Financial Resolutions. - Financial Resolution No. 5: Spirits. – Dáil Éireann (18th Dáil) – Wednesday, 9 Mar 1966

Financial Resolutions. - Financial Resolution No. 5: Spirits.

The Taoiseach

I move:

(1) That the Finance Act, 1920, shall, as on and from the 10th day of March, 1966, be amended by the substitution in Part I of the First Schedule thereto of the matter set out in the schedule to this Resolution for the matter inserted in that Part by section 13 of the Finance Act, 1965 (No. 22 of 1965), and subsection (1) of section 3 of the said Finance Act, 1920, shall have effect accordingly.

(2) That—

(a) this paragraph applies to spirits known as whiskey which at importation are shown to the satisfaction of the Revenue Commissioners to have been wholly manufactured in Northern Ireland and to have been bottled and consigned by the distiller,

(b) the duties of customs to which paragraph (1) of this Resolution relates shall, as on and from the 10th day of March, 1966, be charged, levied and paid on spirits to which this paragraph applies at the rate of eleven pounds, fifteen shillings and eleven pence the gallon (computed at proof) in lieu of the rate chargeable under paragraph (1) of this Resolution.

(3) That the duty of excise imposed by subsection (2) of section 3 of the Finance Act, 1920, shall, as on and from the 10th day of March, 1966, be charged, levied and paid at the rate of eleven pounds, fifteen shillings and sixpence the gallon (computed at proof) in lieu of the rate chargeable by virtue of subsection (3) of section 13 of the Finance Act, 1965.

(4) That nothing in this Resolution shall operate to relieve from or to prejudice or affect the additional customs duties or the additional excise duty in respect of immature spirits imposed by section 9 of the Finance Act, 1926 (No. 35 of 1926).

(5) 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.

SPIRITS (RATES OF ORDINARY CUSTOMS DUTY).

Description of Spirits	Preferential Rates	Full Rates
(1)	(2)	(3)
	£	s.	d.	£	s.	d.
For every gallon of Perfumed Spirits	21	4	10	21	8	10
For every gallon of liqueurs, cordials, mixtures and other preparations in bottle entered in such manner as to indicate that the strength is not to be tested	17	18	5	18	1	9
For every gallon computed at proof of spirits of any description not heretofore mentioned and mixtures and preparations containing spirits	13	5	6	13	8	0

Mr. Cosgrave

What is the precise distinction between the duty on spirits in Northern Ireland and here and what quantity, roughly, is involved?

The Taoiseach

The quantity is not very considerable but a special preferential rate of duty applies to Northern Ireland pot-stilled whiskey as compared with the standard rate applying to whisky imported from Great Britain.

Mr. Cosgrave

Has this always been the case?

The Taoiseach

It has been the case for some time. The position is not being changed.

Mr. M.J. O'Higgins

How much is the differential?

The Taoiseach

Fourpence a glass.

Mr. J.A. Costello

There is one matter of considerable importance in reference to this tax to which I wish to refer. It is intended by this to put a rather onerous addition to the taxation of whiskey. I wonder if the effect that this will have on the industry, a very old-established industry in this country, has fully been adverted so far as the export trade is concerned? This is a matter to which very serious consideration should be given. We are listening every day to exhortations by Ministers, by the Government and by various people to increase our exports. One of the industries that has had the greatest difficulty—I think we ought to say it in their favour—in creating new export markets is the Irish whiskey industry. They had very great difficulties to overcome. They had to enter a market that had practically been captured by the very rich distillers of Scotch whisky and they had to overcome—certainly on the American market—a taste that had been acquired for Scotch whisky as against Irish whiskey. I think this industry has been over-taxed throughout the years. It is one of the oldest industries in the country.

When we were in office, my colleague, the late Deputy Norton, made superhuman efforts to get Irish whiskey well-known in the United States and to increase its market. I think Powers, Jamesons, the Cork Distillers and the Tullamore whiskey people have done their best to create an export market for this country. It is a very valuable market but a very difficult one to get into. The Government will cripple this industry by imposing additional tax. If the Minister will look at the history of the taxation of whiskey, he will find that, above all the other beverages, it has suffered a greater impact from the point of view of taxation than possibly beer, tobacco or any of the ordinary sources of revenue. I would press on the Minister the urgent necessity to refrain from crippling this industry. If he will not reconsider this tax of 4d a glass which he now proposes, he should at least consider giving some additional incentives to the industry in the Finance Bill. It is very necessary to give the industry incentives of some kind to increase its export trade and to help it to gain some advantage, in the light of the difficult problems facing it. It is of urgent importance that this matter should not be allowed to pass in this House in silence.

The Taoiseach

I cannot follow the Deputy in his argument that the increased tax on the home comsumption of whiskey will dimish this industry's prospects of expanding its exports.

Mr. J.A. Costello

I heard the industry say that themselves.

The Taoiseach

The consumption of whiskey has gone up. Last year the consumption of Irish whiskey was higher than ever before, but, of course, Irish distillers exporting to Britain have to bear higher taxation in that market than they will here.

Mr. J.A. Costello

This industry is doing its best to increase its exports. It should be helped in that, but putting an additional tax on the home market will cripple it. The last time an additional tax was put on whiskey, I saw an interview in the newspapers with representatives of the industry in which they made the point that I am now making.

Mr. M.P. Murphy

Resolution No. 5, like Resolution No. 4, indicates that the Government are leaning very heavily on the drinking public for tax revenue. On the one hand, the Government tell the people to save and the saving they are asked to make is not to drink to any great extent. If the drinking public should take that advice, where is the taxation from drink to come from? I think it very peculiar that in this country the Government are forced to lean so heavily on drink to bring in a big percentage of their revenue.

So far as whiskey is concerned, there is some difference as against beer. It may be said that a certain quantity of the whiskey consumed here is consumed by the affluent section of the community, that section which has benefited from Government policy. It is reasonable to assume that those people who have been so generously dealt with by the Government, who have got increases of salary up to £1,000 a year, will not be caused undue hardship by Resolution No. 5. They will be able to find the additional 4d a glass imposed under the Resolution. However, there is another section of the community that would like the little half-one, the old age pensioner. The old woman, after she collects her pension on a Friday, likes to have her half-one or two half-ones. Fianna Fáil have now taken that luxury from her. No longer will it be possible for any of the lower-income groups in this country to drink whiskey. The old age pensioners must forget about the half-one and the old woman who draws her pension on Friday must also forget about it. Fianna Fáil have put the half-one beyond them.

This Government, despite statements made in the past that drink should not stand any additional taxation, are now leaning heavily on the drinking public. There is something wrong in a State which draws such a substantial portion of its revenue from drink. On one hand, the Taoiseach advises people to save and on the other, he hopes that they will continue to drink so that the Minister for Finance can balance his Budget. The Taoiseach and the Minister for Finance are really asking the people not to take their advice, not to reduce their drinking.

An Ceann Comhairle

The remarks the Deputy is making would be more relevant to the Finance Bill.

Mr. M.P. Murphy

Thank you for your advice, Sir. Resolution No. 5 will have an adverse effect on consumers of spirits but it will also have an adverse effect on many people who derive their livelihood from the sale of drink. There are a big number of publicans who contribute daily to the economy of the country and the distillers provide a big employment content. If, as a result of these impositions of Fianna Fáil, consumption of spirits is reduced, will that not affect the livelihood of a number of our people?

I have much stronger feelings on Resolution No. 4 but it must be admitted that one of the sections of the community contributing most to general taxation is the drinking public. They may be despised by some people and it may be said that they are no great advantage to the State, but that is completely false. Resolution No. 5 imposes on the consumer of every glass of whiskey a tax of almost 4/-. Even though this group may be looked down on by other sections of the community, they are contributing in a big way towards the revenue this country so badly needs and are contributing an undue proportion of that revenue.

Mr. T.J. Fitzpatrick

(Cavan): If I were to discuss the general effect of this Budget on the tourist industry, I would be out of order, but it would be wrong to allow Resolution No. 5 to be disposed of without pointing out to the House its likely effects on the tourist industry. We are spending considerable sums in endeavouring to attract foreign tourists here. We have set up various tourist boards and appointed many civil servants and quasi-civil servants to advise them. At the same time, we are doing everything possible to price ourselves out of the tourist market.

One of the things we had in this country to attract the tourists was the comparative price of cigarettes, whiskey and things like that, but we are gradually closing the gap, making the country less attractive to the tourist. The weather here is doubtful, to say the least of it, but one of the attractions for tourists was that they could get spirits very much cheaper than they could buy them at home. Therefore, we are doing a bad day's work for the tourist industry by increasing the price of spirits by 4d a glass. That is one of the things, perhaps, that the people who are making forecasts of the economy have overlooked, that this Budget is calculated to damage considerably one of the best methods we have of righting our balance of payments.

Mr. Corry

I want to mention something which may not be very nice for the people of this House because when somebody talks now about the agricultural community, it is like mentioning hell. The price paid for a luxury article such as malting barley is the very same today as in 1948. The publican has got an increased margin; the workers have got their increases; but the farmers have got nothing in this famous industry Deputy Costello spoke about. One of the excuses given, when there was all the talk about the export market, was that we could not——

An Ceann Comhairle

The Deputy seems to be rambling into the barley.

Mr. Corry

If this position continues, there will be no growers. I put forward the complaint that those gentlemen are searching the country at present for a horse race or a dog race to put money into but they have nothing for the man producing the goods.

Mr. Clinton

Deputy Corry's reference to barley was not altogether irrelevant. The price of malting barley is too low but I do not think the way to increase it is to increase taxation on the end product. The case has been made by Deputy Costello that this industry is also overtaxed. They have been making an effort to expand their exports. We have evidence in today's papers that there is now a determined effort on the part of the distillers to come together and make a real export drive. It is very unfortunate that just at this time the Government should decide to increase taxation on the industry. This is a time when the industry will need all the money it can find to make this export drive effective. The purpose of an increased tax on spirits is to raise extra revenue but it is very doubtful if it will have that effect. We had evidence on at least two occasions previously that when spirits were overtaxed, revenue was reduced. It is likely this increase will mean decreased rather than increased revenue.

Mr. Norton

Might I ask the Minister for Industry and Commerce a question, as he is sitting there? I believe there is an application before his Department by the brewers and distillers to have the price which they can charge the trade increased. Has he come to any conclusion about this application? Shall we find that having voted against an increase in the price of spirits tonight, perhaps next week the price will be raised again when the Minister decides to grant the application? Would the Minister avail of the opportunity to make some comment or has he reached any decision on the matter?

The Committee divided: Tá, 68; Níl, 61.

Tá

Aiken, Frank.
Allen, Lorcan.
Andrews, David.
Blaney, Neil T.
Boland, Kevin.
Booth, Lionel.
Boylan, Terence.
Brady, Philip.
Brennan, Joseph.
Brennan, Paudge.
Breslin, Cormac.
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.
Cronin, Jerry.
Crowley, Flor.
Crowley, Honor M.
Cunningham, Liam.
Davern, Don.
de Valera, Vivion.
Dowling, Joe.
Egan, Nicholas.
Fahey, John.
Moore, Seán.
Nolan, Thomas.
Ó Briain, Donnchadh.
Ó Ceallaigh, Seán.
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.
Kenneally, William.
Kennedy, James J.
Kitt, Michael F.
Lalor, Patrick J.
Lemass, Noel T.
Lemass, Seán.
Lenihan, Brian.
Lenihan, Patrick.
Lynch, Celia.
McEllistrim, Thomas.
MacEntee, Seán.
Meaney, Tom.
Millar, Anthony G.
Molloy, Robert.
Mooney, Patrick.
O'Connor, Timothy.
Smith, Patrick.
Wyse, Pearse.

Níl

Barrett, Stephen D.
Barry, Richard.
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, Henry P.
Dockrell, Maurice E.
Donegan, Patrick S.
Donnellan, John.
Dunne, Seán.
Dunne, Thomas.
Esmonde, Sir Anthony C.
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'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.

Dáil Éireann debate -
Wednesday, 9 Mar 1966