Dáil Éireann debate -
Wednesday, 21 Feb 1962

Vol. 193 No. 3

Committee on Finance. - Cement (Amendment) Bill, 1962— Second and Subsequent Stages.

Minister for Industry and Commerce (Mr. J. Lynch)

I move that the Bill be now read a Second Time.

Part III of the Cement (Amendment) Act, 1938, which incorporates Sections 12 to 17, inclusive, is concerned solely with the importation of cement. Section 13 provides that it shall not be lawful for any person to import cement for use in this country save under a licence issued by me in accordance with the provisions of Part III of the Act.

In the period of 24 years which has elapsed since the Act was passed Cement Ltd., the sole manufacturers of cement in the State, have, by and large, been able not only to supply the full requirements of the home market but also to build up a substantial export trade. In practice, therefore, and excluding the World War period and certain other short periods of exceptional supply difficulties, the necessity has not arisen for licensing any imports of cement.

Cement Ltd., in common with other Irish industrial undertakings, are concerned to ensure that everything possible is done to enable the industry to survive and prosper in the conditions of free trading which will prevail in the event of our joining the European Economic Community. In planning to consolidate the industry both technically and financially the company have represented to me that it is desirable to replace the existing protection which is, in effect, a total prohibition of imports, by bringing into effect now the customs duty of 30 per cent. full rate, and 20 per cent. preferential rate, which was imposed by Government Order some time ago, but which, of course, has not so far been applied. Having considered the implications of the Company's representations in all their aspects, I am fully satisfied that it is necessary for the good of the industry and in the national interest, that the existing import control arrangements should be terminated and should be replaced, as proposed, by the lesser degree of protection afforded by the customs duty.

Cement Ltd., consider that even though the customs duty of 30 per cent. (full) and 20 per cent. (preferential) on cement will, under Common Market conditions, have to be stepped down and eventually disappear, the protection of the duty should be sufficient to allow the company to consolidate itself in the intervening period to meet any competition, except aggressive dumping.

Except in so far as it may become necessary to offset increased costs which are outside the control of the company, Cement Ltd., have undertaken not to increase their home market prices which, I understand, compare favourably at present with cement prices in Britain and on the Continent.

I commend the Bill to the House and look forward to its early passage through all stages so that Cement Limited may be in a position to proceed with their plans as soon as possible.

Mr. Donegan

We welcome a situation in which an Irish company has reached a stage of considerable export, at the same time providing all the goods required in its particular field for the country itself. It would not be amiss at this stage to say that the services given by Cement Limited, to the country have been excellent. The quality of their goods is excellent and in every way in their employment and treatment of labour they have been very welcome here.

This Bill is in line with future Common Market policy. It is quite obvious that its purpose is to create a customs duty which will protect Cement Limited, and which will be ready for the progressive dismantling of such customs duties which will come when and if we become a full member of the Common Market.

I think all nations in Europe, in the period before they enter the Common Market, have seen to it, in regard to particular industries, that where there was full prohibition or some form of protection other than customs duty, a customs duty was set up which, by progressive reduction, would give some protection during the years to come. This is a wise measure and one which will commend itself to the House.

The development at Drogheda, where Cement Limited, from their basic production, are now embarking on a new factory to make pipes, with a very considerable capital investment, is one that should also be welcomed. I am sure every member of this House will be glad to hear about it as well as its extra labour potential.

Mr. Faulkner

We are all aware that if this country is admitted as a full member in the Common Market, tariffs and quotas on goods coming from member countries to this country will eventually have to go. Over the past couple of years, industry in this country has been endeavouring to equip itself so that it will be capable of meeting the difficulties which will face it in the very near future.

It seems clear that to convince the European Economic Community of our earnestness in seeking full membership and of the ability of our industries to face up to competition outside, it is desirable that by degrees we lower the tariffs on goods coming into this country where the industry here producing similar goods is capable of standing up to this. However, as this matter has a direct bearing on my constituency, I should like to make a couple of points.

The cement industry in Drogheda has the greatest male labour content of any industry in my constituency. The economy of the town of Drogheda is dependent to a considerable extent on the employment in this particular industry. That is not to say that other industries are not playing their part in the economy of the town but, because it has a mainly male labour content with a considerable number of families directly and indirectly dependent on it, it is understandable that I should be concerned with the possible effect of these proposals on employment. The Minister has already examined this matter fully and I should like to know what effect the proposals in this Bill are likely to have on employment in the Drogheda cement factory. Should they have a detrimental effect, I know that he will keep the matter under review. I am glad to note that a tariff of 30 per cent. full rate and 20 per cent. preferential is being retained for the time being, because there was a certain amount of uneasiness in Drogheda regarding this matter. Having read reports about this Bill many workers in the industry feared that imports were to be admitted freely.

Mr. Leneghan

I have very little to say on the Bill and only two points to make against it. It is an extraordinary situation that, since 1938, the cement industry was able to carry on without any such Bill being introduced. Evidently, the Minister could, at his leisure, control imports of cement until we reached a point at which it was possible to export cement. When we are supposed to be entering the Common Market— one of the reasons given for introducing this Bill—we are putting on a tariff, while we have been led to believe up to now that the tariffs would have to be wiped out if we went into the Common Market. The Minister should not try to fool anybody.

The only reason I see for this Bill is to give Cement Ltd. an opportunity to increase the price of its products. Somebody will now try to import cement and will, no doubt, get a permit and the price will be increased by 30 per cent. Immediately, Cement Ltd. will have a very fine opportunity to increase its price so that it will make a further substantial profit and will then, of course, be in a position to compete when we enter the Common Market. That is a very peculiar type of economics. Unless we are given an absolute assurance that there will be no increase in the price of the products of that company. I shall vote against the Bill if the opportunity to vote arises.

Mr. J. Lynch

This Bill will have no adverse effect whatever on employment in Drogheda. On the contrary, by enabling the company to consolidate its position, it will serve to secure the employment of workers there and in Limerick. In the period between now and our possible entry into the Common Market, the intention of Cement Ltd. is to make a further financial investment in the company, to make it more economic and competitive so far as imports are concerned.

In regard to Deputy Leneghan's criticism, I doubt if anybody will want to import cement and sell it at a higher price than that at which it is available from Cement Ltd.

Mr. Leneghan

What about water pipes and such products?

Mr. J. Lynch

For one thing, the company have been controlled for some considerable time; secondly, they have given an undertaking that, with the removal of the import restrictions, they will not increase their prices, unless though force of circumstances outside their control, for example, justifiable wage increases. I should like to point out that the most extreme and restrictive form of protection is quantitative restriction of imports. That is what is now being removed and replaced by a comparatively low rate of tariff so that the Deputy's fears are completely unfounded and his criticism unjustified.

Question put and agreed to.

Agreed to take remaining stages to-day.

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