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Dáil Éireann debate -
Thursday, 5 May 1938

Vol. 71 No. 5

Finance (Agreement with United Kingdom) Bill, 1938—Committee Stage.

Section 1 to 4, inclusive, agreed to.
SECTION 5.
Question proposed: "That Section 5 stand part of the Bill."

I asked the Minister yesterday if it were present to his mind what class of biscuits this section really referred to, and I understood him to say that, at the moment, he could not tell me the exact class of biscuits to which it referred. I wonder if the Minister has had the opportunity since of ascertaining the class of biscuits referred to?

Of course, I can tell the Deputy that the class biscuit referred to, in the parlance of the Bill, is an unsweetened biscuit not containing cocoa, but it the Deputy desires me to give him the trade names under which these biscuits are sold, that would be a matter of some difficulty. The section refers to a duty of 3d. per lb. on all biscuits imported which are made from or contain wheat or a wheaten product and do not contain cocoa and are not sweetened. I think the Deputy may take it that all unsweetened wheaten biscuits would be included in that class.

Yes, but what I am really concerned with is the question of whether or not this duty has reference to what is popularly known in the country as the "farthing biscuit" On fair days biscuits of that kind used to be sold and bought by the country people for their lunches. They used to be sold by Marsh's, of Belfast, and by Jacob's

Was that a sweetened biscuit?

Well, I am not quite sure whether it was or not. I think it is a biscuit made of wheat and do on, but I do not know whether it would be classed as sweetened or not. However, Deputy O'Neill tells me that there is probably sugar in these biscuits, and in that event it may come under the classification of a sweetened biscuit. However, perhaps the Minister would inquire into that matter?

The reference here is only to unsweetened biscuits—such as dog biscuits.

Oh! such as Ryevita?

Ships' biscuits and water biscuits.

Section 5 put and agreed to.
SECTION 6.
Question proposed: "That Section 6 stand part of the Bill."

I wanted to ask a question with regard to the First Schedule here, but perhaps it would be better to wait until we come to the discussion of the First Schedule.

The First Schedule is mentioned here.

Yes, the First Schedule related to Section 6.

That is right. The First Schedule relates to Section 6, which the Deputy may discuss now.

Well, Sir, I just want to get the effect of it. The First Schedule lays down certain duties which are to be charged on United Kingdom and Canadian goods instead of the existing duties. Now, I take it, from the explanation that the Minister for Industry and Commerce has given us, that, on the ratification of this Agreement, the rates of duty in the First Schedule become operative subject to any quantitative control of those goods. Where there is quantitative control of those goods, as I understand it, that control and the duty will remain until the Prices Commission review them. Where that quantitative control is not to be continued, they will then substiture, for the quantitative control and that duty, a new duty, which may be the same as the existing duty, but which anyway will be minus the quantitative control. Where there is no quantitative control on the articles mentioned, but where there is a duty, that duty will stand and come into operation, so far as I understand. Now, I should like to ask the Minister whether or not the members of the Prices Commission will or can review that in their ordinary procedure, or will they wait for some special request to review any of the articles mentioned in the First Schedule?

I think the Deputy has got it fairly right. The only point is the possibility of the Prices Commission reviewing the reduced duty for which the First Schedule provides. There is of course, nothing in the Agreement or in legislation so far which prevents the commission from doing so, but I think the Deputy may take it as being extremely improbable that the commission might do so at an early date. It is possible that the commission might arrive at some such conclusion at a later date, but I think the Deputy may take it that the concern of the commission, very probably, in its early stages, will be related to goods which are subject to quantitative regulation. Of course, at a fairly early stage—although I cannot say when— the question of substituting a duty for quantitative control, with regard to certain classes of goods to which such control applies, will have to be considered, but with regard to other classes of goods, an early review will be a matter of inquiry.

Yes, but where there is a question of quantitative control, that quantitative control remains until it is reviewed by the Prices Commission, and then the commission remove the quantitative control, but substitute a new duty, which may be the same as, or increase or reduce the duty in the First Schedule.

Yes, that is right.

I want to ask the Minister some questions with regard to certain duties, and I think in dealing with this Schedule and indeed with all this Bill, we should not lose sight of Article 14 of the Agreement, which is a valuable article, and also Article 18, which provides for further consultation in the event of the Agreement working out in any unexpected way. Now, take the case of linen thread. At present linen thread is subject to a duty of 100 per cent., and here it is proposed to reduce the duty to 40 per cent. Does the Minister propose to have recourse to Article 14 in order to protect linen thread?

If necessary. The Deputy may not be aware that the duty originally imposed on linen thread was 40 per cent., and 40 per cent. should be quite adequate protection to the manufacturers of linen thread here. It was increased to 100 per cent. only because dumping was in fact being resorted to against them and also the under-cutting of prices for the purpose of taking their market. We have agreed to reduce the duty to 40 per cent. because we are relying on Article 14, and if dumping, as defined there, should be resorted to, then Article 14 would have to be invoked. But on the basis of fair and normal competition, the industry here should be well able to maintain itself on the basis of a 40 per cent. duty.

The next item I want to refer to is shirts. The duty is reduced to 30 per cent., and I think at present it is 40 per cent. We have to bear in mind that, while the Bill is part of the legislation implementing the Agreement, it is also a tariff Bill in the ordinary sense of the work, and the reactions of certain of these tariffs on the industry must be considered. I want to make one point to the Minister. We are going to let in shirts at a duty of 30 per cent., which, I think, is a reasonable duty and a generous duty even, and also shirt collars at 30 per cent. But the Minister ought to consider at once the state of the raw materials of the shirt industry. For instance, the type of collar which I am wearing at present is made of an interwoven material which is used by most collar-makers at present and is also used for the purpose of fronting and cuffing shirts. It is not obtainable in this country, and there is at present being levied upon it a duty which I believe was originally put on to protect flannellette. I put it to the Minister that he ought to make that material available at once to our shirt manufacturers. If this duty is going to be reduced, general licences ought to be issued to them for the purpose of importing that textile. There is this additional justification for such a course, that the textile is of such a character that it could not possibly be used for any purpose other than shirt collars, cuffs, and fronts. You could not use it for any other form of clothes, because it is too stiff and strong. You could not, for instance, convert it into sheets or anything like that. The only thing it is suitable for is semi-stiff shirt collars, cuffs, or fronts. I can assure the Minister that that is a matter of urgent importance for the shirt trade and for the collar trade at present. Under sub-head 10, the duty on under-garments is reduced to 33? per cent. That was something higher, but I cannot remember what it was.

Forty per cent. was the minimum.

These are all woollen garments.

"Wholly or mainly of wool and either are wholly or mainly knitted or are made of knitted fabric."

The duty there is going to be reduced to 33? per cent. I think they will have a fair run for their money there. In regard to blankets, I think it right to draw the Minister's attention to this. I have heard loud lamentations from certain manufacturers that the reduction of the tariff to 25 per cent. is going to cripple them. I do not believe that myself. I believe, for instance, that the Providence Woollen Mills could compete with any country in the world if they have a tariff of 25 per cent. But it has been mentioned to me that in certain circumstances that tariff is going to cripple certain units in the blanket trade. I think the Minister might look into that question with a view either to putting an end to talk of that kind or to find out what is the special difficulty which besets the complaining parties who are talking a great deal about the reduction of that tariff. I also wanted to ask what is the significance of item 19—woven tissues made wholly or partly of wool and chargeable with the duty imposed by Section 11 of the Finance Act, 1934.

Ordinary woven tissues.

All of them.

All woven tissues. There are two duties, one on articles of a value under 1/3 per square yard, and one on articles over that. They are subject to quantitative regulation.

In addition to this?

Therefore this duty will come up for immediate revision by the Prices Commission?

It is rather odd that you should not incorporate in the actual Schedule to the Agreement a duty which will be the first to be reviewed.

I do not say the first, but it will be an early one.

It gives the British producer some temporary preference over foreign producers in the interregnum?

There is an existing duty?

Yes, of 30 and 20 per cent. It is reduced to 15 per cent. and 10 per cent. The effect is, not to permit of more cloth coming in and to ensure that those who get licences will in fact have an inducement to use these licences to import British rather than cloths of other origin. On the other point raised by Deputy Dillon, I can only say that in preparing these lists of duty reductions, which were the subject of very detailed and protracted discussions, we endeavoured to ensure as well as we could that none of the reductions went so far as to endanger the prospects of the industries concerned in the production of these goods. In order, however, to make doubly sure, we got inserted in the Agreement a clause which provides that, if the imports of the goods are so increased as a result of the reductions that the prospects of success of the producers and manufacturers of the goods in Éire would be endangered, then in such circumstances we can impose quantitative regulations. If we do impose that quantitative regulation, we have to discuss with the United Kingdom Government the question of the quantity of these goods of United Kingdom origin that will be admitted in. I think myself that the Deputy is correct in the assumption that with the 25 per cent. duty the manufacturers of blankets should be well able to hold the market.

As to the question of certain classes of cloth used by certain shirt manufacturers, there is probably nothing so difficult as the regulation of importation of shirting cloth. There are two or three diverse purposes to be served at the same time, one to convenience the shirt manufacturers—you want to encourage them to use our own cloth to whatever extent is possible and you want, at the same time, to give them reasonable varieties but not sufficient latitude to induce them to change over to imported cloths from those that are made here. These matters are the subject of continuous discussions between the inserted parties and officers of my Department, but I am not sufficiently familiar with them to say precisely what particular class of cloth is allowed in under licence at the moment or what is subject to restriction of any kind. If the clothing manufacturers have a case to make on that I am quite certain they will make it, and I may say we will go as far as it is possible for us to meet them, subject to the quantities of shirting cloth we produce within the country. I think, however, with the 30 per cent. duty against United Kingdom goods they are still adequately protected. The most dangerous competition from the point of view of the shirt manufacturers came, I think, from countries other than the United Kingdom. In recent years some very cheap goods of that class were available from Japan and certain other countries but, of course, as against these goods the old duty still operates.

There was a point I mentioned yesterday on the Second Reading which the Minister did not deal with in his reply. Article 10 provides, as the Minister has just mentioned, for the reimposition of quantitative control and also for the increase of duties when quantitative control is first removed. There is nothing in the Bill about either of these. Has the Minister sufficient power at the moment or will that require fresh legislation?

Oh, no; there is ample power to deal with that without further legislation.

Question put and agreed to.
Section 7 put and agreed to.
SECTION 8.
Question proposed: "That Section 8 stand part of the Bill."

There is a 6d. stamp required on the entry form in the case of non-dutiable goods. That is being abolished in the case of United Kingdon goods.

those are the only former tariffs that are interfered with— tariffs before the Government came into office-pakage duty?

I do not think that that was a tariff; it was a device for raising a certain amount of revenue. This stamp applied only to goods that were not subject to duty.

You are not at all sure of that. It was for the purpose of stopping them comming in, was it not?

This stamp applies to goods that are not subject to duty.

I know they were on before and it stopped that trade. It was for the purpose of keeping the trade here. It is not Fianna Fáil propaganda we are dealing with now; it is business.

I do not know what class of propaganda we are dealing with now. I do not recognise it.

Question put and agreed to.
SECTION 9.
Question proposed: "That Section 9 stand part of the Bill."

Is the Minister free to give us any information on what the reason was for the reduction of this minimum duty from 2/6 to 1/-

I think the idea was to encourage whatever trade might be available by way of small parcels sent in from distributing houses. I am not at all sure that the reduction of the minimum customs duty does in fact facilitate that particular class of trade, but I think that was the reason for which it was pressed. The Deputy must not ask me to try to interpret the minds of the British Government in the matter. They suggested that these changes should be effected—the abolition of this stamp duty in the case of non-dutiable goods, the reduction of the minimum duty in the case of dutiable goods, and the modification of the package duty for which this Bill also provides. Clearly the type of trade that is affected by these imposts is retail distribution, trade by parcel post, or over the the Border or from distributing houses rather than the bulkreade that would be done by a manufacturer with wholesale distributors. Some of these reductions for which the Bill provide will undoubtedly facilitate that type of trade. It will facilitate certainly that trade in the case of non-dutiable goods. Of course, from the industrial point of view, in the case of dutiable goods, the protection is the amount of duty that is imposed, and it will continue to operate. In fact, there will still be a minimum duty operating. I think the operation of the minimum duty couveniences the importer rather than inconveniences him, because it makes a certain simple arrangement possible, whereas, without it, there might be delays arising out of the necessity for calculating the exact amount of duty in the case of single article costing 9¾d. or 8¾d. or something of duty but the effect of all the changes is, undoubtedly, to facilitate that kind of, distributive trade.

I suggest to the Minister that there is a further thing that will result from this and that is the goodwill which is equally as important as anything else. In the case of the small gifts which are occasionally sent to this country at Christmas and other times, I think it means a reduction from 3/- with the 6d. stamp off—a reduction from 3/-. It that applies it will mean, I think, in a large number of cases that people will be disposed to send gifts to this country.

Gifts were one of the things which were definitely mentioned. They were liable to a minimum duty and Post Office delivery charge and package tax as well.

I appreciate the good will to which Deputy Benson referred and I am sure it is a valuable asset, but let us not close our eyes to what this reduction is going to mean. It certainly is going to stimulate the postal shopping with Selfridges, Harrods, Barkers and the other large stores that advertise in the British papers coming in here. And, now, that postal shopping can come to a very substantial total, as those advertisements prove, because these stores would not spend thousands of pounds putting advertisements in the papers if they did not draw custom and, as a matter of fact, having worked as a shop assistant in a big London store myself and having for some time worked as the postal clerk, I know what volume of postal orders does come in to these London shops. Now we have set certain standards of employment in shops in Ireland and they are pretty high. No such standards apply in Great Britain and I do advise the House to bear this in mind that this is just one of those cases where we have got to watch. If we fix by law certain standards for our employees in this country we have got take reasonable measures to ensure that we will not permit competition founded on inferior standards. We have fixed high conditions for the shop assistants in this country and the general inclination and trend is to improve them to the best of our ability. We ought to watch. I do not say that this reduction in the duty is going to have a disastrous effect. I do not think we can possibly know until we see it in practice, but I think we ought to be on our guard in that matter. If we have large distributive centres paying rates and so forth in the City of Dublin we ought to be reluctant to encourage people to pass their trade over to large stores in London, or Manchester, or elsewhere.

I think what the Deputy says is correct. The effect of the Article and the changes which it provides is to encourage that type of business, at any rate, if not to encourage it, to make it less difficult to carry on in the future than it has been in the past. The Article would not be there if I had my way, but there it is.

Question put and agreed to.
SECTION 10.
Question proposed: "That Section 10 stand part of the Bill."

Perhaps the Minister would expound this section to us a little more. Does he apprehend that it will have any effect on the packing industry in this country?

None at all may convenience people shopping in Border towns, or the sending in of gifts, to which Deputy Benson referred, but, apart from that, I do not think it is likely to upset the packing industry. The reduction only apply in respect, of goods imported, on the one hand, for the personal use of the importer, that is if a person goes into Derry, for example, and makes purchases there and goes back again, the goods if dutiable will be liable to duty and the duty will be charged, but a package tax will not be charged over and above the duty. A second example is that of gifts which are sent in for the use or enjoyment of the consignee and which are imported through the post. The third provides for the case of a limited number of parcels sent in through the parcel post. A box of half a dozen Oxo cubes, for instance, would pay only one tax on the cover and not a tax, as at present, upon each cube.

Question put and agreed to.
Question proposed: "That Section 11 stand part of the Bill."

Would the Minister explain if there is anything more in this section than appears on the face of it, namely, that an electric lamp might come in as part of some appliance?

This deals with the case of motor cars. We are undertaking that, as part of a motor car aggregate, that is, the group of parts which when put together constitute a motor car, electric filament lamps may come in. At present electric filament lamps are subject to quantitative regulation. The Agreement provides, however, that when we remove that quantitative regulation, we may subject the lamps imported as parts of these aggregates to a higher duty than the compounded duty, the comparatively low duty to which the whole collection of parts is liable. What we are doing here is making electric lamps imported in that way subject to the same duty as electric lamps imported in any other way, that is, a duty of 75 per cent. ad valorem.

The Minister talks about an aggregate and it is a little difficult to understand. I suppose it is right to regard electric lamps as part of the aggregate of motor car parts. I think I understand what it means now. They are going to break up anything that is coming in and I take it that will apply also to other articles of which an electric filament lamp coming in is a subsidiary portion.

The only circumstance dealt with in this section is the lamp which is part of this motor car. It relates to motor cars only.

Then it is not possible to get an electric filament lamp as part of any appliance other than a motor car?

Not under this section.

Question put and agreed to.
Section 12 agreed to.
Question proposed: "That Section 13 stand part of the Bill."

What are these ply yarns? Are they yarn threads?

I suppose they are the material from which threads are made. They are yarns as distinct from thread. They have been subject to duty, but are not made here, in fact.

Is the manufacture of linen thread a reserved commodity?

So that anyone who wanted to manufacture linen thread could come in and start manufacturing it and would exempt himself from the penalties of Article 14, if he chose to go that way about it?

Yes, I presume so. He would, of course, have to conform to the Control of Manufactures Act. I am not saying that I would encourage it.

What I cannot make out is why you took the tax off flax yarns.

Because they are not being made.

And that was not in pursuit of this Agreement at all?

Quite. The tax has been there and up to the present we have had to issue licences to people to import these ply yarns so that a certain amount of inconvenience was caused. That inconvenience will cease with the removal of the duty. What we say is that we are not going to put a tax on ply yarns.

Question put and agreed to.
Question proposed: "That Section 14 stand part of the Bill."

This is the most favoured nation clause in respect of Canada?

Question put and agreed to.
Question proposed: "That Section 15 stand part of the Bill."

Is the existing practice with regard to licences to remain because a number of people seem to have experienced hardship? In some cases they have been refused licences for materials although they were being incorporated in manufactured articles, but I suppose that would be a very wide subject to introduce on this section.

The Deputy will have an opportunity to discuss the whole question on the appropriate Minister's Estimate later on.

The marginal note to this section refers to modification of licensing provisions.

The Deputy may discuss such modifications.

I should like to debate that ruling with you, Sir.

I do not think the Minister considers Deputy Dockrell's line of argument irrelevant.

I merely wish to make the point, in passing, that there is probably nothing in recent legislation that is harder to administer, because, in some cases, manufactured articles which are being imported are the raw materials that are being assembled in this country in other manufactures. I take it that there is no modification of the existing practice and that it is merely up to every importer and manufacturer who wants to import goods to fight his own corner with the Department.

There is nothing in this section which says that a licence will or will not be issued. The effect of the section is no provide that where the goods concerned are of a class procurable in Great Britain and it is decided to issue a licence, that licence will operate so as to allow the person receiving it to import these goods free of duty from the United Kingdom, or to allow him to import them from any other country subject to a 10 per cent. duty.

Where they are required for manufacture, theoretically, the Minister ought to grant a licence.

That does not arise in this case, It is a question of general administration.

Does this section arise out of something that happened about two years ago when the Revenue Commissioners found it necessary to admit duty free a consignment of stuff upon which duty had been imposed in the previous week?

Because it purports to give the Minister the right to waive a statutory duty, does it not?

The Minister has that right in respect of a number of duties. He has the right under existing legislation to grant a licence to some person to import the goods without payment of duty. We have entered into an Agreement with the United Kingdom, however, to give them a preference in such case. This is a somewhat difficult section to put in understandable form, but the effect of it is that where we do issue a licence—and whether it is to be issued or not will be determined on entirely different grounds—that licence will operate only to entitle the person to free importation of goods of United Kingdom origin. If he wants to import goods of other origin, they will be liable to a 10 per cent, duty unless the goods are not procurable in the United Kingdom. That is what we have agreed upon and that is what we are taking power to do here, although it will be more a matter of administration than of legislation.

That practically reverses the position that existed during the economic war?

That is quite satisfactory. In regard to the issue of licence for free imortation of tariffed articles in certain circumstances, another question arises. In the Agreement, Schedule 2, which describes the articles on which no tariff is now to be levied, has an immensely long list, but when you come to the Schedule to this Bill setting out those articles from which duties are removed, it is a very short list. Are we to take it that all the goods mentioned in Schedule 2 of the Agreement and not mentioned in the Third Schedule to the Bill do not bear a duty at the present time and that Schedule 2 only operates not to put a duty on these things in the future?

Yes. They may, of course, be subject to an emergency duty, but that disappears, in any event.

Section 15 agreed to.
SECTION 16.
Question proposed: "That Section 16 stand alter the present law."

This section does not materially alter the present law?

It is a slight elaboration.

Yes, because we may fix different percentages.

For different countries?

For different classes of goods.

Can you do that for different countries?

This only applies for the purpose of the Agreement.

Could you say that in order that an article should qualify for manufacture in Great Britain, only 10 per cent. of it need be manufactured there, but that an article which is a product of France or a product representing itself to be a product of Canada must have 90 per cent, manufature in that country?

We can very the percentage between classes of goods, but not between one country and another.

Section 16 agreed to.
SECTION 17.
Question proposed: "That Section 17 stand part of the Bill."

What is the necessity for this section?

It is a formal business. These duties are placed under the charge of the Revenue Commissioners. I think that this provision appears in all these Bills

Section 17 agreed to.
Section 18 agreed to.
FIRST SCHEDULE.

I move:—

At present No. 20, page 10, the second column, to delete the words "leather or skin" and substitute the words "leather and skin".

This amendment correct a printing error.

Amendment agreed to.
Schedule, as amended, agreed to.
SECOND SCHEDULE.

What is the meaning of taking the duty off rose bushes in reference No. 7 and putting it on again in reference No. 9 of Schedule 3?

That refers to rose stocks. They are different from rose bushes. Rose stocks are what the bushes are grafted on.

If I buy a rose bush from Samuel McGready, of Portadown, is there a 2d. duty on it now?

3d. That would be a rose bush.

Are you not taking the duty off rose bushes?

No. We are reducing it from 6d. to 3d.

You are not taking the duty off rose stocks together?

Yes, if they are of United Kingdom origin.

"A rose by any another name..."

Second Schedule agreed to.

THIRD SCHEDULE.

I take it that there is a provision in the Bill which we are going to discuss with the Minister for Agriculture in a moment which will allow us to refer to the pig business.

If the pig businness is referred to in the Bill, the Deputy will be in order in referring to it.

If there is nothing in the next Bill referring to pigs, I shall raise the whole issue on this Schedule. However, I do not want to pin the Minister for Industry and Commerce to his seat unnecessarily and if I can raise the matter on the next Bill with the Minister for Agriculture, we can have the issue out then and we can allow the Minister for industry and Commerce to go his way.

Then you had better raise it on the next BIll.

I find that there is reference to a pig in the next Bill?

Let us hope it is not a boar.

The Deputy is positively becoming witty.

I should like to know what is the actual position in regard to the boot and shoe industry. Is there to be a 20 per cent. tariff on imported boots and shoes?

That matter does not arise on this Schedule but I may, perhaps, explain that when the Agreement comes into operation imported boots and shoes will be liable both to a duty of 20 per cent. and to quautitative regulation. In fact the importation of boots and shoes is now prohibited except under licence, the issue of licences being regulated in accordance with the Control of Imports Act. Even if a licence is issued, the person importing boots and shose under the licence will have to pay 20 per cent. That position will continue until a review has been carried out by the Prices Commission, following which quantitative regulation will cease to operate but some new duty—what it will be, I cannot say—will be substituted for the 20 per cent, if the Prices Commission so recommend.

The position will be much the same as that before the Agreement was made?

It will be exactly the same until the Prices Commission shall have investigated it.

I am glad the Minister has made that statement because a certain amount of alarm exists in regard to what the position of the boot factories will be as a result of the Agreement. I am sure the Minister's statement will allay the anxiety that prevails.

Third Schedule agreed to.

Title of the Bill agreed to.
Bill reported with one amendment, agreed to, received for final consideration and passed.
Bill certified as a Money Bill within the meaning of Article 22 of the Constitution.
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