Deputy Treacy has given notice that he wishes to raise on the Adjournment the subject matters of Questions Nos. 21 and 22 on today's Order Paper.
Adjournment Debate. - Protection for Footwear Industry.
While those of us associated with the boot and shoe industry were well aware that the whole question of the continuation of protection was subject to review under the Anglo-Irish Free Trade Agreement, and while we were also aware that negotiations were proceeding for some time with the British Board of Trade and with the manufacturers concerned on the possible abolition of the quota and its replacement by a duty likely to be implemented on 1st July this year, nevertheless the rather cavalier fashion in which the Minister made his announcement without regard to the majority wishes of the trade and, particularly, without reference to the unions concerned, was a cause of dismay. This news was received with shock and indignation by the unions concerned and, indeed, by a large section of the employers in the trade.
One would have thought that before the Minister made such a pronouncement fraught with such serious repercussions for all concerned, he would have had regard to the majority views of all parties concerned, that he would in particular, have called in the unions whose duty it is to serve the interests of the workers, because it is the workers who will suffer as a result of any relaxation of protection. The employers concerned can obtain for themselves golden handshakes, but it is the workers who will be thrown on the industrial scrapheap as a result of the Minister's decision.
The fears of my union in respect of the abolition of the quota are very well founded. Our fears are based on our sad experience in 1947 when the quota protection was removed and a huge consignment of footwear, mainly from Britain, amounting to some 2,000,000 pairs, was dumped in this country in the space of a few months. The dislocation of the industry at that time was appalling, and there was widespread unemployment and short-time working in almost every shoe centre. We had to wait for a new Government and a new Minister for Industry and Commerce to come into this House to put back the barriers of protection and afford the industry an opportunity of picking up the threads of economic life.
The Minister is taking an unnecessary risk by the abolition of the quota; it is a retrograde step. It is all the more astonishing that he should opt for the abolition of the quota at a time when the British Government have indicated their willingness to continue the quota system for another four years. One would imagine that the Minister who is responsible for the welfare of this industry would grasp this generous offer with both hands. He must be aware that it is an acknowledged fact within the trade that the quota system is the most effective system of protection, and it represents, I contend, the view of the majority of those directly interested in the trade.
The unions concerned are unanimous in their belief that the abolition of the quota will have disastrous consequences. I am sorry the Minister sought to misrepresent the views of my union officers, whom he met yesterday, in his reply to supplementary questions here today by implying that the unions were in some doubt as to the right course to adopt. He certainly misconstrued a statement made by one of my union officers to the effect that the acceptance of the quota was the lesser of two evils. Lest there be any doubt in the mind of the Minister, I want to place on the records of this House the views of the president of my union, Mr. Paul Alexander, expressed by telegram. I quote from the Irish Independent of 25th May last which reads:
Mr. Paul Alexander, President of the Irish Shoe and Leather Workers Union sent the following telegram to the Minister for Industry and Commerce, Mr. Colley, yesterday: "On behalf of 5,000 members of the unions engaged in the footwear industry, we protest strongly against your disastrous decision not to accept British Government quota offer. Your decision can only lead to large-scale unemployment."
It is pertinent to point out from the same paper of the same date that the meeting from which Mr. Alexander supposedly sent this telegram was a meeting in the Imperial Hotel in Cork which was convened by the shoe manufacturers of Cork city, the Lee Boot Manufacturing Company and the Cork Shoe Company. I understand this meeting was attended by no less a personage than the Taoiseach himself. I am sure the Taoiseach conveyed to the Minister the unanimous view of the Cork manufacturers and the President of my union, that the abolition of the quota was fraught with the most disastrous consequences for their trade.
We contend that the abolition of the quota will expose our manufacturers to most unfair competition and the possibility of dumping on a large scale, bringing with it economic and social ruin to thousands of our fellow workers. There are some 6,000 workers directly involved in the manufacture of footwear in this country; and there are also some 2,500 workers engaged in ancillary trades. The Minister will have to have regard to the fact that he is trifling with the livelihoods of some 35,000 people. There is no doubt in our mind that if the quota is abolished, industrial graveyards will result and thousands of our fellow workers will lie dead upon the economic battlefield before the battle between the tycoons of the British and Irish footwear industry is ended. Crows may be flying through factories where now are employed hundreds of workers in remunerative employment and it may well be that some of these factories will be utilised as depots, store houses, for British footwear, whence they will be transported and sold.
The Minister cast doubts on the wisdom of accepting the British offer of retaining the quota for another four years. I should like to disabuse the Minister about that. If he applies a simple arithmethical exercise to the quota figures, vis-à-vis the duty which he proposes to implement and of which he seems to be greatly enamoured, he will find that the quota of 165,000 pairs per annum fixed at present constitutes a mere three per cent of the domestic consumption. Even if that quota were to be trebled to 495,000, it would still constitute a very small percentage of the domestic user. It would fall far short of the millions of pairs we had in “Black 1947” which could come in and most likely will, by reason of the tariff system.
All that the British or foreign manufacturer has to do is conform with the duty which is now laid down, a duty of 31.5 per cent, or 3/5d per pair, reducing to by 4½ per cent or 9d per pair until it disappears in 1975. The huge combines in Britain and on the Continent will be able to overcome this duty, especially this diminishing duty, relatively easily and we can expect inroads to be made on the Irish industry in coming years if this is to happen. A duty of 54 per cent or 9/- per pair on non-British imports will not deter the giants of Europe from availing of our small market.
It is alarming to think that the Minister bases his decision on this matter on the views of the manufacturers only without proper regard for all interested parties, and in particular the unions. There are some 25 shoe factories in the country, some of them controlled by one firm only. Are 20 men to be allowed to decide the destinies of 6,000 workers directly employed and 2,500 in ancillary trades? Are 20 men to be allowed to decide the fate of some 35,000 people? This is a negation of industrial democracy.
The employers concerned would be very foolish to think they can survive the power of the British and European giants in the shoe industry. Some industries in Britain and on the Continent, of which I have some knowledge, could supply the needs of our market by a few weeks production and given any loophole, could wreak havoc on the industry here. If the Minister is in any doubt about the views of the workers, he should consult the unions for their views. Are the workers to be sacrificed on the altar of the Free Trade Agreement or on the altar of monopolistic capitalism? Are they to have no say in regard to the future of the industry to which they gave the best years of their lives? I hope the Minister will come down on the side of the vast majority concerned in this matter.
I have striven to show the Minister the desirablity of availing of these precious four years for the continuation of the quota in order to afford industrialists the opportunity of gearing themselves to meet sterner competition effectively and to carry out the process of adaptation and modernisation which is badly required. The Minister seems to convey the impression that what he is doing will confer a benefit on the boot and shoe industry. The boot and shoe industry have always enjoyed free trade with Britain, and at the same time, had protection. The Minister must realise that as the barriers of protection go down, inroads will be made into the industry and unemployment, redundancy, short time, will be the order of the day. The Minister will also appreciate that this decision emanates from the Anglo-Irish Free Trade Agreement which, we were told, was to prepare us for entry into the Common Market.
The question of the Agreement does not arise. The Deputy would not be in order in criticising the Agreement on an Adjournment Debate.
I do not propose criticising it at length but I want to submit that the decision of the Minister in regard to the quota is directly related to the Anglo-Irish——
That would open up a very big debate.
I cannot open a big debate in the few seconds left, but if the Chair will bear patiently with me——
The Deputy is not in order. I am calling on the Minister who has ten minutes to conclude.
It is no use pretending, as some people have been pretending, that this is a clear-cut issue and that the obvious advantages for the industry lie in one direction and that in the other direction lie nothing but chaos and ruin for the industry and that nobody in his sane senses could think of following it. Apart from the fact that I hesitated for quite a while before deciding in which direction I thought the best interests of the industry lay, it is true, as I indicated to the Dáil today, in response to questions, that the industry itself is divided virtually 50-50 on the merits of the alternative courses. This should make it quite clear that the decision in this case is not an easy one and that nobody can be quite sure which is the right decision, if there is a right decision, or whether it is a question of one being better than the other.
Deputy Treacy in the course of his supplementary questions today, and again on the Adjournment Debate, has endeavoured to convey the impression that the members of the union whom I met yesterday were quite clear in their minds and had no hesitations and no doubts as to what was the right course, and he has quoted from a telegram, published in the newspapers, which was sent to me by Mr. Alexander, the president of the union, and he has quoted correctly from it. I would suggest that it is very easy for people to panic, especially if someone is trying to make them panic, and to make exaggerated statements. However, in the calmer atmosphere of the discussion which took place yesterday, the members of the delegation from the union saw clearly that there were merits on both sides. They were looking at it, and rightly so, from the point of view of their members and their members' interests.
Since Deputy Treacy said what he did and quoted that telegram, I should like now to quote from a note made at that meeting yesterday by an officer of my Department. I saw this note only this evening about six o'clock; it corresponded with my impression of what had happened yesterday.
Towards the end of the meeting the Minister asked the trade union representatives if they were satisfied that the long-term interests of the industry would be best served by retaining the quota.
There are then some notes about what was said in reply and then the notes continue:
The Minister repeated his question and Mr. So-and-So, one of the officers, with some diffidence and reluctance, said that they thought that keeping the quota would be the lesser of two evils. This seemed to be accepted by all present.
That phrase "with some diffidence and reluctance" is important because that was my own impression and it was arrived at independently by the official who made the note.
This attitude reflects great credit on the union representative because it is not in my opinion helping the position at all to suggest that the issue here is quite clear cut. The long-term interests of the industry and of the workers engaged in it may well be better served by not continuing the quota because, if the quota were to be continued for a period of four years, at the end of that period, the industry would then be subjected to competition at a relatively low rate of protective duty, whereas now the rate of duty would be relatively quite high and would enable the industry to withstand the competition very much better than it could in four years time under a low tariff.
One of the essential things to grasp in this is that the issue is not whether, on the one hand, there should be a tariff instituted now or, on the other hand, whether there should be a quota for an indefinite period. Deputy Treacy, I think, spoke of the quota as being the best form of protection for the industry. This might be true if it could be carried on indefinitely, but the reality of the situation is that the maximum period for which the quota can operate is four years——
Even so.
——and, at the end of that four years, the duty would be substantially reduced and it is in the light of that that the decision must be made. The easy decision in this case, and the one that would certainly be the most popular with many people, would be to continue the quota for a period of four years, but I am not so sure that it would not be an irresponsible decision, having regard to the long-term interests of the industry and the workers in it. I am not saying that either way this is quite clear; my whole point is that it is not. It is, in fact, misrepresenting the position to suggest that anybody can be absolutely certain that one way will be chaos and vast unemployment and the other will be some form of E1 Dorado. That just is not the position.
Deputy Treacy referred, as he did earlier today, to the position which obtained in 1947. I want to say again that his version is incorrect. What happened in 1947 was that substantial quantities of footwear were allowed into the country, under an expanded quota, duty-free. That is the point— duty-free. That is the very situation I wanted to avoid because, if we impose a quota for another four years, at the end of that period footwear can then come in here almost duty-free and the danger is that the 1947 situation will be repeated. It is to avoid that very situation that I considered applying the tariff instead of the quota.
The fact that an offer was made by the British to allow the quota to continue for another four years must be viewed realistically in the light of our interests and one can only assume that, in making that offer, the British Government was having regard to the interests of Britain's manufacturers. I do not say that the interests of both sets of manufacturers are mutually exclusive, but the mere fact that the offer was made by the British is of itself no reason why we ought to accept it. Indeed, since the British Board of Trade is very effective in looking after the interests of its own manufacturers, there is every reason for our having some doubts about it and looking at it again and again from our point of of view. I say this without any disparagement of the British Board of Trade; they are doing their job.
Deputy Treacy also said that, even if the quota were increased to, I think he said, 400,000, or more, this would be a better situation than abolishing the quota and operating under the tariff. I am not at all sure that that is so; in fact, I am almost certain it is not so. I know there are one or two manufacturers who voted for the retention of the quota who would feel that any extension of the quota would be damaging to them because it would mean shoes coming in on their particular market free of duty and had they known this was to be the situation, they would have voted for the tariff rather than the quota. I know this is so.
Deputy Treacy referred to the Free Trade Area Agreement. He went through the ritual; it is ritual now for members of the Labour Party to say all our ills are due to that Agreement.
This one certainly is: this is the backlash.
The Deputy forgets that under that Agreement our exports have been going up enormously to the extent that the trade figures for January and February of this year show industrial exports up by one-third on the corresponding period last year, which was itself a good year, and this represents new jobs and good jobs for our workers. The Labour Party should remember that when they attack the Agreement. This is what it means and the workers engaged in export industries are conscious of that. The Deputy may be making a political mistake when he attacks the Agreement.
As far as I am concerned, I got the impression that Deputy Treacy has not much hope for the future of the footwear industry. One feels certainly that he thinks it is going to disintegrate, that it is going to disappear without a quota anyway. I believe that some elements in the footwear industry are quite efficient and some are not. Of one thing I am certain: if it is featherbedded, it will do no good in the future. I am also certain that there are sufficient people among management and workers with the right outlook to ensure that the industry will do well, given the right conditions. I have faith in the future of the industry. There is, in my view, too much lack of faith on the part of a number of people who have been agitating.
I indicated to the Dáil today that I have already entered into further negotiations with the British authorities in this matter and I hope something reasonably satisfactory to the industry as a whole will emerge from these negotiations. I have indicated that what was available so far was not satisfactory to the industry as a whole; they were divided on it. But, whatever emerges, if the industry is to succeed in future and if the workers are to continue in employment, certain elements have got to improve enormously. I think Deputy Treacy would agree with me on that.
Yes.
The Dáil adjourned at 11 p.m. until 10.30 a.m. on Thursday, 30th May, 1968.