I gave notice that I would raise on the Adjournment the question of the position in which a very large tobacco factory in Dublin finds itself because of the new duties, as a result of which the factory has to close down and 300 persons employed in the factory will be put out of employment. We are dealing here with a very important industry, the Customs duty on unmanufactured tobacco providing about three and a half million pounds yearly. The Minister for Finance decided, in view of the financial situation, that he would have to get another £350,000 from tobacco entering the country.
I think it should be pointed out that when dealing with the Budget last year, Deputy Blythe, who was then Minister for Finance, mentioned that he wanted another £300,000, but, for reasons that he fully explained at the time, he decided that it was impossible to get £300,000 from tobacco without injuring the income to the revenue and some of the firms manufacturing here. Therefore he turned away from the tobacco tax. The present Minister for Finance pointed out that the duty on unmanufactured tobacco is 1/4 greater in Britain than it has been here up to the present, and that, for that reason, there is what he considers a margin up to 1/2 that he can afford to impose on unmanufactured tobacco coming in. It is not a fact that there is a difference of 1/4 between the amount of duty leviable on unmanufactured tobacco in Great Britain and here. The position here is that there is a duty of 8/2½ on unmanufactured tobacco of a particular kind, while in Britain the full rate has been 9/6, showing a difference of 1/3½ or, as the Minister said, 1/4.
There is no preferential rate here, but in Britain there is a preferential rate of 7/5½. Increasing quantities of unmanufactured tobacco are being brought into Britain under the preferential rate to the extent, even some time ago, of 25 per cent., and it is still increasing in quantity. There is increased importation of Canadian tobacco. If the average was taken it would not be more than 9/- per lb. on unmanufactured tobacco in Great Britain as against 9/4½ all round here. There is no use in the Minister for Finance keeping an eye on the position here and in Britain and taking that as an index of what he can do in the way of taxation here. He has to look at Irish circumstances, and apparently that is what he has not done. The Minister pointed out that if he imposed the full 1/2 on all factories it would not be possible for certain manufacturers to survive. He suggests that by putting half on certain native manufacturers they will be able to continue in business by putting a small increase on the price of tobacco, and that the others by carrying out the policy firms in Britain have adopted can suffer their losses, and can be as gentle in dealing with purchasers of tobacco here as elsewhere, although they are not in the same position as regards the amount of duty they will have to pay on unmanufactured tobacco brought in.
There is this discrimination between tobacco companies in this country, and we are told that the difference is as between native manufacturers and those who are not native manufacturers, but who have come into the Free State since the 1st April, 1922. Amongst the firms that have come to the Free State since 1922 have been the representatives of a large tobacco combine, Messrs. Gallaher. Messrs. Gallaher are being put into the position I have pointed out, as a result of certain of their competitors here getting a preferential rate of 7s. 5d. in the lb., and of competing in the early days of their establishment with a very big combine. The Minister anticipated that the price of tobacco would be slightly increased here. As a matter of policy, dictated no doubt by some of the bigger interests in the tobacco trade, the price has not risen. Incidentlly, if there was an increase in the manufacture of tobacco here, taking the census of production figures from 1926 to 1929, there was an increase of £500,000 in the manufacture of cigarettes. Otherwise there would have been a drop of a quarter of a million, so that cigarettes are an important factor in our tobacco industry. The position is that Messrs. Gallaher are going to be forced to close down because they are being discriminated against as not being an Irish firm.
We are told in the columns of the "Irish Press" to-day, with a great flourish of trumpets, that a record has been established in the swiftness with which an English firm made application to a property agent to buy up the factory which is going to become derelict on the East Wall. A factory is going to be closed because it is not a native factory, although it is a fully established one, contributing a considerable amount of money to the revenue, giving a considerable amount of employment, and is a definitely rooted industry here. That factory is going to be shut down, and there is a flourish of trumpets because an English factory, admittedly, is supposed to be looking after the site in order to come here to start the assembling of motor chassis. Apart altogether from the heavy incidence of the tax on tobacco generally, the Minister for Finance and the Minister for Industry and Commerce should, in fairness, look into the circumstances of this firm which is about to be closed down.
They have told us, without being very explicit, that their policy with regard to industrial firms in Ireland is to have them directed by Irish people, controlled by Irish people, and Irish capital is to be the capital that is to run them. We are told that in this Session we are to have a Bill that will outline their policy in that connection. We are told that this firm of Messrs. Gallaher is outside the pale of that kind of consideration. We are told that implicitly by the action taken here. Messrs. Gallaher are an Irish firm. They have shown vigour and independence in the development of their industry and in preventing their industry falling into the control of the bigger combines. In and outside Ireland tobacco-lovers are indebted to Messrs. Gallaher for getting tobacco cheaper than they otherwise would get it. They have successfully fought very strong combines. The Minister for Finance knows very well that in Belfast they successfully fought more than that and that in times of difficulty in Belfast, when an endeavour was made to prejudice the firm because it recognised no difference of religion in the employment it gave and stood stoutly by Catholic workers, they won through.
The Minister knows the firm is Irish to that extent. He knows, too, or he can find out that when, under the changed circumstances here, the Boundary wall came about, Messrs. Gallaher were not in a position to come in immediately; that is, in 1922 and 1923. They came in since then and, when they did, they were welcomed by tobacco traders from one end of the country to the other. They have established themselves and, during the last two or three years, they spent upwards of £250,000 in the way of building. They built up a preliminary factory in Rathmines and then they constructed an up-to-date modern factory at the East Wall that Dublin City might well be proud of. Their buildings alone cost upwards of a quarter of a million. They gave employment at a time when it was very badly needed. At the present moment they are paying about £700 a year in rates alone to the Dublin Corporation.
They have completed two years' trading here. Naturally, a firm coming in at the great expense I have indicated will not make millions in its first two years. Messrs. Gallaher are at the point when, having firmly established themselves here, they are on the eve of making profits. After the work they gave when they were setting up their factory here—that is, building work alone—and after the employment they gave in their factory—and Ministers are urging that employment is now very necessary—it is too bad to see them being dealt with in this particular way. Three hundred persons are being put out of employment and Free State shareholders in the firm of Messrs. Gallaher are also, as it were, being put out of their employment—they are being deprived of their income. This is happening, too, when additional firms are being invited to come here and start industry of one kind or another.
When the Minister for Finance and the Minister for Industry and Commerce contemplate their policy of inviting outside firms with capital and experience to come here in order to develop some Irish industries, they would be well advised to consider seriously what effect upon their long-view policy the shutting down of a factory like this is going to have. I submit that this is a disastrous line of policy on the part of the new Government. It is disastrous after the ten years' life of a new State to discriminate so drastically against persons who, during the State's short life, have come in and have established quite a number of factories here.
These factories are a great addition by reason of the employment they give. Messrs. Gallaher are an outstanding example of sound business organisation, sound methods of trading. Their employees are well treated both as regards remuneration and the circumstances in which they are asked to work. The factories alone are a great addition to the appearance of our City. The Minister for Finance is faced with this, that the tax which he has put on is too heavy. He will have to review it and take some of it off soon. He is faced with that position at a time when he has not yet made up his mind how he is going to differentiate between Irish firms starting industries here and firms that are not Irish. Before he has made up his mind on that, before he has disclosed his mind either to this House or to the industrialists in this country, before he decides to invite firms from outside to co-operate with him in establishing industries here, he takes an action which must be highly prejudicial to the success of the policy or the line of action upon which he is embarking, whatever that line of action may be.
What I would like to see is this tax reduced all round. I do not think that the Minister will agree with that. There is a good deal to be said for a firm with its roots so much in Ireland and with the vigorous and independent spirit that this Irish firm has shown in the work it has done here in Dublin since it was started. This firm has had only two years of life here and they are getting to their profit-making period just now. They do deserve special consideration of some kind or special examination of some kind. If the Minister is going to insist on driving them out of production by shutting down their factory, he should give a fuller examination to the circumstances so as to see if he will be able to give the House a better reason for his action than that the firm is not a native firm. I will make an appeal to the members of the Labour Party who have given the fullest assistance to the present Ministry in support of their Budget policy—which, in many instances, undoubtedly has hit the working classes——
