Imposition of Duties (Confirmation of Orders) (No. 2) Bill, 1950—Second and Subsequent Stages.

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. Cosgrave)

I move that the Bill be now read a Second Time. The effect of this Bill is to confirm ten Orders made under the Emergency Imposition of Duties Act, 1932. Orders Nos. 1 and 6 in the Schedule relate to buckets. Prior to the making of the Orders the duty on buckets was limited to the complete article. Deputies are, no doubt, aware of the emphasis which is being placed on exports by nearly all countries since the end of the war. A corollary of this policy is that wherever possible countries are concentrating on the export of manufactured or partly manufactured articles rather than on raw materials. These factors operated in the case of the raw materials for bucket making and, accordingly, there was a grave danger that, on the basis of the existing duty, the degree of manufacture of buckets carried on in the country would diminish and that the work would become restricted to the assembly or finishing off of buckets imported in a partially manufactured condition. The two Orders in the Schedule confirm the duty imposed and extend it to component parts of buckets and partially manufactured buckets.

Order No. 2 relates to woollen knitted wear. The revised duties on clothing which were reintroduced in January, 1948, achieved, on the whole, the purposes for which they were intended, with the exception of hosiery. An examination of the position with respect to hosiery showed that the situation was not unsatisfactory in the case of cotton and rayon underwear and hose and in the case of woollen hose, including socks. Imports of rayon hose are, however, subject to quota restriction in addition to the tariff. The output, sales and employment of the concerns producing cotton and rayon underwear and hose and woollen hose, including socks, increased each year since 1946. In the case of woollen outerwear, sales have remained static, while imports continued at the substantial rate of approximately £500,000 per annum. In these circumstances, it was decided to increase the full rate of duty on woollen underwear and outerwear to 40 per cent. and to restore the suspended preferential rate of 33? per cent. The restoration was carried out under an Order under the Supplies and Services (Temporary Provisions) Act and the Order is not scheduled in the Bill.

The purpose of Order No. 3 is to remove a loophole in the main Order which it amends. The cloths covered by this Order are used mainly as linings, and the Revenue Commissioners were authorised to exempt cloths which had been subjected to proofing. It was found that cloths were being brought in which were intended for and were suitable for use as linings but had been subjected to a process of proofing merely for the purpose of evading the objects of the duty. The effect of the amending Order is to restrict the exemption to cloths proofed by a process involving the use of rubber or rubber solution.

Orders Nos. 4, 5, 8 and 9 may be taken together because their purpose is to protect a number of new industries. The first of these industries is the production of wide elastics suitable for braces and suspenders by a new company in Ennis. Deputies are aware that the production of other varieties of elastic up to one inch in width has been carried on at Ennis for a number of years. The second of these industries is the production of files and hacksaw blades at Newbridge. Apart from general economic considerations, there are definite advantages in having essential tools of this nature produced in the country. The third new industry is the production of wallboard from straw at Athy. This industry is valuable not only from the point of view that it produces an article which has a large and growing use and which has hitherto been entirely imported but also from the point of view that it uses straw as a raw material and provides a ready market in a tillage area for surplus straw.

Order No. 7 merely gives statutory effect to what was already an administrative fact by exempting from scope of the duty elementary parts, fixed resistances and fixed condensers for the importation of which, in the past, duty-free facilities were given. Elementary or completely unassembled parts are the raw material of the wireless industry in this country and, in fact, in other countries. The production of elementary parts represents a separate aspect of wireless manufacture which is not yet being undertaken here.

Order No. 10 was designed to meet a specific situation caused by the export from Hong Kong of cheap cotton shirts. The landed cost of these shirts was considerably below the price at which the raw material for similar cheap shirts could be bought by Irish manufacturers. It may be that the danger from this sort of competition will grow in other respects in future but at present it is intended to confine the Order to the shirts mentioned. I may say that a number of orders were placed for these shirts and the danger to our manufacturing concerns was imminent. In fact, I think at least one consignment had arrived here.

Mr. Lemass

I have no objection to the confirmation of each of these Orders. I think, however, that one might comment on the fact that in no less than four of the cases under review now, it was apparently necessary to amend the Order after it was made. We were certainly given to understand that when the Industrial Development Authority got to work, it would so carefully examine every proposition that came to it that the possibility of error would be eliminated. The cautious, careful systematic methods of the Industrial Development Authority were contrasted with what were described as the slip-shod methods of the Department of Industry and Commerce in the bad old days. I cannot remember any case, however, even when tariffs were being multiplied much more rapidly than at present, in which in the course of a few months, four Orders made had to be amended because of errors, before being brought to the Dáil for confirmation. I think these errors were the result of the inexperience of the Industrial Development Authority, and that when they have gained a little more knowledge about the work that they have undertaken, these errors will not arise in future. It is bad for trade when Orders of this kind are made and have subsequently to be altered. Those who engage in trade are entitled to feel reasonably sure that when the Government takes a decision and announces that decision, it has fully examined the matter in all its implications, that the Orders will stand, and that they can make their arrangements accordingly. It is, from every point of view, unfair if the Government subsequently find that they have to amend these Orders and issue new Orders with immediate effect.

I am glad that the Government have decided to rectify the position concerning Irish galvanised buckets. Unfortunately they delayed so long about dealing with the situation that considerable damage was done to the existing industry, and it looked at one stage as if it might have to come to a stop. The evasion of the existing duty which was being practised had previously been checked by an administrative arrangement, but substantial imports of partially manufactured buckets and component parts were faciliated by an administrative decision of the Revenue Commissioners. Possibly their decision was right in accordance with the letter of the law, but a proper liaison between the Revenue Commissioners and the Department of Industry and Commerce would, I think, have resulted in that administrative decision being followed by action to rectify the law, if the importance of the matter had been appreciated there.

I am glad to know that the wallboard factory at Athy has now reached a stage where the undertaking to afford protection by way of a duty is to be implemented. As many Deputies know, that factory was started before the war. The company which built it was set up as far back as 1938 but, because of the war and the difficulties which it created, the enterprise could not be proceeded with. The construction of the factory was started immediately after the war ended and those who were responsible for it had great hopes of getting an important industry located there which would contribute substantially to the solution of many building problems here. It will, I think, be a successful enterprise and it is certainly one well worth supporting.

The extension of the manufacture of elastics at Ennis to include elastics of a greater width was a likely development from the enterprise there, an enterprise which at one time was the subject of heated controversy in the Dáil. We are glad that the days when that enterprise was the subject of controversy have long since passed and hope that, in its new development, it will be as successful as it was in the old.

The manufacture of files, hacksaws and other tools of that kind is also an industry well worth supporting. There were various proposals relating to these commodities submitted to the Department of Industry and Commerce from time to time, all of which had some merits, but all of which encountered difficulties of one kind or another. I trust that the manufacture of files and hacksaws will be followed in due course by the manufacture of other similar tools, the production of which, in this country, is to be encouraged.

None of the other matters requires comment except to say that I hope that the present arrangement relating to the examination of proposals for alterations of duties or the imposition of new duties will permit of expeditious action. The Parliamentary Secretary referred to the importation occasionally of very cheap cotton shirts which might have seriously upset our own industry for a considerable time after it had taken place. In pre-war days developments of that kind had always to be anticipated. In a small country such as ours it is always possible to produce considerable dislocation by the importation of one occasional consignment, sold at an exceptionally cheap price for some exceptional reason. Because of that danger, powers were taken by legislation to act promptly and, in anticipation of consent of the Dáil, by Government Order. These powers are still there, but we are not quite clear as to the extent to which the Government has delegated their use to the Industrial Development Authority; and, if such delegation has taken place, whether it is likely to involve delay. In the case of the cotton shirts, to which the Parliamentary Secretary referred, he stated that one part of the total quantity ordered had reached this country and was on the market here before any action was taken. I do not know whether or not that was a large consignment, but it will have done no harm if it teaches the officers of the Department and the Industrial Development Authority, whichever of them is responsible, the need for vigilance and prompt action in a case such as that.

There are none of the Orders scheduled to the Bill to which we have any objection. So far as we are concerned, the Parliamentary Secretary can have all stages of the measure to-day.

Mr. Cosgrave

I do not know whether the Deputy was entirely fair to the Industrial Development Authority. I do not know whether anyone has ever yet described the officers of the Department of Industry and Commerce as being slip-shod in the past. The Industrial Development Authority was established in order to have available advice on technical and other matters connected with industrial development. It so happens that the section of the Department, formerly administering Orders and quotas covered by the Bill, is now transferred to the Industrial Development Authority. I think it is reasonable enough to accept that human ingenuity will always try to evade these tariffs, quotas and restrictions. That is precisely what happened in each of the cases mentioned.

In the case of buckets, the duty was originally on unassembled parts. Then the bucket was brought in assembled but not dipped, or blacked, as it is sometimes described; while that constituted a threat to certain existing industries, one particular industry engaged in these operations resisted the application of the tariff. It may be that our responsibility is to those industries already established. There was certainly a conflict of interest in that particular case.

In the case of linings, the tariff originally imposed did not include the process to which these are subjected and, through some form of proofing in a rubberoid solution or through some technical process, certain parties succeeded in evading the tariff. In that case, again, when the matter was examined, the position was rectified.

In the case of hacksaws and files, it was considered there that the original duty was sufficient. Shortly after its imposition, outside concerns took advantage of it to sell here cheap tools and dump consignments of low-priced articles on the market. For a time they succeeded in swamping the market. The result was the duty had to be increased.

In the case of wallboard, the rate of duty imposed there was originally 6d. The promoters of the company, the officers of the Industrial Development Authority and the Department of Industry and Commerce considered 6d. adequate. Events once more showed that it was not sufficient and the duty had to be increased to 1/-. I do not know whether it is wise in cases of that nature to work on the assumption that the higher the rate of duty the more successful it is likely to be or, alternatively, to start with a low rate of duty and increase it subsequently. One drawback in starting with a high rate of duty is that manufacturers may charge higher prices than would be justified. The question is whether one will bring the duty up and increase prices or bring it down and so lower prices. In each of the cases in which efforts were made to evade the duty, or to evade the quota, as the case may be, the efforts succeeded. In connection with Deputy Lemass's last remark in relation to the delegation of powers to the Industrial Development Authority, the examination of cases, such as the examination into the duty imposed on cotton shirts, is carried out by the Industrial Development Authority but, of course, their recommendations can only be implemented by the Government.

Question put and agreed to.

Bill passed through Committee, reported without amendment, received for final consideration and passed.

An Ceann Comhairle

This is a Money Bill within the meaning of Article 22 of the Constitution. Seanad Eireann to be notified accordingly.

Dáil Éireann debate - Tuesday, 13 Jun 1950