I move:—"That the Local Authorities (Combined Purchasing) Bill be received for final consideration."
DAIL RESUMES. - LOCAL AUTHORITIES (COMBINED PURCHASING) BILL, 1925—FOURTH STAGE.
It is only now that the proposals contained in this Bill are becoming known and that local authorities are wakening up to the attempted limitation of their authority and the imposition of a certain restriction on their functions as buyers, and I suggest that it would be better to adjourn, say for a fortnight, the Report Stage of the Bill, until the local authorities have an opportunity of expressing their views on the matter. I think it was the President who said that he would be prepared to consider proposals regarding consultation with the local authorities. I would suggest to him, and to the Minister in charge of the Bill, that it would be better to consult with the local authorities before attempting to pass the Bill in its present form than wait until the Bill is passed and then suggest that the local authorities should appoint somebody to assist in the administration of it. The local authorities are beginning to express their views on the unwisdom of tying them down to purchasing articles set forth in a list compiled by the Minister, these articles to be supplied by certain specified people. I would suggest that further consideration of the Bill be deferred, to allow the authorities to understand what is proposed and, perhaps, to approach the Ministry with a view to modifying the character of the Bill.
I support Deputy Johnson on this matter. When the measure came before the House one would have thought that local authorities would be acquainted with its proposals. It appears, however, that it is only recently that it has come to the knowledge of the local authorities that such a measure is before the House. I have received a resolution—I presume other members of the Dáil have received the same resolution—which indicates a desire on the part of the local authorities to have a conference with the Government. I presume the President has knowledge of that desire. It would be much more valuable to carry local sentiment with the Bill than to pass the Bill in opposition to, or without the concurrence of, the local authorities. When the Bill was before the Dáil on a previous occasion, I think the President indicated that he would deal with some points on Report Stage. I cannot imagine that there will be anything lost by giving the time that may be necessary to secure the support of the local authorities for the Bill.
The President, I think, indicated that he intended setting up an Advisory Board in connection with the working of the Bill. That would be very desirable and helpful, and I think that the local bodies, if they have anything to say on the subject, should be heard. I agree that it is rather late for them to wake up to the fact that this Bill is before the House, and that it affects their freedom of action in connection with purchasing. But we must recognise that this House has not been sufficiently long established to enable the general public to appreciate fully the importance of the work that is carried on here. I think that this would provide a very valuable lesson in that respect, and would impress on local authorities that they should raise their objection to any legislation here in good time and put their case before the Dáil. We are not so conversant with the local bodies that we are able to express their views, and I think it would be a distinct advantage if the President would adopt Deputy Johnson's suggestion.
I would like to add my appeal to that of Deputy Hewat and Deputy Johnson, and to request the President to defer the further consideration of this Bill for some time. A certain amount of confusion prevailed in the minds of members of local authorities in connection with the measure. The Council of Municipal Councils has circularised urban councils asking their views on the question and I think it would be desirable if the President would agree to the postponement of this stage of the Bill, pending receipt of the views of the councils in the Saorstát. It is not an unheard-of thing for the Government to take the views of the people interested in different measures before the House. The licensed trade and other trades were consulted before their interests were interfered with. It is not asking too much to request the President to agree to the suggestion made by Deputy Johnson and Deputy Hewat.
Deputy Hewat has said that it took public bodies a long time to wake up to the fact that their interests were being interfered with. I might add that the business men were also asleep and failed to see that this measure very seriously interfered with them.
I do not think any business principle arises in this matter at all. Business men do not take the stand that the Government have not the right to purchase in the lowest market.
It was my intention to have accepted an amendment to have an Advisory Board set up to deal with contracts and tenders in connection with this measure. I would have been prepared to agree to such a body to consist of two members nominated by the General Council of County Councils, two members nominated by the Municipal authorities Association, one member by the Chamber of Commerce and a chairman to be appointed by the Minister. That would meet the case, I think, in so far as objections have been made by the local authorities.
The real question at issue here is the principle of the Bill. If the principle be accepted, the machinery is a matter upon which agreement can be easily reached. If the case that is put up is that tenders can only be agreeable to local authorities if accepted from persons in their area, then there is no chance of agreement.
It is unlikely that low prices will be obtained. It is obvious that the expenses of the local authorities must be greater than if there be bigger competition for bigger contracts. With a view to introducing an amendment dealing with that, I propose, with the leave of the Dáil, to discharge the order and to take it on Wednesday. I do not see that any useful purpose can be gained by entering into a conference with local authorities. Now "local authorities" means summoning local authorities. Whom are you going to summon? We have various institutions in the country which would probably have a right to see that they should be invited—county councils, borough councils, urban councils, county homes, mental hospitals, and so on. By the time each one of these bodies would have met—and I suppose they would be entitled to meet in order to select some person who would come to the conference—very much longer time than a fortnight would have elapsed and I do not know that we would arrive at an agreement any more quickly. There is a strong case being made against this Bill by some local authorities, and by some bodies described as chambers of commerce throughout the country. The principle of the Bill is the real issue. Are we agreed that rock-bottom prices must be obtained, and are we agreed that Irish manufactures and Irish industries must be encouraged? If we are agreed on these things we ought to be able to find a solution.
I have not a copy of the resolution sent me, but I understand that other Deputies in the area got copies. I understood that the President had been approached to receive a deputation from the local bodies.
I do not recollect having received any such letter. I did receive a resolution from the Dundalk Chamber of Commerce objecting to the Bill.
Mr. Hewat
The resolution sent me was from the Grangegorman Mental Hospital, and it followed a communication from, I think, Monaghan. I gathered from that communication that the President was to receive some deputation on this matter. If that is not so, I am wrong. Of course, as the President says, if the principle of the Bill is not accepted, a conference would not be of very much use. I did not gather that the principle of the Bill in its entirety was disputed by the local bodies as a whole at all events, and all I was pressing for was that if these important public bodies think they have reason to object to the provisions of the Bill, it would clear the air very much if the President had an interview with them and showed them that the Bill was in their interest. If the President has not been approached to receive the deputation, that is another matter.
I think the President is wrong in suggesting that there is any objection to the purpose of the Bill. He speaks of the principle of the Bill as being to ensure, as far as possible, that the lowest prices will be fixed for articles, and that these shall be as far as possible articles of home manufacture. That is accepted by the Dáil, but that is not the principle of the Bill. The principle of the Bill in pursuance of the objective they have mentioned is to prevent local authorities pursuing that objective by any methods except those set down by the Ministry of Local Government. That is the principle of the Bill, and that is the principle that I object to in the Bill—that the Ministry refuses to accept an amendment, for instance, to allow upon the list of contractors any person who is not prepared to contract for the whole country, even though he might be able to supply local authorities in his own area, or even within the province, at lower prices than the central authority. It is in pursuance of that principle which the President suggests is not the principle of the Bill, that the local authorities are beginning to rouse themselves in opposition to the machinery which the Ministry has set up in this Bill for the purpose of securing the end upon which we are all agreed. I suggest to the President that in trying to achieve the end upon which we are all agreed, it is quite reasonable that he should take into consideration the interests that are going to be affected by the machinery set up to achieve that purpose. He has not done that, and he is not willing to wait until they express themselves after they have learned what is being done on their behalf.
I do not see that there is any case made for postponing the consideration of the Bill to a fortnight hence, because, as I said, I understand there is very considerable difficulty in getting in touch with these bodies. In the proposed amendment to meet the purpose it is proposed that there shall be associated with the Trade Department two members from the General Council of County Councils, two members representing the Municipal Authorities Association, and one member representing the Chamber of Commerce—
Which one?
There is an Associated Chamber of Commerce.
That body ought not be too large. The suggestion that there should be a member for the Chamber of Commerce is in order to have industry represented. You will have in the other four representatives persons thoroughly acquainted with the needs, necessities, desires and business of the local authorities. I think that ought to meet the objections raised in that connection.
I would like to branch on to another subject. Deputy Good, my colleague, pressed for a schedule in the Bill, and he asked that the Minister give the matter consideration.
I forgot to mention that. I did not promise to give it favourable consideration, but I gave it favourable consideration. I am not disposed to agree that it would serve a useful purpose to include a schedule. I say that for many reasons. One is that if we put in a schedule we would be committed to it. Cases might arise in which it would not be advisable to adhere to the schedule. These would be cases in which other articles not on the list would be needed. It would be open to any local authority to get a copy of that list. On the whole we came to the conclusion that fixing up a schedule and not adhering to it would not be desirable and that it would not certainly serve the purpose of the Bill. It would mean much criticism if articles were purchased that were not in the schedule, and on the other hand, the non-purchase of articles on the schedule for some particular reason.
I do not know whether the President recognises that there is really a conflict in connection with this Bill which ought to be confined within certain definite limits. The Bill has two main purposes. One is the subsidising or fostering of home industry and the other is economy. Those two purposes do not necessarily run concurrently. In connection with various matters that will arise as to the materials, it would be very helpful to have a schedule. Everybody would then know the articles that were going to be of universal application to local authorities. At this time of the day it would be perfectly useless, even if one desired it, to say that we are out to buy in the cheapest market, irrespective of source of origin. At the same time, I think that unless there is some limit as regards that, you are possibly going in the direction of ruling out economy in the purchase to the extent of not buying at all in the cheapest market. Concurrently with the fostering of industry in the country, the question of local industry comes in as compared with non-local industry but at the same time industry within the Free State. Then again there is the question of the price that should reasonably be paid for a local article in comparison with the standard value if it were not a local article—in other words, if it was not manufactured in the Free State. These things ought to be guarded against. This Bill does not do much in that direction. There is, therefore, all the more reason why the opinions of the local authorities should be expressed in an intelligent way as to the operation of the Bill and why they should be allowed to put forward any objections which they may have.
The President has suggested an advisory committee attached to the trade department which would be representative of the local bodies and others. That seems to get over the difficulty as far as an advisory committee can do so. But I think the main principles of the Bill should have some reasonable limitations. The President has emphasised the importance of getting articles at the cheapest rate. That ought to be put into operation in carrying out the principles of the Bill. If you shut out competition from outside, you eliminate all question of the importation of goods that can be made within the Free State. That is a very far-reaching principle if carried to its extreme length. It might be that the economic side of the question would be altogether ignored.
The advantage there is to be derived from having a trade department is that it gets a list of articles likely to be required by local authorities within a given space of time, not necessarily twelve months. For instance, we found we wanted, I think it was 1,000 bedsteads for the Gárda Síochána. Bedsteads were not manufactured here. We knew the price usually paid for them. It is easy to get that information from mental hospitals, ordinary hospitals, county homes, etc., and you can estimate what the actual price is. Having found that, it is easy to go to some ironworks in the Saorstát and ask if they could manufacture the article at the price. In that way you can give some employment immediately. That has actually happened in one case. I think Deputy Corish will admit it.
Without the Bill?
Yes, without the Bill. As a matter of fact, it is in order to ensure that such a thing can happen in the future that we are bringing in this Bill. Cases arise where there are different specifications for the one article, necessitating a large number of tenders with no chance of getting a standard article which would suit everybody, and which it would pay a manufacturer to take up and produce. It would not pay to manufacture a number of articles much the same, but with different specifications. Having got the information as to what is required within a certain time, it is possible to keep a manufacturer working who might otherwise have to close down. That was done in the case of one particular manufacturer, the order being placed although the goods were not required for six or nine months. By placing the order at a given moment the factory was enabled to continue. The Deputy will recognise how useful a contract of that sort is to such a factory, even though no profit is made on the contract. The very fact of keeping the factory going is in itself an advantage.
We found ourselves up against rings in another country. One would be perpetually up against these rings if stock were not taken of the needs of the country and if some estimate were not made as to when the goods would be required so that one is not forced into a market that is protected by a number of rings. That is a situation which the local authorities could never get out of if they were buying separately. Other people have learned something from the specifications and the articles required by the local authorities. I recollect when I was a member of the Dublin Corporation, on one occasion the Chief of the Fire Brigade at the time, who was a very capable engineer, made out a specification for a fire engine. He ordered the engine from an English company. The following year the London County Council bought twenty-six fire engines of the same sort. They learned something by the fact that this particular engineer in Dublin, knowing his business and being an excellent man, was able to draw up a specification for an engine which would suit a city like Dublin. They had the advantage of that, and I am certain the price they paid was much cheaper than that paid by the Dublin Corporation. While local authorities continue to do business in the old way they can never get advantages like that. They might get them, but it is unlikely. It is within the competence of a central department to get such advantages and the local authorities benefit by them.
Supposing there were an ingenious engineer, say in Kilrush, who desired to purchase for the use of the council a particular engine or machine, he would not be able to do that under this Bill. He would be bound to buy through the central authority under the specification provided by them. The example the President has given regarding the fireengine is exactly the analogy that would kill the purposes of this Bill. You are denying engineers of local authorities the opportunity to exercise initiative as the Dublin engineer did. That is one of the objections I have to the attempt to compel local authorities to buy from the central authority, even though the central authority cannot do better than they can do. It is this killing of the possibilities of local initiative that is going to be the outcome of the enforcement of the powers taken in this Bill. It is quite usual, of course, and probably easily understandable for the President to say what he desires to get through this Bill.
It is very effective advocacy, no doubt, and we are all satisfied that what the Minister desires should be attained, but what we dispute is that you are going to get that, and that alone, through the machinery in this Bill. The machinery is giving you powers far beyond your desires. If this Bill becomes law in its present form it will give the Minister for Local Government, with the assistance of this Advisory Council, powers to do things very much more drastic than the things which are suggested as his intention. If he were to bring in a Bill embodying his intentions we could, I think, all support it, but he has brought in a Bill embodying very much more than his intentions, and giving the Minister power to do things which, I think, will be found detrimental to the interests of local government authorities, will add to the likelihood of trusts and combines developing in the country, and will help to suppress and frustrate the desires of local businesses to develop by natural means, that is through their local custom growing until they can cover the whole country. You are simply saying to the large producers to-day: "We are taking you as you are, we are going to put you in the favoured list, and we will put you in the position in which the small local manufacturers, merchants, and traders will not be able to compete with you." It may be said that the practice of the Trade Department hitherto has been to spread over the whole country the number of persons on this contractors' list. That has been the practice, I admit, but the powers in this Bill are such as would enable the Minister, whether he had or had not the advice and consent of the Advisory Committee, to confine the contractors' list to one, two or three persons situated in Dublin, Cork or any other part of the country. My objection is not against the intention and purposes of the Minister but against the powers that are given to the Minister in this Bill to do things which he has not yet done, and probably has no intention of doing, but which his successor would be able to do by the powers given in the Act.
I desire to ask the President whether there is any arrangement by which a local contractor or manufacturer could get a contract for any article which is not more than from 10 to 15 per cent. higher than, say, a foreign article. If an article could be made locally for a public authority, and if a considerable sum of money is spent in wages locally, will this authority to be set up have power to buy a foreign article that may only be, say, 10 per cent. cheaper than the local article? I have serious reasons for asking the question, and I would be glad if the President could give some assurance that Irish manufactures will get preference, provided the article is not more than 10 to 15 per cent. dearer than the foreign article which may be dumped in here by means of mass production. Some twelve months ago I read an article in an engineering journal pointing out that a local firm wanted a very big plant and that they found it could be purchased for a sum of money in Switzerland which was £12,000 less than that at which it could be provided locally, but the local authority, which wanted this work carried out, decided, as it was not more than 10 per cent. dearer than the foreign contract, that it was good practice, good work, and a desirable thing to give the contract to a local person. I would ask the President whether there is any provision in this Bill allowing a similar procedure to take place as regards local authorities in Ireland. Later on, if the President desires it, I will state a case for him on this matter which will, I think, be worthy of consideration. I think that no foreign article manufactured by low wages and on mass production should be allowed to deprive local workers of their right to live and right to work in cases where the article made locally is not more than from 10 to 15 per cent. dearer than the foreign article.
I would like to get that question in proper form. It is a very long one.
Debate adjourned till Wednesday, March 18.