get industry going in a country with little
industrial tradition and no reserves of skilled labour or experienced manage-
ment: financial help and tax relief were also given, and where there was
*
Senior Research Officer, London School
of
Economics and Political Science
1
The author is greatly indebted to
Professor
W.
J.
L. Ryan
of
Trinity College, Dublin, at
present with the Department
of
Finance; to Mr
D.
Nevin
of
the Irish Congress
of
Trade Unions;
and
to
Mr
D. McAuley of the Federated Union
of
Employers,
for
answering many questions and
for
providing
or
suggesting materials; and to
Professor
E.
H.
Phelps Brown
of
the London School
of
Economics,
for
his help and advice at all stages.
W.
J.
L. Ryan,
The Nature and Effects ofProtectiue Poliq in Ireland,
1922-39,
unpublished Ph.D
thesis, Trinity College, Dublin
(1949)
3
T.
Murray, ‘The First Stage ofthe Industrial Revival’,
Administration,
Vol.
X,
iv
(1962),
p.
336
46
LABOUR AND INCOMES POLICY IN THE REPUBLIC OF IRELAND
47
little prospect that private capital would be forthcoming, the State itself
entered the industrial field. Electricity supply, for instance, was national-
ized in
1927.
It has been said that the Irish are ‘very much afraid
of
being
called
socialists but not of acting in some respects like s~cialists’.~ ‘Looking
back, it could almost be said that in the
I~~OS,
when the only formal plan-
ning was to be found east of the Vistula, the Department of Industry and
Commerce was working away patiently at a sort of unformed plan of
industrial expansion.’ But protectionist policy encouraged the emergence
of
uneconomic units; the home market was small; and as industry did not
expand enough
to
provide enough jobs for all who needed them, emi-
gration persisted. Agriculture remained the principal source of employ-
ment and the major source of exports; and between
1929
and
1939
the
real national income rose but little.
By
1957,
only
25
per cent of those at work were in industry and only
16
per cent in manufacturing, and emigration had attained
a
rate at which
the natural increase of population was exceeded. Industry contributed
only
28
per cent of the national income and little to exports, of which
75
per cent came from agriculture. While, during the war years, agricultural
exports had more than covered a much-reduced import programme,
external resources were depleted in each year from
1947
to
1956,
by which
time there was an exchange crisis and restrictions had been imposed.
From
I
94.9
to
I
956,
the volume of gross national product rose by only
8
per
cent, compared with
21
per cent in Britain.6
The nearness of Britain to Ireland and the difference in their living
standards create problems for the Republic: they give an incentive to
emigrate not only to those without work, but also to those in jobs, including
skilled workers who can ill be spared. Proximity to Britain also has
a
‘demonstration’ effect that has ‘tended to set, at British levels, the
expected
standards for Irish wages and salaries, private consumption and services
generally, irrespective of differences in natural resources’.7 ‘The copying
of some part of the British [welfare] services has been seen
as
a condition
for reducing emigration’8
-
yet up to
1957
emigration was rising. In the
view of the Capital Investment Advisory C~rnmittee,~ too high a pro-
portion of the national resources was being devoted to ‘social’ investment
-
the building of houses, schools, etc., highly desirable in themselves and
providing temporary employment
-
at the expense of projects that ‘increase
the national income and do not merely redistribute it’, and would be
capable of providing a lasting source of employment. The prevailing mood
in the first post-war decade was one of despondency. ‘After thirty-five
years of self-government, people are asking whether we can achieve an
4
C.
F.
Carter,
‘A
Problem
of
Economic Development’,
Administration,
Vol.
VII,
ii
(1959), p.
1
10
6
T.
Murray,
loc.
cit.
8
Economic Deuelopment,
Pr. 4803 (usually known
as
the
Whitaker Report
and
so
called below),
7
Whitaker Report,
p.
11
8
Capital Investment Advisory Committee,
Third
Report,
Pr. 4068 (1958),
p.
13
9
ibid.,
pp.
4-9
Stationery Office, Dublin (1958), pp. 10,11,13
u
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