I think amendments 39, 41 and 42 might be debated together and also the position taken up by amendment 40.
Finance Bill, 1932—Committee Stage (Resumed.)
The following amendments stood on the Paper:—
39. In sub-section (3), to delete all from the word "Any," line 29, to the word "Eireann," line 32, inclusive, and substitute the words:—
"Any licensed manufacturer of tobacco who can show to the satisfaction of the Revenue Commissioners that the business of which he is the licensed holder was being carried on on the first day of June, 1932, and has been carried on continuously since that date."—Risteárd Ua Maolchatha.
40. In sub-section (3), to delete all from the word "Any" in line 29 to the word "be" in line 34 and substitute the words "If it is shown to the satisfaction of the Revenue Commissioners in respect of the business of a licensed manufacturer of tobacco that such business was being carried on on the 1st day of April, 1922, and has been carried on continuously since that date and is," and in line 40 to delete the words "to be" and substitute the word "is," and in line 42 before the word "shall" to insert the words "the person licensed to carry on such business," and in lines 43 and 44 to delete the word "manufacturer" and substitute the word "person."—Aire Airgid.
41. In sub-section (3), to delete all words from the word "who" line 34 to the word "residents" line 41 inclusive and substitute the words—"or two or more individuals who is or all of whom are nationals of Saorstát Eireann; or owned by a body corporate the issued capital of which is to an extent exceeding one half (in nominal value) thereof in the beneficial ownership of a person who is or of two or more persons each of whom is either a national of Saorstát Eireann or a body corporate the issued capital of which is to an extent exceeding one half (in nominal value) thereof in the beneficial ownership of nationals of Saorstát Eireann; or owned by the body corporate by which it was owned on the 1st day of June, 1932; or beneficially owned by the individual or all some or one of the individuals by whom it was beneficially owned on the 1st day of June, 1932; or carried on in direct succession to any of the aforesaid individuals deceased by the personal representative for the time being of such individual or by a trustee for the time being of the will of such individual in execution of the trust of such will; or carried on by the personal representative for the time being, whether a national of Saorstát Eireann or not, of a national of Saorstát Eireann who has died and at the time of his death was the beneficial owner of any shares in a body corporate which owned any such business on the 1st day of June, 1932."—Risteárd Ua Maolchatha.
42. In sub-section (3) to delete all the words from the word "In," line 47, to the word "Ireland," line 50, and substitute the words—"In this sub-section the expression ‘national of Saorstát Eireann' means either (a) a person born in Ireland or a person either of whose parents was born in Ireland, or (b) a person who at the relevant time is and for not less than seven consecutive years immediately preceding that time has been resident in Ireland."—Risteárd Ua Maolchatha.
It is for the purpose of applying to the scheme of discrimination in the tobacco duty the principles which are found in the Control of Manufactures Bill, now before the Dáil, that these amendments were put down. It is certainly a thing that is exceedingly difficult to justify. It is impossible, in fact, to justify discrimination between firms already operating, and which have been operating, for some considerable time. All these firms started operations without any objection being taken, or any suggestion being made to them that they were going to be subject to particular levies which other firms would not be liable to. We have appealed under many heads for some consideration in this matter of the reduction of taxation. It has been pointed out that it is quite possible, in the scheme as drawn up, for the Government, or for their Departments, to maintain the scale of expenditure outlined while giving some remission of taxation, that they have been taxing much more than has been shown necessary by the scheme of expenditure so far outlined. If these amendments were adopted, it would mean that, for all practical purposes the increase of the tobacco duty would not be 1/2d. but would be 7d. I do not know what the proportion of tobacco manufactured by the different firms is, at the present time, and I do not know what the average increase will work out at. It will work out at something substantially less than 1/2d., because a considerable amount of tobacco will only pay the additional 7d. By the acceptance of this amendment the Government will not lose anything like the total sum. The amount may be anywhere from 3d. to 5d. I do not know what it will be but it will be substantially less than 7d.
If the amendments are adopted, it means that firms that were working on the manufacture of tobacco, at the time of the introduction of the Budget, will be treated in the same way, and no one will be picked out for penalisation. The scheme embodied in the section as it stands is actually a scheme of penalisation. It is as if in the settlement of the licence duty payable by publicans it was stated that publicans should pay so much, but a publican, or the publican mentioned in the Schedule, should pay twice that rate. Although it is not stated in words it is a definite proposal that particular firms, which can be easily identified, are going to be dealt with specially and charged upon certain tobaccos, a higher rate than other firms. That is an indefensible principle and the Government should I think seize the first opportunity of getting rid of that principle. If extended there is scarcely any abuse which might not grow out of it. If firms are arbitrarily selected for special penal taxes on a particular ground there is no reason why, in next year's Budget, there should not be other firms in some other industry arbitrarily selected upon some other grounds in order that they might have to bear penal taxes.
I am satisfied if these amendments are adopted it will not put any of the native manufacturing firms out of business. It will not have any ill-effect which the Government is trying to avoid when it determined to increase the tobacco duty and introduced this principle of discrimination. It will be possible, if this amendment is accepted, for a firm to go on, and for a progressive firm to continue to make progress, even under the high rate of duty that is charged. It will be worth the while of the Government to do some scraping and scamping if necessary, if whatever loss of revenue that might arise in the acceptance of this amendment made it necessary in order that they might get out of the difficulty and leave the particular path upon which they would be entering by the enactment of the section as it stands.
I do not know whether, as a result of negotiation and promises that Ministers have held out, the particular firm which was threatening to close down has decided to continue open. I think, if we look at this thing as it is, the question of the opening or closing of that firm is a minor matter. The evils that would spring from this section, if adopted, will be very much greater than the closing of a firm or two. There would be a complete loss of confidence on the part of the firms that they could depend upon getting fair play. Whatever the firms will be, and whether they are going to close or continue open, that are going to suffer the full rate of increase, while other firms get off with half the rate of increase, are definitely suffering unfair treatment and legislative penalisation. We have heard a great deal about retrospective legislation. This looks like a retrospective fine. This looks like imposing conditions over the right to carry on here which were not imposed when capital was invested and the industries were started. I do not know whether any Minister would attempt to defend, in the abstract, this sort of treatment. It certainly is going to make, not only foreigners, but many other sorts of people very timorous about investing very large sums in industries. If we want to have industrial progress, we must make everybody feel that whatever the necessities of the Exchequer may necessitate in the future in the way of taxation, there is going to be fair treatment and some sort of equality of sacrifice for everybody, that there is going to be no such thing as deciding that we are going to put taxation on in such a way as to enable this particular firm to progress and push that other firm out of business.
There should be nothing in the way of penalties imposed unless they are going to be imposed by a court. This is a sort of fine which is proposed to be put on certain firms because they had the temerity to start their factories after a particular date, that date being many years ago. If you give warning to people that they will be subject to certain disabilities before they start their industries or before they invest their capital, then they have no cause of complaint, but it is something in the nature of banditry on the part of the State to allow people to come in and invest money in industries under the definite impression that they will get the same treatment as other firms and that they will not be attacked, and thereafter to come down on them and charge them higher rates of duty on the goods in which they are dealing than other firms have to pay. It would be better from the point of view of the country, if there was no other way out of it, to drop this taxation altogether and impose some other tax rather than start on the path the Ministry is starting on and rather than cause the fears that are bound to exist if this scandalously unjust thing is done. But it is not necessary to drop the tax and impose another tax, because, if the amendment is adopted and all firms that were operating at the time when the Budget was introduced are charged only an extra 7d., the amount lost by the Exchequer will not be so great but that the Government can manage to carry on. I am satisfied personally that they can very easily spare the money. I am satisfied that the whole scheme of taxation is entirely too lavish and beyond the requirements of the Government, but, without suggesting that they should admit that, it is perfectly clear that they could effect economies sufficient to enable them to accept this amendment.
I think there are many things to object to in the Budget, but there is none of them as bad as this or that will have the far-reaching effects of this. If it is carried out it will do such damage as will not be remedied for a very long time, because if a Government or a Parliament deliberately carry through a measure that is palpably unjust, all the confidence that previously existed cannot be restored in any reasonable period of time. Taxation is hard at any time, but unjust, unfair taxation and legislative penalisation of this sort is something far more damaging and far-reaching in its ill-effects.
It is quite impossible for the Government to consider the acceptance of the amendment put down in the name of Deputy Mulcahy—for two reasons. First, to accept it, in the form in which the amendment has been put down, would cost the Government up to £175,000. No matter what is Deputy Blythe's belief, we cannot contemplate dropping that amount, and if we are going to do away with the rebate altogether the only way in which it can be done away with would be to impose the full rate of duty on all Irish manufacturers. The effect of that, the Government is convinced, would be to close down within a very short period of time every native manufacturer in this State, every manufacturer who continued to work on and give employment here through the trying years of 1916 to 1922, and to leave the whole of the Free State market to outside concerns.
The general policy of the Government is to secure that Irish industries will be controlled and owned by citizens of this State so long as this country is divided. We are not going, simply because the Budget position drives us to impose extra taxation, to impose that taxation in such a way as will drive out of business any existing native manufacturer. If we were to accept the principle behind Deputy Blythe's amendment, we would have no alternative except to impose the taxation at such a rate as would crush out the natives and leave the whole of this important industry in the hands of foreigners. For that reason we cannot accept the amendment.
I think that before this passes through the House it is only right and proper that the greatest protest, as far as this Party is concerned, should be made against the measure proposed in the Finance Bill by the Minister. The Minister says he cannot accept the amendment of Deputy Mulcahy—that it would be impossible to accept it because it would cost a sum of £175,000. Has the Minister forgotten entirely that if this passes he is going to wipe out a concern which has invested a sum of £250,000 in this country and that 300 hands are going to be disemployed? Will it be a greater national gain to lose this £175,000 or a greater national loss to save that £250,000 invested in that industry and to keep these 300 people in their employment?
I was anxious to know, during this debate, what action the Labour Party were going to take on this question. I see Deputy Norton in the House and I see other members of the Labour Party, and we want to know what they are going to do about this. Are they going to allow these 300 people to be thrown on the streets and to allow the wiping out of a capital sum of £250,000? Have the claims of these 300 people no effect on the attitude of the Labour Party? Is it their policy to permit these people to be destroyed, and, if not, what are they going to do in this debate? Labour is anxious here, from what I can gather of their policy, to maintain in employment every possible citizen for whom employment can be obtained. What are they going to do about this measure which the Minister for Finance proposes to pass through this House? Do they think it reasonable or proper that a firm like Gallaher's should be permitted to come in and invest £250,000 in a great industry —they are model employers — and that they should be penalised under this? Have they no criticism to offer? Is it reasonable, fair or just — is it in the interests of the Labour Party — is it in the national interest of the country —and, if not, what action does Labour propose to take? We, on the Opposition side of the House, know that it is perfectly futile to hope for anything from the supermen who now occupy the Government Front Bench, but we do expect assistance from the Labour Party, with whom lies the fate of 300 people. We ask the Labour Party to take some action to save this factory. I believe that the Labour Party cannot possibly approve of this section of the Finance Bill. The Government talked about setting up industries here which will be entirely controlled by Irish nationals. Will anybody say that the firm of Gallaher's is not an Irish firm, that Gallaher's does not come within the category of "nationals." If the firm of Gallaher is a national firm, as we contend it is, surely the Labour Party will not vote for this amendment, knowing what it will mean to employment in the City of Dublin and knowing that the effect of the Bill will be to throw 300 people on the streets. Deputy McGilligan stated here on one occasion that if we wanted to prevent the industrialisation of the country we could not do better than bring foreign capitalists up and show them Gallaher's tobacco factory when it is closed, as, I presume, it will be closed if this section becomes law.
In this amendment, we should have the support of the Labour Party. I regret that there is not a single representative of Dublin city representing Labour in the House and, therefore, upon the shoulders of Deputy Norton there rests responsibility for a very important decision. Will he oppose this section or will he go into the division lobby in support of it? We are all anxious for the industrialisation of this country but I heard Deputy Norton on more than one occasion say that he did not believe in the setting up of a number of small firms giving limited employment. I heard Deputy Norton say that he did not believe in small industries scattered throughout the country.
Perhaps I will be allowed to say what I did say. I said that I believed the tariff system, as introduced, and reliance on tariffs solely, would dot the country with these small diffused industries.
Mr. Byrne
That is exactly the point. The Deputy has put it more clearly than I could hope to put it. This is not a small factory; it is a large factory. It is a factory which has been steadily losing money but which still carried on. It was introduced into this country by the Government which has laid down office.
Has Deputy Byrne authority for stating that this factory has been steadily losing large sums of money?
Mr. Byrne
For the first year, money had to be taken from other branches of the enterprise to make good the losses sustained here. If Deputy Dillon would read the newspapers, he would get that information without applying to me for it.
I suggest that the Deputy should not communicate to this House information which is not authoritative and which is only obtained from the newspapers.
Mr. Byrne
The new statesman, Deputy Dillon, has ways and means not open to the ordinary Deputy but we, here, must exercise common sense.
The "Evening Herald."
Mr. Byrne
I know that what I am stating now is correct and when a Deputy makes a statement in the House it is generally accepted. Whether Deputy Dillon accepts it or not is a matter of complete indifference to me. I am making the statement authoritatively. I know that the information I am giving is perfectly correct. This firm was working at a loss and when the time came to recoup the loss it was faced with this section of the Finance Bill. We are anxious to find employment for 80,000 persons. Is this the means to do so? Is pure, national sentiment to outweigh economic necessity? Is this section going to be supported by members of the House when they know that, instead of resulting in increased employment, it is going to result in increased unemployment? What action is the Labour Party going to take?
The Labour Party have been sent, here to look after the interests of the workers. Will they be protecting the interests of the workers of the country or of the City of Dublin if they vote for this section? It is all very well to talk about setting up nationals in industry. But if we are going to set up a network of industries, absolutely inefficient in working capacity and in productive capacity and in a thousand other ways, all the efforts of the new Government are merely waste of time. There can be no gain from such a national policy.
I know no country which would not welcome the advent of a firm of the importance of Messrs. Gallaher's. I know no country which, after it had invited a firm to come in and invest £250,000, would mete out to it the treatment which is being meted out under this Finance Bill. We have been told by the Minister for Industry and Commerce that employment will be found somewhere else for these 300 employees. Coming from the constituency in question, I want to tell the Minister that these people do not want employment found for them elsewhere. They want to retain their jobs and it is the duty of the Minister for Industry and Commerce to use all the influence that in him lies to see that these people are given a reasonable opportunity to retain the remunerative work they have now got. It is his duty to give this firm a reasonable chance of recouping the losses they have suffered. As the ex-Minister for Finance said, this is one of the most senseless and prejudicial sections ever introduced into a Bill by a Government whose policy is the strengthening of the industrial arm of the country. I have had experience of other countries and I have seen free sites offered, special railway facilities offered and special reduction in taxation offered to induce firms to invest capital in these countries. When we get a decent firm to come here and invest capital, this section is introduced, a section which can only result in closing the doors of the factory. The cardinal maxim—equality of taxation — applies to all measures of this kind. When any Government departs from that maxim and singles out certain firms to be dealt with in the drastic way that Gallaher's are being dealt with, there can be no justification of their action. I hope I am not beating the air. I hope we will hear from Deputy Norton or some other member of the Labour Party as to what action that Party proposes to take or whether they propose to allow the factory to be closed down and 300 hands to be permanently disemployed.
When this matter was previously discussed in the House I indicated that preference of this kind, which might result in the disemployment of workers, was a kind of preference which I approached without any enthusiasm, and I indicated that this legislation introduced a feature of taxation which, so far as I am concerned, was unprecedented, namely, that it purported to impose taxation by reference to an entirely new factor, the factor of time. It was provided in the Finance Bill that firms not in existence on the 1st day of April, 1922, were not to get any rebate, and that condition made it impossible, in my view, for, at least, one of the existing tobacco factories to get within the law and be entitled to the rebate for which it would qualify if the reference to time was deleted from the section. I object completely to the idea of imposing taxation on the basis of the date on which a factory was established. Of course Deputy Mulcahy's amendment is open to the same objection. It purports to establish a condition that on the 1st day of June, 1932, if the factory is in existence well and good, but if it is not, then the same penal effects are carried in the amendment if it is passed. One could hardly discuss Deputy Mulcahy's amendment without encroaching to some extent on the Minister's amendment. Since the question of Gallaher's was discussed in the House many things have happened and a good deal of water has flowed under the bridges. There has been a good deal of discussion, and I think every Deputy who actively concerned himself in an endeavour to bring about a situation that would permit Messrs. Gallaher's to remain open is probably in possession of more information to-day than he possessed on the last occasion. In his amendment the Minister proposes to remove from the Bill the requirement that business should have been carried on in the Saorstát, by proposing to delete "Saorstát Eireann," which is some slight advance, but which still carries, and so does Deputy Mulcahy's amendment carry, the objectionable feature that taxation has to be related to the date, the 1st day of April, 1922, in one case, and the 1st day of June, 1932, in the other case.
How would the amendment be in order if it was not on those lines?
In connection with these amendments I suggest to the Minister that all reference to dates ought to be deleted. I suggest that the 1st day of April, 1922, in his amendment ought to be deleted. If that were done it would then be possible for any manufacturer of tobacco in this country to carry on irrespective of the date upon which he was established here provided it is
"shown to the satisfaction of the Revenue Commissioners to be in the beneficial ownership of an individual who is an Irish-born resident or of individuals the majority of whom are Irish-born residents owning between them more than one half of the capital invested."
If the Minister in his reply is prepared to say that he is willing to delete "the 1st day of April, 1922," from the amendment a position will then be created that any firm within the country could qualify for the full rebate under that section. It is possible then for Gallaher's, which Deputy Byrne told us was an Irish firm, to so arrange matters that 51 per cent. of their capital could be held by Irish Free State nationals. If they were an Irish firm it would be possible to have that arrangement carried out. If so, the difficulty which has arisen in relation to that firm, and perhaps in relation to other firms, might be obviated. Before contributing any further to the discussion, I would like to hear the Minister's views about "the 1st day of April, 1922."
I was under the impression that the Minister's amendment was in the nature of a drafting amendment, and not the substantial amendment that Deputy Norton suggests.
I am prepared to consider the suggestion made by Deputy Norton in relation to the date. The date was put in, in the first instance, to safeguard the position. I have carefully considered what position would be created, and I agree with Deputy Norton that there would be some injustice in restricting the benefit of the rebate merely to Irish manufacturers established before "the 1st day of April, 1922." I am prepared favourably to consider his suggestion to delete the words "business was being carried on on the 1st day of April, 1922, and has been carried on continuously since that date." That would be the substance of an amendment which I feel that I could introduce on the Report Stage, and I think it would meet Deputy Norton's point.
Does the Minister suggest to delete the word "business" from the date in his own amendment?
Yes, and possibly "and".
Could the Minister say briefly, after the amendment is amended, what the position will be? Would any firm at present manufacturing tobacco in the Free State be entitled to the preferential rate of duty?
No, only where more than half of the nominal share capital is owned by Irish-born residents of the Free State.
How will that affect Wills and Players?
They would not be entitled to the rebate.
Would they be entitled to the rebate if they formed an Irish company, and if the business were transferred to a specially formed company which would comply with this condition?
If they bring themselves within the terms of the section they would qualify for the rebate. The other conditions, that the company should be managed and controlled here, and that the majority of the nominal value of the share capital should be held by Irish born residents, would still persist.
If all the tobacco manufacturers come in would that involve the Exchequer in a large amount? It might be enormous.
Before a company can so transform themselves other duties would have to be paid in respect to the share capital of the firms, and also stamp duties on transfers. In addition there would be the question of making a fresh issue of capital and the probability is that that would all take time and that in this particular year the Exchequer would not lose substantially by the amendment we have suggested.
Assuming that firms took the measures that would be open to them to take, and that would be, I think, relatively easy to take, the effect of what the Minister is now doing would be to enable all the manufacturing firms to come in under the extra 7d. rate.
If they bring themselves within the terms of the section, they will get the rebate, but they will not get it until they do so.
There have been two points of prime importance raised in this matter. Deputy Norton, rather late in the day, has come to realise that a discrimination which is founded on a particular date is bad.
I discovered it before the Deputy did.
But his Party yesterday voted in a division against an amendment which sought to cut out that same discrimination by way of time applied to the rebate of 20 per cent. on dividends derived from companies founded in the State after a certain date.
After the passing of the Act.
Yes, after the passing of the Act, this discrimination by way of date.
No.
Absolutely a discrimination by way of date, and yet the Deputy's Party supported that proposal so that it is not principle only that rules in this. These 300 people are going to be clamouring against the Deputy and they are going to stand as a sign of the Deputy's interest in the working class population. That is the big thing, but this particular thing is, of course, a little vague and in the air, and there are no concrete examples of hardship caused by it. It is not principle that rules with the Deputy at all, and his speech to-day was an attempt to found a case for these 300 people on a principle that was not adverted to yesterday, and it is a matter that should be adverted to and a matter that will have to be raised hereafter. Leave the date question aside, and the date question is one that has been accepted. Let the Minister not take any pride to himself that he is accepting it as a matter of principle either, but because these 300 people have moved Deputy Norton to show his power in this House. That is the beginning and end of it. Let there be no nonsense about principle from the Minister in what he is going to accept. The Minister shakes in his shoes with fear for his Government because Deputy Norton was also shaking in his shoes for fear of these 300 people.
Not at all.
The Deputy only thinks that. He only imagines it.
I indulge myself in these imaginings, but we can get the explaining of these imaginings later.
As the Deputy explained to the 300 people in Balbriggan in 1924.
We heard Deputy Curran explaining later, and I do not think the House was very much influenced by what the Deputy said. The second point made by the Minister was the point of financial sacrifice to the Exchequer, and we have down an amendment which we suggested was acceptable to him and following on a little bit of questioning on that, we come to the point that if the English companies, not Gallaher's——
Gallaher's is an English Company.
If the combine desires to subject itself to certain relatively very trifling expenditure in the way of the issuing of shares here, and one thing and another in the details of company formation, they are going to get the rebate so that the taxation then will be 7d. all round. It will take some time to do that, and it will not be accomplished this year, but let us say that next year we are at that point. We then come a little bit further because if, through stress of Government pressure and the amendment that has been proposed, the Imperial Company are forced to reconstitute their company, it is questionable how far they will not fall also for the 20 per cent. rebate under the previous section as being a new business.
The Deputy had better read the section.
Very good. We will consider it in relation to the amendment when we see the full effect of it, but I hint at that at the moment. At any rate, say that in a year the position is that they are all on a footing of 7d. The Minister cannot accept that this year, because it is going to lose him a couple of hundred thousand pounds. Let me omit for a moment that £200,000, as a mere flea bite to the people who said they could save £2,000,000, and let us take the £175,000 that is going to be lost. Is that going to be lost under the amendment, if the companies take the ordinary and obvious steps to qualify under the amendment, and if that is the position, what is the new situation then with regard to the Exchequer?
We have also to consider the third point. It has been fully explained here for the first time to-day from the Government Benches, although it was previously explained from the Opposition Benches, that this discrimination was rendered necessary, not by the circumstances in which the industry found itself, at any time, but by Government action. The Minister has, I think, by implication at any rate, admitted to-day that if there was no new tax on tobacco, there was going to be no hardship on the Irish firm which it is sought to safeguard. It was only when the Government came to the point of deciding that they had to impose extra taxation that it was seen that there was going to be a bad reaction on Irish firms. That is understandable. The Irish firm is in a peculiar position. It makes its business out of a particular type of pipe tobacco. Its main sales are in that type and there is the obvious business apprehension that, if the purchasing power of those who use tobacco is lessened, the people who want to use tobacco will have to go from a dearer type of tobacco to a cheaper type, which is the product of the combine and not of an Irish firm. But the reason why the Irish firm might find itself in difficulties is because the Government have reduced the purchasing power of smokers in the country by putting an extra tax on tobacco, and having done that, having decided to make this first blunder, they find that they have to safeguard the main Irish firm and to do that they have to get into this vicious position that Deputy Norton complains of, of having to make a discrimination pivoting around a date.
We will have to see this amendment when it appears in its proper form and get the full reactions of it realised, but even at this point we should get some indication from the Minister on the point that Deputy Dillon has so cogently put: What is going to be the sacrifice almost immediately to the Exchequer? Is it not going to be something very nearly identical with the £175,000 which the Minister said he would lose if the rebate were accepted all round? Supposing he does come to the point next year of discovering that the amendment in fact does mean the imposition of a 7d. tax all round and that the Ministry want the produce not of a 7d. tax all round but of a 1/2 tax all round, what is the new situation then going to be? Are they going to put on the 1/2 tax, because I understood from the Minister's statement to-day that it was clearly realised that the Irish firm was going to suffer?
I think this is the best possible example we could have of the effects of an ill-considered tax and of the results of the necessary amendments— necessary because of Deputy Norton— that are being put in upon the tax. Surely, before we come to consider it on Report Stage — and this is merely getting material for Report Stage— we should have some information from the Minister as to what he hopes to get from the tobacco business under this amendment, say, in the next six months or next year, and what is likely to be the position next year. Will it be that it is the equivalent of 7d. all, round if ordinary business people take ordinary business measures or that he will have to go further and look for 1/2 tax all round and what is going to be the effect next year of that tax on the main Irish firm?
Since the establishment of the Irish Free State, all the requirements of our people in the matter of tobacco have been supplied from within the country. The consumption of tobacco was, of course, increasing and, consequently, there was some development in the industry until last year when apparently saturation point was reached and the yield from tobacco duties showed some reduction. Deputy Byrne made a very interesting statement. He said that in 1930 Messrs. Gallaher were induced to come in here. Does Deputy McGilligan stand for that? Does Deputy Blythe stand for it?
What was the date?
The statement was that in 1930 or 1931 Messrs. Gallaher were invited and induced to establish a factory.
Mr. Byrne
I never used the word invited. I deny that. I did not use any date either.
Are any members of the Deputy's Party prepared to stand behind that statement? Apparently they are not.
The Minister need not take that as certain.
The Deputy is never certain about anything, of course.
What is the significance of Deputy Cosgrave's statement?
We are not answering any questions now. The Minister can make his speech and we can answer it afterwards if we like.
The position is that, under any circumstances, while existing duties remain in operation, our people's requirements of tobacco and cigarettes will be supplied within the country.
No.
So long as the duties remain in operation the import trade will be negligible.
That is more like it.
Home requirements will be met here. It is necessary to give some little consideration to the nature of the concerns established here, the amount of employment they give, the plant and equipment they instal and what new labour saving devices there may be. Some have been, I understand, invented lately.
Mr. Byrne
Would it not be the duty of any Government to endeavour to bring into the country any new industry which is likely to bring about national gain?
Do the Deputies on the Front Benches opposite accept the statements that were made by Deputy Byrne? Do they accept it that in 1931 all the requirements of the country were being supplied from within the country? In those circumstances why should a new foreign firm, not required from the point of view of output, be invited to come in?
Mr. Byrne
Gallaher's is not a foreign firm.
It is owned and controlled in England. The Chairman of the company is not even an Englishman; he is a Belgian.
Mr. Byrne
Does the Minister say that it is not an Irish firm?
I say the Chairman is a Belgian.
Mr. Byrne
It is a very funny Belgian name, anyhow.
Deputy McGilligan says that the alteration suggested in the amendment, which the Minister for Finance has undertaken to accept, has been introduced not by reason of a principle but by the clamouring of 300 people.
The clamouring of one man.
The Deputy said it was the clamouring of 300 people. I want to give Deputy McGilligan a little advice. I suggest the Deputy should go and talk to those people. He will find amongst them a better national outlook, a better appreciation of the necessity for legislation of this kind and a willingness to bear the consequences of any adverse effects that may follow——
Shock troops.
—from legislation of this kind than he will find amongst the members of his own Party. I met those people and had a talk with them. If the Deputies opposite will consult their Party managers in reference to the efforts made by those Party managers to make political capital out of this incident, and find out what were the results of those efforts, they will have better information upon that point. The principle behind this amendment arose out of the circumstances under which increased taxation was imposed. We decided that the Budgetary position necessitated increased tobacco duties. We were aware that an increase of the tobacco duty was going to have an adverse effect on Irish-owned firms, not because the purchasing power of consumers was to be reduced, but for the very reverse reason.
We anticipated no increase in price would follow because the industry here is dominated by one big foreign combine. Whatever price it sets the other firms have to follow. We anticipated that firm would not increase prices in consequence of increased duties. We anticipated that that firm would bear the increase out of profits which it could afford to do. The much smaller Irish-owned firms could not afford to do that and we decided a rebate should be given; the principle of differentiation should be introduced and, where an Irish-owned firm was concerned, the increase in the tobacco duty should be somewhat less than in the case of other firms. The date was a minor matter. The insertion of the date had very little to do with the principle; it has nothing, in fact, to do with it.
The principle in this as in other industries is that it is desirable, in so far as it is possible for the State to influence development, to influence it in favour of getting these industries into the control and under the ownership of our own people. In this industry we are starting rather late. Deputy Blythe will remember the circumstances under which the Imperial Tobacco Company came here. He will remember the representations made to him by the Irish tobacco firms in existence at the time. Many of them have disappeared since. He will remember the discussion between himself and his colleagues on the Provisional Government as to whether or not the Imperial Tobacco Company should be allowed to operate here. The decision to allow them to operate was arrived at in the full knowledge that their coming in was going to mean the disappearance of the old Irish firms. We were not going to repeat the tactics that were adopted then. We found the tobacco industry dominated by external companies. I have said here before and I repeat it now that there is no national danger to be anticipated by allowing foreign firms to engage in any industry or by allowing foreign capital to engage in any industry or enterprise, unless or until the foreign companies get to the position that they have dominated that industry. Then the position was one which nobody sincerely concerned in the prospects of industrial development here could regard with favour. We were not going to take any action which would have not merely the result of stereotyping that position but in addition increasing the stranglehold which foreigners had upon Irish industry and increasing the dangers to the survival of the Irish firms.
Would the Minister say how these foreign companies got the stranglehold?
Because they had very big capital resources; they had a very strong connection with the Irish market before the setting up of the Saorstát; because they were able to undertake large advertising schemes which the smaller Irish companies could not entertain and because they were able to give special bonuses and gifts to retailers.
That is the very point that I want the Minister to come to. That is the very thing which the Irish firms always did and which the foreign companies resented and exerted themselves in trying to stop.
At any rate it is always possible for a huge combine with millions of capital behind it in a country like this, to dominate the industry as against the smaller Irish-owned concerns. The position anyway for the future is that any firm in this country the shares of which are owned to the extent of 51 per cent. by Irish-born residents and which is managed and controlled in the Saorstát becomes entitled to this rebate. That applies with the amendment to existing Irish firms or to any new Irish firms which may be started. That situation is in line with our general policy in relation to industrial matters, and if as a result of this sub-section as amended, the factories now owned and controlled by foreign firms become owned and controlled by Irish-born residents then I think a distinct national advantage will have been registered.
The Minister has neglected to give the House the information that is in the office of the Ministry in connection with a firm which he states is a foreign combine. The Minister for Finance has been served with that information or at any rate the information of the Minister for Finance is this: that approximately £8,000,000 of Irish capital is invested in that foreign combine which the Minister has just stated dominates the tobacco industry in this country. The Minister knows that. And Irish shareholders draw exactly the equivalent in profits from that foreign combine in this country. The one question which was put to the tobacco manufacturers here in 1923, which was I believe the period when they asked for a three years' immunity from the activities of the Imperial Tobacco Company in this country, was what would they have to sell to the Imperial Tobacco Company when leaving the Government Buildings Offices with that guarantee in their pockets and they admitted that they would have more to sell than when they came in. And then the question was — who would buy it?
There happens to be in this country a very large number of consumers of tobacco and those are the people about whom neither the Labour Party nor the Government cares twopence. The Labour Party of course knows that it means the dismissal of 300 men in Gallahers' at the present moment. If the factory closes it is their votes and their presence here in the House and their policy that is doing it. It is all nonsense to say that the employees of Gallahers' firm are perfectly willing to be the shock troops in this great economic offensive which the Government is pursuing having more casualties than there are victories in the course of their Irish activities. The Minister for Industry and Commerce or the Minister for Finance knows what profits were distributed to the Irish shareholders of the Imperial Tobacco combine. I want to know whether it is a matter of any significance to them that the large sum of Irish money invested there should not get at least the consideration which possibly a quarter of that sum is getting in connection with this particular measure.
Twelve months ago when we wanted a sum of £350,000, we considered whether we would put a duty on tobacco. It seemed a sort of revenue which might be easily procured but we were informed that the result of the imposition of that tax would be such that the effect on the smaller Irish-owned firms would be practically enough to close them and so we put the tax on sugar. As a result of that tax, in Kildare the Minister's Party won a seat. Now the Government have got into the difficult situation in which they find themselves at the present moment, and all their talk and all their explanations will not get away from the fact that this was a bad tax. It is a tax imposed on an industry in face of a reduction in the revenue from it last year of £13,000. The Government should have seen that the tax on tobacco had reached the saturation point. Has the Minister inquired to know what is the amount of the tax in the case of 1/- spent on a packet of cigarettes? Apparently not: the Government act first and find out from an examination afterwards, as the Minister has already admitted here.
I have listened to the observations of the Minister for Industry and Commerce. I am fully aware of the sources of information he has at his disposal when considering the putting on of a tax. It is therefore a matter of great concern to this House that the Minister should inform us that he was influenced in his revolutionary procedure in the matter of taxation by the information that foreign tobacco combines, and he especially referred to the Imperial Tobacco Company, were in the habit of offering superior bonuses and gifts to the distributors who handled their products.
I did not say that. A Deputy asked me why it was that the foreign combine was able to do these things in the matter of securing trade and I mentioned that was one of the things they could do.
The relation is to this discussion.
I said it could be done; I did not say it was done.
The Minister said that a stranglehold was secured in the matter of this industry by foreign firms and that it was to grapple with that situation and to protect Irish firms he was acting. I asked would the Minister say what enabled these foreign firms to get the business and he said they had great resources, great schemes of advertising; they had a far larger capital and that they had made a practice of giving superior bonuses and inducements to the tobacco distributors. Now if that slipped from the Minister and if it was not his intention to say it, I have not the slightest desire to nail him to it. All I can say is this, that from my own experience of the tobacco trade, extending over years with Irish firms and with branches of the Imperial Tobacco Company, that the statement made by the Minister—the information he has given the House in that matter is not true. I say that if Irish tobacco manufacturers made the representation to the Minister that they were being harassed by the Imperial Tobacco Company inasmuch as the Imperial Tobacco Company were giving bonuses or inducements to the retailers, then I have to say that the persons who brought that information to the Minister were deceiving him.
They were not.
I ask the Minister to go further and make inquiries and I in confidence will impart to the Minister information on that matter if he cares to consult me.
The Deputy knows from controversy in the Press that it has been on occasion the practice of the Imperial Tobacco Company to object to shopkeepers displaying in their windows the gifts or the goods of the Irish manufacturers of tobacco and the ex-Minister for Industry and Commerce referred to the matter in this House.
It has been the habit of the Imperial Tobacco Company to have made a bonus agreement with distributors and in this agreement it is set out that no undue preference was to be extended to another firm in the same line of business and that in such circumstances they would withdraw the bonus from these retailers. They took up the position that the display of gifts involved in the gift scheme which this preference is designed to finance would be regarded by them as an unfair discrimination against their merchandise. They also attached conditions in the agreement that some display will be made of their merchandise and that proviso extends to everyone. But if the suggestion was made to the Minister that the Imperial Tobacco Company sought to compete by offering superior advantages, then that information is false to the best of my knowledge and belief. I think it is a very grave thing that the Minister should allow himself to be influenced by such a consideration, if he has so allowed himself to be influenced. I have already expressed my views on this principle of discriminatory taxation and I need not repeat them now. I detest the whole principle of discriminatory taxation. I do urge the Minister to inquire strongly into that information that he says was conveyed to him, and to call to grave account whoever came to him and deliberately deceived him. I would remind the Minister when he speaks of the impossibility of the comparatively smaller factories standing up against the Imperial Tobacco Company, that there are factories here at present that are run in such a way that they have not only held their own against the competition of the foreign combine but they are actually beating them in their own field.
Gallaher's beat them.
There are other firms who to my knowledge, without any preference, met the Imperial Tobacco Company on their own grounds and beat them and are beating them. My experience of business leads me to believe that the very fact that it could be spread about that the Government are helping and subsidising them will be an injury to these competent business men rather than an assistance. I know that certain Irish tobacco factories were going down, were being squeezed out, and I know why. I will tell the Minister why, but I do not think it is expedient to go into a business question in a public debate. I know another factory which had the same difficulties and took steps to overcome these difficulties. Men were sent round to say to people: "Let us know what your trade is and we will put in machinery if necessary in order to produce what will suit your trade; we do not want you to take what we want to sell but to provide what you want to buy," and that firm took away hundreds of pounds worth of business every year from the Imperial Tobacco Company simply because they took up that position. Other firms were prepared to follow on these lines. I am not going to discuss that aspect of the case, as I do not think it would serve any useful purpose to decry Irish firms in public. I will be very glad, however, to give the information to the Minister. He would be surprised if he went into the every-day working of that factory, so far as distribution is concerned, to see how an efficient factory was able to face the Imperial Tobacco Company and take business away and how inefficient ones, whether he gives 7d. 1/2 or 1/9 to them, will be dragging the devil by the tail.
I think the position now is that the Government have offered a way out to firms that will reconstruct or form an Irish company and bring themselves within the conditions laid down here. They are doing something in that that they are not proposing to do in the Control of Manufactures Bill, because that Bill is going to allow a firm which is already in existence to carry on the same business without suffering any penalty or being molested in any way. What is being done in the case of the tobacco people is that they are forced to pay certain charges; they are forced to reconstruct the company or form a new company or else they are going to be penalised to the extent of 7d. in the £. In any case, I gather from the Minister that his reason for preferring his own proposal to the proposal in Deputy Mulcahy's amendment is that he wants £175,000 this year from them anyway. I think that the Minister cannot justify for the sake of getting £175,000, an attack on firms that came in and opened business legally and without any discouragement being offered to them at the time they did so. There are things that a Government might well do, and do without being subjected to any criticism, for the purpose of balancing the Budget. There are other things which they are not entitled to do to balance the Budget. What the Minister is proposing to do in this section is scarcely less discreditable to the State than to say, "We do not propose to pay the interest on the National Loan because we cannot afford it." The Minister has relied on nothing more than that he cannot afford £175,000. The £175,000, if it is necessary to get it, could be got in other ways and it ought to be got in some way that is not discreditable to the State.
The Minister has not attempted to deny so far, at any rate, that to penalise a couple of individual firms by legislation drafted to impose burdens on them that are not imposed on others is something discreditable to the Government and Parliament and is going to shake confidence and do a continuing injury to the State. When the Minister has gone so far that he has accepted an amendment which is likely to lose him this £175,000 in a few years and that will probably lose him a good proportion of it this year, he ought to make up his mind to avoid doing the thing that this section does — adopting the course of allowing firms to come in and invest capital, start business on equal terms with other firms and then put a penal taxation on them. That is a wholly discreditable thing. One may object on grounds of policy to things that the Government have been doing. This is objectionable on the ground of principle. Deputies on the Government Benches talk a great deal about standing on principle and the honour and credit of the State and disregarding the immediate financial results of some of their actions. That could be applied with a great deal more force to this than to many of the things to which they applied it. Here for the sake of £175,000 this year the Government are deliberately setting out on an unjust course and a course which is going to shake business confidence, not merely amongst foreign firms, but home firms. If a thing so discreditable and shady as this can be done, nobody can feel confidence that some sort of shocking discrimination is not going to be applied to themselves in future. It is just a shade better than repudiating the National Loan. It is the kind of thing that no firm ought to fear that the State would do. The State ought to take such a line that people will know there are certain things to which there is no danger of their being subjected. They should know, if they are to be subjected to heavier imposts, that they are to be subjected to them in common with neighbours and competitors and that they are not going to be specially picked out for imposts which will not fall upon others. The fear of actual and deliberate injustice from the State ought not to be present in the mind of any man in business. To create that fear is something that certainly means that the future development of the country will suffer.
The Minister for Industry and Commerce talked a terrible lot of rubbish about the stranglehold on this industry and the great national advance that was going to be registered as a result of what was being done in the Budget. Does it matter twopence from the national point of view whether or not this industry is mainly in the hands of foreign firms? It is not a basic industry in any sense. It is a very minor type of industry, though it employs a large number of hands. It does not affect the general economic position of the country and it is not capable of developing a big export trade. That is quite impossible. It is one of the industries in which it is really a matter of indifference whether the main firms are foreign or home firms. To try and put some sort of a patriotic halo around this act of injustice is entirely ridiculous. It is more ridiculous than many of the things which the Minister for Industry and Commerce indulges in along these lines.
The Imperial Tobacco Company was allowed to come in. The Government of the day refused to consider any proposals to protect the firms here because many of them were not so competently conducted as to have any claim to be allowed the monopoly of the market or to be given special opportunities to survive. The good firms have been able to survive and we were always anxious that they should be enabled to survive and progress. It would be possible for the Minister to get his 7d. and allow these good firms to survive and progress. It would be desirable certainly not to do this thing that never has been done in our legislation before for the sake of the difficulty of finding a sum which may be about £100,000 or £120,000.
Certain questions were asked which have not yet been answered about taxation and the effects of the amendment. I wish to put these questions again and I should like to debate one or two of the points that have been raised by way of answer to these. In addition to what the Deputy who last spoke has described as the rubbish enunciated by the Minister for Industry and Commerce in this matter, there was one startling blunder made by him in that respect to which Deputy Dillon has already called attention. In relation to this tax the Minister for Industry and Commerce spoke of the bonuses, the remissions and the rebates that foreign firms give over and above what the native firms give and indicated that as one of the matters which in his opinion enabled the foreign firm to establish its stranglehold on Irish industry. When he was questioned on the matter by Deputy Dillon he at first seemed to deny that the point had been raised as a relevant one on this tobacco business but later he showed that he had still somewhere in his consciousness the thought that it was a point to be made as he alluded to a certain debate that had arisen here some time ago in which I had to reply on action that was being taken by the Imperial combine against the Irish firm. A little consideration would have shown exactly what conclusion had to be drawn from that debate. The debate arose over this: that the combine was threatening to withdraw their bonuses from people who gave a particular display.
Is the Deputy in order in discussing what happened two years ago?
The point was raised in answer here. It was debated by Deputy Dillon and was replied to by the Minister for Industry and Commerce in interjection and was further debated by Deputy Dillon.
Does the Deputy propose to waste the time of the House in discussing it further?
It has got to do with the amendment because we are told the whole object of this is to prevent a stranglehold on Irish industry. One of the ways in which that stranglehold could be effected on Irish industry was by remissions of rebates. The only concrete instance mentioned of how the stranglehold was alleged to have operated was these displays and gifts. The argument was that these bonuses given by the foreign firm were going to be withdrawn if a certain advertisement and a certain scheme on the part of the main Irish firm was given any prominence in the windows. What was the scheme? A remission scheme or bonus scheme by way of gifts which the foreign firm considered an unfair advantage that the native firm was getting over it. I feel sure that the native firm has been driven to make other rebates other than those given through gifts.
The Minister for Industry and Commerce asked me to visit the workers in Gallaher's factory. I have asked him to visit them and to make to them the points he made here previously. The only comfort he could offer them was that there were going to be some casualties—probably they will be amongst the first casualties. He was not going to turn away from the course he was pursuing because certain people fell by the wayside. At that time the Minister did say or did make one point which he has rather denied to-day. He said that they had been asked the reason for this differential tariff and that they were told that the reason was that they wished to give preference to Irish manufacturers. That, he said, was not the reason. To-day the whole tenor of his speech was that the reason of the differential tariff was to give a preference to Irish manufacturers, although he previously said that was not so.
He had also previously said that the Government had done everything possible to try to keep the possible adverse reactions of the increase of duty down to the smallest possible dimensions, and that he thought they had succeeded in doing that. I would like some indication of what that means. Whatever the number of workers is — the number has been variously estimated — if all that number is going to be put out of employment, I do not see how it can be said that the adverse reactions of the duty have been kept down to the smallest possible dimensions. Further, on that occasion, the Minister for Industry and Commerce said that he was satisfied that if the firm desired they could find means of continuing their existence here, and he was not satisfied that it was the difference which had been effected in the rate of duty which had caused them to close down. He said further — and this is the point to which I want to draw the attention of the Minister for Finance — that the case they were making with regard to closing down was largely a case based upon the increase in the duty, an increase which they were not prepared to pass on to the customer, and not a case based upon the differential rate of duty. So, according to the Minister for Industry and Commerce on that occasion the reason that the firm of Gallaher was going to close down was not because of the differential, but because of the increase in the duty which they were not prepared to pass on, and therefore would have to bear themselves.
What is the new situation? We are going to have an increase, although not 1/2d. but an increase in duty certainly put on the tobacco manufacturers in this country. Is it going to be passed on? Presumably not. If the Imperial Tobacco Company fancied themselves strong enough not to pass on the heavier duty of 1/2d. they surely are going to consider it within their powers to withstand the 7d. duty without passing it on. Suppose there is a 7d. duty on as a result of all the chopping and changing, a new 7d. duty imposed on all tobacco manufacturers in the Free State, and supposing that is not passed on to the consumer, what is going to be hereafter the situation as between the main Irish firm, between Gallaher's and between the Imperial combine? Is the Minister satisfied that that figure of 7d. duty all round is not going to have as bad an effect on the main Irish firm as the imposition of the 1/2d. threatens to have upon Gallaher's? We have got to get back to the foundation of all this, that the tobacco firms were all getting good business as they said in pre-Budget times and the main Irish firm wanted no differential taxation prior to this Budget. They were prepared to carry on, prepared to hold their own and satisfied that they could hold their own. The new situation is that they are going to have 7d. extra put upon them. Is the Minister satisfied that the main Irish firm is not going to suffer very definitely from that and will the new situation not be worse than the present if the inclination on the part of the main Irish firm be to give up some part of their industry in the struggle, and to dismiss certain employees? I think it is realised, quite clearly, by the Minister that the old situation was satisfactory to the Irish producers as well as to the nonnative producers. Though the Irish producer was under a handicap, and felt the intolerance of whatever stranglehold that might be operating or not operating he was not merely holding his own but increasing his trade in a very imposing way. The new situation is not that. It is one in which there is at least going to be 7d. upon everybody although there may be some differentiation against some of the others. Are some of the competitors of the main Irish producers to be under the 7d. rate? What will be the situation then? Are we then to be faced with another proposal, that now that we have seen this increased taxation work out to the disadvantage of the Irish firms there must be some other concession, and we may have to go back to discrimination again though going away from it at this point?
I spoke previously of an Irish firm here, and, definitely, it was that Irish firm's contention that the increased tobacco taxation would mean that there would be a tendency to drift away from good tobacco which the Irish firms manufactured to a cheaper kind. Is the idea that the tendency would be to drift away from the goods of the Irish firms to those of the nonnative firms? That is denied by the Minister, because he is clear that there will be no reduction because the tax is not going to be passed on. But the purchasing power of the consumer has been reduced otherwise than by the imposition of the tobacco tax. It is reduced owing to the enormous taxes since the time the Budget appeared and that purchasing power has lessened and lessened very considerably. At any rate the contention was advanced that as the purchasing power of the consumer waned the drift would be away from Irish manufacture to the foreign and cheaper article. That situation is going on here already even if there was no tobacco duty, and that drift is going to increase because of the increased tax on tobacco. I asked earlier, and would press again, for information as to what is the financial sacrifice involved if all or most of the tobacco manufacturers decided to qualify for the 7d. rebate, if they decided to operate their Irish companies on a footing within the terms of sub-section (3) of Section 18, as presumably it will be if amendment 40 is included. What is the financial sacrifice that would be involved? It is only then that we could get a proper idea as to whether or not the 7d. ought to be put on. I think it is clear from the Minister's admission that the only way out of the difficulty, if he wants to avoid doing a discreditable thing, and to avoid hitting Irish industry, is the complete abolition of this new tobacco duty — the remission not merely of the 1/2 duty on those having a differential duty imposed against them but the whole lot. An estimate, I think, at any rate, could be given, and we could relate that with what other means there may be of getting it, or what other means there may be of saving the money that would be lost if this tax is not put on.
The last point I asked information on is this — I am not so sure that it is under the Minister's control that the estimate could be given — but there are in the main three companies concerned in this whole business. One of these I have called the main Irish producing firm, the other is the firm of Gallaher's and the other is the Imperial Tobacco Company. Is it possible to get any comparative figures as to the amount of Saorstát capital involved in these three firms? I do not know if a very detailed estimate could be given, but I think nobody will deny that there is much more Saorstát owned capital in the Imperial Tobacco Company than there is in the other two companies combined. If that is so, I wonder what is the point of the discriminatory taxation as it was previously intended.
I shall now put amendment No. 40, standing in the name of the Minister for Finance.
There is the further suggestion that amendment 40 be amended. It could then be put in proper form.
It can be brought up again on Report.
Can we have the proposed amendment to this amendment circulated very early?
Yes.
Question put and agreed to.
Amendments 39, 41 and 42 not moved.
Question: "That Section 18, as amended, stand part of the Bill"— put and agreed to.
Section 19 agreed to.
SECTION 20.
(1) In addition to any other duty which may be chargeable, there shall be charged, levied, and paid on every package imported into Saorstát Eireann on or after the 12th day of May, 1932, which contains any substance to which this section applies —
(a) if such substance is prescribed in the official import lists to be entered on importation by weight and the weight of the package is under seven pounds, a duty of customs at the following rates, that is to say:—
(i) if the weight of the package does not exceed two pounds — twopence, and
(ii) in any other case, one penny on every pound or fraction of a pound of the weight of the package; or
(b) if such substance is prescribed in the official import lists to be entered on importation by measure, a duty of customs at the following rates, that is to say:—
(i) if the content of the package does not exceed two pints — twopence, and
(ii) in any other case, one penny on every pint or fraction of a pint of the content of the package.
(2) Where a package, which but for this sub-section, would be chargeable with the duty imposed by this section contains any packages chargeable with the said duty, then, if the said duty is charged and paid on all the last-mentioned packages, the said duty shall not be charged on the first-mentioned package.
(3) The duty imposed by this section shall not be charged or levied on any package which contains only a bona fide trade sample of any commodity and is consigned in the ordinary course of trade to a trader in such commodity and is not for sale.
(4) Whenever the Minister for Finance is satisfied, on representations made to him by the Minister for Industry and Commerce, that a person bona fide intends to establish in Saorstát Eireann equipment and facilities for packing in Saorstát Eireann any substance to which this section applies, the Minister for Finance may by order authorise the Minister for Industry and Commerce to issue, at his discretion, to such person a licence to import, at any time or times before such date (not being later than the 12th day of November, 1932) as the last-mentioned Minister shall think proper to specify in such licence, packages containing such substance either, as the said last-mentioned Minister shall think proper, without limit or limited in all or any of the following ways, that is to say, to a specified number of packages, to packages of a specified class, or to packages of a specified size.
(5) The Revenue Commissioners shall admit without payment of the duty imposed by this section all packages imported under and in accordance with a licence issued by the Minister for Industry and Commerce under the next preceding sub-section of this section.
(6) Section 25 of the Finance Act, 1924 (No. 27 of 1924), shall not apply to the duty imposed by this section and accordingly the minimum charge imposed by the said Section 25 shall not be chargeable in respect of the said duty.
(7) This section applies to the following substances, that is to say:—
(a) all foods (whether for consumption by human beings, animals, or birds) not excluded by the next following sub-section of this section; and
(b) all drinks not excluded by the next following sub-section of this section, and
(c) cosmetics: and
(d) medicinal preparations not excluded by the next following sub-section of this section; and
(e) seeds of fruits, vegetables, or flowers.
(8) This section does not apply to the following substances, that is to say:—
(a) fresh fruit, or
(b) fruit, fish, fish paste, meat, or meat paste in sealed bottles, jars, tins, or cans, or
(c) fresh fish imported before the 12th day of November, 1932, or
(d) natural mineral waters, or
(e) serums, vaccines, or preparations in ampoules.
(9) In this section the word "package" means any bottle, box, carton, envelope, wrapper, or other container of any kind whatsoever, and references to the weight of a package shall be construed as referring to the total weight of the package and everything contained therein.
I move amendments 43 and 45:
43. In sub-section (1) (a), line 56, after the word "is" to insert the words "over two ounces and."
45. In sub-section (1) (b), after the word "measure," line 2, to insert the words "and the content of the package exceeds one quarter of a pint."
What I really want to put to the Minister is that there are certain very small packages coming in here, and I think it would be a hardship, and unnecessary to have 2d. packages taxed, such, for example, as Oxo cubes. I understand that none of the amendments of the Minister would exempt them. There are other cases like this. Certain cheese is brought into the country wrapped up in small triangles. I think it would be absurd and a hardship to have a charge of 2d. upon a small triangular piece of cheese that might not be an ounce in weight. It is with the object of exempting certain small packages of very inconsiderable value which could not be well packed up here that I move these amendments.
With regard to the small wrappings, rather than packets or something bound up ready to give away, that might be so, but in the case of Oxo cubes they would be covered by the terms of amendment 47.
With regard to the question of cheese, that has been given a great deal of consideration and I have not yet been able to find a way to meet it. I could not possibly accept the amendment in the terms which the Deputy proposes because it would mean that a very large number of things would escape duty altogether—such as cosmetics.
Would the Minister consider the question of exempting, by some specific amendment, this and one or two others like it, because I think it is an excessive charge?
I will consider that.
What about shot-gun cartridges?
They are not packages.
Amendments, by leave, withdrawn.
I move amendment 44:
In sub-section (1) (b), page 17, line 2, after the word "measure" to insert the words "and the content of the package is under six pints."
This is merely a drafting amendment. In this case, the amendment actually appeared in the copy of the report of the Ceann Comhairle but the words were omitted from the text of the Bill circulated.
Amendment agreed to.
I move amendment 46:
To delete sub-section (4).
I do not want to take up very much time but I think it is an undesirable thing to carry out this business of giving licences and exemptions to individual firms by the order of the Minister to the extent to which it is proposed to be carried. It may cause some temporary inconvenience to a firm to be taxed if it is going to start packing here, but I think it is better that that should be borne than that we should carry this discriminatory principle to the lengths it is proposed to carry it.
I think that the Deputy has not fully appreciated the point. The position is that certain firms — and we have already indicated that this will result because of the effect of the tax — are prepared to come in here and pack their goods for the public and instal machinery and probably give extensive employment. In order that the community may reap the full benefit of that, it is essential that these firms should maintain their present trade. It will take a very considerable time probably before they can get the machinery installed, and we have either to put them in the position that they will have to pay the tax to prevent it being put on the public or else lose their trade altogether and their competitors have the full advantage of this.
Are these Saorstát competitors?
Well some other people possibly, if not Saorstát competitors. Some other people might find some alternative.
A Saorstát alternative?
Not necessarily. People might give up using Oxo cubes or Bovril altogether and use some other substitute and nobody would know whether it was a Saorstát competitor or somebody outside that would reap the benefit of that. The reason we are asking for powers to give a licence is that if these people are allowed to come in here — and they will only be allowed to come in if there is no suitable Saorstát alternative — if they are going to provide employment within the Saorstát then they would be put in this position either to have to spend a considerable sum in paying the tax and maintaining their trade or come in here and find that their existing custom had altogether disappeared. One of the main purposes of the package tax would be defeated.
It is only on an occasion like this, when the Minister is off his guard, that you can get some appreciation of his economic principles. He says these people will either have to pay the tax themselves — and I gather that that was not before his mind — or else that they will have to pass it on to the consumer. If anybody had been incautions enough to make an insinuation that a tax was likely to be passed on to the consumer, when previous taxation was being discussed, we would be told that it was almost un-national. Take the case of boots and shoes. All these taxes are being borne by the people on the other side. Another example was Oxo or Bovril cubes. He suggests that the people might lose the taste for Bovril or Oxo cubes. What are they made for? Where does the meat from which it is an extract come from? Is it Irish or Argentine stuff? Is there any possibility of getting an Irish substitute? If so, and if there were a tax put on them, and anyone complained, we would be told immediately that these things would be manufactured here — home produce — the home article — all the way. The other arguments to my mind are equally weak and bad on this matter. The Minister wants to be empowered to grant licences. He says it will take people a certain time to get the machinery going, and in the meantime you are going to have people drifting over to something else or stopping the use of the article altogether. If they are anxious about their trade what better lever can you get in order to get them to come in than by telling them that they will be up against this tax before the period in which they can get the machinery established? The argument is weak anyway, but in relation to the particular matter we are discussing it is very weak. We are arguing against a particular, invidious type of control being left to two Ministers. It is not the Revenue Commissioners, as might appear from a casual reading of the amendment, who are to decide anything. It is two Ministers. They are going to be satisfied about certain things, and then the Revenue Commissioners may by licence authorise these things to be done.
I move to report progress.
Progress reported.
The Dáil adjourned at 2 p.m. until 3 p.m. Tuesday, 5th July.