Dáil Éireann debate -
Wednesday, 4 May 1938

Vol. 71 No. 4

Committee on Finance. - Finance (Agreement with the United Kingdom) Bill, 1938—Financial Motions by the Minister for Finance.

Minister for Industry and Commerce (Mr. Lemass)

I move Financial Motion No. 8:—

(1) That a duty of customs at the rate of one shilling and sixpence the square yard shall be charged, levied, and paid on all woven tissues which are imported on or after such day as shall be appointed in that behalf by the Minister for Finance and are so imported in the piece and contain, in the opinion of the Revenue Commissioners, not less than forty per cent. by weight of silk and are of a value not exceeding one shilling and sixpence per square yard.

(2) That a duty of customs at the rate of eightpence the square yard shall be charged, levied, and paid on all woven tissues which are imported on or after such day as shall be appointed in that behalf by the Minister for Finance and are so imported in the piece and contain, in the opinion of the Revenue Commissioners, not less than forty per cent. by weight of artificial silk or of silk and artificial silk and are of a value not exceeding one shilling and threepence per square yard.

(3) The provisions of Section 8 of the Finance Act, 1919, shall apply to both the duties mentioned in this Resolution with the substitution of the expression "the area of application of the Acts of the Oireachtas" for the expression "Great Britain and Ireland" and as though the Second Schedule to that Act contained a list of goods which were, by way of preferential rate, to be admitted free of duty and articles chargeable with either of the said duties mentioned in this Resolution were included in that list.

The purpose of this Bill is to give effect to our part of the Trade Agreement, and various sections of the Bill, in a sense, are disconnected; they relate, not so much to one another as to the appropriate Articles of the Trade Agreement. The expression "United Kingdom" is defined as being the "United Kingdom of Great Britain and Northern Ireland, the Channel Islands and the Isle of Man." Deputies will note, however, that the provisions of the Bill relate not merely to the United Kingdom but also to the Dominion of Canada. In 1932 we made an agreement with Canada which binds us to give to the produce of that country upon entry into this market the benefit of the lowest rate of duty applying to the produce of any other country. Canada was the only country with which an agreement of that character was made at Ottawa. An agreement was also made with South Africa, but it provided for specific preferences and not for a general preference of that kind. If it should be decided at a later date, as a result of another agreement, to confer similar treatment on the produce of some other country, then separate legislation would be required for that purpose. The Bill is expressed to come into operation on an appointed day which will be fixed by the Minister for Finance. That day will probably be at the end of next week, assuming that this group of Bills is enacted by the Oireachtas within that period and that the British Government are also in a position to complete their legislation before then, which is probable. Section 3 of the Bill implements Article 11, sub-section (2) of the Trade Agreement; that is to say, it imposes the agreed duties upon silk and artificial silk consigned from countries other than the United Kingdom.

Mr. Dillon

Consigned?

Mr. Lemass

Originating in countries other than the United Kingdom. The effect of the section is, of course, to give a preference to the extent stated to British produce of that character in this market. Section 4 implements Article 16 of the Trade Agreement, in so far as it imposes a customs duty at the rate of 3/- per ton upon coal. The existing prohibition upon the importation of coal will disappear. Section 5 implements part of Article 10 and Schedule 5; that is to say, it imposes a customs duty of 3d. per lb. upon unsweetened biscuits not containing cocoa, which are made from or contain wheat or some wheaten produce. At present some biscuits are not liable to duty, but their importation is prohibited except under licence. The prohibition upon importation will be withdrawn and this duty of 3d. per lb. will operate instead.

Mr. Dillon

Is there any duty at present?

Mr. Lemass

No duty. At present there is prohibition.

Mr. Dillon

Will the Minister tell us what on earth is an unsweetened biscuit not containing cocoa? It must be the queerest biscuit ever made. Is it a dog biscuit?

Mr. Lemass

Certain kinds of crackers are unsweetened and do not contain cocoa.

Mr. Dillon

Will this apply to the big penny biscuit which Messrs. Marsh of Belfast, used to manufacture and which was sold in boxes?

Mr. Lemass

I could not answer that question.

Mr. Cosgrave

Is it an article of diet which soldiers got in tins?

Mr. Lemass

The present position is that biscuits containing wheat are subject to prohibition under the Cereals Act. Biscuits, whether containing wheat or not, but containing cocoa, are liable to a duty of 3/- per lb., with a preferential rate of 2/- per lb. Biscuits, whether containing wheat or not, and not containing cocoa, but sweetened, are liable to a duty of 1/6 per lb., with a preferential rate of 1/-. The only biscuits which are not at present dutiable are unsweetened biscuits, whether containing wheat or not, and not containing cocoa. Biscuits of the same class containing wheat are subject to prohibition.

Mr. Dillon

These biscuits referred to now are going to have a duty of 3d. on them and nobody knows whether they exist or not.

Mr. Lemass

This imposes a duty of 3d. per lb. on unsweetened biscuits, not containing cocoa, which are made from or containing wheat or wheaten product. The Deputy will find that other sections of the Bill relate to other classes of biscuits. The proposal is that prohibition under the Cereals Act is being removed from all biscuits of United Kingdom origin containing any wheat, whether they are sweetened or unsweetened, or whether or not they contain cocoa, and the new United Kingdom preferential rate of 3½d. per lb. is to be imposed upon all biscuits which are sweetened, that is, biscuits whether they contain wheat or not which do not contain cocoa, with corresponding full and Dominion preferential rates of 1/6 and 1/-. It is further proposed to impose a new duty of 3d. upon biscuits containing wheat, not containing cocoa and not sweetened, coming from any country. This leaves the position in respect of biscuits, not containing wheat, not containing cocoa, and not sweetened as at present. That is, they are free of all duty. There is at present a prohibition on biscuits containing wheat. The arrangement under the Bill is that a duty of 3d. per lb. is to be put on unsweetened biscuits containing wheat, but that the prohibition under the Cereals Act will remain in the meantime on all biscuits containing wheat not coming from the United Kingdom. I do not know whether that makes the matter clear.

Mr. Cosgrave

Were there former importations?

Mr. Lemass

It is not possible to say. These biscuits were all subject to prohibition except under licence, and no licences were issued.

Mr. Cosgrave

Previous to prohibition, were they imported?

Mr. Lemass

Previous to that, I do not suppose there was a separate category under the trade returns, and so it would be impossible to say. Under the trade returns they would be classified as biscuits, whether sweetened or unsweetened, or containing cocoa or not. There are, of course, oaten biscuits, rye biscuits, and biscuits not containing wheat, which were imported in the past, and which are also manufactured here. Section 6 deals also with Article 10, Schedule 5, in respect of matters other than biscuits and ply yarns. The effect of the section is to give reduced rates of duty in respect of various articles mentioned in Article 10, which are grown, produced, or manufactured in the United Kingdom and the Dominion of Canada. These rates are less than the full rate, or less than the preferential rate, where there is a preferential rate.

Mr. Dillon

Are you going to take the schedules afterwards or should we raise questions on the schedules as you go along?

Mr. Lemass

I do not know what the procedure is. I am prepared to go through the Bill explaining the effect of the sections and deal with any points raised by Deputies subsequently. There is, of course, the possibility of dealing with these matters on the Committee Stage. It would be preferable to deal with them then.

Mr. Dillon

You would prefer to deal with them in detail on the Committee Stage?

Mr. Lemass

I think it would be better. Section 7 implements Article 9 of the Trade Agreement. Section 8 gives effect to Article 6, paragraph 2, of the Agreement. Section 9 gives effect to Article 6, paragraph 1; that is to say, it reduces the minimum customs duty from two and sixpence to one shilling in the case of goods of United Kingdom or Canadian origin. Section 10 gives effect to Article 10, paragraphs 4, 5 and 7, of the Agreement which deals with the package tax. Section 11 implements Article 17, sub-section (2) of the Trade Agreement which deals with the importation of motor-car lamps. Section 12 implements Article 17, sub-section 3, of the Trade Agreement, which is the same section as that to which sub-section 11 of the Bill relates. Section 13 of the Bill deals with Article 10, Schedule 5, of the Trade Agreement. It exempts from duty articles which are ply yarns and are made wholly or mainly of flax. They were liable to a duty of 100 per per cent.

Mr. Cosgrave

There is no prohibition, is there?

Mr. Lemass

No, there is no prohibition other than the duty, the ply yarns being manufactured here. Section 14 implements Article 5, paragraph 2 of the Trade Agreement, as regards certain of the articles mentioned in Part II of Schedule 4 by repeal of the duties on certain articles of United Kingdom or Canadian origin. Section 15 implements Article 7 of the Trade Agreement. Section 16 gives power to the Minister for Industry and Commerce to make regulations prescribing the proportion of the value of an article which must be the result of labour within a particular country in order that such article may be regarded as an article manufactured in that country. Different regulations may be made in respect of different classes or descriptions of articles. I should say that in calculating the proportion of value account will be taken also of materials added in the particular country.

The Bill is one to give effect to the various parts of the Trade Agreement under which we undertake to do certain things of benefit to British producers and manufacturers. It is largely a reproduction of the terms of the Agreement itself and raises no new point which was not discussed when the question of approving the Agreement was before the House.

Mr. Cosgrave

The Minister in his concluding statement said it raises no new point. Would he say if this Bill goes in any way outside of the implementation of the Agreement? It does appear on its face to depart slightly from some of the clauses, if not most of the clauses, which it is proposed to deal with. In connection with ply yarns, which he has mentioned, have they any comparison with what are called worsted yarns?

Mr. Lemass

Oh, no.

Mr. Cosgrave

None whatever?

Mr. Lemass

The ply yarns are flax.

Mr. Cosgrave

There is mention in the course of the Bill of goods from Canada. That is not in the Agreement, and I think the Minister did not refer to that, at least not while I was in the House.

Mr. Lemass

I mentioned that. In 1932 we made an agreement with Canada, under which we undertook to give them the benefit of the lowest duty applying to the goods of any other country, and we have consequently to extend to Canada the benefit of any concessions given now to the United Kingdom. That requires legislation, and advantage is being taken of this Bill to effect that legislation. Canada is the only country with which we have such an agreement. If an agreement of a similar kind should be made with any other country subsequently fresh legislation will be required.

Mr. Cosgrave

That is the only departure from the implementation of the Agreement?

Mr. Lemass

That is so.

Mr. Dockrell

I would like to ask the Minister a question. The effect of No. 6 is to reduce the duties to the rates mentioned in the First Schedule as applied to the United Kingdom and Canada. I take that to be the position.

Mr. Lemass

That is right.

Mr. Dockrell

Well, now, there is just one little thing that I am interested in—there may be some others— No. 14; that is, about articles made wholly or mainly of wood. I notice there are not less than five references, and I take it that the Minister on the Committee Stage will be able to give us in a broad way just what is the effect under that section, because, while I would like very much to look up the five references, I would not say that I would be in a position to do that before the Bill comes on to the Committee Stage, and I think the Minister ought to give us as far as possible on the Committee Stage the "boil-down" of what these various things are.

Mr. Cosgrave

There is one other point that I would like to draw the Minister's attention to. It is in the First Schedule, the third last item— boots and shoes. The rate at which the duty is to be charged is 20 per cent. I understand that there is quantitative regulation at present in operation; there is a prohibition on boots and shoes except as regards a certain quantity. The method of dealing with that will, I presume, be decided by the Prices Commission ultimately. In connection with that it is mentioned here: "boots and shoes of which the upper is wholly or mainly of leather or skin or either of them." The Irish boot manufacturers are compelled to use Irish leather, I believe, in the product of their manufacture. Will that matter be the subject of investigation by the Prices Commission? What is the relative advantage or disadvantage which the Irish manufacturers have to endure in connection with their manufacture? In other words, we will assume that the British manufacturer produces boots and shoes and that their quality and price, compared with the Irish quality and price, differ. Will allowance be made by the Prices Commission in the investigation of whatever quality material the Irish manufacturers are bound to use in the manufacture of their goods? Does the Minister get my point?

Mr. Lemass

Yes, certainly.

Mr. Larkin

The finest kids are all produced outside the United Kingdom. They are all foreign production. It is only where you have got sole leather and heavy leathers that you are getting this prohibition tariff. I think while Deputy Cosgrave is making the point that one that ought to be more carefully considered is whether you are going to put these new factories in Enniscorthy and Gorey in a position that they will have to close. If people want particularly superfine uppers— mostly ladies of course who are always patriots! —they will buy them and they ought to be made pay for them. We can produce a very decent leather for uppers for fine boots but we cannot produce these superfine leathers and they are coming in now on a quantitative agreement, as you know, in thousands. There is also a sole leather and heel leather that should never be allowed in. At the present moment I suppose your office is submerged with submissions that you ought to give them further leave to import uppers and so on. I hope there will be no change in the shoe industry until the Prices Commission have considered and have reported to you.

Mr. Moore

This is really a Committee point but it has been put to me by an interested party and I think I should give the Minister a chance of answering it now. With regard to clause (g) Section 12, dealing with motor cars— a £750 motor car is to be admitted free if it is shown to the satisfaction of the Revenue Commissioners to be of a type which is ordinarily kept for the personal use of the owner and members of his family or household. The question I was asked to address to the Minister was whether that precludes a car from being used for taxi purposes—taxi or hire purposes. Further, there is a point in the same paragraph—a motor car which is of a value of not less than £750—does that mean the c.i.f. or retail selling value?

Mr. Benson

I notice that in his explanation the Minister passed rather rapidly over Section 6. I hope that does not indicate that he does not understand it any better than I do. The section, of course, refers to Article 10, is it not, of the Agreement? The Schedule attached to Article 10 is divided into two parts. The Schedule attached to Section 6 is in a single part. I do not know what the proposal of the Minister in that way is. This Section 6 is for the purpose of reducing the duty, but the Article also contains provision for a higher duty if quantitative control is removed or for the reimposition of quantitative control at a later time. Are we to understand that it is the Minister's view that the duty should be reduced and, if necessary, further legislation should be introduced to deal with the matter, or has he at the present moment sufficient legislation to deal with that situation?

Mr. Cosgrave

Would the Minister also refer to reference No. 10 in the First Schedule, which is much the same case as that which I mentioned in connection with boots and shoes?

Mr. Lemass

Some misunderstanding appears to have been caused amongst boot and shoe manufacturers and their employees, and also amongst their customers, the retail distributors of boots and shoes, as to the effect of the Trade Agreement. The Agreement operates to reduce to 20 per cent. the import duty upon boots and shoes, but the importation of all boots and shoes is at present prohibited, except under licence. In so far as the protection afforded to Irish boot and shoe factories is concerned, the duty is of no real consequence. The effective protection is given by the prohibition of imports. A periodic quota is fixed which represents only a very small fraction of our requirements, but, apart from the quota, no boots and shoes can be imported. That is the present position, and that position will continue until there has been a review by the Prices Commission of the position in respect of the boot and shoe trade.

The Agreement involves the substitution of the quantitative regulation of imports by a Customs duty, but it specifically provides that when quantitative regulation ceases to operate the duty upon boots and shoes may be increased. It will, of course, be a matter for the Prices Commission, following its investigation, to say to what extent an increase in the duty upon boots and shoes is necessary in order to offset whatever disadvantages boot and shoe manufacturers in this country may have as compared with boot and shoe manufacturers in Great Britain. If their labour costs are higher, if their raw materials cost them more, if they are subject to disadvantages by reason of the restricted size of the market, or any other cause, then, my view as to the correct interpretation of Article 8 would enable the Prices Commission to fix the duty at such a level as would offset these disadvantages. Whether it is correct or not that their raw materials cost them more is a matter I need not discuss. There are certain types of leather produced here which appear to be cheaper than the corresponding types produced in Great Britain, but that is, of course, a different thing from saying cheaper than the price at which British manufacturers can buy, because they may be able to import leather at a cheaper price. The other classes of leather are higher. We are not at present making all the upper leather required by our manufacturers and a fairly substantial development in production will be necessary before all that upper leather will be produced here; but if that leather should be dearer it is clearly indicated that the duty should be sufficient to offset that higher cost as well as any other higher costs or disadvantages which local producers may have. It is intended that that will be done following a review by the Prices Commission before the quantitative regulation of imports ceases. Any retailer of boots and shoes who delayed purchasing his requirements from Irish factories in anticipation of an early modification of the import restrictions would be unwise. There will be no modification of the import restrictions until the review by the Prices Commission has been completed.

Deputy Dockrell will find the woodwork in respect of which a reduction of duty is being effected at Reference No. 267 in the Tariff List. It is a very long list which would take some time to read out. The principal classes of woodwork affected are builders' woodwork, boxes and articles of that kind. These goods will be subject to a lower rate of duty when imported from the United Kingdom of United Kingdom origin. Deputy Moore raised the question of motor cars. As the Deputy will notice, the Agreement obliges us to give the benefit of the reduction in duty to private motor cars, and only to private motor cars, of c.i.f. value of £750 or more. In fact, cars of that value have not been assembled here, other than omnibuses and cars which do not come within the description of private motor cars. It is clearly intended that the benefit of the reduction should be given only to private motor cars as defined in the Bill.

Mr. Larkin

The Minister did not refer to rubber boots and over shoes and rubber heels. Is there going to be any alteration of the position in regard to these?

Mr. Lemass

There is no change being effected immediately by the Agreement, but, of course, as in respect of any other article, there may be a review of the present position by the Prices Commission. The Agreement by itself effects no immediate change.

Mr. Moore

May I point out to the Minister with regard to what he has said on the question of these expensive motor cars that it will be very hard to administer that provision? Can the agent or trader import these cars only after he has received an order, on a guarantee that he is going to sell to a private motorist only when he can guarantee that the car will be used only for personal purposes? It looks a very difficult provision to administer.

Mr. Lemass

There is a definition in the Bill. In order to get the benefit of this reduction in duty the car must be of a value of not less than £750; it must be shown to the satisfaction of the Revenue Commissioners to have been manufactured in the United Kingdom or in the Dominion of Canada; it must in the opinion of the Revenue Commissioners be suitable only for the carriage of persons or of persons and their personal luggage; it must have, in the opinion of the Revenue Commissioners, seating accommodation for not more than six persons exclusive of the driver and must also be shown to the satisfaction of the Revenue Commissioners to be of a type which is ordinarily kept for the personal use of the owner and members of his family or household. I think that is as elaborate a definition as we could get.

Mr. Moore

Surely the last provision will be impossible to administer?

Mr. Lemass

The section says "of a type". It is not a matter of the intention of the owner, but the type of car.

Motion put and agreed to.

Mr. Lemass

I move Financial Motion No. 9:—

(1) That save as is otherwise provided by this Resolution, a duty of customs at the rate of three shillings the ton shall be charged, levied, and paid on every of the following articles imported on or after such day as shall be appointed in that behalf by the Minister for Finance, that is to say:—

(a) coal, culm, shale, slack, and coke, and

(b) solid fuel which, in the opinion of the Revenue Commissioners, is composed wholly or mainly of coal or coal dust.

(2) That the duty mentioned in this Resolution shall not be charged or levied on any article which is shown, to the satisfaction of the Revenue Commissioners, to have been produced or manufactured in the United Kingdom of Great Britain and Northern Ireland; or in the Channel Islands, or in the Isle of Man, or in the Dominion of Canada.

Motion put and agreed to.

Mr. Lemass

I move Financial Motion No. 10:—

That a duty of customs at the rate of threepence the pound shall be charged, levied, and paid on all biscuits which are imported on or after such day as shall be appointed in that behalf by the Minister for Finance and, in the opinion of the Revenue Commissioners, are made from or contain wheat or a wheaten product and do not contain cocoa and are not sweetened.

Motion put and agreed to.

Mr. Lemass

I move Financial Motion No. 11:—

That where a number of articles collectively chargeable with the duty imposed by Section 12 of the Finance Act, 1934 (No. 31 of 1934), at the rate mentioned at reference No. 16 or at the rate mentioned at reference No. 17 in the Fourth Schedule to that Act includes an electric filament lamp chargeable with the duty imposed by the Emergency Imposition of Duties (No. 45) Order, 1934, made under the Emergency Imposition of Duties Act, 1932 (No. 16 of 1932), such lamp shall, if imported on or after such day as shall be appointed in that behalf by the Minister for Finance, be chargeable with the said duty imposed by the said order, and the value of such lamp shall not be reckoned in the computation of the total value on which the amount of the said duty imposed by the said Section 12 is chargeable at the rate aforesaid on the said number of articles so collectively chargeable.

Motion put and agreed to.

Mr. Lemass

I move Financial Motion No. 12:—

That wherever a statute or a statutory order (whether passed or made before or after the passing of this Resolution) contains a provision to the effect that, if the Minister for Finance, after consultation with another Minister, so thinks proper, the Revenue Commissioners may by licence authorise a person to import articles chargeable with the duty to which such provision relates without payment of such duty or on payment of such duty at less than the rate ordinarily chargeable, such provision shall, as respects licences issued thereunder on or after such day as shall be appointed in that behalf by the Minister for Finance, have effect subject to the following modifications, that is to say:—

(a) the Minister for Finance shall, in the exercise of the powers conferred on him by such provision, have regard to Article 7 of the Trade Agreement made on the 25th day of April, 1938, between the Government and the Government of the United Kingdom;

(b) in the exercise of the said powers the Minister for Finance may do either or both of the following things as he shall, after consultation with the other Minister mentioned in such provision, think proper for the purpose of complying with the said Article 7, that is to say:—

(i) restrict any licence issued under such provision and authorising importation without payment of the duty to which such provision relates to articles grown, produced, or manufactured in any of the following places, that is to say, the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, and the Dominion of Canada;

(ii) require that the duty to which such provision relates shall be charged, levied, and paid at a particular rate on articles grown, produced or manufactured in a particular country (other than the said United Kingdom, the Channel Islands, the Isle of Man, and the said Dominion) and imported under a licence issued under such provision.

Motion put and agreed to.

Resolutions reported and agreed to.