I did not understand what the Minister said when running through the Resolutions. It is clear, however, that there is going to be a duty of ½d. per lb. charged on all bread, which includes certain other things, brought into the Free State after 27th October of this year. This, in the main, affects the cross-land frontier trade. It is going to affect Donegal and County Louth. It is going, possibly, to affect the town of Letterkenny, as a distributing centre, and Dundalk more than any other two places in the country. The Minister, however, went on to say, as far as I understood him, that Section 2 was included because, up to date, the situation had not very much changed for the better from what it was in the summer time with regard to the baking of bread in Donegal. I wonder has it changed at all for the better as far as Louth is concerned?
Financial Resolutions. - Resolution No. 5.
Yes.
At any rate, there is going to be permission given to the Minister for Finance, in consultation with the Minister for Industry and Commerce, to authorise or to license people to import articles chargeable with the duty without limit as to time or quantity, and that provision was explained as due to the fact that the situation was not satisfactory so far as Donegal was concerned. I wonder could we get that in a more precise way. What was the value of the bread, including these other things, imported into Donegal across the land frontier for two years past, or the first six months, or any period at all comparable, in 1930 and 1931, and what has been imported over a comparable number of months in 1932, so that we can get some idea how far the situation is better from the angle of getting Donegal people supplied with home-baked or Donegal-baked bread rather than the imported stuff? There was a promise of more than one bakery in Donegal if certain things were done. I want to find out how far they have fructified and where we are with regard to what passed across the frontier and what will pass hereafter subject to the duty.
There are no separate figures available which would show the importation into Donegal. The total importations last year were valued at £225,000 and the amount of that which went into Donegal, so far as we have been able to discover, is substantially less than one would assume to be the case on the population of that county and the population of the other counties into which bread was sent; mainly, we deduce, for the reason that a much larger amount of the bread consumed in Donegal is home-made bread than elsewhere. The position as far as Louth is concerned is that there are some excellent bakeries, in fact bakeries in sufficient number and of sufficient size to supply not merely the requirements of the County Louth, but also the requirements of neighbouring counties. I do not think there need be any doubt as to the ability of these bakeries to supply the needs of that part of the country. One bakery has such a reputation for a certain class of bread that it gets orders from the City of Dublin in competition with the Dublin bakers.
As far as Louth, Monaghan, Cavan, Sligo, Roscommon and Longford are concerned, they have an adequate supply of bread from the existing bakeries. The Belfast bread has been going into all these districts. As far as Donegal is concerned, the position is definitely unsatisfactory. I had hoped that those engaged in the bakery business in Donegal would have shown a little more enterprise in preparing themselves for the period when this duty would be imposed, as the intention to impose it was definitely announced. It is difficult to know what precisely is the position there. Conflicting statements have been made. Clearly, the existing bakeries could not supply half the ordinary requirements of the county. Of course, developments will take place. There is a new bakery being established in the northern end of the county and certain proposals in respect of another bakery are in my Department. From personal conversation with persons engaged in the business there I know the intention is to extend or to establish bakeries in other districts in the county. Of course that will take some time. In the meantime it will be necessary to ensure that a supply of bread will go into the county. That supply comes at present from Belfast.
Into Donegal?
Yes.
But they get a lot from Derry; in fact, most of it comes from Derry.
A big lot of it comes from Belfast. Personally, I can see no reason why it should not be possible to send bread to Donegal from other Saorstát counties by rail, just as it can be sent from Belfast to Donegal by rail. That is a matter which will have to be examined in more detail. The position will be that for the present we will permit into Donegal whatever quantity of bread is required, and we will reduce or stop that supply only when we are satisfied that the bakeries within the county or other bakeries in neighbouring counties can meet the needs of the people. The imposition will confer substantial benefits on the bakers in the other parts of the northern counties who have suffered by reason of assisted competition from the Six County bakeries, and it will help to increase employment substantially in the industry. We hope that the position in Donegal will rectify itself in a short time. The matter will have to come up for review in the event of that not taking place.
I would like, on a special item like this, to get some of these theories tested. I know the situation with regard to Louth is very much as has been described. I know there is in County Louth a number of excellent bakeries, as far as one can judge. Yet these people found themselves for a long time subject to a competition from Belfast bakeries that they could not stand up against. They were being undersold. The Minister stated that there was unfair competition and, to some extent, assisted competition.
I did not use the words "unfair competition."
Well, the words "assisted competition" came in. What is the allegation this time? Is it cheap Belfast labour? We would, of course, expect to hear about cheap Japanese labour and cheap Madeira labour. Is it cheap Belfast labour this time, or is it that the railway system is so much better managed so far as the Six County part is concerned that freights can be reduced so that bread from Belfast can be sold in County Louth at a rate less than at which the bread manufactured in County Louth itself can be retailed? We have what would appear to be excellent bakers in the county, and they advertise; they do not find themselves limited, in the way of capital. They have been in business for a long time and are provided with good machinery and a fairly good system of distribution. Yet these people have found themselves undersold in their own county by Belfast bakers.
The situation in Donegal is a different matter. There has not been a great deal of manufacturing there and, in the main, Donegal used to be supplied from Derry. Belfast bread came into Donegal against the competition from Derry. I had not thought the Belfast competition was so successful that it could now be said that the main bulk of the Donegal requirements were coming from Belfast, and not from the city of Derry. It used not be so. There must have been some examination of this matter before the Minister decided on a tariff. What is the situation? What is the explanation of the peculiar situation in Louth which has forced the Minister to come to the aid of these people? What is the nature of the assisted competition?
Special assistance in the matter of railway freights. Special facilities are given to Belfast bakers, as a result of arrangements come to with the railway company, to import bread into the Twenty-Six Counties at special rates. Special fast services are also supplied. That is an ordinary business arrangement. The main reason why the Belfast bakers have been able to compete so successfully in the Twenty-Six Counties is because of the fact that night baking is permitted in bakeries in Belfast. The trade unions will not allow night baking in bakeries here, and I think there is an International Convention at present going round having in view the abolition of night baking altogether.
That International Convention is not very well signed.
I know, but there is a volume of international opinion in favour of abolishing night baking. The fact is that night baking is permitted in Belfast, and it makes a substantial difference in the cost of production of bread. The Prices Tribunal which operated some years ago stated that it represented the difference of ½d. in the 4 lb. loaf. That difference has enabled the Belfast bakers to compete in the Twenty-Six Counties against the Twenty-Six County bakers. I am not at all sure that there may not be other reasons. It is quite possible that the organisation of the Belfast bakeries and the size of their operations have also enabled them to reduce costs and to compete with the bakeries existing here. There is and always has been some doubt as to whether the price which prevailed for bread in the Twenty-Six Counties was as low as it might be. The Food Prices Tribunal gave that matter very careful attention, and reported that in a number of districts the price of bread was higher than the price of the materials and labour appeared to justify.
However, the position is that no increase in the price of bread is anticipated or should take place, and there can be no question of the adequacy of the bakeries in the particular counties to meet the requirements of the people. If there is an increase in the price of bread or a failure to effect a reduction when a reduction is due to take place, we would have to reconsider the position in respect of this duty if it were not possible to take action under other legislation which may be enacted.
I would like an assurance from the Minister that in case there is a new bakery established in Donegal immediate assistance will be given by way of licence in regard to flour supplies. I take it that the men who will indulge in this venture will be new to the flour trade, and any handicap in that direction would tend to embarrass them. If they were assured of a licence in respect of flour supplies it would be a source of encouragement to them.
Quite definitely the flour situation will have to be taken into account. As regards the volume of flour, the requirements of our people are calculated by taking the output of the Irish mills and the volume of flour imported. There has to be added the flour content of the bread imported and, consequently, the amount of flour to be imported to assist the production of the Irish mills will have to be increased by an amount equivalent to the flour content of the bread now excluded. In the event of bread being produced in Donegal in lieu of being imported it will be necessary to permit into Donegal the volume of flour represented by the volume of bread excluded.
Yes, but do I take it to be the case that immediately the Minister will take active steps to give the utmost facilities for the import of flour for the purpose?
Of course I cannot give an assurance like that for a place about which I do not know anything, but you may assume that no difficulties will be created for those engaged in the trade there.
I hope the Minister does not intend the House to understand that all the bread in the Free State was made in the County Louth.
Some of it.
This question has arisen more or less as a corollary to the milling scheme.
Quite.
That, apparently, has been lost sight of. It was on the advice of the bakers concerned that this tariff on bread coming across the Border was put on. It will be understood that the quality of bread in the Saorstát will decline in proportion to the extent that we cannot buy the more high-class patent flours. It was felt that the Belfast bakers, being able to buy their flour in an unrestricted market, where they would be able to pick the world's wheat, would be able to undersell in competition with the Saorstát bakers. I think that was the problem as far as Louth and the eastern counties are concerned. The same things applies to Donegal. The Minister has given the matter a very sympathetic hearing, and the trade agrees, on the whole, with the action the Minister has taken in the matter. I quite understand that in the event of any baking industry being started in Donegal that the necessary facilities and the necessary licences will be given.
Yes.
I would like to ask the Minister in regard to Donegal whether he has given any consideration as to the method in which he will permit the imports of bread pending the establishment of adequate baking facilities? Will he issue licences to Hughes' and English's and other outside bread manufacturers or will the individual purchasers in Donegal get licences? Will he see that no undue hardship is suffered by any man who is in the bread distributing trade as a result of these restrictions? Will he see that neither Hughes' nor other outside bakers will be able to use their powers of allocation of bread to bring pressure on any particular distributor, and will he see that the distributors in Donegal will be protected in the interregnum between the imposition of this tariff and the setting up of adequate plants in Donegal for producing the necessary supplies of bread?
The Deputy may assume that that will be done. I could not give him details as to the manner in which the licences will be worked. Generally it will be to permit those who have imported to continue to import bread either in the same quantity or in diminishing quantities.
The Minister will give that matter consideration?
Yes.
The Minister has said in explanation of the phrase about existing competition that there are two or three items to be taken into consideration:—First, the railroads of the Six Counties give special arrangements with regard to freights. It seems to be peculiar that this is done in the Great Northern Line, but that it cannot be insisted upon as far as the Free State portion of that line is concerned. Would the Minister find out how much of the bread is carried by motor vans along the road? So far as there is the motor distribution by road that would negative the distribution by railways. I suggest that matter immediately falls for consideration. The railways in Northern Ireland get certain advantages which are not very much, but they will certainly be small as far as consignments of bread are concerned. They are not subject to the duty on coal to which the Free State railways are subject. It is hardly proper to impose what is likely to be an extra charge upon the community. The second item was night baking. I have not the reference by me at the moment, but I will be surprised if the Minister's statement is found to be accurate as to night baking in Belfast practically reducing the price of bread sold in Louth by a ¼d. in the 4 lb. loaf.
A ½d. in the 4 lb. loaf. That is the report of the Prices Tribunal.
I wonder does it. Does it come to this—that night labour in Belfast is cheaper? I would be surprised to hear that that is a fact. Is it not possible that the Food Prices Tribunal found that the taste of the people lay towards fresh bread, and that the Tribunal thought that that taste quite possibly accounted for ½d. in the 4 lb. loaf; in other words that the people would pay more than ½d. for a night loaf as against the loaf baked the day before? I have not looked at the reference, but I would be surprised to find that baking done by night is cheaper than baking in the ordinary hours. I cannot imagine a trade union letting that go. These are the items which the Minister gave in what he described as the assistance given to the Belfast bakers which enabled them to compete against and knock out the highly equipped and well-managed bakeries in Louth.
There is considerable doubt as to whether the price of bread had been sufficiently low in the Saorstát, but it was a peculiar way of meeting that by putting an extra ½d. on the 4 lb. loaf. If the price of bread is too high now it will still remain too high. The Minister's claim is that these schemes of control are going to do what competition has not been able to do, and he puts a tariff against the competitive factor. Is he going to succeed in getting the price of bread lower or in keeping the price as it is? If these firms have been complaining that they have been suffering economic hardship by reason of the competition from Belfast, is it not a most reasonable thing to think that they will recoup themselves now by raising the price of bread? Why should they continue to sell bread at an uneconomic price once the competitive factor is removed? They have got to recoup themselves for certain losses for a certain period. Even if those who are in the trade feel peeved with this I think they will have to take whatever scant comfort they can from the fact that the price of bread per the Minister's Prices Tribunal has been too high. Presumably the attention of this new Commission will be directed to bread as one of the special articles of food reported upon by the Tribunal. Still the first move in all this is to put ½d. per pound impediment on the competitive bread which comes in.