When the unemployment figure rose to a peak of 11 per cent in 1952 as a result of an international slump in textiles that hit linen badly, Brookeborough descended on Churchill and his ministers demanding a range of special measures. Although the Treasury and Board of Trade resisted, the Home Office stressed the political and strategic importance of helping ‘Sir Basil’:
The problem of unemployment in Northern Ireland was fundamentally different from that in this country because political considerations were involved which did not arise here. The adjacent Republic was politically hostile and there was in Northern Ireland a large dissident minority. Large numbers of unemployed constituted a potential source of serious civil disturbance, which might even lead in the long run to civil war.102
Brookeborough went home with extra Admiralty orders for ships, subcontract work for Short and Harland, and new textile orders from the Ministry of Defence. He also extracted the setting up of a joint committee of British and Stormont officials to investigate possible long-term solutions to the problem. There was strong resistance from the Treasury and other Westminster departments to many of the proposals that the Stormont officials put forward, particularly the remittance of employers' National Insurance contributions, but eventually a subsidy for the indus-trial use of coal and support for the creation, in 1955, of a Northern Ireland Development Council chaired by Lord Chandos were conceded.103
More important than these essentially palliative measures was the acceptance by the Treasury of the principle of ‘parity plus’. It could be argued that this principle was implicit in the post-war agreements that underlay the extension of welfarism to the province, but the formal statement of the new principles underlying the financial relationship between Belfast and London strengthened Brookeborough's hand. In 1954 the Treasury representatives on the Joint Exchequer Board accepted not simply parity of social services and standards but the necessity to incur special expenditure to make up a substantial leeway on such services and amenities as housing, schools and hospitals. Crucially, it accepted the need for special expenditure to offset the economic disadvantage suffered by Northern Ireland by reason of geographical remoteness.104 The result was in evidence by the end of the decade. In 1960 capital expenditure on hospitals in Northern Ireland over the previous five years was 12 per cent of the UK total at a time when the North's share of the population was 2.5 per cent. The share of the university building programme was 4.6 per cent; of roads, 5.3 per cent; and of housing, 3.6 per cent.105 The success of Brookeborough and his officials in pushing the North's case for special treatment was reflected in the decline of the Imperial Contribution, which hovered between £17 and £20 million at the beginning of the 1950s but by 1961 had fallen to £8.7 million at a time when the annual subvention from Westminster had reached £44.8 million.106
If, despite this, the Prime Minister was under increasing political pressure on the unemployment question, it was in part because of rising popular expectations. The government's constant emphasis on how much better economic and social conditions were in the North compared to the Republic cut little ice with many of its trade union supporters, who were, like 80 per cent of northern trade unionists, in British-based unions and whose fundamental economic, social, and cultural frames of reference were set by developments in the rest of the UK. The regime was the victim of its own propaganda, which, in response to the dominion status lobby, had emphasized Stormont's distinct powers and its relative autonomy from Westminster. This played into the hands of the NILP, whose solution to the unemployment problem was a more activist government.
The fundamental problem was that Stormont's demands for special treatment were regarded in London as having been quite substantially indulged by the mid 1950s; and not even the onset of the IRA assault softened this attitude. To add to Brookeborough's problems, the UK investment boom of 1954–5 and what the Treasury perceived as inflationary pressures and a threat to the balance of payments led to a credit squeeze and interest rate rise. This had a severe impact on the linen industry in Belfast at the same time as UK firms were reluctant to consider new investments in the province. Unemployment, which stood at 6 per cent in June 1956, rose to 10 per cent in the same month in 1958.
The NILP had positioned itself skilfully to benefit from the government's problems. It had been devastated in the 1949 Stormont elections because of its internal divisions on the border, which allowed Unionists to depict it as a crypto-republican party. Its response was to take a pro-Union position, which led to the loss of its anti-partitionist elements, who then went on to set up branches of the Irish Labour Party in West Belfast, Derry and Newry.107 Its leading members lost few opportunities to denounce the ‘Franco state’ in the South and to support the government in the use of internment and the Special Powers Act against the IRA. It also benefited from a critique of government economic policy in The Economic Survey of Northern Ireland, by two Queen's University economists, published in 1957. This had been commissioned by the Minister of Commerce in 1947 and delivered to his successor in 1955. Its publication had been delayed by the government for fear that it would buttress the NILP's attack, although the Minister of Commerce, Lord Glentoran, was able to quote an Economist review that described the Survey as giving ‘a picture of the remarkable adaptation of the Northern Irish economy to the pace set by British economic progress – the adaptation of a hardy plant to an unpromising soil’.108
What the NILP extracted from the Survey was the idea that the various aids given to industry had not had a sufficient pay-off in terms of jobs created. This was linked to the accusation of a nepotistic link between the government, the Unionist Parliamentary Party and local industrialists, in particular those involved in linen production. In the 1950s twelve of the fourteen Unionist MPs for Belfast constituencies had links with traditional industry as proprietors or managing directors.109 It was certainly the case that pressure from local manufacturers, who feared that the Industries Development Act would bring in new firms that would compete for labour and force them to pay higher wages, had led to the introduction of the Re-equipment of Industry Bill in 1950, which compensated local firms by providing grants for new equipment and modernization. When the uptake on this was judged insufficient, a new and even more generous scheme, the Capital Grants to Industry Act, was introduced in 1954. Although modernization almost inevitably implied job losses, there was a widespread belief, shared by Terence O'Neill, who was Minister of Finance at the end of the 1950s, that the ‘linen lords’ were only interested in using government aid to buy up rivals and shut them down.110
Class-based tensions within the Unionist electoral bloc were nothing new, but they were given increased potency by a relaxation of communal tension in Belfast, where the collapse of the Nationalist Party and the absence of any significant IRA activity made it easier for Protestant workers to consider voting Labour. As early as the 1953 Stormont election, the Unionist Party headquarters at Glengall Street was bemoaning the fact that ‘Our Party is losing the support of the lower paid income group and the artisans to the NILP.’ The lack of any working-class Unionist MPs and the domination of Belfast Unionist representation by the local bourgeoisie were seen as important in encouraging defections. Whatever reserve of working-class deference still existed was weakened by social change, as the heartlands of proletarian Unionism began to lose population to new housing estates in which the party had failed to establish a presence. Most significantly, Glengall Street noted that ‘the “Big Drum” which has heretofore dominated Unionist politics' had lost its energizing power for at least a section of the working class.111 In the 1958 election the NILP won four new seats in Belfast. Although two of these seats, in Oldpark and Pottinger, had a sizeable Catholic working-class population, the other two, Victoria and Woodvale, were solidly Protestant. The lesson was spelt out in a ministerial discussion of unemployment:
The maintenance of a Unionist government at Stormont depends to an increasing degree on the success or otherwise of its economic policy. Partic
ularly in the city of Belfast voters are considering such matters as unemployment when deciding how to cast their vote and unless success is achieved in reducing the present total of unemployment… the Unionist Party cannot hope to retain the allegiance of the working class population.112
With the strong prospect of serious redundancies in shipbuilding and the aircraft industry, an air of desperation descended on Brookeborough's ministers. The usually cautious O'Neill was so exercised by the threat that these redundancies ‘would kill us off’ that he may have reduced his colleagues to stunned silence by a proposal to drain Lough Neagh, the largest expanse of inland water in the British Isles, to create a new ‘county Neagh’ – this would be leased out in hundred-acre farms and have a new town at its centre.113 The redundancies, when they came, were almost as bad as feared, and they exhausted Brookeborough's declining capacity to bring back good economic news from London. Early in 1961 Harland and Wolff announced that 8,000 men would be paid off in the summer, and later in the year Short and Harland declared that, because of lack of orders, there was a real danger of closure, threatening another 7,000 jobs. The year also saw the closure of the largest linen mill in Belfast, which employed 1,700 and had received a substantial amount of government assistance.114
Although the NILP did not win any new seats in the 1962 election, its share of the vote rose to 26 per cent from 16 per cent in 1958. It had fielded more candidates, but there was evidence, accepted by Unionist headquarters, that it had consolidated its position in Belfast, where its total vote in the sixteen constituencies it contested was 58,811 while the Unionist vote in the same constituencies was 69,069.115 The inroads made by the NILP into the core working-class constituency of Unionism was recognized by Sir George Clark, Imperial Grand Master of the Orange Order, in a post-election speech in which he accepted that the election showed that the government needed a greater sense of urgency in dealing with unemployment. He also admitted that the Order contained ‘a great many Labour men who, while wearing a sash, nevertheless had a different political outlook’, adding that he had no quarrel with such members.116 Clark and some other leading Unionists recognized that the NILP had to be fought on its chosen terrain and that ‘banging the drum’ would be insufficient.
The problem was that Brookeborough, who was seventy-two when the 1960s began, increasingly appeared to have hung on to power too long, particularly when de Valera stepped down in 1959. Although Lemass was already sixty when he became Taoiseach, his promotion of a radical shift in the state's economic policies and the launch of the first economic development programme undermined the more complacent Unionist assumption about southern ‘backwardness’ and strengthened the critics of Brookeborough's lack of a long-term strategy for the northern economy. His semidetached style of government, which had allowed him plenty of time for running his estate in Fermanagh, the indulgence of his beloved fishing and shooting, and occasional long winter cruises in sunnier climates, was increasingly seen as dangerously anachronistic. He became the butt of an effective NILP campaign against a ‘part-time’ and ‘amateur’ government. The death of the talented and moderate Maynard Sinclair in the Princess Victoria ferry disaster in 1953 had removed his most likely successor, while the marginalization of Brian Maginess, who left the cabinet to become Attorney-General in 1956, meant that the government had no member who would have been a substantial enough figure to suggest an earlier exit to the Prime Minister. Four decades of power had inevitably bred complacency. The large number of uncontested seats produced many backbenchers whose only imperative was to satisfy the parochial and often sectarian pressures from their constituencies. The sectarian tone of Unionist politics had deterred a substantial section of the Protestant middle class from political involvement and drained the already shallow pool of ability from which Unionism could draw.117
Brookeborough had successfully weathered the arrival in power of Labour and the onset of the welfare state. Unionism now faced new threats on both the economic and political fronts that were beyond him. His success in extracting resources in the 1950s had reflected his ability to argue that the security interests of the UK as a whole would be threatened by economic decline in Northern Ireland and the possible political unrest it would stimulate. His charm and strong familial links with the metropolitan elite had helped Ulster's case at Westminster. By the end of the decade, with signs of the IRA's defeat and a new and apparently more pragmatic nationalism in the South, British governments had less reason to be concerned about the political and security implications of the North's unemployment figures. At the same time, Brookeborough's old allies were passing from the scene, and he was increasingly perceived in London as a conservative obstacle to the modernization of the province's politics and better relations with Dublin.
In 1961 he had been able to extract a joint-study group of Stormont and Westminster officials chaired by Sir Robert Hall to look once again at unemployment. The Northern Ireland members suggested that the Treasury provide an employment subsidy to all manufacturing concerns in Northern Ireland, but the idea was summarily dismissed.118 When the Hall Report was published in October 1962, making it clear that there was a marked reluctance to grant more special assistance to bail Stormont out of a local political crisis, Brookeborough was finished. His successor would replace demands for short-term palliatives with ambitious plans for regional planning and modernization. Unfortunately, the energy and ingenuity that were used to transform thinking on economic policy were not extended to the area of community relations.
6. Expansion: Ireland 1959–1973
Free Trade and Programming
An analysis of Anglo-Irish economic relations prepared by British officials in 1960 depicted Lemass's succession to de Valera as a political watershed:
With the ending of Mr De Valera's lengthy dominance of the Irish political scene and the emergence of Mr Lemass, himself a businessman, at the head of a more business-like administration, the political atmosphere in the South is changing. The spirit of 1916 and 1922 is on the wane. While it is too much to expect that any political leader in the Republic would ever abandon the hope that Partition will one day cease, Mr Lemass has been realistic enough to admit that this must be a long term objective.
It was much less optimistic about the Republic's economic prospects:
Their efforts to diversify their economy by the development of secondary industry have had only limited success. They depend, and are likely to continue to depend for as far ahead as can be seen, on selling their agricultural goods to the United Kingdom, but their prospects of expanding their market here are very poor… it is impossible to be optimistic about the Republic's economic future.1
What has subsequently become seen as the ‘Lemass–Whitaker watershed’ in the economic history of the Republic was also less than obvious to most of the state's citizens at the time. During a symposium on Whitaker's Economic Development, one economist pointed out that, outside of a small circle in Dublin, the impact of the document's publication had been extremely limited. It had done little to lift the mood of despondency and loss of confidence that had settled on the nation.2 Trade unionists criticized Whitaker for his refusal to put job creation as the primary objective of the development programme. Certainly there was little to spark popular enthusiasm in Economic Development. It was no selling point to inform the public that the implementation of the programme would lead to a doubling of national income after thirty-five years.3 Although it was soon evident to informed observers that the repeal of restrictions on foreign investment was bringing a rapid influx of capital from the US and Europe, there was little sign that the new mood of optimism amongst sections of the political, industrial and financial elite was percolating down to the broader population.
Lemass's reconsideration of the economic nationalist regime was threatening for employers and workers in the many sections of Irish industry that would find it difficult to compete with imports if there were a substantial reduction in the protective tariffs they enjoyed. Yet Lem
ass was aware that the creation of the European Economic Community and Britain's attitude to it would have profound implications for the Republic. Britain initially attempted to organize a rival group of countries to the EEC within a European Free Trade Area (EFTA). This threatened the privileged access of Irish agricultural exports to the British market, and in response in 1959 Lemass had opened negotiations with Harold Macmillan's government to try to achieve a radical revision of the framework governing Anglo-Irish trade. In return for the extension of the British system of price support to Irish farmers, he offered the removal of tariff barriers against British goods. However, pressure from British farmers and the Northern Ireland government blocked his proposals.
This did nothing to blunt the drive to liberalize the Irish economy, for it was soon apparent that Britain was reconsidering its attitude to the EEC, which meant Ireland had no option but to follow. As Lemass had explained to British officials in 1960, he ‘did not believe that small countries could stand alone and the Republic had no alternative but to link her economy with that of the United Kingdom’.4 With 90 per cent of its agricultural exports and 70 per cent of its exports of manufactured goods going to the UK, it would have been impossible for the Republic to consider joining the EEC if Britain had maintained its original sceptical position. In July 1961 Lemass announced that if Britain applied to join, Ireland would apply too. It was being made clear to Irish industry that the days of a protected home market were numbered.
Ireland Since 1939 Page 21
