Fianna Fail Economic Policies

Fianna Fail Economic Policies

Fianna Fail Government 1932
1. Cumann na nGaedheal’s policies had relied on continuity & caution - felt there was no need to protect infant industries.
2. Fianna Fail’s victory in 1932 brought a shift to protectionism.
3. Fianna Fail wanted government involvement in the economy to create prosperity for a drive to independence, promotion of native Irish resources and protectionism in the light of international economic crises.
4. They wanted to break all links with Britain to make Ireland more independent – stopping land annuities.
5. There was a drive for self-sufficiency.

Support Measures
1. Set up Industrial Credit Company - to make loans to industries.
2. To finance big projects set up semi-state companies such as the Irish Sugar Company to develop the sugar beet industry, Aer Lingus to develop transport, Bórd na Móna to develop bogs & Irish Life to develop insurance.
3. Many firms were given monopolies to incentivise them.

Industrial policy
1. Self-sufficiency & development of industry was prioritised. Lemass (Minister for Industry) developed industry in time of global crises.
2. High tariffs on industrial imports to make them expensive & loans/tax breaks to Irish industrialists. 3. In 1932 and 1933 budget restrictions were imposed the on import of thousands of items and Lemass encouraged factories making textiles, footwear, cutlery, cement etc.
4. From 1931 - 38 - industrial output rose from £55 - £90m in a world economic crises - only supplied the Irish market.
5. The Control of Manufactures Act of 1932 & 1934 decreed that all new firms should be Irish owned - but flexible to allow Cadburys etc to set up through subsidiaries. 

Agricultural policies
1. Grants and subsidies to cattle farmers and encouragement of tillage (more employment & selfsufficiency).
2. Guaranteed prices for wheat & sugar beet. Imports of wheat, sugar, bacon butter were restricted.
3. Fianna Fail wanted to modernise farms and make farms bigger and more tillage.
4. Policies not a success for taxpayers and consumers - items were expensive. 

Free Trade and Protectionism
1. Free trade is an economic theory which promotes unlimited international trade - an open market leads to increased competition, lower prices and greater choice. It benefits exporters but smaller producers may suffer from competition. During the 1920s Cumann na nGaedheal favoured it but there was shift to protectionism under Fianna Fail.
2. Protectionism favours protection of domestic industry from foreign competition and is achieved by high tariff on foreign imports -followed by Fianna Fail to make Ireland politically and economically independent of England. 

Policies of Fianna Fail - Economic war
1. Land Annuities: annually £3m. DeValera argued they were unjust, needed for economic recovery at home, had never been voted for by the Dáil in 1926. They were not paid by Northern Ireland. He stopped paying them.
2. Economic War ensued, Britain imposed duties & restrictions on imports of Irish beef/cattle. In 1932 Government passed Emergency Imposition of Duties Act - duty on British coal and 20% duty on various goods. 3. Some historians argue - “The economic war was a godsend to Fianna F ail , as it enabled them to introduce their own protectionist programme under the guise of patriotic necessity”

4. Economic War greatly affected Irish population. Wealthy cattle farmers suffered, farm labourers lost their jobs, living standards fell, basic foreign goods became more expensive. Some amelioration with Coal - Cattle Pact 1935.
5. But political success in Anglo-Irish Agreement 1938 – one off payment to British for land annuities (£10 million) and return of the three naval ports.

Success or Failure
1. Major social problems remained – poor housing, unemployment, low wages, large-scale emigration.
2. Economic War had a major impact on the economy and was followed by shortages as a result of World War 2.
3. Plan for self-sufficiency didn’t work. Some industrial development did occur but unemployment remained high. 4. Protectionism led to poor quality products and higher prices.
5. Taxes increased and there was increased spending on health, education and welfare.