Dáil Éireann debate -
Wednesday, 9 Mar 1966

Vol. 221 No. 8

Financial Resolutions. - Financial Resolution No. 3: Customs and Excise—Tobacco.

Minister for Finance (Mr. J. Lynch)

I move:

(1) That the duty of customs on tobacco imposed by section 20 of the Finance Act, 1932, (No. 20 of 1932), shall, as on and from the 10th day of March, 1966, be charged, levied and paid at the several rates specified in Part I of the Schedule to this Resolution in lieu of the several rates specified in Part I of the Second Schedule to the Finance Act, 1965 (No. 22 of 1965).

(2) That—

(a) this paragraph applies to manufactured tobacco which was manufactured in, and consigned from, the United Kingdom and was manufactured therein from materials other than materials falling within Tariff Heading number 24.02 in the Schedule to the Imposition of Duties (No. 128) (Customs Duties and Form of Customs Tariff) Order, 1962 (S.I. No. 163 of 1962),

(b) the customs duty on tobacco mentioned in paragraph (1) of this Resolution shall, as on and from the 1st day of July, 1966, be charged, levied and paid on manufactured tobacco to which this paragraph applies at the several rates specified in Part II of the Schedule to this Resolution in lieu of the rates chargeable under paragraph (1) of this Resolution,

(c) the provisions of section 8 of the Finance Act, 1919, shall apply to the duties imposed by this paragraph—

(i) with the substitution of "the area of application of the Acts of the Oireachtas" for "Great Britain and Ireland" and as though the expression "manufactured tobacco" in the first column of the Second Schedule to that Act did not include manufactured tobacco to which this paragraph applies,

(ii) as though manufactured tobacco to which this paragraph applies, together with the descriptions of such manufactured tobacco in Part II of the Schedule to this Resolution, were mentioned separately in the said first column and the appropriate preferential rates specified in Part II of the Schedule to this Resolution were mentioned in the second column of the said Second Schedule opposite the mention of those goods in the first column thereof, and

(iii) subject to the last paragraph (beginning with "Goods shall not be deemed") of subsection (1) of the said section 8 being disregarded,

(d) in this paragraph "the United Kingdom" means Great Britain, Northern Ireland, the Isle of Man and the Channel Islands.

(3) That the duty of excise on tobacco imposed by section 19 of the Finance Act, 1934 (No. 31 of 1934), shall, as on and from the 10th day of March, 1966, be charged, levied and paid at the several rates specified in Part III of the Schedule to this Resolution in lieu of the several rates specified in Part II of the Second Schedule to the Finance Act, 1965.

(4) That the expression "hard pressed tobacco" mentioned in Part II of the Schedule to and the next paragraph of this Resolution has the same meaning as it has in section 17 of the Finance Act, 1940 (No. 14 of 1940).

(5) That the expression "other pipe tobacco" mentioned in Part II of the Schedule to this Resolution means manufactured tobacco of kinds normally intended to be used in pipes, not being hard pressed tobacco.

(6) That, subject to the provisions of paragraph (7) of this Resolution, there shall be charged, levied and paid on all stocks of tobacco of every description which at five o'clock in the afternoon of the 9th day of March, 1966, are in the ownership or possession of a licensed manufacturer of tobacco and in any place in the State other than a bonded warehouse, a duty of excise, payable by the manufacturer, at the following rate, that is to say:

(a) so far as the stocks consist of unmanufactured tobacco, three shillings and five pence for every pound weight of the stocks, and

(b) so far as the stocks consist of tobacco (including snuff) other than unmanufactured tobacco, three shillings and five pence for every pound weight of unmanufactured tobacco from which, in the opinion of the Revenue Commissioners, the stocks were derived.

(7) That the duty provided for by paragraph (6) of this Resolution shall not be chargeable on any manufactured tobacco (including cigarettes, cigars and snuff other than offal snuff) as to which it is shown to the satisfaction of the Revenue Commissioners that it was at five o'clock in the afternoon of the 9th day of March, 1966, fully prepared for sale by retail and that either—

(i) it was not the product of any operation carried out by any manufacturer in whose ownership or possession it was at that time; or

(ii) it was at that time held as retail stock in premises used for selling tobacco by retail; or

(iii) it was at that time in transit from seller to buyer under a contract of sale:

Provided that no tobacco shall be deemed for the purposes of this paragraph to have been fully prepared for sale by retail if, according to the ordinary course of business of the person in whose ownership or possession it was or to whom it was in transit, it had still to be subjected to some further process (other than packing) before being sold by him.

(8) That every licensed manufacturer of tobacco shall not later than the 16th March. 1966, make a return to the Revenue Commissioners in a form approved by them giving such information as they may thereby require and, in particular, showing the quantities by weight of tobacco of every description in his ownership or possession at five o'clock in the afternoon of the 9th day of March, 1966, in any place in the State other than a bonded warehouse.

(9) That every licensed manufacturer of tobacco shall—

(a) produce, if so required, to any officer of Customs and Excise the trade books and all accounts and documents belonging to or in the possession of such manufacturer which are necessary for verifying the return made in pursuance of paragraph (8) of this Resolution, and

(b) render all reasonable assistance to such officer in the taking of an account of the tobacco which was in the ownership or possession of such manufacturer at five o'clock in the afternoon of the 9th March, 1966.

(10) That every licensed manufacturer of tobacco shall, immediately upon making the return required by paragraph (8) of this Resolution or on the 16th day of March, 1966, whichever is the earlier, pay to the Revenue Commissioners the full amount of the duty mentioned in this Resolution on any tobacco which was in his ownership or possession at five o'clock in the afternoon of the 9th day of March, 1966, and was chargeable with the said duty, and the Revenue Commissioners may, if they think fit, defer the payment of the duty to a date not later than the 1st day of November, 1966, upon the manufacturer giving security by bond or otherwise to their satisfaction that such duty will be paid.

(11) That every manufacturer required by paragraph (8) of this Resolution to make such return as is mentioned in that paragraph who either fails to make such return or makes a return which is incomplete, false or misleading in any material respect or fails or refuses to do anything which he is required by paragraph (9) of this Resolution to do shall be guilty of an offence under the statutes relating to duties of excise and shall for every such offence incur an excise penalty of fifty pounds, and all tobacco in relation to which such offence was committed shall be forfeited.

(12) That where drawback is payable in respect of tobacco on which the excise duty provided for by paragraph (6) of this Resolution has been paid, such drawback shall, to the extent of the duty paid in pursuance of the said paragraph (6) as determined by the Revenue Commissioners, be a drawback of excise.

(13) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

SCHEDULE.

DUTIES ON TOBACCO.

PART I.

Customs.

		£	s.	d.
Unmanufactured:—
if stripped or stemmed:—
containing 10 per cent or more by weight of moisture	the lb.	3	9	5
containing less than 10 per cent by weight of moisture	,,	3	17	1½
if unstripped or unstemmed:—
containing 10 per cent or more by weight of moisture	,,	3	9	4½
containing less than 10 per cent by weight of moisture	,,	3	17	1

		Full	Preferential
		£	s.	d.	£	s.	d.
Manufactured:—
cigars	the lb.	4	6	10 1/5	3	12	4½
cigarettes	,,	4	4	6 3/5	3	10	5½
Cavendish or Negrohead	,,	4	6	3	3	11	10½
Cavendish or Negrohead manufactured in bond	,,	4	5	7 4/5	3	11	4½
other manufactured tobacco	,,	4	4	3	3	10	2½
snuff containing more than 13 per cent by weight of moisture	,,	4	3	10 1/5	3	9	10½
snuff not containing more than 13 per cent by weight of moisture	,,	4	6	3	3	11	10½

PART II.

Customs.

		Full	Preferential
		£	s.	d.	£	s.	d.
Manufactured:—
cigars	the lb.	4	4	9 9/10	3	12	4½
cigarettes	,,	4	2	6 2/5	3	10	5½
Cavendish or Negrohead	,,	4	4	3	3	11	10½
Cavendish or Negrohead manufactured in bond	,,	4	3	8 1/10	3	11	4½
other manufactured tobacco:—
hard pressed tobacco	,,	3	19	10 9/10	3	7	10
other pipe tobacco	,,	4	1	10	3	9	9 1/10
other manufactured tobacco	,,	4	2	3 2/5	3	10	2½
snuff containing more than 13 per cent by weight of moisture	,,	4	1	10½	3	9	10½
snuff not containing more than 13 per cent by weight of moisture	,,	4	4	3	3	11	10½

PART III.

Excise.

		£	s.	d.
Unmanufactured:—
containing 10 per cent, or more by weight of moisture	the lb.	3	8	3½
containing less than 10 per cent by weight of moisture	,,	3	15	10½
Manufactured:—
Cavendish or Negrohead manufactured in bond	,,	3	10	3½

I should like to explain this in view of the complications involved by reason of the Agreement with the United Kingdom which was recently signed. The effect of this Resolution is to raise the duties on tobacco by the equivalent of 2d. per packet of 20 standard size cigarettes (minus a margin for turnover tax). It also proposes to impose a special excise duty at an equivalent rate on all duty-paid stocks of manufactured and unmanufactured tobacco held by tobacco manufacturers at 5 p.m. today. There is also a provision to implement, as from the 1st July next, certain provisions of the Free Trade Area Agreement by (a) applying special reduced rates of customs duty to cigarettes and other manufactured tobacco products of United Kingdom origin and (b) extending, in part, the rebates on home-manufactured hard pressed and other pipe tobaccos to similar imported products of United Kingdom origin.

Mr. Cosgrave

Is there any relief in this for hard-pressed tobacco?

Mr. J. Lynch

No.

Mr. Cosgrave

Does it apply to hard-pressed tobacco?

Mr. J. Lynch

The relief of 1/4d or 1/5d still obtains.

Mr. Cosgrave

But it is an increase on hard-pressed?

Mr. J. Lynch

Yes.

Mr. James Tully

Does this mean that if the British alter their tax again, we must do likewise?

Mr. J. Lynch

No. We have special reduced rates of excise duty which would be regarded as preferential visá-vis tobacco imported from Britain, and under the Free Trade Area Agreement, we will not affect these duties so as to avoid the preference being extended to Irish-made tobacco products. The tobacco manufacturers in Ireland opted for the application of the rebate as to one-tenth over a period of ten years, and part of this Resolution applies that one-tenth rebate to British tobacco.

Mr. James Tully

It is the price at the time the Agreement was made, because the Minister knows it is quite possible that the duty will be increased?

Mr. J. Lynch

The British rate of duty does not affect it at all. What is involved here is the protective element in excise duty on Irish tobacco.

Mr. James Tully

The protective element of duty on Irish tobacco vis-á-vis what is imported?

Mr. J. Lynch

Yes, vis-á-vis the customs duty on tobacco coming in here under the British excise duty.

Mr. Cosgrave

How much is involved each year?

Mr. J. Lynch

One tenth of 13/5d. It is infinitesimal as far as tobacco duty is concerned.

Mr. Dillon

On this Financial Resolution, I want to say I do not think this House knows the nature of what it is doing. You cannot take Financial Resolutions, as we are doing here today, one after another and treat them in isolation. I ask the House to pause for a moment to consider what these Financial Resolutions will mean to a man earning £10 a week.

The Taoiseach

Only one Financial Resolution. The Deputy can discuss the whole Budget tomorrow.

Mr. Dillon

Yes, one Financial Resolution. We can discuss some of them now, which the Taoiseach will not like. Have we reached the stage now in this country that we lay it down in the sovereign Parliament of this country that anyone who earns £10 a week is indulging in reprehensible self-indulgence if he smokes one packet of cigarettes a week? We are to be asked to deal not with one Resolution but with one two, three, four, five, six, seven, eight, nine separate Resolutions. I admit that when we deal with the firearms Resolution, we are not concerned with the circumstances of the ordinary citizens of this country. But I want to submit to the House that, as we proceed to tax, in this Resolution, tobacco, having taxed petrol and raised income tax, including that payable under PAYE, already by some other Resolutions, we are building up a burden to be borne not by the rich of this country but by the ordinary citizens, in an effort to raise funds, unless Dáil Éireann is proclaiming the doctrine that any ordinary citizen can legitimately be called upon to deliver himself from the impact of this tax by abstaining hereafter from the consumption of tobacco, beer, spirits and his children from lemonade. I remember that last year this House was called upon seriously to account for its failure to discuss adequately the Financial Resolutions. I know that we have tomorrow in which to discuss the Budget but it is no harm for the House to open its mind to the facts now of the details as they come before us of the whole instrument we shall be called upon to discuss tomorrow.

An Ceann Comhairle

The Deputy must keep to the Resolution.

Mr. Dillon

——to this Resolution, one detail of which, one detail of a boomerang Budget——

An Ceann Comhairle

That may be, but the only thing that is open for discussion at the moment is——

Mr. Dillon

——this Resolution, taxing tobacco. I want to submit to the House that this Resolution is made necessary by part of the profligate conduct of this Government who created the situation which makes necessary this Resolution and the one we have already passed.

An Ceann Comhairle

The statements of the Deputy may very well be pertinent but they are outside the rules in relation to this Resolution.

Mr. Dillon

Surely I can attack the propriety of taxing tobacco?

An Ceann Comhairle

The Deputy is not doing that at the moment.

Deputies

He is.

Mr. Dillon

Surely I am entitled to do this? I am going to attack the propriety of taxing tobacco. I am going to attack the propriety of taxing beer. I am going to attack the propriety of taxing spirits. I am going to attack the propriety of taxing mineral waters. I am going to attack the propriety of every profligate act by this Government that this boomerang Budget has made necessary. You conspired, who now sit on the Government side of the House, to precipitate a situation which compelled us to introduce these Resolutions and they have boomeranged on you. This country will some day call this Government to terrible account for a dirty, political strategy when they created a situation——

An Ceann Comhairle

I must still rule that the Deputy is not keeping within the rules of order.

Mr. Dillon

Am I not entitled to protest against the tobacco tax?

An Ceann Comhairle

The Deputy must keep to the matter contained in this particular Resolution. That is the only matter before the House.

Mr. Dillon

The matter contained in this Resolution is a proposal to increase the tax on tobacco. I say that that will be paid by every old age pensioner, by every working man, by every ordinary citizen of this country. I am entitled, I think, within the rules of order, to ask this House to consider how it became necessary, in this year, to call on the ordinary people of this country to carry a burden of the kind suggested in this Financial Resolution.

An Ceann Comhairle

The Deputy may discuss on the Budget how the burden came about.

Mr. Dillon

Am I not entitled to ask the Government why they want to tax tobacco?

An Ceann Comhairle

The Deputy may discuss what is in this Resolution, and that only.

Mr. Dillon

Why, then, I ask the Minister for Finance, do you want to tax tobacco? Mind you, our rights to discuss these things are pretty sacred.

Mr. Barrett

Hear, hear!

An Ceann Comhairle

That is why I am endeavouring to help the Deputy.

Mr. Dillon

I fully appreciate that and confidently depend on the Chair's prudent discretion to ensure that no taxes will be imposed on our people without adequate opportunity for discussion in this House.

An Ceann Comhairle

That rule is enshrined in this discussion.

Mr. Dillon

My first question is to ask the Minister for Finance: "Why must you tax tobacco? Why must you reach into the pocket of every working man and a great number of working women in this country——"

Mr. Norton

——and a lot of unemployed.

An Ceann Comhairle

That is not pertinent to the motion. It is pertinent to what follows the motion but it certainly is not——

Mr. Dillon

If I cannot ask the Minister for Finance of the Irish Republic why he wants to tax tobacco, it is a caution.

An Ceann Comhairle

We will not prevent the Deputy from doing so on the appropriate occasion but this is not the appropriate occasion.

Mr. Dillon

I am going to be asked to vote on this and I want to know why. The Minister for Finance is asking me to vote to put a tax on tobacco. Am I not entitled to ask him: "Why do you want me to vote to put a tax on tobacco?" Am I not entitled to say: "I believe it is on account of your profligate and disreputable political stratagem which has caught up with you and boomeranged upon you. I am damned if I will vote for it and make the people pay for your dirty political stratagem"? Am I not entitled to say that?

Mr. MacEntee

The Deputy has said it.

Mr. Dillon

Yes, and am I not entitled to say it? With all Deputy MacEntee's past behind him, am I not entitled to expose it? Look again at that Deputy over there. He will trot into the lobby now because he is afraid to lose his seat but he knows—Deputy MacEntee knows as well as I do——

Mr. MacEntee

Are we talking about tobacco?

An Ceann Comhairle

Deputy Dillon must keep within the rules of order. I am endeavouring to help him in that direction. The Deputy is not entitled to introduce the matter he is now introducing. He is entitled to discuss exactly what is in this Resolution.

Mr. Dillon

Surely I am entitled to argue and to try to persuade Deputy MacEntee, who is a Deputy of this House——

An Ceann Comhairle

I did not know Deputy MacEntee was in the House.

Mr. Dillon

I know—look at him, cowering in the back bench, hanging his head in shame.

Mr. M.J. O'Higgins

That is an unusual reference to Deputy MacEntee, to know he is in the House.

An Ceann Comhairle

Surely it is not relevant to this Resolution?

Mr. Dillon

This is a deliberative Assembly. Surely I am entitled to ask Deputies on the Government side of the House to endeavour to save their souls?

Deputies

Oh!

Mr. Dillon

I had to remind Deputy Ó Briain earlier today that he was so shocked that he broke into the English language.

Donnchadh Ó Briain

Take another jump at yourself.

Mr. Dillon

There it is. They are in a state of shock. I am going to ask Deputy MacEntee to come out of his hole and tell us—he was Minister for Finance in this country—what does he think of this proposal to tax tobacco. Does he approve of this situation in which we find ourselves today, called on to tax every citizen of the State who uses tobacco in order to meet the desperate situation described by his young successor here today? He has been handed this baby by his predecessor and I want to put it to Deputy MacEntee that many of the evils which brought about the proposal which we are now considering flowed from the decisions taken by a Government of which he was a member. I challenge him to defend his record. He has a duty to do so. I have retired.

(Interruptions.)

Mr. Dillon

I have retired from any activities as Leader of my Party. He has retired as Minister for Finance and I have retired as Leader of the Opposition, a position of responsibility and dignity in this democratic institution. I have retired from that position but I am not challenged to defend my record. Deputy MacEntee, whether he likes it or not, is challenged to defend his record.

An Ceann Comhairle

Certain impositions on tobacco have been suggested by the Minister for Finance. They are embodied in this Resolution. That is the only matter that arises relevantly for discussion on this occasion.

Mr. Dillon

You will not hold, Sir, that this is not a deliberative assembly in which everybody is entitled to call on his colleagues to walk into the lobby against the Resolution?

An Ceann Comhairle

I thought the Deputy had done that very demonstrably.

Mr. Dillon

I do not think, you, Sir, would wish to limit the flow of my remarks.

An Ceann Comhairle

I do not wish to limit anybody. I only wish that they would keep within the limit of the proposed impositions by the Minister. The Deputy is not doing that at the moment.

Mr. Dillon

The Chair is the ultimate authority and on him only I must confidently leave my right to debate any matter in this House. I propose to debate tobacco for some time and I am sure I will have your full and happy co-operation, Sir. On whom do Deputies opposite think this tax will fall? How far does Deputy MacEntee think this tax will affect the ordinary man? What proportion of our people use tobacco? I have been present at 32 Budgets in this House. In a great number of these, a change has been made in the tobacco tax. I do not think I do Deputy MacEntee an injustice when I say that in every Budget he introduced in this House in which he increased the tax on tobacco, he added: "But as I do not wish to put a burden on the old age pensioners, I include a provision in this exempting hard-pressed tobacco".

I think this is the first or second time in my recollection that the Minister has come in here and said that our circumstances this year are so desperate that he could not continue that concession. In this tax we make, and rightly make, a special provision for the protection of Irish industry in so far as it is engaged in the tobacco industry. For the first or second time in my recollection in 32 years in this House, the Resolution to tax tobacco contains no concession for the old age pensioner.

It is true that in a later part of his Financial Statement the Minister has provided an increase of 5/- per week. In case Deputy MacEntee should labour under the delusion that that is designed to cover every old age pensioner who has to pay the tax, I would call his attention to the sentence in the statement which says: "That concession is designed only for old age pensioners who have no means." Deputy MacEntee and I know rural and urban Ireland well enough to realise that the old age pensioner who has no means constitutes a very small minority of those old age pensioners who will be badly hit because they will have to pay this tobacco tax.

I ask Deputies of the Fianna Fáil Party to wake to where they are going. They have sunk lower than I have ever seen a Party sink before in this House and their humiliation is such that they are dragging us down with them. We will talk about that in greater detail on the General Resolution but let every Deputy who votes for this tax know that he is not only voting for a tax on tobacco but also to tax every old age pensioner, with this exemption that we will compensate those of them who are utterly destitute and have no means of livelihood at all by 5/- a week as from next November.

Remember that these people will have to come in hat in hand and proclaim themselves destitute before they qualify for the compensatory payments designed to offset the levy their neighbours are now called upon to pay. Cheer that one. I say to the Fianna Fáil Party: "Cheer that decision if you dare." I am ashamed of you. I am ashamed of the degradation into which we are all dragged down today. I am perhaps hypersensitive because I remember better than a great many Deputies in this House the contemptuous prophecies that were made that, given the right to control our own destinies, we would disgrace ourselves. I do not believe that is true but I am ashamed that we are taxing the tobacco of the poor.

Mr. M.P. Murphy

I should like to know from the Minister before a vote is taken, what is the total tax as a result of the proposals in this Budget, on 20 standard size cigarettes and on 20 tipped cigarettes, on one ounce of pressed tobacco and one ounce of non-pressed tobacco. The smokers of the country are entitled to know what they actually pay to the State when they buy a packet of cigarettes or tobacco. I should like the Minister to tell us the total tax, including the turnover tax, on those four items, 20 standard cigarettes, 20 tipped cigarettes, an ounce of pressed tobacco and an ounce of non-pressed tobacco.

Mr. J. Lynch

First, I should deal with the hysterical intervention of Deputy Dillon who made it appear that for the first time we are imposing a tax on tobacco. The Deputy was a member of a Government who introduced five Budgets and in two of them he not only proposed but voted for an increase in tobacco prices——

Mr. M.J. O'Higgins

And in 1956 you voted against it.

Mr. J. Lynch

——when in 1956 the increase imposed was twice as much, 4d on the packet of 20, which perhaps would represent 6d at the present time. This beating of breasts for people who smoke cigarettes and tobacco sounds a bit hollow coming from people who themselves imposed and voted for these tax increases.

In answer to Deputy Murphy, the increase on the packet of 20 standard cigarettes will be 2d which will include an allowance for turnover tax.

Mr. M.P. Murphy

I want to know the total tax. Would it be about 3/6d?

Mr. J. Lynch

On a packet retailing at 4/4d for 20, the duty content was 2/11.8d to which may be added the 2d extra.

Mr. M.P. Murphy

And 2½ per cent turnover tax.

Mr. J. Lynch

No, the 2d includes turnover tax.

Mr. M.P. Murphy

What about tobacco and tipped cigarettes.

Mr. J. Lynch

It will vary according to the quality and brand of tobacco. It would be about one and three-fifths of a penny. The differential between hard-pressed tobacco and flake tobacco —which is the other kind generally smoked—is about 1/6d per ounce. That cannot be the same in all cases because the differential varies with the price of the particular brand.

Mr. James Tully

The Minister said last year that very few people smoked hard-pressed tobacco.

Mr. J. Lynch

Of all the people smoking pipe tobacco in this country, 86 per cent smoke hard-pressed tobacco.

Mr. M.P. Murphy

I asked the Minister four questions including the amount of tax on hard-pressed and flake tobacco, including turnover tax; the amount of the total tax on tipped cigarettes which are very popular, and we want to know these figures. The Minister mentioned 1/6d an ounce on hard-pressed tobacco——

Mr. J. Lynch

No; that is the differential.

Mr. M.P. Murphy

——but it was much more than that before the Budget so that the Minister's figure must be incorrect. Am I right in saying the Minister has not got the information and that the tax on non-pressed tobacco will be in the region of 3/8d per ounce? Instead of the Minister giving me the figures, I am giving them to him. Somebody going into a shop for an ounce of hard-pressed tobacco— and that is 86 per cent of the pipe smokers, according to the Minister— will be paying the State 3/8d on average, with slight variations according to brand. Perhaps it would be better to let the Minister give the figures officially.

Mr. J. Lynch

The duty content in flake tobacco is about 3/7d or 3/8d.

Mr. M.P. Murphy

I was not too far out.

Mr. J. Lynch

The Deputy asked questions but he does not want to hear the answers.

Mr. M.P. Murphy

I asked questions as a member of the House because the people will be asking me and other Deputies, and I think they are entitled to know the answers.

Mr. J. Lynch

I do not deny the Deputy his rights as a member of the House. The duty content of the ounce of hard-pressed tobacco is roughly 1/6d less than in the case of flake tobacco. That is the 1/6d I referred to.

Mr. M.P. Murphy

And the tipped cigarettes?

Mr. J. Lynch

About 2/7d. These are very variable.

Mr. Donegan

On the new tipped cigarettes—I do not want to mention the name—costing 3/11d per packet of 20 and made in Ireland, how much is the duty content?

Mr. MacEntee

May I put it to the Chair that there is a proper place for asking these questions? They can be put down as Parliamentary Questions on the Order Paper and Deputies will get all the information they want.

Mr. Norton

Ordinary cigarettes are going up by 2d for 20 and tipped cigarettes by 2d also. If I heard correctly, the tax element is one and three-fifths of a penny which goes to the Government but who gets the remainder of the 2d in the case of the tipped cigarettes?

Mr. J. Lynch

It is not easy to answer these questions now or even as Parliamentary Questions because the duty on tobacco is paid on leaf in bond and when the leaf comes out of bond, it goes into the manufacturing stage. It is not possible to know exactly to what extent tobacco goes into the tipped cigarettes. The Deputy asked what part of the 2d is for taxation purposes. All of the 2d, less the turnover content of the 2d, is for taxation purposes.

Mr. Norton

I am afraid the Minister does not get the point. If ordinary cigarettes go up by 2d on a packet, and if a tipped cigarette with less tobacco in it also goes up, the Government will not get the full 2d. Who is getting the balance? Is it the cigarette company? If so, what arrangements have been made with the Minister for Industry and Commerce, when there is price control, because it is not an even 2d the Government will get? Will it be the cigarette company or the retailers who will get it? We are entitled to know who will get it. If the Minister does not know, he should know.

Mr. J. Lynch

I thank the Deputy for the admonition. It is very nice. If I could only get it through the Deputy's skull——

Mr. L'Estrange

The Minister is getting very arrogant.

Mr. J. Lynch

Am I now? I can listen to other arrogance and I do not hit back too hard. I am trying to explain that the imposition of tax is on leaf as it comes in. It is very difficult to follow all the manufactured uses of tobacco thereafter but the new tax will relate to the issue at that stage and I am only trying to relate it to that. It will be roughly about 2d on a packet making due allowance for the turnover tax and other increases on hard-pressed tobacco and so on that I referred to.

Mr. Norton

I am either expressing myself very badly or the Minister's skull is as defective as my own. Since the amount of tobacco in tipped cigarettes will not be the equivalent of the 2d, have the companies been given the privilege by the Minister for Industry and Commerce to keep portion of the 2d? They will increase the price by 2d and there will not be 2d worth in the packet.

Mr. P. Belton

Is it true that 2d is going on a packet of tipped cigarettes and less tobacco will be going into them? Is it a fact? Will tipped cigarettes go up by 2d, with less tobacco going into them? I want to know this.

Mr. Donegan

That is the clear question.

Mr. Booth

It might be no harm if the Deputy tried to understand——

Mr. Coughlan

That is what we are trying to do.

Mr. Booth

It must be frustrating for you to be so stupid.

(Interruptions.)

An Ceann Comhairle

Order.

Mr. Booth

I am very sorry if I am upsetting anyone. The point as I see it is that the Minister has not put 2d on the packet of cigarettes. All that he said is that the tax is charged on leaf tobacco which, in his view, probably means that the retailer will charge——

A Deputy

He did not say any such thing.

Mr. Coughlan

Go back to school.

An Ceann Comhairle

Order. Deputy Booth is entitled to speak.

Mr. Coughlan

That is what he did not say.

Mr. James Tully

He is not entitled to make misstatements.

Mr. Booth

What the Minister said was that he is putting duty on leaf tobacco in bond, not on the packet of cigarettes or on ounces of tobacco, and if Deputies could only join with Fianna Fáil, they would get more "with it" and be able to understand it.

Dr. O'Connell

Deputy Booth will know that the public are not interested in what duty goes on in bond but in what duty goes on the packet of cigarettes.

(Interruptions.)

Dr. O'Connell

The Deputy might try to explain this to the people in his constituency. They might understand it.

Mr. Booth

Thank heaven, they do understand it.

Dr. O'Connell

What we are trying to ascertain, before we consider voting on this, is what the Minister means by this duty. In bringing this before the House he had right to have it in great detail for us and for the public also. It is not sufficient to say as he has said in his speech "the equivalent of 2d per packet of 20 cigarettes". Deputy Booth did not read this.

Mr. Booth

I understand it.

Dr. O'Connell

"The equivalent of 2d per packet of 20 cigarettes." Will there be 2d on the tipped cigarettes as well, or will the revenue from this go directly to the Exchequer?

Mr. S. Collins

Even if you relate it to duty in bond, the amount of tobacco in 20 tipped cigarettes is less than what will be used in the manufacture of 20 non-tipped cigarettes and, therefore, there is a differential in the amount of tobacco going into them. Will there be any differential in the 2d or will the differential go to the manufacturer for his own aggrandisement?

Mr. M.J. O'Higgins

I want to find out whether Deputy Booth is correct or not. The Minister in his Budget speech on page 7 spoke about specific proposals and dealt with the specific proposals and the expected yield and then he went on until he came to tobacco and the specific proposal as far as tobacco was concerned was the equivalent of 2d per packet of 20 cigarettes and the yield was £1.10 million. The impression the Minister has given, whether he intended it or not, by the particular phrasing is that on every packet of 20 cigarettes there is going to be an additional tax of 2d. What we want to know is whether the Minister meant that or something else.

Mr. James Tully

The document which the Minister has before the House contains a number of figures for tobacco duty and the Minister's Budget speech specifically mentions 2d per packet of cigarettes.

Mr. Molloy

The equivalent.

Mr. James Tully

Would the Deputy keep quiet? The Deputy is never allowed to speak and he should not start interrupting now. When the Deputy grows up and he is allowed to take part in debates he can——

Mr. S. Dunne

Somebody slap that child.

Mr. James Tully

Is it true——

Mr. Molloy

I am objecting to that, Sir. I think I am entitled to the honour of being called "Deputy".

An Ceann Comhairle

It does not add to a debate to shout. I must say that with respect to the Deputy, too.

Mr. James Tully

What I want to know, and I am trying to make a reasonable argument, is whether this 2d. per packet to be collected on 20 cigarettes is all to be passed on to the Government or, in regard to the amount collected on tipped cigarettes, will portion of the 2d. be left with the tobacco manufacturers? Let us not go around in circles. If the Minister could tell us, we could have the vote.

Mr. MacEntee

Could I intervene?

(Interruptions.)

Mr. MacEntee

I am doing so at the urgent request of Deputy Dunne. It is all very well for the neophytes in the Labour Party, like Deputy Norton and others, to misunderstand the procedure of this House. What we are now discussing is not what was in the Minister's speech but what is in Financial Resolution No. 3. Financial Resolution No. 3 leaves no room for doubt in the mind of any Deputy who can read and understand. The proposal before the House is to put a duty on tobacco by weight and not by number. If the Deputies who are puzzled by this will take the trouble of reading the White Paper circulated, they will see that unmanufactured tobacco will be chargeable by the pound. Manufactured tobacco is similarly to be chargeable by the pound. The tax is not levied per unit on the packet. It is levied on the tobacco by weight. I hope you will understand——

(Interruptions).

Mr. MacEntee

I beg your pardon. I hope I am in possession, Sir? Of course, to talk to the Labour Party is to talk in very broad terms. What the Minister did say was that the duty he is asking the House to levy in the Financial Resolution will be, in his opinion, equivalent to 2d per packet.

(Interruptions).

Mr. MacEntee

That is a general statement. The excise duty the Minister is now asking the House to levy is set out quite clearly in Financial Resolution No. 3.

Mr. T.J. Fitzpatrick

(Cavan): The Minister in this Resolution is asking the House to impose a tax on tobacco. The House is entitled to the benefit of his assistance as to what the effect of this Resolution will be. It would appear from the Minister's speech that he anticipated the effect of the Resolution would be to increase the price of 20 cigarettes by 2d. I should like the Minister to tell us whether he believes as a result of this Resolution the price of 20 cigarettes will be increased by 2d and if he will approve of that increase. The next question I want him to answer is: does he believe that 2d per packet of 20 non-tipped cigarettes is an adequate price to cover the tax? If he does, it follows as a matter of course that 2d per packet of 20 tipped cigarettes will be more than adequate to cover the tax. What the House wants to know is what is to happen the excess over the amount necessary to cover the tax on 20 tipped cigarettes. Those are two simple questions I would like the Minister to answer.

Mr. James Tully

Before the Minister replies, let me show him today's Evening Press. If he has any doubt about what the effect will be, it says “Tobacco is up by the equivalent of 2d on 20 cigarettes”.

Mr. Molloy

The equivalent.

(Interruptions.)

Mr. Norton

I am afraid I cannot——

An Ceann Comhairle

I am calling on the Minister.

Mr. Norton

I have made several attempts to clarify the question I originally asked.

Deputies

Chair!

Mr. Norton

I cannot hear the Chair.

An Ceann Comhairle

The Deputy made several successful attempts to speak. The Minister is entitled to explain the position. Several questions have been put to him.

Mr. J. Lynch

As I tried to explain and as Deputy MacEntee pointed out, the duty is imposed on leaf tobacco at the rate of 3/5d per lb. I said in the course of my introductory statement that it would be the equivalent of 2d on 20 cigarettes. I meant that to apply to the standard type of cigarette. Everybody knows what the standard type of cigarette is—untipped, uncorked or without any other kind of tip. There are larger cigarettes than the standard type. Naturally, these would carry what would be a higher increase than 2d, while cork tipped cigarettes would carry a lesser increase than 2d. Again, I am not able to say exactly what the increase on all brands of cigarettes will be because it will vary with the size and with the type of tip.

Mr. T.J. Fitzpatrick

(Cavan): Will the Minister take steps to ensure that a profit will not be made out of that tax and that only sufficient will be added to the price of 20 cigarettes to cover the tax?

Mr. M.J. O'Higgins

Has the Minister any information with regard to the percentage sales as between tipped and non-tipped cigarettes?

Mr. J. Lynch

Again, I tried to tell the House that we assess our duty income from the leaf tobacco. While it is not part of the function of the Revenue Commissioners to tax individual cigarettes and they, therefore, would not have specific knowledge of the ratio, I understand it is about one third tipped as against two thirds ordinary untipped.

Mr. Norton

Since the Minister does not seem to know what the price of tipped cigarettes will be, will this be the subject of negotiations between the Minister for Industry and Commerce and the cigarette manufacturers or will his Department look after it? Surely the manufacturers will not be given a free hand to decide what is to be done with the balance of the tobacco duty they are collecting on the price of tipped cigarettes? Has the Minister been listening?

Mr. J. Lynch

I think I heard enough of the Deputy to be able to answer him.

Mr. Norton

Will there be consultation between either the Minister or the Minister for Industry and Commerce and the cigarette manufacturers before the price of tipped cigarettes is finally settled?

Mr. J. Lynch

There will not—not with me, but the Minister for Industry and Commerce under the general prices legislation has power to investigate these things.

Mr. Norton

To investigate. This is happening this evening and the Minister is responsible. This will not be investigated for months to come. We saw how long it took last year before we got around to doing something.

Mr. MacEntee

This is a matter of administration.

Mr. James Tully

Administration could start before the Budget is introduced as well as afterwards.

Mr. Norton

Whatever fault we may find with the present Minister—and he is not perfect—he is a long way ahead of Deputy MacEntee when he was there.

Mr. Donegan

What is the position in relation to the price of cigarettes in the ordinary establishment this evening? As I understand it, they are bound not to charge more under the Prices Stabilisation Order than was charged at a certain date in the recent past. I know of no order made by the Minister for Industry and Commerce this evening allowing an increase in the price of cigarettes. What will happen tomorrow morning?

Mr. J. Lynch

That order has already been announced on the 6.30 p.m. news.

Mr. Donegan

That is how it is being done? If the order has been announced on the 6.30 p.m. news, will the Minister say if the increase is the same for tipped cigarettes as for standard-size cigarettes?

Mr. James Tully

The photograph in the Evening Press shows tipped cigarettes.

Mr. Donegan

If an order has been made this evening and announced on the 6.30 news, no doubt there are different new prices allowed for tipped cigarettes, standard-size cigarettes and other types of cigarettes on sale. I should like to know what is the increase allowed in that order in respect of tipped cigarettes? Let the Minister own up.

Mr. J. Lynch

The order mentions specifically the amount of the duty.

Mr. Donegan

Am I to take it that the order mentions specifically the amount of the duty as stated in the Financial Resolution or as stated in the Minister's speech; in other words, in the form of a tax per pound of tobacco or in the form of a price per packet of cigarettes?

Mr. M.J. O'Higgins

In other words, what will we have to pay for our cigarettes?

Mr. Donegan

I am entitled to get information as to what is in this order which I am told was announced on the news this evening.

Mr. J. Lynch

The order is of general application permitting increases in commodities which are subject to increased duties as a result of the Budget, and it specifically refers to the increases equivalent to the amounts of the duties concerned.

Mr. Donegan

We are still, therefore, like a bull in a fog. We have not been told whether or not there is 2d on tipped cigarettes.

Mr. Norton

There obviously is.

Resolution put.

The Committee divided: Tá: 71; Níl: 64.

Tá

• Aiken, Frank.
• Allen, Lorcan.
• Andrews, David.
• Blaney, Neil T.
• Boland, Kevin.
• Booth, Lionel.
• Boylan, Terence.
• Brady, Philip.
• Brennan, Joseph.
• Brennan, Paudge.
• Breslin, Cormac.
• Cronin, Jerry.
• Crowley, Fler.
• Crowley, Honor M.
• Cunningham, Liam.
• Davern, Don.
• de Valera, Vivion.
• Dowling, Joe.
• Egan, Nicholas.
• Fahey, John.
• Fanning, John.
• Faulkner, Pádraig.
• Fitzpatrick, Thomas J. (Dublin South-Central).
• Flanagan, Seán.
• Foley, Desmond.
• Gallagher, James.
• Geoghegan, John.
• Gibbons, Hugh.
• Gibbons, James M.
• Gilbride, Eugene.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Hillery, Patrick J.
• Hilliard Michael.
• Burke, Patrick J.
• Calleary, Phelim A.
• Carter, Frank.
• Carty, Michael.
• Childers, Erskine.
• Clohessy, Patrick.
• Colley, George.
• Collins, James J.
• Corry, Martin J.
• Cotter, Edward.
• Crinion, Brendan.
• Kenneally, William.
• Kennedy, James J.
• Kitt, Michael F.
• Lalor, Patrick J.
• Lemass, Noel T.
• Lemass, Seán.
• Lenihan, Brian.
• Lenihan, Patrick.
• Lynch, Celia.
• Lynch, Jack.
• McEllistrim, Thomas.
• MacEntee, Seán.
• Meaney, Tom.
• Millar, Anthony G.
• Molloy, Robert.
• Mooney, Patrick.
• Moore, Seán.
• Moran, Michael.
• Nolan, Thomas.
• Ó Briain, Donnchadh.
• Ó Ceallaigh, Seán.
• O'Connor, Timothy.
• O'Malley, Donogh.
• Smith, Patrick.
• Wyse, Pearse.

Níl

• Barrett, Stephen D.
• Barry, Richard.
• Belton, Luke.
• Belton, Paddy.
• Burke, Joan T.
• Burton, Philip.
• Byrne, Patrick.
• Casey, Seán.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Seán.
• Connor, Patrick.
• Coogan, Fintan.
• Corish, Brendan.
• Cosgrave, Liam,
• Costello, Declan.
• Costello, John A.
• Coughlan, Stephen.
• Creed, Donal.
• Crotty, Patrick J.
• Desmond, Eileen.
• Dillon, James M.
• Dockrell, Henry P.
• Dockrell, Maurice E.
• Donegan, Patrick S.
• Donnellan, John.
• Dunne, Seán.
• Dunne, Thomas.
• Esmonde, Sir Anthony C.
• Everett, James.
• Farrelly, Denis.
• Fitzpatrick, Thomas J. (Cavan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Governey, Desmond.
• Harte, Patrick D.
• Hogan, Patrick (South Tipperary).
• Hogan, O'Higgins, Brigid.
• Jones, Denis F.
• Kenny, Henry.
• Larkin, Denis.
• L'Estrange, Gerald.
• Lindsay, Patrick J.
• Lyons, Michael D.
• McAuliffe, Patrick.
• McLaughlin, Joseph.
• Mullen, Michael.
• Murphy, Michael P.
• Murphy, William.
• Norton, Patrick.
• O'Connell, John F.
• O'Donnell, Patrick.
• O'Donnell, Tom.
• O'Hara, Thomas.
• O'Higgins, Michael J.
• O'Higgins, Thomas F.K.
• O'Leary, Michael.
• Pattison, Séamus.
• Reynolds, Patrick J.
• Ryan, Richie.
• Spring, Dan.
• Tierney, Patrick.
• Treacy, Seán.
• Tully, James.

Tellers: Tá, Deputies Carty and Geoghegan; Níl, Deputies L'Estrange and James Tully.

Resolution declared carried.