Industrial Development (Encouragement of External Investment) Bill, 1957—From the Seanad.

Minister for Industry and Commerce (Mr. S. Lemass)

I move that the Committee agree with the Seanad in amendment No. 1:—

SECTION 5.

In sub-section (2) (b), line 12, "month" deleted and "year" substituted.

I do not think these amendments will cause any difiiculty to any member of the Dáil. Deputies will remember that one of the provisions of the Bill had the effect of entitling a company which could not make itself qualified to carry on manufacturing operations in this country, under any of the provisions of Section 5 of the Bill, but nevertheless was manufacturing now, to continue to do in the future the same business as it is doihg now. The Bill, however, as it left the Dáil limited that right to manufacturing operations carried on by that company within the month prior to the 1st Dlay of this year. It was argued in the Seanad that some companies in that position might be engaged in seasonal operations and that the period of a month was too short to cover it, and that the period should be increased to a year. The effect is to ensure that companies may carry on in the future any manufacturing operation which, they carried on in the year prior to May 1st, 1958.

Mr. Sweetman

The year prior to it?

Mr. S. Lemass

The 1st May, 1958. That is the date of the Bill, the date on which the amendment was introduced.

Mr. Sweetman

I thought it was the time of the passing of the Act.

Mr. S. Lemass

I move that the Committee agree with the Seanad in amendment No. 2:—

SECTION 5.

In sub-section (3), lines 25 to 27 deleted and "year with another, not more than 10 per cent. of the aggregate value of its total output is sold on the home market." substituted.

The second amendment has a different point. It will be recalled that the Bill put outside the scope of the restrictions imposed by the Control of Manufactures Act, any company carrying on a business primarily for export and that condition was described as one in which sales on the home market were only incidental to the export sales and so regarded if taking one year with another the quantity sold on the home market did not exceed 10 per cent. of the company's total production of each commodity. The removal of the word "each" in that respect is the purpose of the amendment. The effect would be that the company is outside the terms of the Act altogether, if 90 per cent. of its total production is for export, even though the 90 per cent. may not be reached in respect of one of the commodities it is producing. It is a further extension of the scope of the exemption which, I think, is desirable and necessary.

Mr. Cosgrave

Is the onus on the company to prove that not more than 10 per cent. of its produce is sold in the home market?

Mr. S. Lemass

As the Deputy knows, the Bill does not contain any procedure for enforcement by the Minister. The position might arise under which the authority of a company to manufacture would be challenged. The company can itself go to the courts under a section of this Bill and get its position established. If it is challenged, it is the courts will decide.

Mr. Norton

Who is it intended should challenge the sale on the home market?

Mr. S. Lemass

Presumably the Minister would, but probably the Minister would act only when some interest had been affected and representations had been made to that effect.

Mr. Norton

I think the Minister knows he will not act in this matter at all. It is one of the cod aspects of the whole Bill. As I said when I saw it first, it is a lawyer's paradise.

There is one aspect of the matter on which I should like to get some clarification, in case there has been a change in the assurances the Minister gave. I understood it was the Minister's view on the Committee Stage that if a company sold 10 per cent. of its production on the home market, it would still be outside the scope of the Bill, but in ascertaining what that 10 per cent. was, it was 10 per cent. taking one year with another. I think I put a question asking if a firm which sold 15 per cent. one year, 20 per cent. the next year, 5 per cent. the next year and 8 per cent. the next year and in that way, by a process of averages, so long as over some period it levelled out at 10 per cent. of its production, was still outside the scope of the Bill. Is that still the position?

Mr. S. Lemass

That is the position. To be outside the scope of the Bill under that heading, it must be carrying on business primarily for export, and the purpose of the sub-section is merely to give some indication of what is meant by manufacturing primarily for export. The Bill as it left the Dáil required that that condition should be met in respect of each commodity which a firm produced. With this amendment, it will be met if it is exporting to the extent of 90 per cent. of its total production.

Mr. Cosgrave

There is no deciding authority?

Mr. S. Lemass

There is not a deciding authority.

Mr. Norton

Nobody cares whether they understand it or not. That was the procedure under the Control of Manufacturers Act. I take it that, under this, a firm producing and selling 50 per cent. of its production on the home market for five years and then cutting its production to 5 per cent. for the next five years, but having an average of 10 per cent. over ten years, is still outside the scope of the Bill?

Mr. S. Lemass

The whole purpose was to get away from these precise calculations. The Bill says that if 10 per cent. of its total production, taking one year with another, is disposed of on the home market in a manner which can be described as incidental to its main purpose of export sales there is no question of its being within the scope of the Acts.

Mr. Norton

Is this intended to be a sort of rough and ready signpost?

Mr. Lemass

Yes.

Mr. Sweetman

Is this the C.I.E. formula?

Mr. S. Lemass

To an extent.

Mr. Sweetman

Does the Minister expect it to operate more effectively than it has in relation to C.I.E.

Mr. S. Lemass

That is a moot point.

Mr. Dillon

Really we are adopting the strangest legislative procedures in this House because even these few minutes' debate make it pretty clear that here we are solemnly legislating to establish a criterion that nobody can possibly define. If you read that in Alice in Wonderland——

Mr. Sweetman: The Looking Glass.

Mr. Dillon

——you would think it was a very grave foible of the author's mind. I do not know why the Minister does it. I take it his desire is to broaden the scope almost to the point of letting everybody in?

Mr. S. Lemass

Yes, within limits. Of course, this discussion is now getting on to the merits of the section of the Bill rather than the merits of the amendment.

General Mulcahy

Surely the amendment covers the section?

Mr. S. Lemass

The sole effect of the amendment is that, whereas under the Bill as it left the Dáil that condition of manufacturing primarily for export had to be met in respect of each product the company produced, under this amendment, it is met if 90 per cent. of the total production is for export, even though it does not do export on that scale in some particular product. It is a further easement of the conditions of the section. But the aim certainly is to make it clear that a company established here primarily for export is completely outside any restriction of this legislation.

Mr. Dillon

The point I want to make to the Minister is that we have now defined the matter, if this amendment be incorporated, as a company in which "taking one year with another"—whatever that may mean—"not more than 10 per cent. of the aggregate value"—not volume—"of its total output is sold on the home market."

Mr. S. Lemass

What was there was "total output of each product."

Mr. Dillon

I suggest that when you get to that, the section means nothing at all.

Mr. Sweetman

That is the intention.

Mr. Dillon

We are almost at the point where the Minister could get all the publicity of dropping this Bill altogether and bringing in completely new machinery to protect the existing interests. As I said on an earlier stage, I think the publicity that he and his agents abroad seeking to get capital to come to this country could get by saying: "Look, we have wiped out the old Control of Manufactures Act. Anyone can come in here now and manufacture for any purpose"—such publicity would be of inestimable value in the whole business of inducing foreign capital to set up in this country. At the same time, we could go to the existing industries that have secured certain guarantees in the past of permanent protection and say to them: "We will give you on foot of these guarantees given by Deputy Lemass, Deputy Morrissey and Deputy Norton, all of whom spoke with authority as Minister for Industry and Commerce, on foot of their several guarantees, legislative protection of a different kind to keep you in existence; but, at the same time we are anxious to get a really good drive going and we want the publicity of being able to say to any candidate for admission that there are no restrictions, apart from the ordinary restrictions of a social kind which apply to every company operating in Ireland." With this amendment from the Seanad, I think you have almost got to the point in which you are doing that, but the trouble is you are getting none of the value of the publicity.

Mr. S. Lemass

That is what I have done in the only practical way.

Mr. Dillon

Does the Minister agree that if the whole Bill were dropped, the publicity before the world of our intention to look for foreign capital would be of incalculable value? I do not think he would find on any side of the House any reluctance to give him such legislative power as might be requisite to protect not only his own undertakings but analogous undertakings given by Deputy Norton and Deputy Morrissey when they were Ministers to induce the development of certain domestic industries which may be put in jeopardy by the relaxed regulations contained in this Bill.

Mr. S. Lemass

As I said in the Seanad, I do not think the time has come for that yet.

General Mulcahy

Does the Minister think the time will come?

Mr. Norton

I take it that the Minister says now that so long as the firm sells not more than 10 per cent. of its total production on the home market, taking one year with another, it is outside the scope of the restrictions imposed by the Bill. Therefore, I take it that if a firm had an output, say, of £1,000,000 spread over ten commodities, that it could nevertheless sell £100,000 worth of a commodity already produced here by an Irish firm and could sell £100,000 worth of stuff against the Irish manufacturer, so long as the £100,000 worth sold on the home market was not in excess of 10 per cent. of its total output.

Dáil Éireann debate - Thursday, 26 Jun 1958

Mr. Lemass

Dáil Éireann debate -
Thursday, 26 Jun 1958