Public Business. - Finance Bill, 1935—Committee (Resumed). – Dáil Éireann (8th Dáil) – Wednesday, 3 Jul 1935

Public Business. - Finance Bill, 1935—Committee (Resumed).

An Leas-Cheann Comhairle

The question is: "That Section 18 stand part of the Bill."

Agreed.

Minister for Finance (Mr. MacEntee)

Yes.

Mr. McGilligan

Was there not somebody in possession when this matter was adjourned last night?

Mr. Fitzgerald-Kenney

I moved the adjournment of the debate, Sir, and I expected to be called on to resume.

An Leas-Cheann Comhairle

I put the question, and if the Deputy does not speak when the question is put, the Chair has no opportunity of knowing whether the Deputy intends to speak.

Mr. MacEntee

May I point out to the Chair that two Deputies were engaged in a private conversation while the public business of the House was going on.

The Chair has no knowledge whether or not Deputy Fitzgerald-Kenney wanted to resume his speech. The Deputy simply moved to report progress, but the Chair had no knowledge of whether he wanted to speak afterwards or not.

Mr. Morrissey

Surely, Sir, it has been the practice that the Deputy who moves to report progress is called upon by the Chair to resume?

An Leas-Cheann Comhairle

It has not been the practice. If he does not offer himself to the Chair, the Chair has no means of knowing whether the particular Deputy who moved to report progress intends to continue his speech. Twice I put the question that Section 18 stand part of the Bill, but no Deputy offered himself. However, I am allowing Deputy Fitzgerald-Kenney to speak if he wishes to do so.

Mr. Fitzgerald-Kenney

In the course of my remarks last night I pointed out to the Minister that the fact that they had endeavoured to meet their ordinary obligations reasonably and honestly as far as they could was far from being a cause why this tax should be imposed upon them. I want to emphasise that point. I want to emphasise the point that when a country and the inhabitants of a country, and especially the poorer inhabitants of a country, have been impoverished by the actions of the Government and by the general policy of the Government, the fact that they have stinted themselves in order to meet public obligations, such as rates and taxes is no reason on earth for imposing further taxes, as the Minister suggests, but is a good reason to the contrary why the Government should not impose further obligations upon them. I go further than that and I say that, if the condition of affairs in this country is this—and it seems to be so—that the Ministry has so impoverished this State; has brought this State into such a condition as the Minister for Finance in his opening Budget statement admitted; has brought this country into such a condition that other sources of revenue are dried up and cannot be taxed any further; then, rather than put these taxes upon the necessaries of life; rather than put these extra burdens upon the poverty-stricken people of this country; rather than make, as these extra taxes will make, people go without the necessities of life; it would be better, much as I hate borrowing, much as I hate the idea of a Government balancing its Budget by means of borrowing, to openly borrow. I say that it would be better and I say it would be fairer, rather than to deprive the poorer sections of this community of things which were absolutely necessary for them in order to preserve life, to make up the Budget deficit by openly borrowing, I say that it would be far better to do that than to impose this 4d. duty upon tea. We are being challenged as to what alternatives there are. The Minister has been regularly appealing to us and going down on his knees to us and to the whole House to tell him, for goodness sake, what he can do to avoid imposing this tax on tea, this tax on sugar, this tax on flour, and the taxes on the other necessities of life. What is the use of the Minister now objecting; what is the sense of his objecting when I say to him that, if he has so mismanaged, as he has mismanaged, the finances of this State that he is driven to putting these taxes on the very necessities of life, it would be better for him to openly admit his mismanagement and, rather than crush down these unfortunate people by these taxes which he is putting on the very necessities of life, that it would be better for him to openly admit his faults and balance his Budget by borrowing?

Mr. McGilligan

We get back to the early hopes of the Minister for Finance in all this. In 1932, the Minister decided that, as between sugar and tea, sugar was an absolute necessity of life and was of very high food value, and that a tax on sugar was what he described as "hard" tax, and one that imposed an undue increase on the cost of living. On the other hand, tea, in his opinion, had very little value as food, was not a necessity of life, and that a tax on it was what might be described as a "soft" tax, as a tax which need not necessarily involve a diminution in consumption or an increase in the amount spent upon the commodity. He went to to say:

"The poor can adjust themselves to it more easily than through a tax upon sugar. They will not have to pay more for tea, and I have no doubt that with a tax on tea we shall have enterprising grocers proclaiming to the public that their ‘2/8 tea is still 2/8.'"

One might make the comment on that that although they were still charging 2/8 for tea, whether or not it was the old tea is a matter that we will leave to be found out by trial or a little bit of error. Last year there was a reduction of 4d. in the lb. in the duty on tea, and the Minister prided himself on the fact that that was possible. Now, this year, we are up against a new situation: the "hard" tax has got to go on, and with it the "soft" tax. Again, this has all got to be considered in the context of the taxes generally on the necessities of life. One might not have quarrelled with the Minister if, driven and harassed by circumstances, he should have had to resort to a tax on tea; but that he should have also to impose this tax once more—the tax which he prided himself on taking off —in the same year in which he is putting additional taxation on the people for sugar, bread, flour, and so on, is a thing that the Minister will find it hard to explain. Deputy Fitzgerald-Kenney said that it would be better, in these circumstances, to borrow openly, and to admit that the Budget cannot balance.

Mr. MacEntee

This, Sir, has all been decided upon on the Second Reading of the Bill.

Mr. McGilligan

I am saying, as a criticism of a tax on tea specially, that it would be much better to admit failure openly rather than to say: "We will cloak failure by putting on again what we have previously described as a ‘soft' tax." It is quite clear what the situation is when, in the year in which the Minister has found himself driven to taxation of the necessities of life and having wrung a huge amount from what he described as the "hard" tax and from other taxes on the wants of the people, he should then have to load up the burdens by retaxing the people in this matter of tea. That not merely argues, but proves in a most conclusive way— and it will be brought home strikingly to the people of the country, and to the poor first—what the present financial situation is. I do not agree with him that the tea tax is a soft tax. I would say this, that as between the tea and sugar taxation the scope of the sugar tax is rather ill-defined, because it comes into so many other things, molasses, syrups, jams and so on; whereas, at any rate, you can get the impact of the tea tax in a very clear way. You can get the incidence of the tax in a very clear and precise way, but it cannot be said to be a soft tax when one is thinking in terms of those who can bear taxation less than others can. From that angle, it is a tax which is definitely going to mean great hardship on certain people in the country.

I do not think the Minister would need the help of many of those who are not just so accustomed to town life as himself to find out that there are great stretches of the countryside, particularly in the west, in which the main article, the article that is, at any rate, used most in the way of liquid, is tea. It is a well-known fact, although it sometimes strikes economists as being a peculiar fact, that there are certain very poor areas in the West of Ireland where of all the items that form the family budget most money is spent on tea, and that, relative to the circumstances of the people, teas of exceptionally good quality are purchased for consumption in those areas. Although that is commented on by economists as being a peculiar thing, simply judging from the angle of the amount paid for it, the truth of the answer has been spoken to by very many people who know those areas—that in those areas the people do spend a very big amount of money on tea because they regard it as the main foodstuff; they have got used to it. I do not say that its food value in itself can be regarded as very high, but the people have got used to it, and it enters more into their ordinary budget and into their ordinary daily routine of life than any other article. They are inclined to pay more in order to satiate that particular choice of theirs. Many persons, travellers, clergymen and inspectors of different types who travel around the west of this country, will tell you that the people there set as much store by tea as, judging by the advertisements, certain workers in industrial capacities set store by beer in other countries. It is essentially a tax that is going to weigh with great severity upon those who live in the poor parts of the western side of this country.

It is unfair to describe it as a soft tax. Of course the Minister did not believe in that phrase, but it was a phrase that attracted him just because of the jingle, and because he thought at the time that he could make some case in regard to the change-over. He was not saving any money by the change-over nor was he losing any by the change when he made it in 1932, but there was an attractive jingle about the phrase "soft tax," and now he arrives back again at a position that was not here since the clearing up period just after the British left, in which we were going to have both the heavy tax on sugar and the old tax back again on tea. I suppose in these days we have what never was there, either in the British times or in the clearing-up period when all the promotion expenses of the State had to be met; in addition to those two taxes we have an extra tax on bread and butter. The Minister may balance his Budget by those means, but, of course, the tendency towards unbalancing is there the whole time, marked by this tax. As Deputy Fitzgerald-Kenny has said, the ordinary sources of revenue have dried up. We are getting now, in the words of Deputy Corry, to taxing necessities which the people must eat and drink. Therefore, they cannot get away from this kind of indirect taxation. The Minister simply must slam the taxes on whatever it is that people sustain their lives by, because then they cannot avoid them. At any rate, he may get his taxes in this year, but he will by degrees weaken even this source of taxation by pressing too heavily on the people who use this commodity. Even if the Minister could escape with some sort of fantastic borrowing this year he must see that the end is in sight, and that even taxes on necessities will defeat their own purpose.

Mr. Davin

Speaking in the House and outside the House in defence of this tea tax, the Minister says to those who want to maintain the social services provided last year, and to provide an additional £250,000 for widows' and orphans' pensions, that we must swallow this tea and sugar tax for the purpose of making up the money for widows' and orphans' pensions. We have the Minister and his colleagues speaking in different voices regarding the manner in which money is to be raised for the maintenance of social services. We have them taxing coal to raise £600,000, and taxing the consumers of butter to subsidise the dairying industry, and here we find them putting a direct tax on the necessaries of life, tea and sugar—those are absolute necessaries of life to people in the rural areas—in order, as he thinks, to provide for widows' and orphans' pensions. When we raised the question of the proposed reduction of £200,000 in the amount of money for the administration of the Unemployment Assistance Act, and the question of the £100,000 proposed to be saved in the administration of the old age pensions, we were told, again in another voice from the same person, that this is money that must be found, and must be found in this way, in order to provide pensions for widows and orphans.

It is very hard to follow the Minister and his colleagues when they speak in different voices in defining this particular tax, and also in defining the economies in the existing social services. I cannot understand the mentality of the Minister who says: "We must tax the widows and orphans"— who ordinarily must use, and always will use tea and sugar as long as they have money to get it—"in order to provide pensions for themselves." They apply the same policy to the people who are entitled to receive the old age pensions. The President, speaking on the Second Reading debate of the Finance Bill, admitted quite definitely that a very big percentage of the large sum—between £500,000 and £600,000— raised for the payment of cattle bounties has not been finding its way to the people for whom it was intended. Supposing 30 per cent. or 40 per cent. of the £500,000 or £600,000 is going in the wrong direction, and is subsidising people for whom it was never intended, I suggest to the Minister that he would be quite justified, in view of the admission made by the President, in cutting the bounties by the amount which he believes is not finding its way to the livestock producers in this country, and thereby find the money which he is now trying to find by penalising the poorest of the poor through a tax on tea and sugar. That is a definite suggestion which I am now putting to the Minister, and to which I should like to hear an answer, especially in view of the President's admission. Why should the taxpayers of this country find increasing sums, as they will be expected to find in the coming year, in view of the meaning of the coal-cattle pact, for additional cattle bounties which the President admits are not going to the people for whom those bounties are intended, while at the same time the Minister stands up here in this House to defend a tea and sugar tax which is penalising the poorest of the poor? The members of this Party will vote against this section of the Bill.

General Mulcahy

Deputy Davin is quite right when he draws attention to the fact that you do not tax the very poor, and the widows, in order to provide pensions for widows. This is not a social services tax; it is a war tax, and nothing else but a war tax. That part of the last ten years that preceded the coming into office of the Fianna Fáil Government showed the tradition that would be natural in this country in respect of taxation. About £1,500,000 in taxation that was on sugar when the last Administration took over office was removed during that period and the tax on tea was completely wiped out. That shows the tradition that would be natural, the procedure that would be natural in this country in the matter of taxation if there was not a war on.

The Minister walked into a war situation in 1932 and the tea tax was imposed. That war has been carried on for a couple of years and it induced the Minister, when he was framing his Budget for this year, to enter the houses of the poorer persons ——to enter, for example, the house of the average civil servant whose wages he quoted to the Dáil the other day. It induced him to look around that house to see what could be taxed. He had already taxed to some extent the sugar that was being used; he had raised the price of bacon by his Excise duty on bacon; he was raising the price of all the food commodities he could lay hands upon, and he had to go to the house to look around and to see what further articles he could tax. When he had sized up what he could get out of linoleum, wallpapers, window glass, and even the mugs on the dresser, he had to look into the tea-caddy and he said "I can get £400,000 out of this." Then he started to pinch the £400,000, and the Ministerial Party is so much aware of what it really means that members of it have been stumping County Dublin telling untruths about the tea tax. The Ministerial propaganda with regard to the tea tax is: "We took it off last year; how could we take it off if our predecessors had not put it on?" A word of truth on the subject was almost sufficient to break up a Fianna Fáil meeting. The Minister for Finance was able to take off the tea tax because it had been put on the year before. It goes on now simply to carry on a war situation.

The moneys raised in this way are simply going down the sewer and neither social services nor Government institutions nor any aspect of the everyday life of the people will be bettered by the way in which the money raised through this tea tax is to be spent. All that will happen is that the people are going to be poorer by reason of a tax that is taken, I will not say in a flat rate from the whole population, but in a rate which, if it varies at all, varies in heaviness on the poorer side. I am sure there is more tea on the average consumed in some of the poorer houses throughout the country and in the cities and towns than in the richer homes, so that the main incidence of the tax on tea falls on the poor. Therefore, the Minister has to concoct untruths for his Party to spread through the country in order to hide what the situation really is.

Taxation of this type, linked to the kind of taxation put on food and on the petty articles in the home, should show Deputies here the extremities to which the Minister is driven in order to keep some kind of appearance on the finances of the State and the extremities to which he is prepared to go, no matter how much at the cost of the poorer classes, to keep up a pretence. What is he keeping it up for? The Minister cannot tell the House that he sees where he is going; he cannot tell the ordinary rank and file, the poorer classes where he is leading them. Yet he continues taking money out of their pockets. It has been mentioned here that in some parts of the country tea is very much used and that until the Fianna Fáil Party put the tax on tea in 1932 a very high standard of tea used to be used. If the Minister has any connection with the tea trade he will know that after the Fianna Fáil tax was put on, when the tax was re-imposed after seven or eight years, following the time it was made free of duty, there was a tremendous fall in the standard of tea that was used in the West of Ireland. People who were accustomed to buy tea at 3/- and 3/4 a lb. fell within a couple of months to tea at 1/6 a lb. To that extent the standard of living in the West of Ireland was reduced in 1932 and 1933. Now, that position is being worked back to, simply because the Minister is forced to look in every direction in order to get money to carry on his war.

We oppose this tax, in the first place, because it is absolutely wrong and unsound and because it is taxation, the greater part of which falls on the poor; and we oppose it in the second place because it is indicative of the whole line of policy of the Minister, that it does not tend to develop social services, that it does not make in any way the national or the economic life of the people stable, and because it is leading to the very definitely unstable future that a war situation usually brings.

Mr. Minch

The tax on tea has brought home to the ordinary people in the rural districts what this economic war means. The poorest in the land now have a realisation of how high the cost of government can be. In Dublin, for some reason or other, whether it is because of the artificial prosperity or for other reasons, the attack on the breakfast table, particularly the tea tax, does not seem to have caused as much antagonism to the Government's policy as there exists in the country. As regards the people in the country, if there is one thing that has made them take an interest in Government it is the tea tax. I have heard it said that the late Kevin O'Higgins declared that until there was a change of Government the ordinary country people would not think politically. They are going to think politically in future because this tea tax, accompanied by many other taxes, has made the poor in the community, the ordinary plain people, realise that they are now brought into a war which is not a decent war nor an honest war. That is a fight in which the people mulcted by a tax on tea, and it is for the purpose of carrying on what they are beginning to realise now is all humbug and claptrap.

An Ceann Comhairle

The question is——

Mr. McGilligan

Has not the Minister anything to say?

Mr. MacEntee

I have listened to the Deputy making the same speech four times during the debate on the Bill and I do not think it is worth while replying.

Mr. McGilligan

I think then I will have another slap at it.

Mr. MacEntee

Is the Deputy entitled to rise now?

An Ceann Comhairle

Yes, since the House is in Committee.

Whatever may be the Minister's views about the quality of the tax, it is quite clear from this year's Budget, from this Resolution, from this particular section, and from what we discussed last night, that the country is going to get hit hard and soft. As far as the Minister is concerned, he is not going to let the people escape. He is going to skin them alive in every fashion. One thing, so far as this tax is concerned, is that it may be that it does appeal to the Minister that the quality of the tea can be degraded. I have no doubt that that is the point, and if the people are fooled the Minister will be satisfied that once more the people will have to be deceived. The people will have to pay and pay. But I would remind the Minister that once more the Government will have taken a very definite step and a deciding step towards lowering the standard of living. I admit that that is their proclaimed aim. It is the old policy of hair-shirts for all. You are advancing to it, and advancing to it with remarkable rapidity. You have listened here and you have been told that this is a tax which can be avoided. It can to this extent: The people can more or less adjust the balance where they are concerned by a lowering of the standard of living and by getting a poorer quality of tea. It is easy to understand why taxes of this kind should appeal to city men, to men who have no knowledge whatsoever of the country. I notice that three-fourths of the Deputies of the Fianna Fáil Party in the House at present are city men. I cannot speak for the remaining backward quarter. There are four in the House listening to the discussion on this tax. Three of them are city men. Naturally our arguments pointing out the importance of tea in the life of the country will not appeal to them any more than to the Minister.

Mr. Kelly

I do not want to take tea with you at all.

General Mulcahy

Tea is a necessary of life that brings sociability and happiness into the lives of the people.

An Ceann Comhairle

The Deputy must not repeat himself.

General Mulcahy

I mention these points for the purpose of affording Deputy Kelly, or any other member of the Fianna Fáil Party sitting in an Irish Parliament the opportunity of doing his duty if the Minister will not do his.

Mr. Minch

Surely the Minister ought to give some reason as to why he is imposing this tax upon tea. It is one of the most important matters that could come up before the House. Deputies on these benches have asked repeatedly for an explanation of this tax, and all they got from the Minister is curt interruptions. Surely the Minister should now state his reasons for imposing this tax.

The Chair cannot accept that motion.

General Mulcahy

Send for the Military Tribunal.

Mr. McGilligan

We want to draw attention to a feature of this debate. A tax is being discussed. No reason has been given as to why this tax is being imposed. It has been asserted, in a variety of statements, that no other tax will yield any result and that everything else has been dried up. There is a further feature of this debate and that is the conduct of the Minister, who, by interruption, by discourtesy to everybody, by threats to sit late, and by appeals to the Chair to rule speakers out of order, is attempting to close down this discussion.

Question put: "That Section 18 stand part of the Bill."

The Committee divided: Tá: 49; Nil; 43

Tá

Aiken, Frank.
Bartley, Gerald.
Boland, Gerald.
Boland, Patrick.
Bourke, Daniel.
Brady, Brian.
Breen, Daniel.
Briscoe, Robert.
Concannon, Helena.
Cooney, Eamonn.
Corkery, Daniel.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Derrig, Thomas.
De Valera, Eamon.
Dowdall, Thomas P.
Flynn, Stephen.
Fogarty, Andrew.
Geoghegan, James.
Gibbons, Seán.
Goulding, John.
Hayes, Seán.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Ben.
Moane, Edward.
Murphy, Patrick Stephen.
O Briain, Donnchadh.
O'Grady, Seán.
O'Reilly, Matthew.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Traynor, Oscar.
Victory, James.

Níl

Anthony, Richard.
Belton, Patrick.
Brennan, Michael.
Broderick, William Joseph.
Burke, James Michael.
Burke, Patrick.
Coburn, James.
Corish, Richard.
Cosgrave, William T.
Costello, John Aloysius.
Davin, William.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Everett, James.
Fagan, Charles.
Finlay, John.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Haslett, Alexander.
Hogan, Patrick (Clare).
Holohan, Richard.
Keating, John.
Keyes, Michael.
Lynch, Finian.
McFadden, Michael Og.
McGilligan, Patrick.
McMenamin, Daniel.
Minch, Sydney B.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Murphy, Timothy Joseph.
Nally, Martin.
Norton, William.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, Gearóid.
O'Sullivan, John Marcus.
Pattison, James P.
Reidy, James.
Rice, Vincent.
Wall, Nicholas.

Tellers: Tá, Deputies Little and Smith; Níl, Deputies Doyle and O'Leary.

Question declared carried.

Question proposed: "That Section 19 stand part of the Bill."

General Mulcahy rose.

Mr. McGilligan

I thought we were going to have a motion to sit late?

General Mulcahy

This again is another tax which is inexcusable at the present time. Evidence has already been given before the Prices Commission that this tax has resulted in an increase in the price of bread and, not only that, but the increase which has already taken place has not brought the price of bread, as far as bakers are concerned, to a remunerative figure and a further increase may be expected in the price of flour arising out of this tax. This tax has been put on at the beginning of a year in which an unknown increase in the price of flour is going to be brought about by the operation of a Bill at present before the House. The Minister for Finance has provided in the Agriculture Estimate this year £300,000 as the bounty on wheat—last year's wheat. The cost of subsidising home-grown wheat is rising to such a figure that the Minister for Agriculture and the Minister for Finance are co-operating with each other to hide the cost to the public, and so the cost has to be hidden by means of legislation which is at present being dealt with.

An Ceann Comhairle

And may not be discussed now.

General Mulcahy

But which makes us absolutely certain, Sir, that there will be a further increase, before the present calendar year is over, in the price of flour and in the price of bread. It is a tax that hits the poorer section of the people in the same heavy way that the tax on tea hits them. It is a tax which is nothing but a war tax and which can do nothing towards improving the general social stability of the people, while, at the same time, it takes increasing amounts out of the people's pockets and takes them in a hidden kind of way.

The taking of that money out of the people's pockets has been even bigger up to the present than would normally be necessary. In imposing this tax, the Minister took no steps at all to protect the people against an unjust rise in the price of flour on which this tax never fell. The various merchants throughout the country have been complaining to the Minister for Industry and Commerce and to Deputies of this House that an entirely unprecedented step was taken by millers with regard to large quantities of flour, the purchase of which was already contracted for. A situation has been created in which merchants, who had purchased flour from millers on a contract, the normal terms of which were that they were given three months to take delivery, have been charged this tax on that part of their contract which had not been taken over at all. I should like to ask the Minister how it comes that no consideration is given to the public when putting on a harsh tax of this kind in the way of relieving them of the incidence of a certain amount of the tax from which they should reasonably be relieved.

It seems to me that this is a policy of giving a certain amount of largesse to millers and people like that, so that there may be more people, standing for business ability and business credit, who can be bought in this particular way to help the Government to put a kind of face on their policy. It can be the only explanation of it. We protest against these taxes which raise the price of bread and the price of flour, prices which Government policy is going to raise still further. As I say, evidence has been given before the Prices Tribunal already that the price of bread is not remunerative for bakers by reason of the great increase brought about in the price of flour owing to Ministerial policy.

Mr. McGilligan

I often wondered how one section of the Budget was raised, and until Deputy Corry spoke last night I had no hint. Taking Deputy Corry's phrase about taxing the things that people must get, it is quite clear that the Ministry came to the point at which they simply said: "Let us find out the one thing from which there is no escape." They got Deputy Corry or perhaps one of his constituents, put him on a sort of compulsory hunger strike, and found what he cried loudest for when that was over. So they arrived, by that process at bread, butter, tea and sugar as the necessary items and they decided to tax these commodities. I do not know if history shows anywhere, except as the prelude to a revolution, an instance of a tax such as the tax on bread or bread-stuffs. In fact, the reverse used to be the position. Even the Minister must have heard of the old system of holding off the multitude by giving them free bread and free games. At the moment, the only thing we have as big game in this country is the economic war and it is not free. It, or part of it at any rate, is going to be paid for by the tax on bread. We have reversed the old procedure. This free bread, and the free circuses or the free games were given as the prelude to the break up of a very big empire. We have now gone down hill so much more than that, that we have decided the time has come when bread-stuffs or to take the old cliché, the staff of life, has got to have something put on it in order to satisfy Ministerial greed.

Again, there should be some explanation of what other methods of taxation were considered and rejected, and why they were rejected, before the Ministry decided that the tax should go on such a definite, universally recognised necessity as bread. The very word "bread" has an association with life itself—with life of a primitive type, with the source and the beginnings of life——of a nature that is brought home to everybody who reads, who says his prayers, or who does anything that shows any touch with life at all. Yet the Ministry decided that the raw material of bread has got to be taxed. Then, as Deputy Mulcahy has pointed out, because of certain activities of the Ministry, the price that has to be paid for flour shows a difference against us of 4d. per stone as compared with the prices charged in the City of Belfast at normal prices. Even so, those who manufacture flour, appearing before the Prices Commission gave evidence that the price, even though 4d. per stone higher than what is paid in Belfast, is not remunerative and they warned the community that so far from expecting any downward trend in prices, the price of bread must rise still further. On top of that situation we get this tax on wheat.

Again, let there be no running away from this—there is no question of protection involved. There is already control and there is already machinery for that at the disposal of the Government. If it were a question of getting more home grown wheat used, there is machinery for doing that. This is intended simply to make the people pay more for what is going into bread. Even the highest point to which the Ministry could rise in their optimism is that they are going to have a 20 per cent. admixture so that as far as 80 per cent. of our wheat requirements is concerned, it is going to be taxed in the way proposed here. Surely that does call for some explanation. One can see the answer that almost any tax—a tax on incomes, for instance—would be the obvious resort before the bread of the people would be touched. We may be told then that if you touch income tax, to a certain extent you touch the source of production and you may drive people out of employment. You may not allow people to get the wherewithal to buy even their bread. The necessaries of life have got to be weighed one against the other in order that you may get the virtues of various taxes seen in relationship one with another. But we have this tax put on without any definite reason being given for it.

I think it is, as I say, historically unique that you should have in the same Budget year, a Government which has decided to put a tax upon such ordinary things as tea, sugar and butter, and add to them, as if they were not sufficiently final, this tax on bread. There is no answer given as to why anything else should not be chosen except bread. I do not know if we can even get an idea of the amount that is to be brought in by this tax. We have got to get what is going to be the inter-action of this tax on the growth and the use of Irish wheat. One thing that is clear is that the only justification for the tax is that if you must get money, and you want to get it with certainty, you want to get it without any fear of a breakdown, any spectacular breakdown in Government, all you have got to do is to watch for something that the vast majority of the people, if not the whole people use, and put a tax on it. A small tax on such a commodity will bring you in more than a heavy tax which would affect only a small portion of the people. It is an ideal thing from the angle of the man who must get money, who has his eyes closed to the sources from which that money is taken, who has no idea of humanity with regard to where the money comes from, who is blind to, or ignorant of, the misery attached to the taxation of foodstuffs. I think there is no example in history of a tax being put on bread except in a period which was simply the prelude to a revolution, when things had got to the worst point, and those who constituted the Government were so blind and so reckless, so conscious of the fact that their existence as a Government was drawing to a close, that they put burden after burden on the community and, as the final straw, put a tax on foodstuffs, a tax on bread. I do not know if the Ministry believe that we have come to that situation here now. Their conduct indicates an appreciation of the fact that we are very close to it. Their only excuse is that of sheer necessity. As I said before, they are on their uppers and there never was such proof of it as this.

Mr. O'Leary

I desire to protest against this tax. When I was young I used to hear people singing a song called "Rowdlam Randy," in which a cake called stampaí císte was mentioned. The policy of the present Government is rapidly driving the unfortunate people of the country back to that position. I would like to bear out the statement made by Deputy Mulcahy with regard to this tax being shoved on to people before the millers had paid it. My attention was drawn to that by two merchants, one in Macroom and the other in Ballyvourney. They were compelled to pay the tax, or else the contracts they had made would be cancelled. The Minister suggested last night that complaints of this kind should be sent forward to the Prices Commission for investigation. I hope that he will take steps to send this complaint forward. If he wishes I can give him the names of the two merchants. I may say that up to recently one of them was a supporter of the Minister and his Party.

Mr. Anthony

I will leave that question aside, but perhaps another occasion will arise for dealing with it. I was very interested on one occasion in getting a particular tariff in order to help our own people, but, as I said, the tax was passed on to the consumer. As Deputy Mulcahy said, there is no certainty that this tax will not be still further increased. We may be told that this is a matter that may be brought before the Prices Commission, but if the bakers and others can produce satisfactory evidence to the effect that they are not overcharging, that they are only getting their ordinary profits, the Prices Commission cannot be effective in reducing the price of the loaf.

I join with the other Deputies who have protested against any policy that will result in increasing the price of food stuffs for the people, particularly for the poor, who, in the main, are the working classes. The tax will press more heavily on them than on the richer sections of the community. I think that the Minister might have looked about for some other source from which to get his revenue before embarking on a policy which, in effect, will mean reducing wages in working-class families. He has not given us any indication that the price of the loaf will not go still higher. I hope that when concluding he will give the House some indication that he will see to it that no profiteering takes place in the price charged for the loaf. I should like, too, to have an indication from him that if and when he is returned to power, which God forfend, he will not on any future occasion interfere with the price of a commodity that is in general use by the poor, the class most affected by any increase in the prices of flour.

Mr. Brennan

This is a tax which, on the face of it, carries no pretensions. On many occasions we have had statements from the Government Benches to the effect that taxation was necessary in order to protect industry of one kind or another. That case cannot be made for this tax. There is no protection being afforded to home-grown wheat by this tax because the position appears to be that the percentage of home-grown wheat to foreign wheat controls the whole situation as far as the importation of foreign wheat is concerned. Consequently, this is a revenue tax pure and simple. It is not a happy matter for Deputies to have to contemplate that the Government have been driven to tax bread in the way they are doing in this Bill. It forces one to the belief that they are in financial straits when they must have recourse to putting a tax on bread which everyone, rich and poor, must use in order to sustain life. Deputy Anthony expressed the hope that, if the present Government continue in office, some assurance should be given by the Minister for Finance that this will be the last attempt made to increase the price of bread in this way. I would like to be able to share Deputy Anthony's hope, but as Deputy Mulcahy has pointed out, in view of another Bill that is coming along, I am afraid one can hardly entertain the hope that the price of flour can remain even at its present level, or anything like it.

The net effect of this is going to be not a protection of Irish industry but a raising of the cost of living, with a consequent reduction in the standard of living. From that point of view, it is certainly deplorable that the Minister has felt obliged to have recourse to this tax. At a time like this, when even the Ministerial Bench admits that it is hard to balance the Budget, and that the country is going through hard times, it is sad that, with our depleted resources, the price of bread must go up because the Government wants more money. On the whole, I maintain that there is no justification for this tax. There cannot be any pretence about it. The Parliamentary Secretary to the Minister for Finance said recently in this House that, because of the success of the activities of the Minister for Industry and Commerce, certain duties and revenues were being cut off from the Minister for Finance. Apparently, the Minister for Finance is going to see that they are brought in somehow. However, I do not think that the returns prove that the contention of the Parliamentary Secretary was correct. We have at present out of our depleted resources to carry very heavy charges and I maintain that the increase of the cost of bread is entirely unwarranted. In common with my colleagues on this side of the House, I protest very strongly against this tax.

Mr. Belton

As the last speaker has touched upon the principle of this tax, it is well to clear away any doubt that may exist in the mind of the so-called man-in-the-street. This is a tax for revenue purposes purely and simply, and it should be known as such. No cheap clap-trap from any soap-box orator anywhere should persuade anybody that this is an imposition on the general community for the benefit of the agricultural community. The Minister for Finance finds himself in straits and looks around to get something to tax. He hits on imported wheat. Badly informed people or credulous people may ask: "Is it not imported wheat?" That wheat is a necessity here. We are not producing at the outside more than 25 per cent. of our wheat requirements. In the current year, during which this tax will operate, we shall have to import 75 per cent of our wheat requirements, so that, to that extent, this is a direct tax on consumers of bread. That should be thoroughly understood. If we were near the point of production of our full requirements and a tax was put on imported wheat, it could be argued that it was an imposition on the general community to help the agricultural community. We are not near that point. It is also well to remember that this tax will mean 6d. per cwt. on the 500,000 or 600,000 tons of wheat that we have to import. If we import 500,000 tons, then this tax will mean an imposition of £250,000 on the bread-eating community, which is practically the entire community. The Exchequer will get that money. That discloses a very alarming situation. Out of the taxation of last year, the Exchequer provided a bounty on wheat amounting to £300,000. The Exchequer is saving that amount this year and transferring it to the community, to be paid indirectly in the market price of flour. Flour will go up to that extent. With that principle, I agree, but see what it discloses as regards the general financial and economic position of the country. Last year, the Government was able, out of general taxation, to provide this bounty on wheat. It cannot do that this year and it throws the burden on to the consumer, who will have to provide another £250,000 by reason of the 6d. per cwt. on imported wheat. No tax has been remitted this year and new taxes have to be imposed. That shows that the economic position of the country is sinking.

We shall probably have an increase in wheat production during the next few years. Next year, we may find ourselves with 100,000 more acres of wheat than we have this year, just as we have 100,000 more acres this year than we had last year. We may even have 200,000 additional acres because of other agricultural crops not giving any return. The people will naturally turn to the crops that give a return. Is this sixpence to be there to make a case for the Minister for Finance to point out as he pointed this year, that because of the operation of the import duties that were put on specifically to help home industry, and not for revenue purposes, and because of the success of the policy of the Minister for Industry and Commerce, there has been a diminution of revenue and that taxation in lieu of that must be imposed? Hence the new tax. We will be told next year, if there is an increase in the acreage of home grown wheat, that this tax will have to be increased to one shilling or two shillings. In case anyone might be misled on the question, I want to make it clear that this is a direct tax on imported wheat that does not compete with wheat produced here. Owing to an arrangement made by another Minister, if we produced 25 per cent. or 30 per cent. of our wheat requirements there will be a market for that quantity at a fixed price. We do not import any wheat except what is required to make up the difference between what we produce at home and our total requirements. There is every indication that while the present Government is in office that is the line they will take. With that line I am 100 per cent. in agreement. I only want to make the position clear. Let everyone then decide whether this is a just tax or not. It is a tax on imported wheat that is not competing with Irish produced wheat. It is a direct tax on bread. This tax is not intended to help agriculture but is intended for revenue purposes only.

Mr. Bennett

If any further illustration was needed of the havoc that the present Government has played with the economic condition of the country we have it here, when it becomes necessary to have recourse to what has been described as this obnoxious course of raising money. I am sure it must be just as obnoxious to many Deputies on the Government side, and to the Minister, as it is to the Opposition. There is no justification whatever for what I might call this bread tax. Judging by the silence on the Government Benches there is apparently no defence of it. We have not heard one Minister or Deputy defending this tax. We have the curious anomaly of one Minister issuing bread tickets, as represented by the number of people to be seen parading before the labour exchanges, and others receiving the dole with which to provide ordinary sustenance, of which bread forms such a large part, and, on the other hand, we have the tax gatherers lined along the quays collecting the wherewithal so that the Minister can provide doles to keep the unfortunate workers and hard-up people alive. It is no satisfaction to some of these poor people that the money they receive has to be got from taxation on the necessaries of life, in the shape of bread, tea and sugar. This is a poverty tax. The Ministry have reduced themselves to the position that there is no way of finding money but to resort to the desperate expedient of taxing food. That represents more clearly than anything else the havoc that has been wrought and the deplorable condition of poverty to which the country has been reduced. There cannot even be the defence that there is any necessity for this tax. It will not have any effect in limiting imports. The tax is designed and framed purely as a revenue tax and not control or to limit imports of wheat. I have intervened mainly to see if I could induce some member of the Government Party to make some sort of plausible defence of this tax. That is due to the House. Deputies on this side are definitely opposed to this tax. We could like some Deputy on the Government Benches to make some defence, if any defence could be made for this tax.

Mr. Cosgrave

This tax appears small when mention is made of 6d. per cwt. on wheat. What the country is entitled to know is what it will represent in the cost of a sack of flour. I presume the tax will not fall upon by-products, such as bran, pollard and the "tails" but the incidence of it will fall exclusively on flour. If that is so it means 1/9½ per sack. Presumably there will be the cost of collecting the money, so that the actual cost will be 2/- on a sack of flour. Having regard to the various other impositions it is monstrous that that addition should be made to the cost of flour.

Mr. Corry

It seems more like a joke that Deputies who opposed this and who spent the whole evening trotting into the Division Lobby, not to increase the loaf by one farthing or anything of that kind, should have increased the price of the loaf and every other necessity that the poor have to buy by 25 per cent., by reducing the hours of labour. These Deputies come along now and talk about increasing the price of bread, but they walked into the Lobby to support Deputy Norton's amendment reducing bakers' hours by six or seven hours. They did that coolly and deliberately, knowing what it meant. They are forgetting about that now, and are here with their tongues in their cheek talking about increasing the cost of flour by 2/- a sack. The age of humbugs has not yet passed. We have many of them on the opposite benches.

Question put: "That Section 19 stand part of the Bill."

The Committee divided:—Tá, 48; Níl, 47.

Tá

Aiken, Frank.
Bartley, Gerald.
Boland, Gerald.
Boland, Patrick.
Bourke, Daniel.
Brady, Brian.
Breen, Daniel.
Briscoe, Robert.
Concannon, Helena.
Corkery, Daniel.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Derrig, Thomas.
De Valera, Eamon.
Doherty, Hugh.
Dowdall, Thomas P.
Flynn, Stephen.
Fogarty, Andrew.
Geoghegan, James.
Gibbons, Seán.
Goulding, John.
Hales, Thomas.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Ben.
Murphy, Patrick Stephen.
O Briain, Donnchadh.
O'Grady, Seán.
O'Reilly, Matthew.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Traynor, Oscar.
Victory, James.

Níl

Anthony, Richard.
Belton, Patrick.
Bennett, George Cecil.
Brennan, Michael.
Broderick, William Joseph.
Burke, James Michael.
Burke, Patrick.
Coburn, James.
Corish, Richard.
Cosgrave, William T.
Costello, John Aloysius.
Curran, Richard.
Davin, William.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Everett, James.
Fagan, Charles.
Finlay, John.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Haslett, Alexander.
Hogan, Patrick (Clare).
Holohan, Richard.
Keating, John.
Keyes, Michael.
Lavery, Cecil.
Lynch, Finian.
McFadden, Michael Og.
McGilligan, Patrick.
McMenamin, Daniel.
Minch, Sydney B.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Murphy, Timothy Joseph.
Nally, Martin.
Norton, William.
O'Donovan, Timothy Joseph.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, John Marcus.
Pattison, James P.
Reidy, James.
Rice, Vincent.
Rogers, Patrick James.
Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Question proposed: "That Section 20 stand part of the Bill."

Question declared carried; the section ordered to stand part of the Bill.

SECTION 20.

Mr. Cosgrave

This tobacco tax increases the charge of Customs duty on tobacco, since the Government came into office, by 2/- in the lb. That tax falls very heavily on the working-classes. Tobacco is one of the few luxuries left to them and, in present circumstances, when other costs are as high as they are, it seems almost ridiculous to be adding to this particular item of tobacco, which is sometimes called a luxury, and which is more times called a necessity, an imposition of this sort. It is quite possible that increasing this tax will have the same result as the increased taxes upon other commodities which place them beyond the reach of the public. It is a very nice question as to whether we have not reached saturation point with regard to this tax. If the impression is that those who use tobacco can afford to pay any tax on it, then if the Minister is particularly short of money and requires money for certain purposes there may be a prima facie case made for introducing this particular tax at this moment. But if, on the other hand, what has been regarded as a fairly steady source of revenue is likely to be prejudiced, as has already happened in the case of beer and spirits, then when this tax fails to produce its money some lame or limpid Minister for Finance would come along later on and say: “I require money for social services; having failed to get it from the rates, and having failed to get it from those who use luxuries such as tobacco, I am driven to taxing the necessaries of life.” It is not perhaps as serious a tax upon the wage-earning class as the tax on tea, but nevertheless it falls heavily upon the class of people least able to bear it, and in consequence it is my intention to vote against this tax.

Mr. Belton

I suppose the Minister and the Government are carrying on the fiction that tobacco is a luxury. Ninety-nine out of every 100 old age pensioners would rather go without food than without a smoke. It is the only comfort they have left. Tobacco has become of such wide use that it is now a necessity to practically all the male population, and to a large section of the female population. Whether it is good for them or not is another matter. When we consider that a material with a commercial value of about 5d. or 6d. per lb. is carrying a tax of 9/4 per lb., surely it will be agreed that there must be a great demand for it. If it is injurious its use should be stopped altogether, but the amount of tax it is carrying shows what the people are prepared to pay for its use. We all know the comfort it is to old people, and young people too. There is no use in the Government continuing the fiction that they are the poor man's Government when they are prepared to tax his smoke without showing any corresponding relief. It shows unmistakably the way in which we are drifting. Perhaps it is a good thing that we have this tax on tobacco, because when a man goes in for his ounce of tobacco and finds that he has to pay out another ½d.—if he smokes three or four ounces in the week his income is reduced by so many halfpennies—it brings home to him the way in which we are drifting, and it will probably teach him such a very useful lesson that he will know how to exercise his citizenship on the next occasion better than he did on the last.

Such an interjection on the Minister's part only serves to illustrate the condition in which he finds himself. It is quite possible that this tax may have the opposite effect. It is possible its imposition may have this effect, that we may reach saturation point in this matter. While we may regard tobacco as important from a soothing point of view, it is, nevertheless, the type of thing that people can go without, and the Minister may find that his revenue will not increase as a result of this tax. As Deputy Anthony pointed out, and as we have endeavoured to point out, this is one more indication of the tragic position in which we find ourselves. It is a very sad state of affairs to find that the Government must tax all foodstuffs and must even tax tobacco in order to accumulate revenue. I am very sorry indeed that a Government of this country should have sunk to such a depth.

Mr. Costello

Listening to what Deputy Anthony said, I recalled a statement made by the Parliamentary Secretary to the Minister for Finance during the Budget discussions which were the prelude to the present Bill, and I was wondering if Deputy Anthony had not really put his finger on the purpose of the tax. Is this tax really brought in for the purpose stated by the Parliamentary Secretary during the Budget discussions? He said that what he liked about the Budget was that it brought everybody up against the facts. In answer to Deputy Anthony, who protested against taxes on working men, the Parliamentary Secretary said: "Why should not the working man be taxed?" He said also that the Budget brought everybody, including the working man, up against the facts. Perhaps Deputy Anthony has really discovered the true purpose of this tobacco tax—that it is not for the purpose of revenue or even taxing the luxuries or the necessities of the working man, the poor man, but it is really for the purpose of bringing home to everybody the facts of the present situation.

Mr. Belton

If there was any substance in that supposition, then somebody should be looking for relief, but no one is being promised relief.

Question put:—"That Section 20 stand part of the Bill."

The Committee divided:—Tá, 58; Níl, 39.

Tá

Aiken, Frank.
Bartley, Gerald.
Boland, Gerald.
Boland, Patrick.
Bourke, Daniel.
Brady, Brian.
Breen, Daniel.
Briscoe, Robert.
Concannon, Helena.
Cooney, Eamonn.
Corish, Richard.
Corkery, Daniel.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Davin, William.
Derrig, Thomas.
De Valera, Eamon.
Doherty, Hugh.
Dowdall, Thomas P.
Everett, James.
Flynn, Stephen.
Fogarty, Andrew.
Geoghegan, James.
Gibbons, Seán.
Goulding, John.
Hales, Thomas.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Keyes, Michael.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Ben.
Moane, Edward.
Murphy, Patrick Stephen.
Murphy, Timothy Joseph.
Norton, William.
O Briain, Donnchadh.
O'Grady, Seán.
O'Reilly, Matthew.
Pattison, James P.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Traynor, Oscar.
Victory, James.
Walsh, Richard.

Níl

Anthony, Richard.
Belton, Patrick.
Bennett, George Cecil.
Brennan, Michael.
Broderick, William Joseph.
Burke, James Michael.
Burke, Patrick.
Coburn, James.
Cosgrave, William T.
Costello, John Aloysius.
Curran, Richard.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Fagan, Charles.
Finlay, John.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Holohan, Richard.
Keating, John.
Lavery, Cecil.
Lynch, Finian.
McFadden, Michael Og.
McGilligan, Patrick.
McMenamin, Daniel.
Minch, Sydney B.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Nally, Martin.
O'Donovan, Timothy Joseph.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, Gearóid.
O'Sullivan, John Marcus.
Reidy, James.
Rice, Vincent.
Rogers, Patrick James.
Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Question declared carried.

SECTION 21.

Question proposed: "That Section 21 stand part of the Bill."

Mr. MacEntee

I want to give notice that on Report Stage, I will move an amendment to delete para graphs (b) and (c) of sub-section (5), and I will move a further amendment to delete sub-section (15).

General Mulcahy

Will the Minister say what is the importance of these sub-sections on which he proceeds to break silence, the Minister having been so silent on important matters during the debate?

Mr. MacEntee

I am merely giving notice that this will be done. I will explain to the House fully on the Report Stage.

Section 21 agreed to.

Is it the policy of the Minister to cut out the Committee Stage and to mark out against each section of the Bill, "majority of one,""majority of two," or "majority of three." Are we coming to that?

Mr. MacEntee

A majority of two is enough for you.

General Mulcahy

One was very nearly enough for the Minister.

Mr. Smith

It is as good as 20.

Question put: "That Section 24 stand part of the Bill."

The Committee divided:—Tá: 58; Níl: 40.

Tá

Aiken, Frank.
Bartley, Gerald.
Boland, Gerald.
Boland, Patrick
Bourke, Daniel.
Brady, Brian.
Breen, Daniel.
Briscoe, Robert.
Concannon, Helena.
Cooney, Eamonn.
Corish, Richard.
Corkery, Daniel.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Davin, William.
Derrig, Thomas.
De Valera, Eamon.
Doherty, Hugh.
Everett, James.
Flinn, Hugo V
Flynn, Stephen.
Fogarty, Andrew.
Geoghegan, James.
Gibbons, Seán.
Goulding, John.
Hales, Thomas.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Keyes, Michael.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
McEllistrim, Thomas.
MacEntee, Seán
Maguire, Ben.
Moane, Edward.
Murphy, Patrick Stephen.
Murphy, Timothy Joseph.
Norton, William.
O Briain, Donnchadh.
O'Grady, Seán.
O'Reilly, Matthew.
Pattison, James P.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Traynor, Oscar
Victory, James.
Walsh, Richard.

Níl

Anthony, Richard.
Bennett, George Cecil.
Brennan, Michael.
Broderick, William Joseph.
Burke, James Michael.
Burke, Patrick.
Coburn, James.
Cosgrave, William T.
Costello, John Aloysius.
Curran, Richard.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Fagan, Charles.
Finlay, John.
Fitzgerald, Desmond
Fitzgerald-Kenney, James.
Haslett, Alexander.
Holohan, Richard.
Keating, John.
Lavery, Cecil.
Lynch, Finian.
McFadden, Michael Og.
McGilligan, Patrick.
McMenamin, Daniel.
Minch, Sydney B.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Nally, Martin.
O'Donovan, Timothy Joseph.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, Gearóid.
O'Sullivan, John Marcus.
Reidy, James.
Rice, Vincent
Rogers, Patrick James.
Thrift, William Edward.
Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Question declared carried.

SECTION 25.

Professor O'Sullivan

On behalf of Deputy Mulcahy I beg to move amendment No. 12:

Before Section 25 to insert a new section as follows:—

The duty of five shillings per ton imposed on coal, culm, shale, slack and coke and also solid fuel which in the opinion of the Revenue Commissioners is composed wholly or mainly of coal or coal dust under the Emergency (Imposition of Duties) (No. 5) Order, 1932, and confirmed by the Imposition of Duties (Confirmation of Orders) Act, 1933 (No. 21 of 1933) shall cease to be charged, levied or paid as on and from the passing of this Act.

We have had examples already of what I may call the topsy-turvy policy of the Government in certain matters. But anything more irrational than their conduct in connection with this tax on coal it is difficult to imagine. We are asking for the removal of this particular tax on coal. Everybody will remember the excuse that was put forward at the time of the imposition of this tax. Even at that time it was a mad idea to strike the Government to adopt this tax, at least if it was their purpose to use it as an economic weapon in the economic war. Anything more foolish or ill-conceived than that particular tax on coal it would be difficult to imagine. It was, as the House will remember, a tax imposed on British coal which was meant to hit back against the British in the economic war. It was pointed out at the time that it could have no such effect. The only result of such action on the part of the Government would be that our cattle would be heavily taxed going into England, and we would pay that tax owing to the fact that we were only supplying a portion of the English market and that most, or practically all, of our cattle had to go into that market. It was pointed out, in these circumstances, and would be plain to anybody except the Executive Council, that the people of this country would have to pay that tariff—every penny of it. That is what happened. Of course, it was denied at the time; now it is acknowledged by everybody.

Then a brilliant idea struck the Government. They said: "What about taxing English coal?" With that simplicity of mind that characterises them on certain occasions, they assumed that because a tax was put on cattle by the British Government and paid by Irish farmers, if a tax was put on British coal by us it would have to be paid by English producers and not by Irish consumers. Again it was quite clear to anybody who gave the conditions of the country a moment's consideration that what would happen would be this: There might be interference with the amount of coal that came into this country, but the tax would be paid not by the British producer but by the Irish consumer. That, of course, was what happened. The only excuse offered for the putting on of this tax—we heard no other justification for it and I wonder will we hear one from the silent Minister to-night—was that it was a weapon in the Irish war. It was a weapon with the unfortunate characteristic of the boomerang when used by unskilled hands. It had the effect merely of increasing the cost of British coal to the Free State, yet it was hailed at the time as the first of the great big strokes that were to be delivered against the British Government to bring them to a sense of the seriousness of entering into an economic war with this country. Anything more foolishly conceived than such a plan it would be difficult to imagine. But foolish as was that plan, the whole thing became nonsensical when the embargo on British coal was declared off and not merely was the divorce between ourselves and the British declared off, but there was to be close union between the two countries, and, in the future, not merely were we to be allowed to take British coal but were to be compelled to do it and, incidentally, to pay an extra 5/- per ton by way of tax.

That 5/- per ton we could escape at first by taking Continental coal instead of British. Now, as a result of the friendly relations established in the war which still continues, we are compelled to take British coal, and that economic weapon which was one of the methods of attacking the British now stands forth clearly, for what it really is, merely a dodge to raise revenue by a tax which is pressing upon everybody. It presses upon people who buy one or two tons of coal, but it presses still more upon people who only buy a bag of coal at a time. That tax is left, and not merely is it left, but now it is imposed on everybody as he has to buy English coal. What was to be a great counter offensive, in the economic war, has now become a weapon for drawing the last penny out of the pockets of the people of this country.

I do not know whether it is £600,000 or not—I forget the actual figure—that the Minister expects to get from this particular tax, but the House will notice that whatever excuse was ever put forward for this particular tax has vanished—I was going to say has more than vanished. However, if it was possible for the Ministry to do anything absurd they would, of course, do it. Not merely has the excuse vanished for this tax, but now we are compelled, whether we like it or not, to buy coal that we were warned not to buy at the time when the tax was first imposed, and we are compelled to do that in the new atmosphere of friendship between the two Governments who are at war.

The war goes gaily on; the fight still goes on, but the burden remains to the people of this country. The people find that the knife they were using against the other side has an unhappy knack of closing and cutting off their fingers. There has been reference to taxes put on in war conditions. Here was an actual war tax meant to hit others and not to tax the people of this country. It was never meant as a tax at all and in fact we were told, when this tax was put on, by many Government spokesmen that it was not the people of this country who would pay this tax but the producer in Great Britain. Unfortunately, even when we had the Continental coal market open to us, that particular statement was not true. How much less is it true now when the Continental coal market is closed to the people of this country and when the people are compelled, by the recent pact, to take British coal and to take only British coal? What is the justification? A war tax, a war measure meant to hit the enemy, kept on in the dire straits of the Government so that they can scrape every penny from the unfortunate taxpayer to meet bloated expenses, because it is absurd to say that this tax cannot be got rid of, as the Minister used to say when he made even the pretence of putting forward a case in this House in favour of the policy he is meant to sponsor.

What is the excuse now? None whatsoever. Expenses are mounting up year after year and mounting up by the million. It is inevitable, if the Government goes in for the policy of gross extravagance, on the one hand, because that is what they are doing, that they have to grind the last 1d. out of the unfortunate taxpayer, on the other hand, and they have to utilise discreditable methods of this kind and turn what is meant, as I say, to be a great war weapon into a weapon against our own people. For that reason, I ask the House to support the amendment.

Mr. Corish

This is a part of the Government's policy which I find very hard to understand. I find it very hard to understand the mentality that conceived it. Prior to the Coal-Cattle Pact, one would be looked upon as unpatriotic if one supported British coal, and, in some quarters, one would be called a traitor for doing so. Public bodies in various parts of the country were almost compelled by the Local Government Department to use Continental coal. This Continental coal could only be brought in in large complements by large steamers, and these steamers were unable to enter the smaller ports, with the result that during the 12 months prior to the Coal-Cattle Pact, a great number of harbour authorities suffered very seriously. Now, since the Coal-Cattle Pact, we are asked to be unpatriotic and, in being unpatriotic, to pay 5/- of a fee. I cannot for the life of me understand why this tariff is put on English coal. We are compelled to take it; we have no option. It is hitting the poor very hard and I am sure it costs the ordinary working man's household at least 6d. per week and that, along with the other taxes imposed by the Government in this Budget, is something which I am not going to support. I think that even now the Minister should see his way to remove the tax altogether. It is an unjustifiable tax. It is certainly not understandable and, to say the least of it, it is absolutely Gilbertian.

Mr. Morrissey

Deputy Corish is, I think, putting it at a very low figure indeed, when he puts the increase at a minimum of 6d. per week in the average household. If Deputy Corish was thinking solely of the 5/- tax, he would probably be in or about right, but the Deputy must remember that it means more than that. This tax becomes particularly harsh because the giving to Great Britain of a monopoly of the coal supplies of this country means not only 5/- per ton tax, but 5/- per ton increase on the coal in addition to the tax, so that the consumer of coal in this country to-day is paying, between the tax and the increase in the price of British coal, that is, the difference in the price over and above the price at which good Continental coal could have been purchased prior to 1st February, at least 10/- per ton. I think Deputy Corish or anybody else in the House will agree that that means a minimum of 1/- per week extra in respect of coal alone in the average household in this country.

Taking three items alone in the Finance Bill—tea, sugar and coal— there is the huge sum of £2,000,000 in taxation imposed on the people. The Minister will get roughly £700,000 from this coal tax. Under the first quota order, the amount of coal to be imported from Britain was roughly 1,100,000 tons. That quota order was due to expire this month. A new quota order has been made for the remainder of this year and, under it, 1,705,000 tons of coal are to be imported, of which 1,704,000 tons must be imported from Britain. It will, therefore, be seen that the quota allows, over a space of about 11 months, an importation of roughly 2,800,000 tons of British coal at 5/- per ton. The people of this country are, however, compelled to pay more than £700,000. I want to submit here that it would be nearer £1,400,000.

Mr. MacEntee

Why not make it £2,100,000?

Mr. Morrissey

The Minister can rebut my figures, if he is in a position to do so, when he is replying. I am putting forward this point and I challenge the Minister to contradict it, that, quality for quality, British coal to-day, including this 5/- tax, is 10/- per ton dearer than it was prior to the coal-cattle pact.

When one has regard to the attitude of the Government on this Finance Bill, one is driven to the conclusion that the coal-cattle pact was negotiated not so much for the sake of getting rid of 150,000 head of cattle, as to enable the Government to collect £700,000 by way of the coal tax. I think that is what is emerging now. The coal-cattle pact surprised everybody in this country. Nobody could understand for a moment how the Government could have concluded such a silly bargain. We can only come to the conclusion that it was arranged and that this monopoly was given to Britain in order to enable the Government to collect, as I say, roughly £700,000 in taxation from the people of this country. We must remember that this is not the only saving the Government has made in this matter. I do not remember the details but when the Government decided to impose a duty on British coal, I seem to remember that there was a question of a half-crown a ton of a bounty or a subsidy or whatever it was called for small boats supposed to be affected. That, I am sure, amounted to a fairly tidy sum which had to be paid by the Government. When the coal-cattle pact was concluded, that subsidy was withdrawn, from the smaller boats. It was supposed to be no longer necessary to pay it and, therefore, there was that saving also. I should like the Minister, if he is going to reply on this, to give us some idea of the sum involved in that subsidy to the smaller boats.

It was first blurted out in the House here that the tax was being retained for the purpose of collecting revenue. Then, as a sort of afterthought, in order I suppose to try to recover a little of the patriotic touch, it was said: "People can burn home fuel; if they burn turf they may not pay the tax on coal." I daresay if they decided to do so, they would very soon find that there was a tax on turf also. The fact remains that there are many reasons why people do not burn turf exclusively. Some people cannot burn turf at all because they have not the means to do so and for many other reasons. One reason that it is not as economic as coal. I think it is admitted by everybody, who knows anything about the matter, that it takes three tons of turf to give the same results as one ton of coal. There is also the question of the inconvenience of storing it in certain private houses because of the bulk of it. If the Minister would take the price of three tons of turf against one ton of coal, even at the increased price, he will find that there is a substantial difference. Here is a tax which was originally imposed for the purpose of keeping British coal out of the country as far as possible. That tax is now being retained although Britain has been given a monopoly of the coal supplies of the country. The people are denied an opportunity of getting coal from the Continent or any other country in the world because of the coal-cattle pact. A fact which I want Deputies to realise is that the people of this country are being compelled to pay not only the 5/- tax for revenue purposes but another 5/- over and above what they were paying formerly, an increase of 10/- per ton in all. That is what the people of this country get on the coal side and we know what they are getting on the cattle side of the pact.

Mr. Rice

Deputy Corish told the House that he cannot understand why the Government have imposed this tax. I think it is rather unkind for Deputy Corish or any member of the Labour Party to criticise the Government for this, because the Government have had the support of the Labour Party for the last three years in wasting the resources of this country, and they must find money from somewhere. Deputy Morrissey has mentioned the fact that in addition to a tax of 5/-, there is an increase in price which the British coal exporters imposed on coal since the coal-cattle pact was entered into. There is another aspect of the matter that strikes me very forcibly as representing a constituency with perhaps more poor people than any other constituency in this country. What is the increase in the price of coal for the poor people of the city of Dublin who buy it in small quantities of a stone at a time? When you come to distribute the increased price of 10/- per ton, over the price of stones of coal, the increase to these people probably works out at £1 per ton.

Deputy Kelly who represents a constituency that I think is almost equally as poor as mine, namely, the South City, told us this evening that he would be confined to barracks if he were to speak on the question of the tea tax. I wonder would Deputy Kelly be confined to barracks by his Party or by his Whips if he were to speak on the coal tax and the effect it has on the poor people of the City of Dublin. This tax is an extraordinary instance of the peculiar orientation of this Government since they came into office. When they first put a tax on British coal as a sort of so-called war measure, they were following the advice which Swift gave this country nearly two centuries ago when he said that we should burn everything English except her coal. The Minister started off with that policy a couple of years ago but now the policy of the Government is that we must not be permitted to burn any coal except British. That is in return for this extraordinary so-called concession, this bargain by which we are entitled to send 150,000 head of cattle more in the year to Great Britain with the duty that we pay the British Treasury on every one of these cattle. This coal-cattle pact is the most astonishing bargain that was ever made by any Government in any country. Such is the condition of desperation to which the country has been reduced by the policy of the Government that even that wretched bargain was accepted by the people. It was accepted by them on the grounds that even a very bad bargain is better than no bargain, having regard to the condition to which the country has been reduced.

Mr. Belton

It was not accepted. The farmers do not want it.

Mr. Rice

I think this tax is on a par with the tax on tea. It is a grinding imposition on the poorest people in this country. I hope that Deputy Kelly will refuse to be confined to barracks and will express his views about it as affecting his constituency.

Mr. G. O'Sullivan

Mr. Bennett

There is a peculiar reluctance amongst Deputies on the Government side of the House to get up and speak in favour of this tax. One Deputy did evade the guards and addressed the House in defence of the Government's proposal, but he was, apparently, effectively silenced. No other Government Deputy has since dared to repeat the process except the Minister by way of interruptions.

Mr. J.P. Kelly

It needs no defence.

Mr. Bennett

Apparently there is no defence possible for the Government's proposals in this Finance Bill. We were treated to the spectacle of an hour's debate on the question of an additional 2/- tax on the bag of flour. We had a discussion in connection with the additional tax of 6d. on the bag of coal. Previously we had discussions on a tax on the bag of sugar and on the bag of tea. A Deputy reminds me that our next discussion will be on a tax on a bag of cement. Well, we have not yet been driven to the stage of eating cement though I think we are coming near it. One Deputy said that this was a 5/- tax on coal, and another said it was a tax of 10/-. I do not know what the amount of the tax will be eventually when the coal reaches the poor consumer through the bellman. When the tax of 5/- a ton comes to be paid by the poor person who purchases a stone or two of coal at a time, I do not know what the actual increase will be. When that 5/- comes to be expressed in vulgar fractions over so many stone of coal, I am afraid it will amount to a considerable sum and particularly after the profiteer has added his little fraction. If I were to refer to the Coal-Cattle Pact, I know that I would be ruled out of order by the Chair. All that I will say on that is that when we export cattle to England Paddy pays the tax on them, and when we import coal from England Patrick pays the tax. Paddy or Patrick has to bear the burden in either case. Yet, there is no Deputy on the Government Benches venturesome enough to get up and attempt to defend this coal tax.

Hear! hear!

Mr. Belton

An Ceann Comhairle

For coal?

Mr. O'Leary

For turf. Well, Sir, it has been argued here that we had fuel of our own, and that there was no necessity to use British coal or any other type of coal. I myself believe that turf is the dearest article that could go into any house, and I may almost say that I was reared in the bog myself. I ran away from it long ago. There used to be great talk of midnight agreement at one time in this House, and I should like to find out from the Minister, when he is replying, when this agreement was signed. The Minister for Finance, the President——

The Dáil adjourned at 10.30 p.m. until 3 p.m. on Thursday, 4th July.

Dáil Éireann debate - Wednesday, 3 Jul 1935

Public Business. - Finance Bill, 1935—Committee (Resumed).

Mr. Kelly

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Dáil Éireann debate -
Wednesday, 3 Jul 1935