Section 11.
Finance Bill, 1952—Committee Stage (Resumed).
Question —"That Section 10 stand part of the Bill"— put.
The Committee divided: Tá, 50; Níl, 44.
Tá
- Allen, Denis.
- Bartley, Gerald.
- Boland, Gerald.
- Brady, Philip A.
- Brady, Seán.
- Brennan, Joseph.
- Brennan, Thomas.
- Briscoe, Robert.
- Burke, Patrick.
- Carter, Frank.
- Childers, Erskine.
- Cogan, Patrick.
- Colley, Harry.
- Collins, James J.
- Corry, Martin J.
- Crowley, Honor Mary.
- Cunningham, Liam.
- Davern, Michael J.
- Derrig, Thomas.
- De Valera, Eamon.
- Duignan, Peadar.
- Fanning, John.
- Flynn, John.
- Flynn, Stephen.
- Gallagher, Colm.
- Gilbride, Eugene.
- Hillery, Patrick J.
- Humphreys, Francis.
- Kennedy, Michael J.
- Killilea, Mark.
- Little, Patrick J.
- Lynch, Jack (Cork Borough).
- McCann, John.
- MacCarthy, Seán.
- McEllistrim, Thomas.
- MacEntee, Seán.
- McGrath, Patrick.
- Maguire, Patrick J.
- Maher, Peadar.
- Moylan, Seán.
- Ó Briain, Donnchadh.
- O'Reilly, Matthew.
- Ormonde, John.
- O'Sullivan, Ted.
- Ryan, James.
- Ryan, Mary B.
- Sheldon, William A.W.
- Smith, Patrick.
- Traynor, Oscar.
- Walsh, Thomas.
Níl
- Browne, Patrick.
- Cafferky, Dominick.
- Collins, Seán.
- Corish, Brendan.
- Cosgrave, Liam.
- Costello, Declan.
- Costello, John A.
- Crotty, Patrick J.
- Crowe, Patrick.
- Desmond, Daniel.
- Donnellan, Michael.
- Doyle, Peadar S.
- Dunne, Seán.
- Esmonde, Anthony C.
- Finan, John.
- Flanagan, Oliver J.
- Giles, Patrick.
- Hession, James M.
- Hickey, James.
- Hughes, Joseph.
- Keyes, Michael.
- Kyne, Thomas A.
- Lynch, John (North Kerry).
- MacBride, Seán.
- MacEoin, Seán.
- McGilligan, Patrick.
- McMenamin, Daniel.
- Mannion, John.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, William.
- O'Gorman, Patrick J.
- O'Hara, Thomas.
- O'Higgins, Thomas F.
- O'Higgins, Thomas F. (Jun).
- O'Reilly, Patrick.
- Palmer, Patrick W.
- Reidy, James.
- Roddy, Joseph.
- Rogers, Patrick J.
- Rooney, Eamon.
- Spring, Dan.
- Sweetman, Gerard.
- Tully, John.
Tellers:— Tá: Deputies Ó Briain and Killilea; Níl: Deputies P.S. Doyle and Mac Fheórais.
Question declared carried.
Is it in order, a Chinn Chomhairle, for the Parliamentary Secretary to the Minister for Agriculture to walk into the House when you are putting the motion announcing the division?
I understand that the doors were locked.
You were standing announcing the division when the Parliamentary Secretary to the Minister for Agriculture walked into the House through the door behind your back.
You are a bad general.
No, you are the bad general. You never wore the uniform.
Deputy Collins has raised a point in respect of order. The order is that when the Chair stands to put the motion the doors are locked. Therefore, I have no knowledge that everything was not as it should be. The doors should have been locked, and I must assume that they were locked.
I must direct your attention to the fact that you had, in fact, virtually completed the announcement of the motion when the Parliamentary Secretary walked in through the door at your back.
That is not true.
It is true.
You were about to rise when the door was closed.
I must assume that the Parliamentary Secretary got in in regular order. The rule is that the doors are locked immediately the Chair rises to put the motion. I must assume, therefore, that the Deputy came in in regular fashion.
I saw the door on this side being locked and then the one on the opposite side. You were standing when the Parliamentary Secretary walked in. I do not think it makes any great difference in regard to the division, but the regulation is there.
I was in a much better position to see what occurred than Deputy MacEoin. What actually happened was that the Parliamentary Secretary was coming through the door as the Chair was rising and could not then be put out.
In this conflict of statement the Chair must assume that the Parliamentary Secretary got in in regular fashion.
Unless the usher had forcibly ejected him he could not have been outside the House.
SECTION 11.
Question —"That Section 11 stand part of the Bill"— put and agreed to.
SECTION 12.
Question proposed: "That Section 12 stand part of the Bill."
This, again, is one of the sections which proceeds to give legal force to the Minister's viciousness. Perhaps before I go on to deal with this we may be able to have agreement to discuss Sections 12 and 13 together.
Is that agreeable? Is there an amendment to that section?
There is an amendment to Section 13. That is the difficulty. If the Deputy will take Section 12, which is actually the important one, we could then amend Section 13, if necessary, discuss the section, and have the issue settled.
I would have put it the other way; I think Section 13 is the more important one.
The principles are the same.
We are discussing the principles under Sections 12 and 13.
I thought it might be convenient for the House, if the Chair has no objection.
I have no objection in the world.
The tobacco tax is said to yield £5,500,000. How much is yielded under Section 12 and how much under Section 13?
The total yield is £5,500,000.
How is that divided?
The yield under Section 12 is less than £5,000,000, and the yield under Section 13 is less than £600,000.
Section 12 is the heavier section?
Are we discussing Section 13?
Yes. We feel we are entitled to direct the Government's attention to the fact, that here again, in the main, they are asking the section of the community least fitted to bear the burden to carry it. Some people will, in a glib way, refer to cigarettes and tobacco as luxuries. I wonder if they are realists at all because, with the growth, not only here in Ireland but all over the world, in the consumption of tobacco, we can hardly put it in a purely luxury class. I feel it may best be described within the category of goods referred to by Deputy McGilligan last night. The Government are exploiting something which the people will buy. The Minister is perfectly aware that it is the cigarette smoker and the tobacco smoker in the lower income group who will, in the main, have to bear the impact of this tax. The incidence of this taxation does not hit the person in the higher income group to the same extent. We must refer back to the simple equation set forth last night by Deputy McGilligan, which shows the complete lack of balance in this situation. We have heard talk in this House about the disequilibrium in the balance of payments and about the disequilibrium in this, that and the other. However, there is one startling realism about this situation; here again we have set forth Fianna Fáil's anti-wage policy; here again we have the people with the small pay packet being asked to carry an extra burden by way of an increase in the price of essential commodities. Last night they were asked to bear an increase in the price of beer, and now we have come to deal with the question of the increase in the price of cigarettes and tobacco—the semi-essentials of both the husband and the wife in most households.
We are entitled to ask the Minister what is his estimate of the real potential of this tax? Is £5,500,000 the maximum yield? On what basis, and on what information, does he calculate that figure? Is this, as was patently demonstrated last night by Deputy McGilligan, an underestimation of what this savage increase in the price of tobacco should yield? Figures were given last night, which were not controverted by the Minister for Finance, to show that the normal revenue from 1d. tax on a pint of beer would be £1,500,000 and that the revenue from a tax of 3d. on the pint of beer would be £4.5 million. However, the tax is calculated by the Minister to yield only £2.4 million. I want to know on what basic figure the Minister calculates the revenue he will get from cigarettes and tobacco? Does this again go to show the sinister purpose of the Budget which, undoubtedly, is budgeting for a tremendous surplus? Would the Minister tell us what has been his previous experience of the yield from 1d. tax? I gather that the 1d. granted to the manufacturers to meet increases in trading costs amounts to something over £1,000,000. On that basis alone, there seems to be a patent underestimation as to what the amount of revenue from this tax is likely to be. He should tell us, now that he is seeking to put this tax into law, what the real yield from it will be. Has the Minister calculated to his own satisfaction what the falling off in consumption may be? If so, will he indicate to us on what estimated fall in consumption he calculates his new net yield from tax? We feel we should protest most vehemently against this incidence of the Budget's severity, which delivers its most crushing blow to people least qualified to bear it. As I said to the Minister last night, what incentive will this type of penal taxation be to the workers on the land and to the workers in industry? Where are the Irish people going to find the 10 per cent. which he seeks by way of savings? Is not this Budget framed on the basis of repression? Is it not a completely retrograde Budget which sets out deliberately to subtract from our present standard of life by decreasing and diminishing buying capacity? This particular tax, which will yield something in excess of £5,000,000, is the most savage tax of the Budget, excluding the raid on the family larder — the shameful despicable raid on the larders which were already incomplete enough.
Now there is to be a further bit of piracy; we have the Minister, with savage glee, placing an extra tax on tobacco, bearing in mind the salutary answer he received from the Irish people when the 1947 Supplementary Budget was introduced, which imposed a less tax on tobacco than does this Budget. With the vicious twist of a specialised mind, he is lashing out, ruthlessly, in his own little tyrannical fashion, on the section of the community least able to carry the burden.
I want the Minister to clear the House's and the country's mind as to whether in fact this is not another patent bit of underestimation. Would he disclose to us what the real yield of this tax would be? Would he also disclose to us why, in his long and wide range of taxes, he had to put the severest tax on this particular type of habit? It may well be that the Minister will glibly say: "You can give up smoking your cigarette or your pipe." That will defeat the Minister's own purpose. The Minister's policy is not designed to ask the people to do that. It is designed to extract the maximum possible he can from those goods that people are most likely to buy. It is a cheap trick — I designedly say cheap —to show his deep-seated attachment to a Tory Chancellor in the design of his Budget.
These points really arose on both sections?
Yes.
Question put.
The Committee divided: Tá, 63; Níl, 56.
Tá
- Allen, Denis.
- Bartley, Gerald.
- Beegan, Patrick.
- Blaney, Neil T.
- Boland, Gerald.
- Boland, Patrick.
- Brady, Philip A.
- Brady, Seán.
- Breathnach, Cormac.
- Brennan, Joseph.
- Brennan, Thomas.
- Breslin, Cormac.
- Briscoe, Robert.
- Burke, Patrick.
- Butler, Bernard.
- Carter, Frank.
- Childers, Erskine.
- Cogan, Patrick.
- Colley, Harry.
- Collins, James J.
- Corry, Martin J.
- Crowley, Honor Mary.
- Cunningham, Liam.
- Davern, Michael J.
- Derrig, Thomas.
- De Valera, Eamon.
- Ormonde, John.
- O'Sullivan, Ted.
- Rice, Bridget M.
- Ryan, James.
- Ryan, Mary B.
- Sheldon, William A.W.
- De Valera, Vivion.
- Duignan, Peadar.
- Fanning, John.
- Flanagan, Seán.
- Flynn, John.
- Flynn, Stephen.
- Gallagher, Colm.
- Gilbride, Eugene.
- Harris, Thomas.
- Hillery, Patrick J.
- Hilliard, Michael.
- Humphreys, Francis.
- Kennedy, Michael J.
- Killilea, Mark.
- Lynch, Jack (Cork Borough).
- McCann, John.
- MacCarthy, Seán.
- McEllistrim, Thomas.
- MacEntee, Seán.
- McGrath, Patrick.
- Maguire, Patrick J.
- Maher, Peadar.
- Moran, Michael.
- Moylan, Seán.
- Ó Briain, Donnchadh.
- O'Reilly, Matthew.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
- Walsh, Laurence J.
- Walsh, Thomas.
Níl
- Belton, John.
- Browne, Patrick.
- Cafferky, Dominick.
- Coburn, James.
- Collins, Seán.
- Corish, Brendan.
- Cosgrave, Liam.
- Costello, Declan.
- Costello, John A.
- Crotty, Patrick J.
- Crowe, Patrick.
- Davin, William.
- Desmond, Daniel.
- Dillon, James M.
- Dockrell, Henry P.
- Dockrell, Maurice E.
- Donnellan, Michael.
- Doyle, Peadar S.
- Dunne, Seán.
- Esmonde, Anthony C.
- Everett, James.
- Fagan, Charles.
- Finan, John.
- Flanagan, Oliver J.
- Giles, Patrick.
- Hession, James M.
- Hickey, James.
- Hughes, Joseph.
- Keyes, Michael.
- Kyne, Thomas A.
- Lynch, John (North Kerry).
- MacBride, Seán.
- MacEoin, Seán.
- McGilligan, Patrick.
- McMenamin, Daniel.
- Mannion, John.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, Michael P.
- Murphy, William.
- O'Donnell, Patrick.
- O'Gorman, Patrick J.
- O'Hara, Thomas.
- O'Higgins, Thomas F.
- O'Leary, Johnny.
- O'Reilly, Patrick.
- O'Sullivan, Denis.
- Palmer, Patrick W.
- Reidy, James.
- Reynolds, Mary.
- Roddy, Joseph.
- Rogers, Patrick J.
- Rooney, Eamon.
- Spring, Dan.
- Sweetman, Gerard.
- Tully, John.
Tellers:— Tá: Deputies Ó Briain and Killilea; Níl: Deputies Doyle and Mac Fheórais.
Question declared carried.
SECTION 13.
I move amendment No. 2:—
In sub-section (5), page 9, line 34, to delete "1st day of July, 1952" and substitute "1st day of January, 1953".
This substitutes the first day of January, 1953, for the first day of July, 1952.
It is very hard to hear the Minister.
I think, Sir, that an explanation is scarcely necessary. If the Deputy would look at sub-section (5), of Section 13, he will see there that every licensed tobacco manufacturer will get time for the payment of duty to a date not later than 1st July. We have proposed to extend the date to 1st January, 1953.
I understand that arrangements have been made to permit the manufacturers to gather something in the region of £1,000,000 by the charge of an extra penny on the packet of cigarettes. Considering that the actual cost of the large packet of cigarettes has gone up 7d.——
On a point of order. The Deputy has stated that the tobacco manufacturers are to secure a certain sum on being permitted to increase the price of cigarettes by 1d. There is nothing in this Bill affecting that. This increase has been made by the Minister for Industry and Commerce on the advice of the Prices Advisory Committee, and there is nothing in this Bill dealing with that particular aspect of the matter. I am putting it to you, therefore, that the Deputy is not in order in discussing it on this section.
There is 1d. for the manufacturers in this Bill yielding £1,500,000 at least.
It is mentioned in the Budget.
I am informing the House that the increase which is taking place of 1d. is an increase in the retail price of tobacco sanctioned by the Minister for Industry and Commerce on the advice of the Prices Advisory Committee. There is nothing in this Bill relating to that, Sir.
The man is rambling. This is a proposal in this amendment to extend to the tobacco manufacturers six months' grace for the payment of duty on stocks of tobacco. Now Deputy Rooney makes the point, and rightly makes the point, that under collateral proposals made by the Minister for Finance and the Minister for Industry and Commerce the tobacco manufacturers are going to collect £1,000,000 over this very period. Deputy Rooney makes the very forcible point that if the tulips are going to collect £1,000,000 sterling as a result of the grace and bounty of the Minister they can well afford to pay within the term specified in the Bill, as submitted, the moneys that will come in course of payment for duty on stocks of tobacco. If the tobacco companies were in a state of bankruptcy or poverty it would be a reasonable proposal to do that.
Sir,——
I am entitled to make my argument.
Is the Deputy making a speech or putting a point of order to the Chair?
I am making a statement against the Minister's point of order. The Minister says there is nothing in this Bill affecting the 1d. to which Deputy Rooney has referred. I am pointing out that the impact of the 1d. is that there is a flood of money pouring into the tobacco factories of £20,000 per week as a result of the penny he is giving them. Surely they could use that to meet the payment of duty on stock, and it is perfectly relevant, with that flood of money pouring into them, as an argument against giving them six months' grace.
It appears to me that the matter falls relevant for discussion on this.
It is anticipated that this 1d. will bring into the manufacturers a figure in the region of £1? million. If that 1d. on the packet of cigarettes is going to bring in £1? million to the manufacturers, surely each of the other six pennies imposed in the packet of cigarettes is going to bring in £1? million. In that case instead of an estimate of £5,500,000 we should assume that the tax would bring in £7.8 million. If 1d. brings in £1? million to the manufacturers it should bring in £1? million to the Exchequer. It is just another proof of the underestimation of the revenue from this tax. Deputy Corry last night let the cat out of the bag when he admitted that there was underestimation and said that he felt that it was justified. I am taking the opportunity at this stage of pointing out that this figure of £5,500,000 appears to be a very low estimate of the revenue if we take it that 1d. will bring the manufacturers £1? million.
I raised that particular point on a section of the Finance Bill and the Minister told me that it had nothing at all to do with the Finance Bill. I would like to take this opportunity of asking him some questions, questions that he did not answer on that occasion. I cannot follow exactly Deputy Rooney's reckoning when he says that the tobacco manufacturers are to get——
They will get £1,330,000.
I would be a little more conservative. I would take the Minister's word when he says that he expects to get £5,500,000 by the 6d. tax on the 20 packet of cigarettes. Therefore if he gives 1d. to the manufacturers they would receive £900,000.
Again I want to put a point of order. I am not giving anything to the tobacco manufacturers under any section of this Bill. I am taking money from the tobacco manufacturers in the first instance. Therefore, I submit that Deputy Corish's argument is now out of order.
Deputy Corish's argument is not on the same line as Deputy Rooney's. I cannot rule otherwise than that the matter is irrelevant for discussion on this amendment, which deals with the extension of the date.
Every time the 1d. for the tobacco manufacturers has been raised, every time it has even been suggested as an aside in the debate, the Minister for Finance is up protesting that it has nothing to do with the Finance Bill, and in this instance protesting that it has nothing to do with the amendment. Are the Government and he now ashamed of the fact that they are making a present of £1,000,000 to the tobacco manufacturers of the country? Is it out of order to argue that while the Minister for Finance wants the tobacco consumers of the country to pay an extra £5,500,000 to meet an economic situation, a picture of which he has painted for us, on the other hand he gives to a thriving industry a present of £1,000,000?
When I talk about a thriving industry the Minister need not take me to task and say that there is unemployment in some of the Irish factories. Let me ask some of the same questions again. Is it necessary to make a present of a substantial portion of £1,000,000 to firms like Wills and to Players? If the Minister could submit any evidence whatsoever that the finances of these companies were in such a state that they were nearing bankruptcy then there might be some excuse for coming to the rescue in the manner he proposes, but under the circumstances which we see, all of us realising that the two big distributors of cigarettes in the country——
I am putting to you a point of order again. I have already explained to you and to the House that the increase which Deputy Corish is now discussing and criticising has been sanctioned by the Minister for Industry and Commerce upon the advice of the Prices Advisory Body which our predecessors set up. I am submitting that it is not in order to discuss on Section 13 of the Bill a decision of the Minister for Industry and Commerce or a recommendation of the Prices Advisory Body.
Which we know nothing of.
This is perfectly absurd. If the tobacco manufacturers are to receive by the bounty of the Minister £1,300,000 surely it is supererogation on the part of the Minister to introduce an amendment to the Finance Bill designed to temper the wind to the shorn lamb. This lamb is not shorn. It is growing taxpayers' wool as fast as the Minister can pile it on.
That is not relevant to the point of order.
The point of order is that we must not talk of the £1,300,000 he is giving to the tobacco manufacturers. I am submitting an argument against giving them time to pay, for they are going to use our money to pay us back the money he is so anxious to pay them.
That is relevant to this discussion. It is the only point which is relevant and which arises on the amendment.
Thank you.
I would not resent the £1,000,000 if I had an assurance from the Minister that the two large tobacco companies were in such a way that they had to receive a subvention of £1,000,000.
In his financial statement on the 2nd April, as reported in the Dáil Debates of that date, column 1140, the Minister said:—
"It is proposed to increase the customs duty on leaf tobacco by the equivalent of 6d. on the packet of 20 cigarettes at present selling at 1/9. The Minister for Industry and Commerce has been satisfied by the manufacturers that it is necessary to allow an increase in price of 1d. a packet to cover increased cost of manufacture. These two factors——"
they are taken together in the financial statement,
"——will raise the price of the popular packet from 1/9 to 2/4."
Then the other relevant comments are made regarding pipe tobacco and hard-pressed tobacco which was to be relieved to some extent. First of all about the amounts. Sixpence is what is going on as far as the yield to the Exchequer is concerned. Again, this matter is very fresh in my mind because I have had frequent discussions about the yield of taxes on many things. One was the yield of 1d. on a packet of cigarettes. That was taking cigarettes comprehensively with the equivalent on tobacco. The calculation for me was £1,300,000 and £1,400,000 in the full year. The Minister was budgeting this year as from the 2nd April and that meant that he was getting a full year's yield this year. Therefore 6d. should bring in £8.4 million. He says that he will get £5.5 million. Again we are faced with this confusion which the Minister could clear up, of course, and will not do. Is he allowing for such a decrease in consumption as is represented by the fall in the revenue derived from the tax from £8.4 million to £5.5 million or is it partly that and partly underestimation; in other words, that it will yield booty, something more in order to give surplus? What is allowed to the manufacturers is very relevant. I do not suppose that I ever saw so easy a gift so simply disclosed to us as this one. In one single sentence he said:—
"The Minister for Industry and Commerce has been satisfied by the manufacturers that it is necessary to allow an increase in price of 1d. a packet to cover increased cost to the manufacturers."
What is the Minister, what is the Minister's colleague, allowing to the manufacturers? Is it £1,400,000, the fruits of 1d., or is it something else? Or is it just whatever 1d. brings? Are they gambling? Were the manufacturers told: "Take 1d., and if consumption keeps at the old rate you will get £1.4 million, but if it goes down to the point reflected by the difference between £8.4 million and £5.5 million you will get only £900,000"?
It is to be noticed that the Minister there says: "The Minister for Industry and Commerce has been satisfied." There is no question, so far as the financial statement is concerned, of the Prices Advisory Tribunal. That came out later, when we were told that the Advisory Body had received representations from the tobacco manufacturers and had advised an increase of 2d. and that the Minister had granted an increase of 1d. before this 1d. increase. What was the first 1d. supposed to bring in — £1.4 million? I suppose it would have, because there would not have been any great fall in consumption when that 1d. went on. What are the manufacturers getting? The Minister says the Prices Advisory Body recommended this. I never heard of it. He says that this body was set up by the previous Government. So it was, but the theme of the agreement and all the remarks made about that body were that the representations were to be made in public. I do not know what facts were brought before the tribunal. We have not got them, but we are asked to vote 6d. to the revenue and 1d. to the manufacturers, on top of another 1d. granted earlier. We do not know to what extent their representations carried weight with the tribunal — in other words, how much they were to be allowed.
I have mentioned twice already that one of the groups of tobacco manufacturers who are going to benefit by the 2d. on the packet are a branch of the Imperial Tobacco Company. The Imperial Tobacco Company, at their recent general meeting, told their shareholders that they were quite sorry — it was a matter of surprise as well as sorrow — that their dividend could not be put at the 35 per cent. level of two or three years ago and that they could only get a 32 per cent. dividend. To a branch of a company paying a 32 per cent. dividend, we propose to allow this 1d. increase, in addition to the 1d. granted apparently some time earlier. That surely requires some better explanation from the Minister than we have had.
His explanation is that it is not in the Finance Bill.
It is surely relevant to the Finance Bill. The people are being asked to pay 6d. extra towards the Exchequer, and, taking, in the context of that levy, the 1d. already granted and the 1d. proposed to be granted, the price will be raised from 1/8 to 2/4, so the increase in the course of the year amounts to 8d. on the packet. That is the purely tobacco side.
The other side is that this is a still further step in the policy of taking away from the value of the wages that people are getting, founded upon the main principle in the Budget, that the Government are satisfied that incomes have already advanced more than the cost of living. Therefore, it is proper to cut incomes and one of the ways in which incomes are to be cut, or intended to be cut, is this, which is to yield £5,500,000, according to the Minister, but which I suggest will yield much more. Taking it at £5,500,000, however, with the beer and spirits levies, it comes to £8.8 million and with the increase in the cost of foodstuffs, to something short of £13,000,000.
The Minister's answer in relation to all these matters is to take each separate tax and divide it over the community and say that it means only 1/6 a week. Each one by itself is something small but the tot is nearly £13,000,000, and, on the Minister's line, that amount of £13,000,000 is to be provided out of present wages. He has certainly no idea of a wages policy allowing for increases. The principle is that this is necessary to reduce purchasing power because the country was living beyond its means so far as external purchases were concerned. "We are spending abroad in excess of current savings", and that had to be reduced. One of the ways by which the people can be prevented from buying things coming across the Border is to tax the things they must buy, the things they are likely to buy and so we get that £13,000,000 piled up and, as I say, that is to be taken from present wages.
This is the biggest slice of the exaction. All the food items come to £4,000,000 and the tobacco to £5,500,000 even on the reduced consumption. If it is going to bring in only £5,500,000, it means that at least £5,500,000 is going to be extracted from the housewife's share of the man's wages for the purchase of other things, but it is also going to mean a certain amount of mortification on the part of people who smoke who must remit some part of the pleasure they get from smoking in order to help the Minister to please the bankers.
I want to praise the docility of the Fianna Fáil Party. I think the picture of the Fianna Fáil Party being flogged into the Division Lobby for the purpose of securing that the tobacco companies which are to receive from the public a gift of £2,800,000 are to be given six months' grace wherein to pay the duty which becomes due on the stocks they at present hold, lest they be incommoded by having to pay on the nail, is something so grotesque as to deserve adequate description. When you come to think of it, now that the bank rate is being raised, if an unfortunate shopkeeper down the country owes a bank £100 to-day, he will be asked to pay 6 per cent. on it and if he does not pay on the nail, the bank manager will want to know what he proposes to sell and when he is going to sell it.
I am at present begging the Department of Fisheries to pay what they owe to a man because the bank manager is at his door every morning saying: "Pay up or we are going to sell you out." But the tobacco manufacturers! Who would ask them to pay? They are getting only £2,800,000. The Minister has not even bothered to tell us what is the sum he expects will be due from the tobacco manufacturers on the stocks they hold. Let us assume that it is half a million — and I do not think it is at all as great a sum. They have had £2,750,000 as a free gift, but so solicitous is the heart of Fianna Fáil, so restless has the sleep of Deputy Killilea become lest the Imperial Tobacco Company should be incommoded, that we have an amendment before us to assure them that, if it is not convenient for them to pay now, they can have six months' credit.
Six months' credit is a useful concession. It would yield no more than £3 to the fellow who owed the bank £100, but three months' interest on £500,000, if it were at 6 per cent., would be £15,000. This amendment is just throwing a little sugar on the pill. We have given them £2,800,000, and now we are going to pay them £15,000 in order to take the present, lest it be too much trouble for them to come over and take the £2,800,000. They must have £15,000 to pay for their bus fare, lest the remission in favour of the dance hall proprietors would rest too heavily upon them. Is not that true? Is it not astonishing? Deputy O'Reilly is an old campaigner with me; does he think we should pay the tobacco manufacturers £15,000 to come and collect £2,800,000 from the Exchequer? Does he not think that is acting too handsomely? Does he not think they could come under their own steam to collect this money? That is all they are being asked to do, to hire their own taxi or even come on the bus and collect £2,800,000, without being paid a further £15,000 to do it. Is it not another subsidisation that this amendment amounts to, for which we are providing £15,000? Has some illuminatus on the Fianna Fáil Benches discovered an explanation?
I invite the Minister for Finance to tell us if it is true that the six months' grace which it is proposed in this amendment to give the tobacco manufacturers will be worth £15,000 to them, if their stock of tobacco calls for a duty payment of £500,000 and they have to borrow that money at 6 per cent. as an ordinary shopkeeper in rural Ireland may have to do? Is that the purpose of this amendment? If the Minister does not care to make the calculation for us, I suggest to him that he has an obligation to tell us, before he asks the House to pass the Finance Bill, what is the amount of duty he anticipates will be payable on the stocks of tobacco now in the hands of manufacturers and what will be the interest saving which will accrue to the manufacturers if they are, by this amendment, excused, by a period of six months' grace, from paying the duty which becomes due on their stocks under the terms of the Bill.
The difficulty here is that it is quite impossible to deal with unscrupulous misrepresentation. I have already made it clear to the House that the Minister for Finance has no responsibility — beyond the usual collective responsibility which he shares with his colleague, the Minister for Industry and Commerce and the Government — for the fact that, acting on the advice——
Does the collective responsibility extend to the dance hall proprietors?
——or, rather, acting on the recommendation of the Prices Advisory Body made in October, 1951, the then price of cigarettes should be increased by 2d. per packet, the Minister for Industry and Commerce has agreed to sanction it, having already sanctioned 1d. of that amount.
Was he bound to accept that?
No more than my predecessor was bound to accept it, when the Prices Advisory Body permitted the licensed traders of Ireland to increase the price of whiskey.
We did not accept——
There was no suggestion then of the Coalition putting money in their pockets.
A Deputy
We would not let meat go up.
There was no suggestion about putting millions of pounds into the hands of the licensed trade or into the pockets of the brewers and distillers.
Tell us about this £1,000,000 that the Minister is giving to the tobacco manufacturers.
That increase in the price of whiskey was made on the advice of the Prices Advisory Body.
The Minister then did not shirk his responsibility for it.
We all know in whose pockets certain members of the late Coalition were. We are not going to have the public fooled in this way.
Will the Minister tell us in whose pocket he is?
The Prices Advisory Body is a body to which a judge of the Supreme Court was appointed as chairman by the late Coalition. They recommended that the price of cigarettes should be increased by 2d. One penny of that price increase was sanctioned by the Minister for Industry and Commerce last October. The other 1d. is being granted now and it is being granted on the recommendation of the Prices Advisory Body. If that recommendation is being challenged, then the people whose conduct is being impugned are, first, a judge of the Supreme Court who was chairman of that body; an officer of the Revenue Commissioners who was subsequently seconded, at the request of the then Minister for Agriculture, Deputy Dillon, to the Department of Agriculture and who has since been appointed a member of the Prices Advisory Body; a representative of the Trade Union Congress; a representative of the Congress of Irish Unions; and another member. The personnel of the Prices Advisory Body which made that recommendation is precisely the same —there is one solitary exception — as it was when the Coalition Government left office. It is the conduct of these gentlemen which is now being impugned — or does Deputy Corish suggest, or Deputy Dillon either, that from their knowledge of the people who constitute this body they are likely to make such a recommendation that the Minister for Industry and Commerce would be justified in turning it down?
Does the Minister want an answer now?
Is that the suggestion? Is not that the only ground on which the Minister for Industry and Commerce could turn that recommendation down, that these people were not justified in making it? Is it suggested that they had some improper motive? It is the conduct of these gentlemen that is being impugned here in the Dáil.
Are the Minister for Industry and Commerce and the Minister for Finance satisfied that 2d. is necessary?
I assume that the Minister for Industry and Commerce is satisfied.
You said in the Budget you were satisfied that these bucks wanted £1,000,000 and you gave it to them.
I did not say that.
You did so.
I did not say it, and if the Deputy were listening even to the passage in my speech which Deputy McGilligan quoted he would see that I did not say that I was satisfied. It is not my business to be satisfied in this matter: it is the business of the Minister for Industry and commerce, in whom I have full confidence, as every member of this House has the fullest confidence, and he was satisfied.
Are you satisfied?
If the evidence was sufficient to satisfy the Prices Advisory Body, upon which Deputy Mac Fheórais and Deputy Dillon and Deputy Norton were prepared to rely when they were in office, is the Deputy suggesting now that it should be insufficient to satisfy the Minister for Industry and Commerce? Is the Deputy suggesting now that this Prices Advisory Body were too easily satisfied, that they were not careful enough before they made this recommendation, which he has alleged is going to result in putting into the manufacturers' pockets, he said, £1,000,000 — or rather £900,000? He was more moderate than Deputy McGilligan; he was not such a fool; he knew what he was talking about, to some extent at least, or knew more closely than Deputy McGilligan. Mind you, I say he knew it; I am not saying that that was the impression which he tried to convey in his presentation of the case. That £900,000 is not going into the pockets of the tobacco manufacturers, in the sense in which Deputy Corish wished to convey it was, because the whole tenor of Deputy Corish's speech and suggestions has been that that is £900,000 additional profit. The Deputy knows that is not so. The Deputy knows that that additional increase of 1d. has been necessitated by the rise in the price of tobacco leaf, by the rise in wage rates, by the rise in the prices of packages, paper, and other materials which the tobacco manufacturers require, and that it is just sufficient to cover these increases in cost and to allow them their normal profit.
God help them.
I know the attitude of the Labour Party — and Deputy Corish is carrying it on — in regard to Irish industry. Irish firms are the firms which would suffer most if the Minister for Industry and Commerce had done what Deputy Corish is suggesting he ought to have done — that is, to say to a Judge of the Supreme Court, to the civil servant who commanded the confidence of Deputy Dillon to such an extent that he had to take him out of the office of the Revenue Commissioners and appoint him to a post in his Department, to the representatives of the Congress of Irish Unions and the representatives of the Trade Union Congress, with which Deputy Corish is so closely allied, and to the other person whose name escapes me at the moment: "We do not believe you arrived at this conclusion justly. We have no confidence in you"— for that is what it means—"and, therefore, we are prepared to disregard and overthrow your recommendation altogether." That is what Deputy Corish wanted the Minister for Industry and Commerce to do.
I wanted him to accept responsibility and not to blame civil servants — because that is exactly what has happened.
Now we have heard something extraordinary. Deputy Corish has made an extraordinary suggestion. Remember, it was the Coalition Government that appointed these persons. When they were appointed we were told by the Coalition Government that they were independent of everybody. We were taking a Judge of the Supreme Court, a high officer of the Revenue Commissioners, representatives from the two trade union bodies, and another gentleman whose name has eluded me since I started to make this speech. They were going to be completely independent persons. They would hear the evidence. If there was any doubt whatsoever the balance would weigh in favour of the consumer. I cannot quote the picturesque phrases of Deputy Norton but he gave one the impression that if a manufacturer went before that body and asked for an increase in prices he would be stripped to the skin and his pockets would be searched. In fact, he would go through the sort of procedure which, we are told, the Gestapo adopted in their treatment of their victims, before he would get a price increase.
What does Deputy Corish say this morning? This independent body was regarded, apparently, by him as a body of civil servants who were to do what their Minister told them to do. There is no longer any question of independence because civil servants are not independent. They are the officers of their Minister. They carry out their Minister's directions except in so far as they, being accounting officers. have a direct responsibility to this House. However, in regard to general administration not touching the expenditure of public money, civil servants are the officers of their Ministers. That is what Deputy Corish now says — that this Prices Body was not an independent body, as Deputy Norton wanted the public to believe, but was a mere rubber stamp to act as civil servants, on the instructions of their Minister, to sign on the dotted line when their Minister told them to do so. Does Deputy Corish want the Irish people to believe that, in fact, that is how the independent Prices Body was regarded when he and his colleagues were in office? I may say that that is not the position now. We regard them as independent. They are treated as independent. We regard them also as responsible persons. When they have fully satisfied themselves in their investigations and make a recommendation we are prepared to accept it unless somebody can come along and satisfy us that that recommendation was unjustly or improperly made. Then, if that should happen, we will do our duty in regard to the Prices Advisory Body just as in regard to any other organ of the State. That is the position. Again, I repeat that there is nothing in this Bill or in any section of this Bill which relates to the particular matter which was raised here in the first instance by Deputy Rooney, then by Deputy McGilligan and then by Deputy Corish — nothing whatever.
Is this a reflection on the Chair's ruling? The Chair ruled specifically on three occasions——
I am repeating what I said before——
On a point of order. The Minister for Finance raised this question and suggested that Deputy Rooney, Deputy McGilligan and myself were not in order in discussing the additional 1d. given to the cigarette manufacturers. On three distinct occasions, the Ceann Comhairle decided that it was in order to mention the 1d. increase. Now the Minister says that we were grossly out of order.
I said nothing of the sort. I have accepted the Chair's ruling in regard to this matter. I am merely emphasising the matter again, because I feel there is a certain deliberate obtuseness of view and apprehension on the part of Opposition Deputies which prevents them from recognising that there is nothing in this Bill which deals with any recommendation made by the Prices Advisory Body. How has this matter been brought in? It has been brought in, if I might say so, on the back of one of Deputy McGilligan's March hares. Deputy McGilligan read through my Budget speech in an attempt to find one or two things which were not sufficiently precise because they were not sufficiently detailed. After all, the speech had to be kept within some bounds with regard to time. I want to make it quite clear that the Minister for Industry and Commerce was acting on the advice of the Prices Advisory Body. Deputy McGilligan had not time to read what was in the Bill or what I said in the financial statement in regard to the increase in the tobacco duties. I said that we were increasing the rates of tobacco duty to such an extent that there would be an increase of 6d. in the price of a packet of 20 cigarettes, arising out of the duty, and that there would be only an increase of 2d. in the case of hard-pressed tobaccos. When Deputy McGilligan was saying that the Revenue Commissioners, on certain occasions, had informed him — this is very interesting — that a duty which would be equivalent to an increase of 1d. in the price of the packet of cigarettes would bring in £1,300,000——
It would bring in £1,400,000 in the full year.
——he quite forgot that that estimate was based on the assumption that the increase in the duty upon hard-pressed tobaccos would be raised to correspond with the increase in the duty upon cigarettes.
He specifically referred to that.
He did not. That, in fact, is the position. If there were a general increase of duty at the same rate over all hard-pressed tobaccos and cigarettes, then——
That is what Deputy McGilligan said.
The Deputy should allow the Minister to make his statement.
He must not make mis-statements.
The Minister should be allowed to make his statement without interruption.
When he got that estimate from the Revenue Commissioners, that, in fact, was what was involved.
And so he said.
So far from making this general increase over all varieties of tobacco, we have granted a very considerable concession — costing us about 20 per cent. of the revenue which we might otherwise derive from the increase in tobacco — to the smokers of hard-pressed tobaccos.
The Minister said 20 per cent?
About that, approximately, because other factors come in as well.
Perhaps the Minister would come down to tell us the tax yield? Would you tell Parliament the tax yield?
Would the Deputy allow the Minister to make his speech?
I wish the Deputy would stop behaving like a political mastodon, sitting there bellowing in the mud.
Tell us the tax yield.
No.
You will be here a long time before you get it passed if you do not.
I am going to continue to make the point which Deputy Dillon is very anxious to head me off.
You will have a weary time.
When we were discussing the sections relating to the increase in duty on spirits, petrol, beer and, now, tobacco, Deputy McGilligan obviously came with a very freshly informed mind to this House. He had apparently been discussing with the Revenue Commissioners how much an increase in the rates of duty upon these commodities which I have mentioned would bring in. Was Deputy McGilligan, when he was discussing the matter with the Revenue Commissioners, before he brought in the Budget of 1951, merely engaging in an academic exercise? Was he just bringing over the Revenue Commissioners to waste their time, and saying: "Look, boys, I just feel a little curious. How much would 1d. in the price of cigarettes yield if we increase the rates of duty to increase the price of a packet of cigarettes by 1d.? How much would an increase of 1d. in the pint yield to the Exchequer if we were to increase the rates of beer duty by an amount which would necessitate an increase in the price of a pint by 1d.? How much would be brought in if we increase the petrol duty by 4d. a gallon"? And, of course, the Revenue Commissioners were able, on the basis of increases of minimum amounts, to give him these figures— £1,300,000 per 1d. increase in the price of cigarettes and the corresponding increases in the price of the other tobaccos.
£1,400,000 in a full year.
Very well, make it £1,400,000 for a full year. He was able to give these off pat. The point I want to bring out is this, that when he was speaking on the Second Stage of the Finance Bill, Deputy McGilligan admitted that he was advised, before he brought in his Budget of 1951, that he would require to find several million pounds and, as he said himself — I am paraphrasing his words —"When I began to pursue this matter further I was told that I would get this from petrol, spirits, beer, tobacco," and then he said: "I would have nothing to do with it." Instead of that, he brought in his Budget here on May 2nd. He opened it in the usual formal way. It received perfunctory discussion in this House. The general debate on the Budget was adjourned until May 8th, and the Dáil was dissolved on May 7th.
On a point of order. Am I to assume, Sir, that other members of the House will be allowed to debate in full the Prices Advisory Body, and that we will be allowed to debate also the Budget of 1951?
Anything you like.
On the amendment.
The Chair understands that the Minister is replying to statements made by Deputy McGilligan in the course of his speech.
With respect, I say the Minister is doing no such thing. The Minister is setting out to give his version of what led up to, what was in, and what was said about, the 1951 Budget. The Minister also in the course of this speech on this section devoted very considerable time to the Prices Advisory Body, both as a body and as individual members in their personal capacity. Am I to understand that other members of the House will be allowed to cover the same ground?
May I submit that we are not discussing the section; we are discussing an amendment the purpose of which is to extend the period of payment of duty on stocks in the hands of manufacturers from 1st July to 1st January? That is the sole topic under discussion at the moment — the amendment.
I want to say, before you give your ruling with regard to that matter, that when Deputy Dillon was absent from the House — Deputy Dillon missed a division this morning and his knuckles were very severely rapped——
Perhaps the Minister would cease this very pleasant bit of playacting until such time as you have ruled.
I want to say before you give the ruling——
I put the point of order, not the Minister, and the Chair is entitled to put his point of view on that.
I beg your pardon. Before you give your ruling——
Is this a point of order?
Deputy Morrissey was not here. It was agreed with Deputy Collins——
The Minister is being grossly disorderly.
It was agreed that we would debate Sections 12 and 13 and the amendment simultaneously. Deputy Collins said he wanted that done for the convenience of the House.
The Minister should not be allowed to be so grossly disorderly.
It is a matter for the Chair whether he will allow him to make that explanation or not.
May I submit that when a Deputy rises in his place and puts a point of order to the Chair, the Minister or anybody else is not entitled to argue that point of order before the Chair rules?
I have not argued.
You have, or intended to do it. That is all I am concerned with.
On the point of order raised by Deputy Morrissey, the Chair is of the opinion that Deputies will get an opportunity of replying to the statements made by the Minister and that it will be a matter for the Chair to decide whether or not they are in order.
I must not get away from this point — I was coming to this. Sir—that in his Budget speech——
On a point or order. Do you seriously rule that, on an amendment to postpone the payment date of duty due on stocks of tobacco in the hands of manufacturers from 1st July to 1st January, it is relevant to discuss the Budget of 1951? Come now. Is it seriously ruled in this House that that is relevant?
It is not relevant to discuss the Budget of 1951 but, certainly, references can be made to it, by comparison with this one.
I want to get a ruling on this point. I want it on the records of the House that, on this amendment, it is relevant to discuss the Budget of 1951.
The Chair did not say it was relevant to discuss the Budget of 1951. The Chair said that comparisons could be made with the Budget of 1951 as against this one.
On this amendment?
We were not allowed to talk about the Budget. We were told we were on the Finance Bill.
Deputy Dillon talked about the Budget and my financial statement. He quoted my Budget speech. He went over the whole background of the Budget, as he said. Deputy Corish discussed the increase in the price of cigarettes which had been recommended by the Prices Advisory Body.
It is relevant.
It is not in the Budget.
It is relevant to this.
The Minister raised ten points of order.
Deputy Dillon should possess himself in patience.
The Minister ought to be ashamed.
The Deputy is looking for information but he is not prepared to take it.
What I was dwelling on—and I think I am entitled to dwell on it—is that Deputy McGilligan has shown himself to be exceptionally well informed in regard to these matters, and I am asking the House to consider how he got that information. He himself has admitted that he was advised that he would require several million pounds more revenue last year. He has not only admitted this, but he did warn the House that if there was going to be any fresh expenditure there would have to be increased taxes. He said that in 1951. All I am now endeavouring to do is to point out the significance of the admissions in the statement which Deputy McGilligan has made in this House in the course of the debate, that these taxes, or at least part of these increased taxes, should have been imposed last year in order to enable Deputy Norton, if he had then been in office, to finance his Social Welfare Bill, to provide for the increase in the old age pensions, and in order to enable Deputy McGilligan, as Minister for Finance, the Minister responsible for the Civil Service, to meet the cost of the increased salaries of civil servants, which he knew were coming into operation last year, and for which we have to provide this year.
That is the point I am making because, as a matter of fact, the discussion on this amendment is not confined to the narrow terms of the amendment. Deputy Collins has been talking about rifling the larders and Deputy McGilligan has been talking about the pay packet. These had nothing to do with the amendment. but they were regarded as relevant by the gentlemen on the opposite side. who are now becoming nervous of the turn which the discussion has taken, because they know it will become more evident that they should have imposed these taxes last year. They know that they should have increased the tax on tobacco last year, but they were afraid of that, and they ran away from it. They had, however, perfectly prepared the ground so that when they had thrown over the Labour Party, sunk Clann na Poblachta and steamrolled Clann na Talmhan, they could come back with their over-all majority and bring in a Supplementary Budget.
Tell us about the dance hall tax.
That is why Deputy Dr. O'Higgins, Minister for Industry and Commerce as he then was, went down the country and said in the year 1951 that if Fianna Fáil came back there would be increases in the taxes on beer, spirits and tobacco.
And you denied it. You said in Rathmines that it was not true.
As I said last night, I knew the inter-Party Government was not straight. I knew the whole Coalition was a crooked set-up, but I did not know how crooked it was. I thought there was still some honesty left in public life even when you were sitting on this side of the House, and, therefore, I could not have conceived— I did not have the knowledge then which I have now — that you would be guilty of that shabby trick on the electorate. For that reason I regarded it then as being unnecessary to reimpose these taxes, but if the public interest——
You denied you made the statement.
Following that meeting every elector in my area received my election address, in which I said——
"I did not mean what I said in Rathmines."
——that our first duty would be to restore order to the public finances and that is the duty which we are now discharging. We are not, like Deputy McGilligan, running away from an unpleasant task. We realise that the national interest demands that it should be done. We remember the very cogent arguments of Deputy Dillon that we must have economic independence on the basis of solvency——
On a point of order, I wish to get an opportunity of recapitulating my views on national economics. I gather that, on the amendment to postpone the payment date for duty on the stocks of tobacco in the hands of manufacturers from the 1st July to the 1st January, I shall be afforded an opportunity of dealing with political economy and national economics, and of giving my views on the economic past of this country as it appeared in 1939 and every subsequent year up to the present and the economic prospects of the country up to 1959. I, therefore, give notice to the Chair that I consider it will be relevant, in the light of the Minister's interesting contribution, to which we have just listened, to enter on that dissertation.
The Chair cannot give a ruling in advance of any particular event. The Chair will rule as the occasion arises.
No occupant of the Chair could forecast what Deputy Dillon would be capable of.
If Deputy Killilea intervenes to throw light on the economic situation we shall have a gala day.
Having traversed the arguments which have been used——
That will not work.
——by the Opposition in the discussion on this amendment, let me now come to the amendment.
Hear, hear! Well done!
That is hardly fair to the Chair.
It is perfectly fair to the Chair because the course of the debate was set before the Leas-Cheann Comhairle took the Chair.
The Minister's practice is to treat the Chair with contempt.
I have the utmost respect for the Ceann Comhairle and the Leas-Cheann Comhairle.
A Deputy
You do not show it.
He might be spared that.
I am trying to continue my statement and it is not very dignified that I should have to protest to the Chair against these interruptions. There should be a limit. I know it is quite impossible to control a certain irrepressible gentleman. We all know——
He has gone away again from the amendment.
He is certainly not referring to himself.
The Minister is in possession.
I think he should continue his disquisition on dignity. It is very interesting. We can leave the amendment over till the next day. There is no hurry about it.
"Dignity" is a delicious touch.
Deputy Norton should refrain from interrupting.
The Minister on dignity! De dignitate by Ciceronia MacEnteea. If Deputy Cogan were here, we would have something about De Senectute.
We should have a day nursery for some babblers.
De dignitate.
I was coming very closely to the amendment. The position is very simple. Considerable stocks of tobacco had been cleared by the tobacco manufacturers from bond before the Budget. They had been cleared in the ordinary course of business. On them, customs duty had been paid. We had the option of allowing these manufacturers to dispose of that tobacco at an inflated price, including the amount of the customs duty, or of levying an excise duty on the stocks of tobacco which had been cleared from bond. We anticipate that we shall get something less than £600,000 as a result of the excise duty. The tobacco manufacturers could not have foreseen that these increased payments would be required of them. They did not know that we were going to increase the rates of tobacco duty. They had cleared these stocks in the ordinary way of business in order to maintain production and to meet the continuous unbroken public demand. Quite obviously even Deputy Dillon will realise that. I do not know whether the lawyers on the other side of the House would, but a person who is supposed to be a businessman like Deputy Dillon will realise that it would be very difficult for many small tobacco manufacturers, particularly the Irish-owned concerns, to find that money overnight. These were stocks that were manufactured but were still held by them for sale in their stock rooms. They were to be asked to pay on the nail. That is what Deputy Dillon and Deputy McGilligan wanted. I am not surprised that Deputy McGilligan wanted it because he has had no touch with the practicalities of commercial life, but Deputy Dillon is supposed to have. Deputy McGilligan suggested that these tobacco manufacturers carrying these stocks should pay on the nail something like £600,000. What undertaking in this country, big or small, could find that money overnight? Then, having paid if to us, they were to wait until the stocks were liquidated before they could recoup themselves. Is not the position clearly one that would have to receive very careful and sympathetic consideration?
It is all very well for Deputy Corish to talk about the subsidiary tobacco companies. What about the Irish-owned concerns? They have not the capital resources of their competitors. How can they find the money overnight to pay on the nail, as Deputy McGilligan said? Quite obviously they had to be given time, the time which we had originally intended to give — the 1st July, 1952. After careful consideration and study of the documents submitted to them, the Revenue Commissioners came to me and said — it is my responsibility and I am not putting any responsibility on them—"It will be essential for you to allow the tobacco manufacturers further time unless you are going to close down certain Irish concerns." All they are being given is time to pay the money, time to enable them to clear their stocks to put themselves in funds to pay it.
It has been suggested that because that time is being given we are doing something unusual. Has Deputy Dillon ever asked for time to meet his accounts? Is there any Deputy who is engaged in business who at one time or another did not find it difficult to find money to pay on the nail? That is what we are doing in regard to this excise duty which fell suddenly on these tobacco manufacturers who had cleared stocks in bond in order to maintain themselves in the ordinary course of production. Some people, however, are trying on the basis of that to suggest that I am putting money into the tobacco manufacturers' pockets; that I am giving them some benefit, some concession which will represent a substantial profit to them. On the contrary, I am merely putting them in a position to carry on and meet their obligations in due course to the Exchequer when they have sold the stocks on which we are levying tax.
Have we not come to a pretty pass when the Minister for Finance gets up and says that the oldest established businesses in Ireland could not get credit from their bankers for three months for a self-liquidating overdraft to meet the payment for excise duty on tobacco which was passing into consumption and which must be consumed within six weeks of the date of the payment being made? Have we reached the stage when the Minister for Finance gets up and says that his advisers came to him and said: "Minister, either these old established businesses must close down or you must give them the credit that their bankers have refused to give them?" Small tobacco manufacturers, the old tobacco manufacturers, can come to the Minister and ask that they should be given that credit, but the shops which are closing in this city and in every provincial town in Ireland because there is no appeal from the bank manager's ultimatum: "You pay on the nail or close your doors," cannot go to the Revenue Commissioners and say: "Give us six months' credit."
The Minister says that, having examined everything, he was satisfied that some of the oldest industries in Ireland were warned by their bankers: "Close down; dismiss your employees; get out; we will not give you six weeks' credit. Even if that means sacking every man in the place and wiping out an industry, this is our decision; out you go." The Minister has volunteered the information that after an examination of the circumstances of the old-established Irish tobacco manufacturers, he was satisfied that the alternative was this amendment or see them go to the wall. No banker in Ireland would give them six weeks' credit, and the only place they could go to was to Parliament to intervene and to amend the Finance Bill. That is the certificate the Minister is giving, I am not alleging it. I am commenting on what the Minister has told us. He says: "I looked into the case, not of the Imperial Tobacco Company, but of the old-established Irish tobacco manufacturers, and I satisfied myself that it was this amendment or close their doors, dismiss their men, and wind up their business."
Do Deputies realise the position into which we have been manoeuvred by these lunatics? Can they imagine that some of the oldest Irish businesses are now in a position that bankers dare to say to them: "Not one farthing; it does not matter whether there are 500 or 600 men depending for a living on your business, we will not give you a week's credit although you are prepared to demonstrate to us that this is only to pay duty on tobacco which is passing into consumption every day, and which must be consumed within six weeks of the giving of the overdraft"? The Minister does not seem to realise that he is commending this amendment to the House on the grounds that he has manoeuvred Irish businesses into the position that they cannot get six weeks' credit for whatever sum is due to pay the duty on stocks which are actually in the process of manufacture. If that is the case of some of the most substantial old businesses in this country, conceive what is the position of those who are not in a position to come to Parliament. If they get an ultimatum, they shut their doors, the men are dismissed, and the proprietors look for a job. It is the Minister who has told us this.
Although he has told us that that is the position in regard to Irish businesses, he is distributing, according to his own allocation, £2,800,000, of which the Imperial Tobacco Company will collect seven-eighths. Then he says that Deputy McGilligan has misled the House because he has not adverted to the fact that if you reckon 1d. on cigarettes to produce £1,400,000, you imply that a corresponding tax applies to tobacco. He says that at column 1141, Volume 130, of the Official Reports of his Budget statement he told the House that he was not going to extend this 1d. to ordinary tobaccos. I said to him: "What then do you lose from revenue?" He said: "Something about 20 per cent." Let us see where that leads us. He admits that 1d. applied to cigarettes and tobacco yields £1,400,000 and that 6d. yields £8,400,000. Take 20 per cent off that because he has not extended it to tobacco. A fifth of £8,400,000 is approximately £1,700,000. Take that from £8,400,000 and you get £6,700,000 as the yield of that tax. What does the Minister for Finance tell us the tax will yield? Look at column 1141. He says there he hopes to get £5,500,000. Which calculation is right? Is it to be £6.7 million or £5.5 million? What is the House to believe? All I know is that we are giving the tobacco companies, of whom the Imperial Tobacco Company represents seven-eighths, £2,800,000 for themselves — 2d. a packet on cigarettes. We will now by this amendment extend the period wherein they can pay tax on stock for six months. Assuming these stocks to be half a million that means that we are giving them a further present of £17,000 interest which would be payable on the half million for six months. We are asked to do that because the Minister says he has personally considered the circumstances, not of the Imperial Tobacco Company but of the old established Irish tobacco manufacturers and he has discovered that when they went to their bankers to get accommodation for approximately six weeks they were told: "Close your doors; dismiss your men; wind up your business; we will not give you a farthing; we will not accommodate you for a month, or a week, or a day." Fianna Fáil sits there and applauds that. Fianna Fáil declares that that is right and that the appropriate way to remedy the situation is to come in here now and move an amendment to the Finance Bill to the effect that if the bankers have decided to close these old established firms up they will rescue them at the eleventh hour by amending the law and they will lay that soothing unction to our souls in the conviction that "Where ignorance is bliss it is folly to be wise."
There may be thousands of other small businessmen who are being told to put up their shutters, dismiss their men and look for a job but, thank God, we in Dáil Éireann do not know about them so there is no need to amend the Finance Bill to relieve them. Was there ever such an example of unscrupulous, callous, shameless abdication of duty? Every Deputy of Fianna Fáil is fixed with notice now on the authority of Deputy MacEntee, Minister for Finance, that he has himself examined the case of a group of the oldest business establishments here and he has himself established the fact that for the want of six weeks' credit they would have had to close their doors, dismiss their men and wind up their business. That is why he is coming in here now to move this amendment and Fianna Fáil applaud that.
That is what Fianna Fáil has done to our people in the last six months. That is what they glory in having achieved in this country within the last six months. They are the greatest curse that has ever come upon our people and, with God's help, we will clean them out of that place at a very early date.
We have listened to a very interesting statement from Deputy Dillon. The first point I would like to make is that the basis of his calculation leaves out of consideration one factor which I have taken into consideration. Naturally, if we have to impose in this year, not merely taxation to cover the increase in the cost of public services which will arise directly immediately in this year but also those increases and costs which occurred last year, but which were not provided for, then the increase in the rates of taxation will be above normal because we shall have to impose in this year those increases in tax rates which should have been imposed by Deputy Dillon and his colleagues last year. Because of the fact that the rise in taxation is steeper than it would have been if they had done their duty, we have to allow in this year for the fact that there will be a reduction—perhaps a substantial reduction—in the amount of tobacco consumed. Deputy McGilligan's rule of thumb which he applied so unintelligently and, in relation to which Deputy Dillon is now doing likewise, in taking the yield appropriate to the minimum increase in the duty and applying that on a much wider scale is patently absurd. We have to allow for the fact that if we have in this year to increase the price of tobacco by 6d. instead of by a more moderate sum there will be a tendency for the consumption of tobacco to decrease. That explodes completely the suggestion that I am underestimating the yield from tobacco duty. I am estimating it as closely as it is possible for any person to estimate it. I have no desire to underestimate. I have no desire to overestimate. With regard to the closing down of these old manufacturing concerns——
That is what you told us.
Before the Minister continues, perhaps he would answer a question.
I do not propose to answer any questions. The Deputy made his speech and he had a full opportunity of making any points he wished. I am directing my remarks to some things which were said by Deputy Dillon.
You are keeping away from the main point.
I was saying that the Deputy suggested that I said these concerns would have to close down.
You did say it.
I said these concerns would be in difficulty, that they could not raise £600,000 on the nail and that those which would be most immediately affected were the smaller Irish-owned concerns. Therefore, since we were making this unexpected demand upon them, we were prepared to give consideration to their position. There is nothing unusual in that. It was done by Deputy McGilligan.
That is your alibi.
It was done by Deputy McGilligan, perhaps not with the same justification, when Deputy McGilligan proposed to collect 13 months' beer duty inside 12 months. That means that one does not increase the rate of tax, but merely compels the people who are brewing beer to pay 13 months' duty within a 12-month period. It comes out of their pockets and out of their resources——
The poor brewers! God help them.
They have to go to the bank and raise that additional month's beer duty. It is quite a considerable sum. It runs into millions.
Let ye all start to sob now.
Of course, Deputy Dillon's heart is now bleeding. He is weeping crocodile tears for the brewers. We all know that. Would the Deputy consider the pangs that rent poor Deputy McGilligan's heart in 1948? What did Deputy McGilligan say: "Oh, you poor brewers, bankrupt and broken, I am screwing 13 months' tax out of you and making you pay that inside 12 months. I realise that that is getting blood from a stone and that you will be stony broke when I finish and, therefore"—said Deputy McGilligan to Deputy Dillon's friends —"we will allow you to pay that additional month's beer duty in instalments spread over the rest of the year; one month's beer duty will be paid by you in ten instalments over the balance of the year." That is the concession which Deputy McGilligan made with Deputy Dillon's full consent in the year 1948 to the brewers of Ireland. When it was permissible to do that in 1948, what objection can there be to a similar consideration to men who are caught in the position in which these tobacco manufacturers were caught, because remember there was this justification, that at least Deputy McGilligan might have argued that he was merely shortening the brewers' credit and still was entitled to collect his beer duty from them as the beer went out. The tobacco, however, on which the excise has been levied had been cleared from bond. Customs duty had already been paid on it in its unmanufactured state. If Deputy McGilligan thought fit to extend to the brewers the credit which I have mentioned, why should not we extend a corresponding consideration to the Irish tobacco manufacturers? That is the point at issue.
Could they not get credit from the bankers?
Why could not the brewers get credit at a time when the Deputy was telling us that everything was rosy, that money was so much more plentiful that he himself was throwing it out at the rate of a million dollars in an afternoon? Why could not the brewers have gone to the banks and got credit then?
The point which the Deputy has raised is relevant to the discussion, because as I have pointed out—this brings it home, I hope, to the Deputy —the reason why the manufacturers were granted an increase in the price of cigarettes was due to the fact that they had increased costs to meet. They had to finance not merely the excise duty on tobacco which we are imposing on them under Section 13, but also to finance the purchase of tobacco at rising prices. They have had to replenish their stocks. The tobacco has to be carried in stock for a considerable time before it becomes manufacturable. The Irish tobacco manufacturers are now in the position in which they have to buy stocks at an appreciating price.
How lucky they were to have two years' stock in hand.
They were stocked up undoubtedly before the pound was devalued under Deputy Dillon, and before Deputy MacBride decided that he was not going to cut the link with sterling but would follow the pound, even if it went to $1.40.
Mr. O'Higgins
What did diddlumdandy say?
You should read it. I do not want to get on to that question. Deputy Dillon's enthusiasm for sterling was such that he would not take money from a German or a Dutchman, because they were only fly-by-nights.
On a point of order. I should like to inquire whether, for the purposes of a debate on an amendment to extend the period of time which the tobacco manufacturers may have for the payment of duty under Section 13 on the stocks of tobacco in hands, it is relevant to discuss the terms of the 1948 Trade Agreement, the sterling link and the prospective relations which we may expect to exist between the pound, the dollar and the franc?
It would not be in order to discuss these matters in detail, but reference can be made to them.
I am much obliged to the Chair. That widens the scope of this debate very much.
Will the Minister publish his letter to Mr. Butler?
Deputy Corish.
The Minister's attitude——
I had not concluded. I was not aware that Deputy Dillon had stopped bubbling.
He has got a note telling him to stop.
I regret having to make these digressions, but we are having these unseemly interruptions.
I told you that papa had slapped him. The best thing he can do is to sit down.
Deputy Dillon was slapped sufficiently this morning for having slept it out.
I am sure you were very relieved at that.
Order!
I was relating the difficulties of the Irish tobacco manufacturers and the consideration which this amendment proposes to extend to them to the question of the devaluation of the pound. The fact of the matter is that they have been compelled to sell their commodities, and quite justly compelled, on the basis of the tobacco prices which were ruling when they bought their stocks and when the pound was standing at $4. This is the problem, that the main body of their stocks was bought when the pound was standing at $4. The stocks of tobacco which they then purchased are now being exhausted, and they have got to replenish them when the pound has depreciated. That is one of the reasons why the Prices Advisory Body, having had full regard to that consideration, have advised that the tobacco manufacturers should be permitted to increase their ordinary retail prices to the public to the extent to which I have referred.
That is why this 1d., about which so much play has been made by Deputy Corish and Deputy Dillon, has been granted to them, because after all we did remain tied up with sterling and we were not able to maintain the Irish pound at $4. That is why we just had to follow suit with Great Britain because we were so tied up with the British market, with which Deputy Dillon has been so much concerned. That is the fundamental factor. That is one of the reasons why the Irish tobacco manufacturers now have to pay for their stocks in pounds worth only $2.80 each. These pounds were worth $4 when they bought the great bulk of the stocks, which are now being exhausted. That is one of the results which followed devaluation, and that is one of the reasons why they had to be granted this increase in the ordinary price of their commodities; that is one of the reasons why they are in these great difficulties, and it is because they are in such great difficulties that we have had to extend this help to them.
(Interruptions.)
The Minister is in possession and should be allowed to speak.
Deputy Corry is interrupting.
Members on both sides are interrupting.
Some of these difficulties arise immediately and directly out of the imposition of the excise duty, and some of them arise more remotely but no less directly out of the devaluation of the Irish pound——
That is a contradiction in terms.
——which our predecessors carried through in September, 1949.
And with which you agreed.
Whatever I agreed to, I am merely putting the responsibility upon the Government which took the decision to devalue the Irish £. Arising out of the unexpected imposition of excise and due to the necessity to replenish stocks using depreciated Irish pounds, it is necessary for this Government to extend to the Irish tobacco manufacturers the same sort of consideration, but not at all on the same wide basis, as our predecessor extended it to the Irish brewers. There was nothing wrong, in my view, with the concession which was extended to the Irish brewers by Deputy McGilligan and the Coalition Government in 1948, and there is nothing more wrong with the consideration which we are extending to the tobacco manufacturers now.
Just £1,000,000.
The attitude of the Minister for Finance towards the wage earners of this country is typified in his approach to this particular amendment. I distinctly remember listening to the present Minister for Finance, then Deputy MacEntee, speaking at Ferns in my constituency during the last election campaign. Deputies should have heard his concern, or his alleged concern, then for the wage earners of this country. It is all the more pathetic when we bear in mind the fact that he was addressing small farmers, road workers and agricultural labourers. He described to them how the inter-Party Government had seriously depreciated the purchasing power of their wage packet from week to week. What is his concern in this amendment, in this Budget and in this Finance Bill? His concern is for the Imperial Tobacco Company. Last night his concern was for the brewers. He said last night to Deputy Cowan: "If the publicans of Dublin are going to suffer in any way as regards their normal profits, I will be prepared to meet them, provided they are not a political gathering."
His attitude, as far as surtax-payers were concerned, was that he would not increase surtax in case he would drive the people who ordinarily paid surtax out of the country. He was not a bit worried that the effect of this Budget would be to drive the ordinary wage earners out of the country.
He also proposes under this amendment to give a further concession of something between £15,000 and £17,000 to companies who, at the present time, are paying a dividend of 32 per cent., and he tries to justify that action. How can he make concessions under this Finance Bill of something in the region of £1,000,000 to people like the Imperial Tobacco Company and, under this amendment, make a present of something between £15,000 to £17,000 to companies? His attitude is: "To hell with the fellow who will have to pay more for his cigarettes, and to hell with the people who will have to pay more for their food." The concern of the Minister for Finance and the concern of the Fianna Fáil Party is for the protection of the Imperial Tobacco Company and for the protection of those who are in receipt of incomes ranging from £2,000 upwards. The whole idea in this particular amendment, and incidentally in the section to which the amendment refers, is to depreciate as far as ever they can, and contrary to what Deputy Cowan thinks, the purchasing power of the wage packet of the workers of this country. This amendment is designed to do that to an even greater degree.
In short, this amendment is one designed to extend a moratorium to the tobacco manufacturers of this country. They appear to be picked out as a class specially deserving of this commiseration from the Legislature of this country. We have before us the Finance Bill, which picks out another distressed class—the dance-hall proprietors — and makes them a gift of £140,000. This is done in the same year as the State proposes to increase the price of tea, sugar, bread, butter, beer, spirits and tobacco for the unfortunate old-age pensioner. We find the Minister swinging from his generosity towards the dance-hall proprietor to an equal display of generosity towards the tobacco manufacturers.
I know of no ground upon which the Minister can justify the amendment which he has submitted. Is it seriously suggested that a company, such as the Imperial Tobacco Company, which was able to pay a dividend recently of 32 per cent. on its capital, has any difficulty in meeting demands which fall on it under this Bill? Of course they have no difficulty whatever. To ask the Legislature to pass an amendment of this kind in order to give the Imperial Tobacco Company a measure of generosity of which it has no need whatever is, in my view, an abuse of the powers of the Legislature. When the Minister pleads that it is necessary that this moratorium, because that is what it is, should be extended to the Irish manufacturers, we are entitled to say to him: "If you have brought about this condition of affairs by your Budget, you ought to go to the Irish tobacco manufacturers and tell them to get this money through their normal financiers—the Irish banks." I see no reason why the Irish banks, having been permitted recently to increase the discount rate by 1 per cent., should not be compelled, as a matter of State policy and in an issue of this kind where the liability is self-liquidating, to advance money in order to enable these otherwise solvent Irish tobacco companies to meet their obligations to the Legislature under the Finance Bill.
I move to report progress.
Progress reported.
Committee to sit again.