I want shortly to raise a point in connection with this Resolution and I want to make it quite clear that I am not trying to make a propaganda speech nor am I suggesting to the Minister for Finance that it is fiscally possible to put into operation the matter to which I wish to refer forthwith. But I would be interested to hear the Revenue view on this question for it is one that has often occurred to me. Under the income-tax code, we levy income-tax on citizens who earn a certain income, and then, in respect of their family responsibilities, we proceed to give them substantial remissions. In respect of each additional member of the family we make an additional remission. That may be regarded as a remission of taxation or as a State contribution to the maintenance of that family. This much is true that, as that taxpayer's family burdens grow larger the State comes further and further to his aid. A man may start out as a young married man with £400 a year. The day after his wedding day he is liable for a certain measure of income-tax. If he lives to have a family of six children and his salary does not increase, he will pay no income-tax. Therefore, as his family responsibilities are gathering, the State comes further and further to his aid and eventually discharges him from all liability. Now, look at the other end of the social ladder. You take a labouring man who is earning £2 a week. He marries. The day after he marries he still has £2 a week.
Financial Resolutions—Report.
How does this come within Financial Resolution No. 1?
I am on the Financial Resolution dealing with the rebate of income-tax for persons of property. I am putting this point-a person who marries, and at the time is earning £2 a week, finds himself by the time he is the father of six children still with £2 a week. He finds that the State has done nothing at all to share his family burden. I am not pretending that that is a reflection on the Fianna Fáil Government, the Fine Gael Government, the British Government, or any other Government. But I would like to hear the Revenue answer to that dilemma. It seems to me that a case can be made —it may be a fallacious case—that the State should concern itself to share the family burden of a man who married who was earning £2 a week. The State concerns itself in sharing the family burden of a man with £400 a year, and who got married on that income, but does nothing at all to share the burden of a person who it was admitted should not be made liable to any tax at all at the time he married.
The debate on the Resolution must be strictly confined to the Resolution. The provision of allowances for the class to which the Deputy refers does not come within the ambit of this Resolution.
Will it be the ruling of the Chair that inasmuch as family allowances come under consideration——?
The absence thereof for certain families does not come under consideration—those families not being liable for income-tax.
Of course, Sir, if you so rule, I do not want to evade your ruling, but——
If the class to which the Deputy refers is not subject to income-tax, then that class does not come within the scope of this Resolution.
Well, if your ruling prevents me arguing the matter——
Does the Deputy wish to argue against the allowances made?
It is quite possible to state a case in a false aspect in order to wangle it within your ruling, so that it can be brought within the ambit of this Resolution——
I am satisfied that it cannot by any method be brought within the bounds of this Resolution.
Well, perhaps under the Finance Act. It is an interesting point, and if there is an answer to it, it would be valuable to have it at the appropriate time.
I could give an answer to that.
It would not be in order.
I am sure if the Deputy thinks over the proposition he has made, and understands the question of allowances in regard to income-tax, he will appreciate the answer.
I should be very anxious to hear the Minister's reply.
This is a Resolution which deals with a question of income tax. It provides for the continuance of a practice which has been in operation for many years.
There is an amendment to Resolution No. 3 on the Order Paper.
I move the amendment to Financial Resolution No. 3. That was really a printer's error:—
1. At reference No. 11 in the Schedule, to delete the words "one penny and one halfpenny" in the third column and substitute the words "three farthings."
This is a Resolution in connection with the importation of vehicles used for extinguishing fires.
This is an exemption for the benefit of blind persons.
This is in connection with hawkers' licences.
The point I would like to get from the Minister in connection with this duty which is imposed from the 19th May to the 1st November is—are non-fabricated steel and iron, free of duty? Fabricated steel will be subject to a duty of 50 per cent. and a preferential rate of 33? per cent. Now, the effective duty on the non-fabricated steel coming from Great Britain is obviously 33? per cent. After the 1st November non-fabricated steel in Ireland will be subject to 37½ per cent. duty, with a preference rate of 25 per cent. Fabricated steel and iron would be subject to 50 per cent., with a preference of 33? per cent. I am informed that the effective difference between the duty on non-fabricated and fabricated steel and iron of British manufacture is 8? per cent., and that as far as that particular concession is concerned it will materially affect quite a number of firms in this business in Dublin. I do not know that there are firms concerned with it in other parts of the country. Apart from that question, I think it is presumed that there is a 15 per cent. duty on fabricated steel, with 10 per cent. perference, through the former period. I have not been able to find that particular imposition. I wonder if the Minister knows anything about it? In any case, so far as this duty is concerned, the position would appear to be very much against any possible activity on Irish manufacture and that the alterations that are made are entirely outside that.
The duty on fabricated steel at the moment is 50 per cent. ad valorem, with a preference of 33?. That is a reduction upon the duty previously in force and is in consequence of the changes arising out of the Trade Agreement with Great Britain. In the ordinary course the duty of 33? per cent. would appear to be sufficient protection for firms engaged in the business of fabricating steel. The duty imposed by this Resolution will not come into operation until the 1st November next. When it does come into operation it is to be hoped that the various classes of unfabricated steel to which it applies will not be imported but will be available from Saorstát sources and at a price which will still allow an adequate protection to the firms engaged in the fabrication of that steel under the existing duty. If firms concerned can in that case show that there are certain circumstances operating which make the duty ineffective, or at any rate will not enable them to secure a reasonable proportion of the trade here, then the matter can be considered. We have already had representations from the firms interested in the matter, and we have asked them to submit their representations in detail so that the matter can be examined carefully. But until they have done so, I do not think any action is called for. No change in the existing circumstances will take place until this duty comes into operation in November. In the meantime these fabrication firms have the assistance of the 50 per cent. duty, with the 33? per cent. preferential rate in the case of Great Britain. I think that they will find that duty will still be sufficient when the Irish steel becomes available, but if that is not the case, then the matter can be considered again.
Will the Minister say whether, under this proposed alteration, Continental steel which came in here free of duty, will come in subject to a 37½ per cent. duty? In that case, with that extra charge on the raw steel——
Why does the Deputy assume that that extra charge will be put on? That duty will only operate when supplies of Irish steel are available. This duty relates to raw steel which is about to be manufactured in a steel mill in this country.
At what price?
That, I suppose, will depend on the demand.
You must take into account what the price of the raw materials will be. If the Irish firms are put into competition with the British and Continental firms, they will be suffering a great disadvantage. It is on that particular aspect that I would like the Minister to give information to the House. I would like to know if he can give any information regarding the price of the raw material to be produced by the Irish firms. While it may benefit one particular activity of industrial development in one direction, it ought not to be at the expense of firms that have been a long time in business and that know every aspect of the business within recent years.
It is impossible to give the Deputy definite information until manufacture has commenced. I know of no reason why it should not be possible to manufacture this steel here at the same price as that at which it can be imported from Great Britain. If that should prove not to be the case, if there should be an increase in cost, that fact will have to be taken into consideration in determining the protection to be given to the firms engaged in fabricating that steel. It is essential to these firms and to the firm that will be making the raw material that the protection on fabricated steel should be adequate. If, after the 1st November, it can be shown to be insufficient in the circumstances then prevailing, the matter can be dealt with. But no change is called for at the moment that I am aware of—that is, subject to whatever representations may be made to me by firms in consequence of the discussions they have already had with the officers of my Department.
The Minister will concede that as far as Continental raw steel is concerned, it can be imported free of duty, but on November 1st it will be subject to 37½ per cent., and British steel to 33?. If those firms have been using Continental steel, they are obviously going to pay a considerably increased price.
Not necessarily. The intention of the duty is to prevent them purchasing Continental steel.
Has the Minister examined the figures and the price at which English steel can be purchased?
On and after 1st November they will not be, I hope, purchasing English or Continental steel; they will be purchasing steel made here.
A very Micawber-like answer.
I think the Minister overlooked a very important part. What are the fabricators of steel to do when they are tendering in the meantime? I take it there is some object in putting a duty on raw steel. The Minister appears to be hinting, although he has not said it, that the price will not be increased; in other words, the price to the fabricators will be the one price as if no duty existed. It is elemental that the price to the fabricators will be the world price, plus the duty.
Why?
That is, I think, almost a law. What is the fabricator to do in the meantime when asked for a tender? He is faced with this situation, that he will have to pay 37½ per cent. more for the foreign steel that he has been buying.
No. I submit to the Deputy that the firm engaged in importing and fabricating its material is in a much better position. In this case we have adopted the unusual practice of postponing the operation of the duty to a fixed date six months ahead. That enables those interested to make arrangements with their customers in the clear knowledge of what is going to happen. If they contract for a supply of Continental or British steel fabricated after the 1st November, it means they have to import the material before that date. If they choose to wait-until after that date, they know precisely the circumstances that will prevail.
The Minister has explained only part of the matter. He does not realise that the fabricator's purse or storage capacity is not unlimited. The Minister says, "Let him get in anything he wants after the 1st November, before the 1st November, and he will not have to pay any duty on it."
I said anything he has contracted to supply, which is a different thing.
His purse is not unlimited, and one type of steel may be required for one job and another type for a second job. For the sake of argument let us take, on the Minister's showing, two fabricators, A and B. They are tendering for two jobs. A thinks he will get one job and he brings in the steel that he thinks will suit. B thinks he will get the other job and he orders the steel for it. When the tenders come along the position is reversed. It is absurd to think that the fabricators have not got at the present time to envisage the position that will occur on 1st November, namely, that they will require steel of a particular type and that is to be 37½ per cent. dearer. I would ask the Minister to look into that position immediately because that is the fabricator's difficulty. He cannot tender for a job without covering himself. He finds that he may have to pay 37½ per cent. more for his foreign steel. That position is going to put him out of business as regards the finished product, because the British finished product can be imported with a duty of 33? per cent. Now, nobody would think of accusing the British manufacturers who are engaged in steel fabrication of being inefficient or anything like that. They have the latest machinery, they have cheaper wages and a whole category of cheaper expenses, and the position is that the market is practically being handed over to them with this in the offing. If this is going to give any effect, the day of the fabricator here is over.
The Deputy can be quite certain that that is not going to happen. Why should we establish a steel mill here if we are going to allow in fabricated steel? Common-sense shows that that is not going to happen. If the duty is not sufficient to exclude fabricated steel and to provide a market for Irish fabricated steel, then both will be affected.
The Minister seems to think that common-sense is going to prevail.
It usually does.
Well, I should like to suggest that it looks as if arithmetic would come before common-sense in appealing to the Government, and the arithmetic is on the side of the fabricators, if they see their raw materials increase by 37½ per cent. The Minister says that if that happens, we will see to it, but how are we going to see to it?
It will not happen. It cannot happen. The Deputy is assuming that, if a duty of 37½ per cent. is imposed, the price of the local commodity is bound to be 37½ per cent. above existing prices. That is what the Deputy generally seems to assume. That will not happen, however. Whatever increase there may be, it will not be 37½ per cent.; it would be considerably less. If, however, there is an increase, and if it is of such an amount as to make 33? per cent., an ineffective protection for the steel fabricators, then that 33? per cent. will have to be increased; but they have got to show that protection to that extent is insufficient, and they have not done so yet.
The Minister admitted a moment ago that the price would be the world price for steel, plus the duty.
I said nothing of the kind. I said quite the reverse.
Oh, I see. That is very interesting, because, you know, we could bring plenty of instances to the Minister's mind in which duties are existing here, to prove that that is the case.
The only case that I know of is the case of fabricated steel, where the prices went up by the full amount of the duty.
Well, as far as the fabricators are concerned, the position is that arithmetic is on their side. The Minister says that common-sense is on the side of the Government and the tariffs. Well, I suppose time will show which is correct.
There is a point I should like to put to the Minister, in view of the fact that he has informed Deputy Dockrell that he awaits the fabrication of steel to convince him of the necessity of raising the tariff.
The tariff has been reduced, as the Deputy knows. It has been reduced from 60 per cent. to 33? per cent.
From 70 per cent.
It has been reduced from 60 per cent.
From 70 per cent. It was 50 per cent., and there was 33? per cent. preference, which was not allowed, and 20 per cent. emergency.
Ten per cent.
It was 20 per cent.
It was reduced.
Yes, but at one time it was 50 per cent and 20 per cent.
Yes, at one time it was 70 per cent.
Very well, then, and one of the fabricators has gone out of business.
I should like to ask just this question. The Minister says that he awaits the arrival of the fabricators of steel to convince him that it is necessary to raise the tariff on fabricated steel in order to protect them when they are using raw steel of Irish manufacture.
Or any steel.
Or any other steel. Quite. Well, I do not think we need doubt that there will be a deputation around pretty soon in that connection. but when the Minister was contemplating the establishment of the raw steel industry, did he address his mind to this aspect of the question at all? Will the establishment of the raw steel industry operate to raise the cost of fabricated steel so high in this country that it may substantially reduce the consumption of fabricated steel in this country and eventually complete a vicious circle which would react unfavourably on the steel fabricator and on the manufacturer of raw steel whom it is proposed to encourage to set up in Haulbowline? The reason I ask that is that it appears to me, from what the Minister has said here to-day, that he has never addressed his mind to the picture of the steel industry. from the raw product down to the finished product, and eventually into consumption. I suggest that, where immense sums of capital are going to be invested. such a review ought to be made so as to ensure that there will be no loss of capital owing to something that was not foreseen or anticipated.
I will take a lot of convincing that it cannot be produced as cheaply here as abroad.
In view of what has been said, one would like to ask what is the differential as between the fabricator in England, Scotland, Wales or the Continent and the Irish manufacturer. There was a difference of 60 per cent. in his favour in selling his product. Time and time again in this House we have been told that a certain firm has closed, and it has been imputed, as it was again imputed to-day in general terms, that such closing down is due to the wage differential. There is not a word of truth in that. They get the same rate as in England, Scotland and Wales generally—the Clyde rate of wages— and in some cases lower than in certain areas in Scotland. Generally speaking, however, in connection with steel fabricating, it is the same rate of wages as the English rate. Now, as we are talking about raw steel, what is it? It is the ores before they are thrown together, and the price for the raw steel is there for anybody to examine. Added to that, there is the freight charge, which is 8 per cent. In some cases it is 10 per cent., and some say 15 per cent. I am sure that Deputy Dockrell can give the actual percentage. The wage is the same and therefore the only difficulty in connection with the Irish manufacturer is that the plant is antiquated. The dockyard, however, did not close because they had not got sufficient plant or because of the wages question, but because of the rationalisation policy of those who control the yard and because they were only using this yard as a weapon in their own hands against their competitors. I say that there is sufficient tax on that steel now if the people would carry out their business in a business-like way. What Deputy Dockrell says about certain varieties of steel is true, but we ought to be able to meet that. The Government that can put up £185,000 for an alcohol plant can also buy the steel and fabricate it here and store it for a period.