Dáil Éireann debate -
Wednesday, 5 May 1926

Vol. 15 No. 10

FINANCIAL RESOLUTIONS—REPORT. - RESOLUTION 10.

Major COOPER

I move amendment 9:—

In paragraph (2) of the Schedule, lines 36 and 37, to delete the words—

“Exceeding one ton, but not exceeding two tons in weight unladen	£30.”
and substitute the words—
“Exceeding one ton and not exceeding 30 cwt. in weight unladen	£25
“Exceeding 30 cwt. but not exceeding 2 tons in weight unladen	£30.”

I put down this amendment in order to meet what seemed to me to be a slight anomaly in the Minister's classification. This paragraph refers to commercial vehicles and lorries. The Minister has made a flat rate for all lorries of more than one ton and less than two tons. I think it is common knowledge that there are on the roads at the present time a large number of 30 cwt. lorries, and I seek, by this amendment, to allow these 30 cwt. lorries a slightly lower rate of taxation than the two ton lorry. I do not think it would entail any serious loss of revenue if the position, as I am going to put it to the Minister, is correct. Take a man in a fairly large way of business who uses four 30 cwt. lorries. Under these financial resolutions there is a direct incentive to that man to get rid of his four 30 cwt. lorries and to put on the road one 6-ton lorry. Assuming—which is a large assumption—that the running cost of the four 30 cwt. lorries and the 6-ton lorry are equal in other respects, he has to pay four licences for his 30 cwt. lorries as against one for a 6-ton lorry; he has to pay four drivers' salaries for the 30 cwt. lorries as against one driver's salary for the 6-ton lorry. In addition, under the Minister's proposal, he will have to pay £120 tax for the four 30 cwt. lorries as against a £90 tax for one 6-ton lorry. I do not think a 30 cwt. lorry does as much harm to the road or is as great an obstruction to traffic as a 6-ton lorry. It is the very heavy lorry that cuts up the roads. It is the very heavy lorry that swings along like the car of Juggernaut caring nothing what is in its way or what is behind it. I put it to the Minister that it would be wise to encourage the 30 cwt. lorry. The adoption of this proposed scale of mine will do that without any serious sacrifice of revenue. In the hypothetical case that I have put before the Minister he will get £100 in tax from four 30 cwt. lorries as against £90 out of one 6-ton lorry. Therefore, under my proposal he will be getting £10 more, and, at the same time, he will be relieving the roads of a certain burden. I think where an article is of such common use as the 1½-ton lorry that the Minister, in framing his schedule of taxation, should try and meet it. I do not know of many one-ton or two-ton lorries, but the 1½-ton lorry is a very common sight on the roads. These 1½-ton lorries are in use in the Army to a large extent. Therefore, I think that the scale of taxation should have been framed with regard to that fact, and in regard to the fact that there is a very large number of this type of lorry at present in use which, if taxed to an undue extent, will probably go off the roads and be supplanted by heavier vehicles paying a less tax and costing less to run.

Mr. BLYTHE

The Deputy seeks to introduce a new break in the classification. Heretofore there has been a rate for lorries of from 12 cwts. to one ton; another rate for one-ton to two-ton lorries, and one for two to three-ton lorries, and so on. One could make out a case for breaking up the scale of charges on a rate for each cwt. weight of increase, but that would not simplify the matter, and there would be certain disadvantages in having such a rate. So far, the person with a 30-cwt. lorry is taxed in the same way as if he had a two-ton lorry. We do not see any particular reason, unless we were to break up the whole scale into much smaller steps, for altering the scale We are simply increasing the scale and the rate for commercial vehicles generally except those which are under a ton. If the Deputy's argument has any force at all, it is that he is in favour of still further steepening the scale. I do not think the Deputy was using his argument that way, but if we desired to prevent people who might be induced by the scale as it stands to put on six-ton lorries, the point is whether we should not steepen the scale somewhat further. If you take into consideration the question of the drivers as an argument in favour of employing the heavier lorry, I do not think the scale is going to have the effect of causing people who have, say, three or four 30-cwt. lorries getting six-ton lorries. The argument in favour of the amendment is simply one for breaking up the scale. We do not think that is called for. It would lead to a loss of revenue and it does not seem to us that a tax of £30 for a lorry one ton and upwards to two tons is an excessive tax.

Major COOPER

May I remind the Minister that it would not be in order for me to move an increase in the scale?

Mr. BLYTHE

I am aware of that.

Major COOPER

I should be delighted if the Minister would move it.

Mr. BLYTHE

I would be interested to know if the Deputy is in favour of it.

Major COOPER

For lorries over five tons, yes.

Amendment put and declared lost.

Mr. T. O'CONNELL

I move amendment 10:—

In paragraph (3) of the Schedule to delete the words "any vehicle," line 49, and substitute the word "vehicles," and in line 53 to delete the words "(a) vehicles" and to delete the whole of clause (b).

The effect of this amendment will be to leave things as they are in so far as taxation is concerned on cars other than the Ford cars. The proposal, in the Minister's resolution, is to revert to the horse-power basis for cars other than the Ford car. In the year 1922 or 1923 the new basis of taxation was arranged by the Ministry, the object possibly being to give a certain benefit to the Ford car at the time. When the basis of the taxation for cars is changed it causes a certain amount of inconvenience. It takes people some time to get used to any new arrangement that is made and to know exactly what particular tax attaches to a particular type of car. Now when things have settled down fairly well in connection with this matter, the proposal is made to go back again to the horse-power basis. I do not think that is a wise proposal or that it is necessary. It will have rather peculiar effects inasmuch as it will mean that the popular or cheap type of car, the small car, will have the tax on it increased appreciably, while in the case of the larger and more expensive types of car the tax will be decreased. I have taken a list of cars from a motoring paper and I find that there are thirteen cars on which the tax will be decreased and thirteen cars on which the tax will be increased. The peculiar thing about this new proposal is that there will be a decrease in the tax on the big cars which cost £600 or over. The Chevrolet car is one of the most popular cars after the Ford, and on it the tax will be increased by £4. There will be a similar increase of tax on the Overland, another very popular car. The tax on that car is pretty heavy already, so that under the new proposal the tax on this and the other cars I have mentioned will be £22 a year. The tax on a Singer car will be increased by £3. Other cars on which there will be an increased tax are the Trojan, the Austin Seven, the Citroen, while on the Morris-Oxford the increase will be £2. Cars on which the tax will be reduced include the Crossley, the Napier, the Rolls-Royce, the Fiat, the Delage, Hupmobile, and the Humber.

I do not believe that the Minister will get very much revenue out of his new proposal. It seems to me that there will be as much one way as the other. The Minister will certainly not get as much by way of increase in revenue as would make it worth while to create the disturbance that will be caused by the reintroduction of the horse-power basis. I do not think there is anything specially in favour of the reintroduction of that basis. I am told by people in the business that the putting into operation of this new proposal will cause them a great deal of inconvenience inasmuch as they have their catalogues printed and issued with price quotations for each particular type of car sold in the Free State, the prices being based to some extent on the scale now in operation. I have been told, too, though of course I do not profess to know very much on this point, that it will mean a very considerable interference with people in the trade who would prefer that the present basis was continued. I have already pointed out that from the revenue point of view there will not be very much in it one way or the other. As far as I know the Ford car will be out of it altogether—that is to say, the Ford car manufactured in the Saorstát. I would like to remind the Minister that there are some old Ford cars still left in the country, and I do not know what he proposes to do with Ford cars that were not manufactured in the Saorstát. If this new proposal applies to them it will mean that they will have to pay a tax of £21 or £22. If that is so I do not know what is going to happen, because you could get some of those old Ford cars at the present time for £15 or so. I do not know what is going to happen if these cars are to be made liable for a tax of £22. I would remind the Minister that quite a considerable number of them are still left in the Free State. I hope the Minister will see his way to accept my amendment and to leave things as they are at present.

Mr. BLYTHE

I think it would save discussion if I said a word or two on one aspect of this. I think Deputy O'Connell has been misled by the use of the phrase "reintroducing the horse-power basis." That basis has never been departed from, and so far as the resolution is concerned we are simply continuing the provisions of the existing Act of 1920. That Act enables the Minister for Local Government to determine the basis on which the horse-power shall be computed. We are not altering the law in regard to the matter. We are simply announcing in connection with the other proposals that it is intended the Minister for Local Government shall reverse the Order made about the beginning of 1923, and so revert to the previous basis of computing horse-power which was in existence.

Mr. T. O'CONNELL

It comes to the same thing.

Mr. BLYTHE

To pass Deputy O'Connell's motion would mean that all cars except the Fords would be free of tax altogether. If Deputy O'Connell wants to put his proposal to the House I think the way he should do it is to propose a sub-section to the Finance Bill confining the power to the Minister for Local Government to fix the basis. At present the Minister for Local Government can take any formula he likes as the formula on which horse-power is to be computed, and prescribe that. If the Deputy wants the present basis made permanent and statutory, so that it cannot be altered in future, he would have to propose a sub-section containing a provision that for the future horse-power was to be calculated on the cubic capacity of the cylinder. We changed from the bore of the cylinder to the cubic capacity of the cylinder. It would be possible as the law stands under the general provisions of the Finance Act of 1920 for the Minister for Local Government to take something quite apart from cubic capacity or the bore, and make, say, some computation based on speed, on the number of revolutions of the engine per second, or something like that. The way to make sure the present basis is retained would be to put into the Act that it should be computed on the cubic capacity of the cylinder.

Professor THRIFT

Could you not take the weight?

Mr. BLYTHE

No; it is horse-power that is prescribed in the Act, and the Minister for Local Government is given power to prescribe a formula for calculating horse-power.

Mr. T. O'CONNELL

I am thankful to the Minister for enlightening me on this technical matter. If the Minister thinks this motion as now down would have the effect of removing the taxes altogether, of course I do not intend to put forward such a foolish proposal. Supposing that I propose to introduce a sub-section into the Finance Bill, I would be glad if the Minister would now indicate what his attitude towards it would be.

Mr. BLYTHE

I will oppose it, for it would mean a loss of about £30,000, as near as I can calculate it, in revenue.

Mr. M. DOYLE

Could the Minister give us any information on the point raised by Deputy O'Connell with regard to the tax on old Ford cars?

Mr. BLYTHE

The proposal in the form in which it will ultimately be put to the Dáil will be to the effect that the Minister for Local Government must be satisfied in respect of any Ford car made before July, 1923, that it will comply with the provisions laid down here, and consequently the Ford car made before that would be liable to the tax on the basis prior to the 1922 or 1923 tax.

Mr. T. O'CONNELL

Any Ford made before July, 1923, will be liable to the £22 tax?

Mr. BLYTHE

Yes.

Professor THRIFT

Would the Minister consider raising the same revenue on a tax imposed according to the weight of the car instead of having this complicated and unsatisfactory calculation?

Mr. BLYTHE

We tried to explore the weight basis, but we could not get sufficient data to enable us to come to any conclusion in regard to it. There is a good deal to be said for the weight basis. Personally I am inclined to it, but I could not get sufficient data to satisfy me that it is one which could be brought before the Dáil at this stage. I believe during the coming year steps will be taken by the Minister for Local Government to ascertain and have tabulated the weight of cars. There are so many weights in each make of car that it is impossible to say at what figure you ought to place the weight tax in order to get a specific revenue at present. Take the Fiat car: there might be ten different weights, and it would be almost impossible, without knowing more than we do at present, to say at what rate per cwt. you would need to levy the tax to get a specific revenue.

Professor THRIFT

Have not these difficulties been got over in respect of other cars?

Mr. BLYTHE

They can be got over by the preparation of statistics, but these are not in existence at present.

Mr. JOHNSON

I would ask the Minister has he considered the effect of throwing on the Minister for Local Government the responsibility of finding out where a particular vehicle was built, or what particular portion of it was built in a particular country. I cannot understand the reasons for doing that. Hitherto, of course, he has had a certain responsibility in regard to the fixing of horse-power, and so on, but this particular proposal involves that he should be brought into direct contact with the makers of the vehicles and I suppose to be satisfied by Messrs, Ford that certain cars were built in their particular place, or cars that Fords made before a certain date would have been built in their establishment. That seems to me to be entirely apart from any function of the Minister for Local Government. It is bringing him in rather to Excise and Customs, and operations of the Minister for Finance. In view of the position of the Minister for Local Government, who is an external Minister and not a member of the Executive Council, there is always the danger of a conflict between the Minister for Local Government and other Departments—by his having to interfere with the Ministry of Finance, or the Ministry of Industry and Commerce, and so bringing about unsatisfactory relations. I do not like this idea of the Minister for Local Government having to satisfy himself that a definite proportion of the cost of producing a particular article has been incurred in the Saorstát. That seems to be entirely outside his province. If there is to be an alteration of the law in that respect I think the responsibility should be on somebody else rather than the Minister for Local Government.

Mr. BLYTHE

The object of these duties is mainly to replenish the Road Fund. The Road Fund is under the control of the Minister for Local Government and as he has certain other powers—the power of fixing, for instance, the method of calculating the horse-power and other powers under this Act in connection with the Road Fund, and the motor vehicles taxation —it did not seem to be necessary or appropriate that another Minister should be requested to do some particular part of the work. The task will not be a difficult one, because the Minister will, from time to time, have to be satisfied that the specified amount of work is being done on the cars that are being turned out at the Ford works in Cork. That can be done by the inspection of the books and documents that will be submitted to him or his representative. The cars which will get this preferential rate of tax have their numbers and the representative of the Minister will be able to ascertain from Messrs. Ford the engine numbers of all the cars turned out at their works.

He will be able to satisfy himself, from the figures that will be submitted to him, that the provisions of the Act are being complied with. There is no intention of having anything like an Excise supervision, which is an entirely different thing. I do not propose to follow the processes. We do not propose to say that it is quite impossible for the Ford Company, if they choose, to do it for any particular reason, to bring in one car from outside and to pass it off as being a car made in Cork. They would not do that, of course, and in any case it could not be done on any scale. The Excise supervision is an entirely different sort of supervision from this. The Excise supervision is extremely strict. Processes are regulated, machines are fitted with devices to show the number of times they have been operated, and all sorts of restrictions are placed on the manufacturers. That is not intended in this case. It is intended that general evidence be given to satisfy the Minister that the cars that are being turned out in Cork are the result of labour done there to a specified extent.

Mr. JOHNSON

Could the Minister satisfy a good deal of curiosity with respect to the extra cost of the Ford cars in the Saorstát as compared with Northern Ireland; and in that respect, can he tell us whether this concession which, in effect, is to the Ford cars, applies to cars, parts of which are made in Cork and which are assembled in Manchester, some of which go to Northern Ireland and some to Dublin? I am sure it is quite easy of clarification, because I have no doubt the Minister has gone into these figures closely. There has been a great deal of mystification on this matter.

Mr. WILSON

I have been very much mystified myself, and I was wondering whether there was a great deal of substance in the contention that when you put on a tariff it immediately caused a rise in the price of the article by the amount of the tariff. If you examine the matter, the Cork works produce 75 per cent. of the car, and there is 25 per cent. of the car imported. I cannot understand by what process of calculation 25 per cent. of a Ford car, on which a tariff of 22 2-9 per cent. is imposed, causes the whole car to rise in price to the amount of the difference between the price at which the car is sold in England or Northern Ireland and here—£25. When the car leaves the works at Manchester the price, plus tyres and including commission, is £125. That would leave the cost of the car made at the factory, without tyres, £100. On this £100 the part on which the tariff of 22 2-9 per cent. would be charged would be only £25. How that sum works out so that it amounts to £25, the difference between the price of the car in the Saorstát and in England, is a thing that I cannot understand. I wonder why we should give facilities to that particular company that is mulcting the citizens of this country in such a large sum. The whole thing is absurd.

Mr. BLYTHE

Deputies will have noticed that there is an amendment down in the name of Deputy Duggan making the 25 per cent. apply alternatively to the "vehicle""or the engine of the vehicle." As a matter of fact, there is not so much as 75 per cent. of the vehicle made in Cork. In so far as the vehicle is imported there is a greater import here than there is in Great Britain. That is the car turned out here has paid more duty than the car turned out in Great Britain. A good number of the wheels and the various parts of the car that have been ground, tooled and finished in various ways in Cork, are really cast in England. For instance, the cog wheel is even imported into Cork as a casting. It is ground, and the cogs are cut in Cork, and, perhaps, the hole for the axle is bored in Cork, but there has been a tax paid on the casting coming into Cork. Take the case of that particular wheel. In England that wheel has borne no tax because it was cast in England. The other reason alleged by the firm, in addition to the operation of the extra duty here as compared with England, is that the costs, because they are assembling in a comparatively small way in Cork, are higher. For that reason they cannot assemble the cars in Cork at the price at which they do them in England. It is said that if there were a greater output of cars and a greater purchase of cars here the car would be cheaper. I do not profess to be able to account for the £25 in the difference, but there certainly is a reason for a difference. I quite accept the statement of the company. I would not be able to assess a certain number of pounds as being the amount of which I would be satisfied. But, undoubtedly, the cost of assembling must be greater in Cork than in places where work of that character is being done on an immensely greater scale. Then there is a certain figure in the matter of the duty. I do not know whether there are cars assembled in Manchester and imported into Dublin. I was unaware that that was being done. I understood that the Free State market was being met from cars assembled in Cork since 1923——

Mr. T. O'CONNELL

Not at all. Would the Minister tell us if it is the case that motor parts manufactured in Cork and taken to Manchester for assembly there have to pay a duty on entrance?

Mr. BLYTHE

Yes.

Mr. O'CONNELL

Would the Minister tell us whether there is a drawback on cars when re-imported into Ireland?

Mr. BLYTHE

Yes, there would be.

Major COOPER

With reference to castings, could the Minister not see his way to liberate from duty iron and steel which we are never likely to produce ourselves, and which are imported as raw material for industry in the Saorstát? Whatever views are held by Deputies on the question of tariffs, I think most people would agree that raw material should come in free of duty. It cannot be produced here. I do not think we produce iron and steel castings.

Mr. BLYTHE

In any case any that are re-exported are allowed a drawback, and in so far as we tax something that might be doubtful as to whether it should be taxed or not, coming into this country, the company is placed at no disadvantage. The company has the advantage of a protective tariff to the extent of 22 2-9 per cent. in general, and I do not think it is a serious matter if certain cars which are in a partially completed state are taxed. I can understand an argument in favour of something that is substantially manufactured being free. It is sometimes hard to draw a line in these cases. If you impose a tax on fully-manufactured articles, then parts will be brought in which require merely the least touch to complete them. The difficulty is largely one of administration I do not think Fords suffer; they have no grounds for complaint because certain goods that might be exempted are ordinarily charged.

Major COOPER

On a point of personal explanation, I would like to say that I am not in the least concerned with the Ford Company, who are very well able to look after themselves. I am concerned with the purchaser who is penalised because he lives in the Saorstát.

Mr. HEWAT

I would like to say in connection with the matter that has now arisen that the advocates of a tariff on all these things are getting a little sample of the difficulties that arise in connection with administration.

Major COOPER

But they are not here.

Mr. JOHNSON

They will vote against the opportunity when it arises.

Mr. A. BYRNE

The advocates are not in now.

Mr. HEWAT

There is one thing perfectly certain, and that is that the object the Minister has in view in connection with these particular tariffs will not have the effect that some of our great tariff reformers believe. I think Deputy Cooper said that raw materials in the shape of iron and steel ought not to be taxed in connection with the production of the Ford car on the grounds that it is a recognised impossibility for those things to be manufactured here. I do not admit that, on the Free Trade basis. I do not agree as to the impossibility of producing many of the things the production of which is considered impossible in the Free State We had a long debate in the Dáil yesterday on the question of tariff reform. I do not accept the position that seems to be laid down that difficulties exist in the Free State in regard to the production of certain articles. We are told that certain things are suffering a material handicap by reason of existing conditions, and we are told that difficulties in this respect are insurmountable. I would like to express the opinion, rightly or wrongly, that without the aid of tariffs—more particularly if tariffs were not there—and possibly with a little help in the first instance, that even iron and steel could be manufactured in the Free State. There is nothing geographically or physically impossible in regard to the manufacture of these things.

Major COOPER

Even coal?

Mr. HEWAT

Yes, even coal. There is nothing impossible in regard to the manufacture of these things. If one looks at the position of some industries on the other side of the water— take pig-iron as an instance—one finds the big bulk of raw material made into pig-iron is imported into Great Britain. That could equally be imported into the Free State for the purposes of manufacture.

Mr. T. O'CONNELL

In view of what the Minister has said, I will withdraw my amendment. I think it will be news —unwelcome news—to a great many people that all Ford cars prior to 1923 will be taxed at the full rate. That is something the people did not know before.

Amendment 10, by leave, withdrawn.

Mr. DUGGAN

I beg to move:—

In paragraph (3) of the Schedule, line 56, to insert after the word "vehicle" the words "or the engine of the vehicle."

That means that clause 3 (a) of the Schedule would apply in the sense that not alone is 75 per cent. of the cost of producing the vehicle attributable to manufacturing operations performed in the Saorstát, but also 75 per cent. of the cost of producing the engine is attributable to manufacturing operations in the Saorstát.

Mr. JOHNSON

Are we to understand that the new Excise duty will apply to any car 75 per cent. of the engine of which is manufactured in the Saorstát? That is an inducement not only to the Ford Company but to any other company.

The PRESIDENT

Certainly.

Mr. JOHNSON

It is an inducement to any company to make its chassis in England and also the hood and the rest of the car, but to make the engine here.

Mr. BLYTHE

That cannot be done without a very elaborate plant.

Major COOPER

In the absence of the protectionists, may I ask if I am right in thinking that this amendment of Deputy Duggan's is very necessary? It is going to strike a very severe blow at the coachbuilding industry and is going to remove from that industry a certain protection which it had under the resolution as originally drafted. It seems to me to be a direct encouragement to make the bodywork of a car, either of wood or steel or any other composition, in France, the United States, or Great Britain, and send it here. It is a direct encouragement at a time when, I believe—my authority is Deputy Byrne—coachbuilders in Dublin are in very great need of employment, and probably the coach-builders in Cork are equally in need of employment. I have no objection to the limiting of the principle of protection, but we ought to know what we are doing, and the matter ought to be made quite clear to the Dáil.

Mr. M. EGAN

With regard to the matter of seventy-five per cent. of the cost of producing an engine, I want to point out that fully one hundred per cent. of the engine is manufactured in Ford's factory at Cork.

Mr. BLYTHE

No, sir.

Mr. M. EGAN

There were certain statements made here when the Budget was introduced, and I did not like to intervene, not having had authority to do so. Since then I made some inquiries with reference to the work carried out in Ford's in relation to the making of their cars. A statement was made here to the effect that the car could be bought £25 cheaper in Belfast or Britain than it could in the Saorstát. The cause of that is the McKenna duties. If the McKenna duties had been taken off—unfortunately they could not have been—the fact remains that the car could have been sold in any part of Great Britain or Northern Ireland and be sold as cheaply in Cork or any other part of the Saorstát. It is in consequence of those duties which are made up on small parts, particularly in steel, that the price is higher. There are steel pieces coming into Ford's which they could not set up a plant to cast. Fully ninety per cent. of the work on those pieces that come in is given to the factory. I am glad to be able to say that Messrs. Ford are laying down a plant, which will probably be finished in a month, to manufacture closed-in bodies altogether. As far as the ordinary truck is concerned, it is manufactured completely in the Ford factory, and if they get the facilities they are looking for, I certainly say it will give a tremendous fillip to the Ford Car, not alone in this country but Great Britain. Unfortunately, they could not obtain them for certain reasons laid down by the Minister for Finance in introducing his Budget. We hope in the near future they will obtain them, and if they do there is no doubt that it will give further employment in the factories. A statement was made when the Budget was introduced that the Ford factory employed only Cork men. I do not like those narrow views to be taken, particularly in an assembly of this description. Having made inquiries, I have found that there are men from as far as Belfast and all over the country employed in Ford's. The minority are Cork men.

Mr. GOREY

They are all Cork men now.

Mr. EGAN

I am afraid you could never make Cork men of some of them. Coming to the statement of the Minister that the engine is not manufactured, my instructions are that the engine is manufactured completely in the Ford factory. Furthermore, the axles are manufactured in Cork and sent to England. Manchester and Cork have to import steel metal to the extent of 33? per cent. from the United States. These things have to pay duty in England as well as here, but as far as the manufacture of the truck and engine is concerned they are manufactured completely in the Cork factory. I sincerely hope, when the next Budget will be introduced, that the Minister will give more facilities to the Ford factory to employ a greater number of men.

Mr. WILSON

Deputy Egan appears to have direct information from the Ford factory. He says that the cause of the difference in price between Northern Ireland and the Saorstát is due to the McKenna duties. The McKenna duties only amount to 22 2-9 per cent. How can you make the two-ninths of £25 equal to £25?

Mr. EGAN

It is not the difference in cost price but in retail price.

Mr. BLYTHE

When Deputy Egan said that 100 per cent. of the engine was made in Cork and I said "no," perhaps we were thinking of different things. As a matter of fact there is not 100 per cent. of the value due to Cork labour. There is about 76 or 77 per cent. of the engine due to Cork labour, but the steel, which has already incorporated in it a great deal of labour, is imported.

Mr. GOREY

This question of 25 per cent. dearer in Ireland becomes more of a mystery the more you hear the argument. The Minister said the castings were ground in Cork and he said the other parts were ground in Cork. I should like him to give us some indication of the relative value of the raw castings and the finished article, and give us some idea of how the cost works out. Deputy Egan says there is a difference in the retail price. That is to say, the retailers of this country have taken advantage of conditions in other countries to keep up this price here. Deputy Egan is evidently speaking with authority; then it is the fault of the retailers here. We want to know what is the value of the unground and uncut raw castings, coming into the Saorstát, for each car.

Mr. JOHNSON

On the motion to add "or the engine of the vehicle" I am perturbed now by the statement of Deputy Egan. This motion is intended to meet the case of Ford's. Now we are told that Ford's will, in a month, be able to supply the whole of the bodies.

Mr. EGAN

Closed-in bodies.

Mr. JOHNSON

In that case there is no necessity to insert this amendment inasmuch as if the whole of the car may be made in Ford's in Cork, that will easily make up the 75 per cent. of the whole of the car. I think it would be well if we had a complete analysis of the whole process of manufacture and retail prices. We would be doubly enlightened if we got that, and, perhaps, before the end of the discussion we shall have it. The Minister dissents that 75 per cent. of the whole can be made up. When the closed-in body is manufactured in Cork, as well as the part of the engine that is at present manufactured in Cork, it will not cover 75 per cent. of the cost of the car. That is a surprising admission, and I think the effect of this amendment may well be that Messrs. Ford, in view of their frequent and very sudden changes of policy, may one of those days say, "there is no advantage to us in having these bodies made in Cork. We will get the engine alone, up to 75 per cent., made in Cork and let the bodies be imported." I think this amendment is going to be detrimental rather than beneficial to the amount of employment given by the manufacture of Ford cars in this country.

Mr. BLYTHE

There is a good deal of exaggerated talk about the proportion of the car made in Cork. Apart from the engine, there is nothing like 75 per cent. of the value of the car made there. The plates, for instance, are probably stamped out, fitted together, and varnished there, but the materials in all cases, including probably the paint and varnish, are imported, and a great proportion of the body is also probably imported.

Mr. GOREY

From America or England?

Mr. BLYTHE

Great numbers of the parts are imported from America, where they are made in large quantities in Detroit. If we left the Resolution as it was and did not separate the engine from the vehicle, and unless the Minister for Local Government was not to pay much attention to the actual duty imposed on him, it would be impossible to give this advantage to any Ford car. If you take the vehicle as a whole, the amount of the car made in Cork would not be anything like 75 per cent. It is certainly attributable to the manufacture of the parts performed in Cork. You must take the case of the raw material, which is produced elsewhere. A considerable amount of work would require to be done on an article to ensure that 75 per cent. of its value is attributable to operations in Cork. A great proportion of the raw material comes in to Cork. One hundred per cent. of the engine is, in some cases, made in Cork. In regard to the other portions of the car they are simply cut and so forth in Cork. I would have to consider a much less figure than 75 per cent. if this were not to be attributable to engines. The figure would have to be substantially under 75 per cent. On the other hand, we are satisfied, if it is necessary for them to make the engine or to have the engine so that 75 per cent. of its value is attributable to manufacturing operations in the Saorstát, the work at present being carried out will continue to be carried out, but as regards the body or body-making there is still the advantage of the 22 2-9 per cent. Customs duty.

So far as we are concerned with the new arrangement of duties, we are doing what we believe to be the maximum that is necessary to induce the Ford concern to continue its manufacturing operations in Cork, as it would be a great loss to the country if that concern were to go. We know that where you have engineering operations carried on and where you have a particular sort of skill required and a population trained in that work, there is a chance that other firms may establish work in the district. It would be most desirable that we should have work of an engineering character here. I do not know if we could build up, for instance, anything that would correspond with the shipbuilding works in Belfast. On the other hand, if Messrs. Ford left Cork and some other firm did not step in, I think the prospects of engineering here would be very remote. When they established their plant in Cork they intended to make not only for the Saorstát market but for the British market. They are practically cut off from the British market and they have to pay 22 2-9 per cent. when the parts are sent to England. Now the British propose to include in the scope of those duties commercial vehicles as well as touring cars, and that is another obstacle placed in the way of the Ford firm. Unless we give some concession like this and increase the demand for cars in Ireland so as to enable them to employ their big plant fully, I think it is almost certain that they will have to close down soon. When we fixed the figure at 75 per cent. we did not inform the Ford people what we were going to do in the matter, and we were not able to examine, as closely as we would like, the actual figure at which the percentage should stand. Consequently the percentage was fixed higher than an examination showed it ought to be fixed. We could not, without disclosing to the firm our intentions prior to the Budget, pursue the matter as thoroughly as we desired. The alternative to Deputy Duggan's amendment would result in lowering the percentage considerably.

Mr. GOREY

The Minister has not dealt with the main matter, namely, the difference in price.

Mr. BLYTHE

I said that I was not in a position to account for the £25 difference. I say it is reasonable and, in the circumstances, right that there should be a difference in price with an increased price in the Saorstát, but what that should be it is difficult for me to say, and it is difficult for anybody to find out.

Mr. GOREY

Deputy Egan said that the same conditions applied here as in England and that the McKenna duties applied to the materials coming from America to England or the Saorstát.

Mr. BLYTHE

I cannot accept Deputy Egan's explanation.

Mr. GOREY

The Minister has not given us any explanation.

Mr. BLYTHE

I have given all I could.

Mr. HEWAT

It appears to me to be clear from the discussion that we, as a legislature, are taking up an extraordinary position on behalf of a particular firm in connection with our Budget. That, in my opinion, is unsound, and I suggest to the Minister that, so far as. I have any principles in the matter, I would much rather subsidise Messrs. Ford's works than bring in legislation of this sort which the Minister himself is unable to explain.

Amendment put and agreed to.

Sitting suspended at 7.10 p.m. and resumed at 8 o'clock,An Ceann Comhairle in the Chair.

Question—"That the Dáil agree with the Committee in Resolution No. 10, as amended"—put and agreed to.