Dáil Éireann debate -
Thursday, 12 Dec 1968

Vol. 237 No. 15

Supplementary Estimates, 1968-69. - Imposition of Duties (Confirmation of Orders) Bill, 1968—Second and Subsequent Stages.

Minister for Industry and Commerce (Mr. Colley)

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

An explanatory memorandum has been circulated for the information of Deputies. The purpose of this Bill is to confirm five Orders made during 1967, under the Imposition of Duties Act, 1957, and the Finance Act, 1962. It is a statutory requirement that such Orders must be confirmed not later than the end of the calendar year following that in which they are made, if they are not to cease to have statutory effect at the expiration of that period.

The first of these Orders (No. 161) provided for an increase in the minimum specific customs duty on pneumatic tyres for certain mechanically propelled vehicles imported from countries other than the United Kingdom from 12/6d each to £3 each. This action was necessary because, with the termination of global restrictions on tyres on 1st July, 1966, imports of these goods had increased considerably and were threatening the Irish industry. With the agreement of the British Authorities, quota restrictions were imposed on United Kingdom tyres at about the same time.

The second Order (No. 162) changed the licensing provision attached to the duty on manually operated lawnmowers so as to permit the issue of duty-free licences for the importation of these goods, which are not now manufactured in this country.

The third Order (No. 164) was made by the Government on the recommendation of the Minister for Finance. It provided for the second tariff reduction on goods of United Kingdom origin in accordance with the terms of the Free Trade Area Agreement, the maintenance of the special tariff concessions in favour of goods of Northern Ireland origin; the exemption from revenue duty of cameras which are designed solely for medical or surgical purposes and certain minor editorial changes in the form of Customs tariff to take account of amendments to the Brussels Nomenclature which had been made by the Customs Co-operation Council.

The fourth Order (No. 165) provided for certain duty concessions on imports of completely knocked down and fully built-up motor vehicles in accordance with the scheme for the motor assembly industry. The purpose of this scheme, which was agreed with the manufacturers and assemblers of British motor vehicles, is to ensure the continuation of the Irish motor assembly industry at its present level at least, on a long-term basis.

The fifth Order (No. 166) was made by the Government on the recommendation of the Minister for Finance. It provided for the implementation of certain tariff concessions arising from the Government's accession to the GATT; the elimination of the duties on lignite and coke which had no protective effect and the attachment of the licensing provision appropriate to ordinary protective duties to a number of minor revenue duties—certain sugar articles, starch and dextrin, bottles and jars, and unprinted paper—which were no longer required for revenue purposes but had a protective effect and to some duties which had a restricted licensing provision limiting the issue of duty-free licences to goods intended for use in a manufacturing process or for the equipment of an industrial undertaking. The ordinary licensing provision permits the issue of duty-free licences in respect of goods which are not manufactured in this country.

I shall be glad to give any further information required in connection with the Bill.

Mr. Cosgrave

I move the amendment standing in the name of Deputy Donegan on today's Order Paper:

To delete all words after "That" and to substitute: "Dáil Éireann refuses to give a Second Reading to the Bill, inasmuch as it involves implementation of the Anglo Irish Free Trade Agreement, until such time as an equitable revision of that Agreement has been negotiated by the Government."

The purpose of this amendment is merely to avail of a procedural method to enable certain matters to be discussed in connection with this Bill. It is not our intention to press the amendment. The purpose is solely to enable us to discuss the Bill and certain other matters affected by the Free Trade Area Agreement.

In considering this measure at the present time we are concerned at the recent action by the British Government, action regarded, I think, by all who have considered it as a breach of the Free Trade Area Agreement. The recent decision to introduce the import deposit requirement is naturally viewed with concern not merely by all Parties in this House but by industrialists, manufacturers and traders who feel that their interests will be adversely affected. When this matter was raised here some weeks ago we expressed the view that there was natural satisfaction at some action being taken to assist our exporters and manufacturers to overcome the effects of this import deposit by an arrangement with the banks. That does not, however, minimise in any way our concern at the fact that this imposition is a breach of the Agreement and, because of that, we are anxious to get from the Government now some information as to what action it is proposed to take to offset the particular charge, now being met by the Exchequer, and in meeting the interest charges involved. There are two aspects to this question—the actual amount of the charge, which can only be determined at some later stage, and the manner in which that will have to be paid off, either by regarding it as a capital charge, in the same way as the import levy was regarded three or four years ago, or by direct taxation.

There is then the other aspect that this was a breach of the Agreement. Under Article 18 of that Agreement, when balance of payments difficulties arise, either party to the Agreement can take certain action. There is provision then in two subsequent Articles —Article 23, dealing with consultation, and Article 24, dealing with the interpretation of certain terms. Suggestions have been made that, because this was the procedure adopted, it conflicts with the terms of the Agreement and, so far as we are aware, no prior consultation took place. There was, I think, the very minimum notification given when it was proposed to do this. Consultation did not take place. Since then officials, representing the Departments affected, have been holding discussions in London and further talks, according to press reports, are to take place apparently in the New Year.

There is another aspect of the matter and it is one I am anxious to discuss because of the terms of the Agreement and the effect of a further reduction in tariffs next July. This Agreement, as does any agreement of this character, depends for its success on its being operated in good faith and in full by both parties. Under Article 23, subparagraph (3), there is provision that, where there are any variations of the terms of the Agreement, either party at the request of the other shall enter into consultation. If, as now appears certain from the recent British Government decision, the import deposit requirement lasts for a full period of 12 months at a minimum, then we are entitled to say that there shall be no further tariff reductions at the rate of ten per cent each year as provided for in the Agreement. Under this Bill we confirm the Order which gave effect to the reduction of ten per cent last July.

It is our view that where this agreement has been breached a continuance in the rate of tariff reduction at 10 per cent should not be proceeded with, and we raise this matter to express on behalf of the Opposition as well as the Government the concern that is felt at the British decision to impose this deposit requirement. In 1964, when the special levies were imposed and, again when this import deposit requirement was made effective, the British Government decided against quantitative restrictions. It is obvious that they cannot apply quantitative restrictions against this country while they are not applied against others in the non-discriminatory GATT clause.

The effect of this decision is to create uncertainty as to the operation of the trade agreement. The terms of the agreement, if properly enforced, would provide protection at present against the recent decision. A number of us remember many years ago under the 1948 Trade Agreement the concern we felt as to the situation that developed because of the suggestion that the requirement in respect of coal would not be honoured and, at that time, we had to enter into negotiations with the British Government on the matter. Nowadays the position of coal is obviously less important in our economy but, in the immediate postwar situation, it was of vital significance.

One of the defects of certain phraseology in agreements of this character, as was true at that time, is that while the Government intend to use their best endeavours to meet certain situations, these phrases are common character, if you like, or commonly adopted in agreements but, when they come to be interpreted in precise and actual terms as applied to a specific situation, their vagueness becomes fully apparent.

In this situation I feel the Government have an obligation to make clear the national concern which is felt here. In this regard I feel that the advantage of a discussion of this character is to emphasise to the British Government the concern of the Dáil and the concern of the country at the present breach of the agreement. It is true that, under the terms of Article 18 of the Free Trade Area Agreement, either Government may take action in respect of balance of payments difficulties. It is equally true, and provided for in that section, that the party which has not taken measures—in other words in this case the Irish Government—may propose at any time other measures designed to moderate any damaging effect of the restrictions or to assist that party to overcome its difficulties.

As well as the present action the future situation is giving rise to concern because of the announcement by the British Minister of Agriculture, Fisheries and Food, indicating that it was proposed to continue what was described as a policy of selective expansion which has been followed since 1965. While that may be strictly true as a statement of policy, the situation has changed since 1965 in that this agreement was negotiated in the very closing days of 1965 and took effect from the beginning of 1966. Under this selective expansion policy, widespread concern has been expressed at the indication that cheese imports in Britain from this country, or exports from this country to Britain, might be restricted in quantity.

When we take the two things together, the imposition of this import deposit requirement and the continuance of a fairly clear indication of a variation in the terms of this selective expansion policy in respect of agriculture, it becomes obvious that there must be considerable national concern at the trend of British policy. Naturally, we sympathise with and understand the British in their economic difficulties. It is a fact of geography as well as trade that these two islands are closely associated and, if difficulties are encountered in Britain, they must affect us here. We have long since advanced from the situation in which anyone believed there were large alternative markets. That does not mean we should not exploit and attempt to expand and develop markets elsewhere.

When this agreement was originally negotiated it was negotiated on the basis that it was a step towards this country's entry into the EEC. This now seems to be no longer a practical possibility in anything like the relatively near future. That means we must seek and develop alternative markets if we can elsewhere. We should certainly examine the situation and explore the possibilities. We should, at the same time, realise that geographic and trading conditions make it reasonably certain that the vast bulk of our trade for so long as most of us can see ahead will continue to be between this country and Britain. That makes it all the more important that agreements of this character should be balanced agreements. We should endeavour now when discussions are taking place, as we are entitled to under the terms of the agreement, to consider and consult. Article XXIII (3) provides:

Should either party consider that an obligation under this Agreement has not been fulfilled or that any benefit conferred upon it by this Agreement is being or may be frustrated or that any cases of special difficulty have arisen or may arise, or that a change in circumstances necessitates or may necessitate a variation in the terms of this Agreement, the other party shall on request enter into consultation immediately with a view to seeking an equitable and mutually satisfactory solution which preserves the balance of the Agreement.

While it is true, as I have said, that the vast bulk of our trade is with Britain, it is not all one-sided. The extent of our trade with Britain and Britain's trade with us now exceeds over £250 million a year on a two-way basis. That is a sizeable figure by any standards. While we gain advantages from the size of that trade we also provide a market for British exporters to this country and we are anxious to ensure that the future operation of this agreement will be undertaken within the terms of Article 23 so that an equitable and mutually satisfactory solution will continue to operate to preserve the balance of the agreement.

We expressed at the time this agreement was negotiated certain doubts about particular aspects of it which anything that has happened since has confirmed. At the same time, we believe that we should exploit and develop whatever advantages are in the agreement rather than attempt to terminate it in a situation in which no one can foresee what the future European trading arrangements will be. One of the defects of the agreement is the fact that it is irrevocable but there is a power in it to consult and to discuss and to reach what are described as equitable and mutually satisfactory solutions. We believe that when this recent decision was taken, accompanied by the recent statement of the Minister for Agriculture, Food and Fisheries in Britain, the time has arrived for a full review of the agreement that we are entitled and that the Government are entitled in the New Year to undertake a full review to see that the terms of the agreement are respected and that our position, the position of our exporters and workers is safeguarded. No doubt concern has been expressed and one of the Orders which is confirmed here provides protection in respect of rubber goods and tyres and is designed to avoid a situation which caused redundancy in Dunlops 12 or 18 months ago. These are the aspects of the agreement which have caused doubts among workers and caused some concern.

The prospect of the whole European trading situation has altered since this agreement was negotiated, certainly altered to the extent that despite efforts in a number of quarters there appears to be no immediate prospect of a change. It is therefore obvious that the claims that were made that free trade conditions would become more widespread in the immediate future do not appear to be realisable in present conditions to the same extent. Certainly the action of the British Government, or indeed the action of some other Governments, either of an administrative character or of character comparable to the import deposit requirement, make it obvious that when difficulties arise Governments will take action to protect their situation. I believe that we have an obligation to take the same action to offset the effects of this agreement and to seek a review within the terms of the agreement so that the operation of it will provide an equitable and satisfactory solution and preserve the balance of the agreement in the interests of our farmers as well as our manufacturers and traders and all those who are employed in Irish industry and in Irish concerns.

Mr. Corish

It is very difficult to know how to approach this particular subject and particularly the amendment in the name of Deputy Patrick S. Donegan with regard to the Anglo-Irish Free Trade Area Agreement. I regret that the Taoiseach did not think it was an opportune time for a pretty full debate on the operation of the Anglo-Irish Free Trade Area Agreement in view of recent restrictions imposed on industrial exports from this country to Britain. I am not enthusiastic about the amendment that has been spoken to by Deputy Cosgrave but, on the other hand, I regret that he does not intend to press it to a division.

Deputy Donegan, in the amendment, calls for an equitable revision of the agreement. I want to reiterate the stand that the Labour Party took when this Agreement was being debated in the House in January, 1966. We did not believe it was a good agreement. We did not believe that there was an advantage for Ireland in the agreement and, as it has turned out now and as has been said by Deputy Cosgrave, even in the working of the agreement to which we objected the balance of advantage appears to be overwhelmingly on the side of Britain. I regret, therefore, that the Fine Gael Party are not pressing this amendment. We have not yet decided whether or not we will call for a division on it.

Mr. T.F. O'Higgins

The difficulty is about the tyre protection in the other Order.

Mr. Corish

Yes, but the amendment itself I think, while it is related to the Bill, certainly could be taken apart from any provisions which I agree the Minister has included in the Bill.

However, what the Labour Party believe is that the agreement should not be reviewed but that it should be scrapped—that may be a crude word for it—and that a new agreement should be drawn up. I do not want to make a long speech on this. If I were to, I would merely repeat the arguments I made in January, 1966. In any case, it appears that we have got the worst side of the bargain in this Agreement and, mark you, I would say this as far as the agreement is concerned: the Irish Government appear to have behaved like gentlemen, too much like gentlemen as a matter of fact——

Mr. T.F. O'Higgins

Hear, hear.

Mr. Corish

——in that the British Government, in order to correct their balance of payments problem, took certain steps without consultation. It was stressed very much in the debate in 1966 that, if there were to be any moves made by one side or the other, there was to be prior notification and consultation. The Taoiseach admitted himself here a few weeks ago that he was notified as to what the British were going to do with regard to industrial exports from this country, but there was no indication from the British Government that there was to be any sort of consultation because, in fact, there was no time for it. What the Taoiseach did when he went to London I do not know. But, with all due respect to him and to the Government, I think all he did and all he intended to do was to make a token protest. The whole thing seems a bit suspicious to the Labour Party and particularly to me. On the day we asked the Taoiseach if he were going across to Britain to try to negotiate better terms in respect of these restrictions, he told us that there were no arrangements made and, lo and behold, in three, four or five hours he was on a plane to London.

Mr. Colley

He explained that later.

Mr. Corish

Perhaps he did. I did not hear him or read it in the newspapers, but maybe I missed that. Anyway, it seems that the Irish Government were treated somewhat with contempt by the British Government. The British, because they had a balance of payments problem, took certain physical steps to control the importation of Irish industrial goods to that country. I know that we have used a certain device to surmount that, and I will refer to it later on. However, we also had a balance of payments problem. The Taoiseach, as acting Minister for Finance, was very worried about it when he spoke in this House when introducing his mini-Budget. He said that if we did not take corrective measures the balance of payments problem would be three or four times as big by the end of 1969.

What did we do? We did not impose physical controls as the British have done. We introduced a mini-Budget. We believed that the best way to correct our balance of payments problem was to tax cigarettes and drink and to increase postal charges and the various other things in the Budget. We did not introduce any sort of measures such as were introduced by the British Government. We were advised by the Central Bank recently that credit would have to be restricted except for certain productive purposes. Now, the Bill here provides for approval of a reduction of ten per cent in our tariff protection from 1st July of this year and what we are anxious to know is—and this is what we asked the Taoiseach—did the Taoiseach tell Mr. Harold Wilson or the British Government whether or not we were still going to proceed with the reduction of ten per cent of our tariff protection from 1st July, 1969. That is why I say we are behaving too much like gentlemen as far as this agreement is concerned. The British take steps to restrict importation of Irish industrial goods. What do we say? We say that we are going to make it easier for the British to send industrial products to this country.

I should like, therefore, to know from the Minister for Industry and Commerce, if he has that information, to tell us what are our intentions. We were told a few years ago that there was urgency about this because Europe was right around the corner. It was stressed year after year since 1959-60 that we would be in the European Economic Community by 1970. Might I suggest—and I do not want to give any solace to those Irish industrialists who are not preparing for free trade at some time—that the situation is not so urgent now and I think certain sections of Irish industry and those employed in it should be given a chance, particularly in the light of what the British Government have done with regard to the industrial products which we usually export to Great Britain.

I do not believe, therefore, that we should have to stick entirely to the terms of the agreement and the spirit of the agreement, as was mentioned by the Taoiseach, to such an extent that we will strip ourselves further of protection from 1st July, 1969, at the rate of ten per cent. The crunch is now coming or will come if this ten per cent reduction in insisted on from 1st July, 1969. Our tariff protection was so high in its initial form, in 1966, that it was more or less prohibitive. It was absolute protection in that it was 60 per cent and up to 75 per cent in respect of countries other than those in the British Commonwealth, but the effect of the ten per cent reductions will certainly be felt with the next reduction; and if we proceed to reduce protection by a further 10 per cent in 1970, in my view, Irish industrial employment will take quite a beating.

Apart from that, we are going to provide £25 million for six months in order to facilitate the export of Irish industrial goods into Britain and by that method—and I suppose we can do nothing about it in present circumstances in view of the type of agreement we have—£25 million will be available to the British Treasury for six months. This is what we are doing in order to help Britain with her balance of payment problem whilst, on the other hand, they do not appear to be too concerned about the balance of payments problem that has been described to us in this House by the Taoiseach as acting Minister for Finance. We have to service this £25 million that is to be made available to the tune of approximately £2 million or a little less but, in round figures, £2 million and now the Irish taxpayer, who has been asked to pay more in the mini-Budget for certain commodities in order to redress our balance of payments problem, will also be asked to pay £2 million in order to assist Britain in her balance of payments problem.

I do not think this is quite good enough. That is the reason why we believe that this agreement should be terminated and that the Taoiseach and his Ministers for Industry and Commerce, Finance and Agriculture should go to Great Britain and negotiate a Trade Agreement in which there are no loopholes such as we have experienced in the last two or three years.

The British have broken their side of the bargain and, as I have said, we are going to behave like gentlemen, going to do everything that is right. That is all very well but when people are dependent on these decisions, when Irish industrial employment is dependent on these decisions, we should not alone protect our balance of payments by physical methods, by restrictions on imports of British goods, but take steps to safeguard our industries and the people who work in them.

We believed when we discussed this in July, 1966, and we still believe, that the balance of advantage was with Great Britain. We said in the House, despite what the present Minister for Finance, Deputy Haughey, said, that there was no real advantage for Irish agriculture. I do not think that anybody, even the present Minister for Agriculture and Fisheries, could say that there has been any dramatic improvement in agriculture or in farm income or in agricultural exports since this Anglo-Irish Free Trade Area Agreement was signed. There has been no dramatic improvement as far as industry is concerned, no dramatic improvement in the provision of jobs in Irish industry. We are getting about the same kind of average as we got when we had not got the agreement. So, there is no advantage in it for this country.

The then Minister for Agriculture and Fisheries, Deputy Haughey, said that the farmers of this country in the first year of operation of the agreement would get an extra £10 million income. All I say in that respect is, tell that to the farmers. They have not seen this. We have not got anything from the Anglo-Irish Free Trade Area Agreement as far as industry is concerned. If there has been any improvement, it is not because of the Anglo-Irish Free Trade Area Agreement.

I believe that if we are to proceed like this there should be a selective dismantling of the tariff barriers. I know there are provisions whereby certain industries can be singled out for special protection and attention but this has not happened. There are very few industries in this country that have not been hit by the two ten per cent reductions since the agreement came into operation or who will escape from 1st July, 1969.

There are industries in this country who do not need protection; there are industries that need a degree of protection and there are industries that need a lot of protection until they get on their feet. It is not so much the fault of Irish industry that they have not progressed as they should as it is of various Governments who have been in office, because up to about seven or eight years ago industries were led by all Governments and by all Ministers for Industry and Commerce to believe that this protection would last for a long time. I believe that these industries were not ready for the stripping of protection and, if there is to be stripping of protection, it should be done in a selective way in order to ensure that all industries that are in any way worthwhile will survive.

Again, we are in trouble. Because the Anglo-Irish Free Trade Area Agreement was mentioned here, I want to mention very briefly—I think Deputy Cosgrave mentioned it also— the position as far as the exports of cheese from this country are concerned. It is a pity that we do not know what decision, if any, has been arrived at as a result of the negotiations between the top civil servants who went to England to discuss the question of cheese and other agricultural imports to Britain from this country. It was a loosely worded agreement. There was much mention of understandings, and all this sort of thing. There was an understanding that our butter quota, for example, would be increased. I think it is now at about 26,000 tons. As far as we can gather, apart from there being no prospect of an increase, there is a likelihood that this may be reduced. If that is one of the results of the agreement, it appears to me that what we believed and said two or three years ago is now justified.

There has not been this dramatic increase, as I have said, in the export of butter from this country to Great Britain and it seems that a move may be made to decrease the amount of cheese we send to that country because, from reports we get, it seems that the British market is flooded with cheese from all over the world. As I said, I regret that the Taoiseach and the Government did not decide to have a full dress debate on the Anglo-Irish Trade Agreement. I do not know what their motive was but I believe that they are somewhat ashamed of this agreement. It was not all that it was claimed to be when the various Ministers spoke on it when it was announced here.

On the actual Bill there are a number of points on which the Minister might enlighten me. He says that:

The first of these Orders (No. 161) provided for an increase in the minimum specific customs duty on pneumatic tyres for certain mechanically propelled vehicles imported from countries other than the United Kingdom.

Does this refer to tyres when it says "from countries other than the United Kingdom" or vehicles?

Mr. Colley

Tyres.

Mr. Corish

The Minister said that the second Order changed the licensing provision attached to the duty on manually operated lawnmowers so as to permit the issue of duty free licences for the importation of these goods, which are not now manufactured in this country. There must be a big market for these lawnmowers or are people so well off now that they are all using electric or petrol driven motor lawnmowers? It appears that if the Minister wants to do anything to promote Irish Industry he might induce industrialists to engage in this business. The fourth Order, he said:

provided for certain duty concessions on imports of completely knocked down and fully built-up motor vehicles in accordance with the scheme for the motor assembly industry. The purpose of this scheme, which was agreed with the manufacturers and assemblers of British motor vehicles, is to ensure the continuation of the Irish motor assembly industry at its present level at least, on a long-term basis.

Has the Minister any comment in respect of the importation of knockeddown parts in respect of Continental cars? Naturally I am concerned with the industry in my own constituency, that of Renault's. I am sure there are others who assemble other Continental cars and I would like to know how they stand in regard to this Order which is, as the Minister said, only in respect of British motor vehicles.

Mr. Colley

I want to be clear about the Deputy's query. Does he want to know the rate of duty?

Mr. Corish

No, how do Continental parts stand as far as import duty is concerned, as against the British? That is all I wish to say on this Bill. As I said already, it is a pity that we did not have a full dress debate on the Anglo-Irish Trade Agreement. I regret that the Fine Gael Party are not pressing this amendment. I do not want to engage in sharp political practice by calling for a division, I do not think that this brief debate is one in which we can or should challenge the Government on the whole issue of the Free Trade Agreement, but I trust that as soon as the Dáil re-assembles, or even, if conditions worsen with regard to the agreement, the Taoiseach will call a special session of the Dáil as he did by telegram on 4th January, 1966. The situation is more urgent now than in 1966 in view of the British Government's action with regard to our industrial products. If not now, perhaps the Minister for Industry and Commerce —I know he must be concerned about this—will induce the Taoiseach at a future date to have such a debate so that we can get an Anglo-Irish Free Trade Agreement in which there will be advantages for both sides, in relation to our industry and our agriculture and so that the British Government will not be able to play ducks and drakes with us as they have been doing with the Agreement negotiated by Fianna Fáil.

Mr. T.F. O'Higgins

I have listened to Deputy Corish and I sympathise with the sentiments he expressed. I am, however, a bit surprised that he has not appreciated that instead of complaining about the Government's refusal to permit a debate on the Free Trade Agreement situation and instead of griping about it the Fine Gael Party have done something about it. We have tabled this amendment.

Mr. Corish

We have a motion on the Order Paper.

Mr. T.F. O'Higgins

I appreciate that. Deputy Corish complains that time was not given to discuss that motion and I think time should have been given. I agree entirely with him. However, instead of griping and complaining in that regard we have taken action in regard to this Bill by tabling this amendment so that this debate can take place. It is in that sense, that there may be an exchange of views here because this matter is of deep concern to the people, that we have tabled the amendment. We seek information and we hope that as a result of this debate the information may be forthcoming. Deputy Cosgrave said, and Deputy Corish agreed with his point of view, that there is a feeling of very deep concern with regard to the present situation of our trading relations with Great Britain. There is deep concern particularly among those employed in our various industries who feel a certain sense of insecurity, an insecurity which stems chiefly from a lack of knowledge of what precisely is happening.

I can remember three years ago almost when the Free Trade Agreement was introduced and debated here. From the Ministerial speeches at the time one could detect a certain definite air of euphoria in relation to what they were saying. The Agreement was introduced by the then Taoiseach, Deputy Lemass, as something which must be a tremendous boon for agriculture and industry. He made two points. He said that this Agreement was sought by the Irish Government, that it came about on the initiative of the Irish Government, and he said that it was an irrevocable Agreement designed and intended to represent a permanent statement of our trading relations with Great Britain. He was followed by other Ministers, in particular the then Minister for Agriculture and Fisheries, Deputy Haughey, who assured the farmers that for the first time they were getting clear and definite access to British markets on a permanent basis for expanding production. Every farmer was assured that from the following July his income would increase significantly and that £10 million was suddenly going to pour into the pockets of the farmers.

I suppose it is understandable if one is making a case that one may be inclined to err on the side of exaggeration but the exaggerated claims that were made from Ministerial benches three years ago are very hard to understand now that the people have been able to temper this agreement in the hard light of experience. We in the Fine Gael Party had expressed very definite doubts and reservations. We did not wish to act in this House in any irresponsible manner so far as our Party was concerned. Traditionally, we have always felt that there should be order and system in our trading relations with Britain and, indeed, with other countries. At times in the past we have had to keep down wild men with one hand and build with the other, always aspiring towards a proper trading relationship with Great Britain, even when certain people held the view that it would be better for Ireland if every ship carrying Irish cattle could be sunk in the sea. Therefore, when we were expressing our reservations and our doubts three years ago, we were not doing so in any irresponsible manner. We were faced with the fact that this Agreement drawn up by the Fianna Fáil Government on their own initiative—as we were told by their Leader—was an Agreement which repudiated the existing Trade Agreement of 1948.

That Agreement of 1948 had stood the test of time. It was—and I use this phrase in a parliamentary sense— a damn good bargain so far as this country was concerned. It was an Agreement which enabled our agricultural products and our industrial products to find expanding markets. It was an Agreement which served this country, on balance, reasonably well. Of course, there were things that might have been in it that were not in it. There were new positions that this Government could legitimately have aspired to get into an extension of that Agreement or, indeed, get into a new Agreement three years ago. The fact is that, when the present Free Trade Agreement was introduced here in January of 1966, it had replaced the 1948 Agreement, and if Dáil Éireann had failed to approve of that Agreement, the situation would have been that we would have had no trading understanding or agreement whatsoever with Great Britain. We would then have been back in a position of chaos and anarchy which I do not think would have been profitable or good for the country.

Mr. Corish

Did the Deputy say if the Agreement in 1966 had been repudiated we would be left without any agreement?

Mr. T.F. O'Higgins

Yes.

Mr. Corish

But the scrapping of the 1948 Agreement was part of this. If we had scrapped this as well, we would still have the 1948 Agreement.

Mr. T.F. O'Higgins

That is a bit of argumentative finesse.

Mr. Corish

The cancelling of the 1948 Agreement was part of what we were asked to approve.

Mr. T.F. O'Higgins

No. It had been cancelled and was finished with. However, it is only a slight point; it does not matter. One of the things that concerned us was, first of all, the fact that this Agreement containing the imperfections that we pointed out was now to be irrevocable, a permanent expression of our trading relations with Britain. I remember saying at the time in that debate that it struck me as extraordinary that, after two or three Ministerial visits to London, even though the Ministers were backed up by high-powered civil servants and all the rest of it, any team of Ministers could be so convinced of their omniscience that they would be able to say: "For all time we have done a deal with the British."

I would have thought that such an agreement would have taken years of study and a careful assessment of what the expansion of our economy could mean to our people, to employment, to industry, and so on. But a few short visits and back they came and said: "Now we have done a deal. We sought it ourselves. It came from our initiative and, apart from refinements, and so on, it will be a permanent expression of our trading relations with Britain."

Certainly, it was not so accepted by the Fine Gael Party. The only basis upon which we could tolerate, and did tolerate, the introduction of such an agreement was that it represented a stepping-stone on the way to European union. It was in the sense that, before this agreement could ever have its full effect, this country and Britain would have been part of the European Community and this agreement, with its imperfections, would have disappeared under the Treaty of Rome. It was only in that sense that we regarded the agreement in any kind of reasonable light. I should add that we made it perfectly clear that if the Free Trade Agreement was to stand on its own, divorced from Europe and divorced from any possibility of this country entering the European Community, then we would oppose it vehemently and if we had the power we would cancel the agreement and repudiate it.

It was not a question, as was made clear at the time, of repudiating the Agreement in defiance of its terms, because this agreement in its preamble is based on the understanding that both countries would be in the European Community by 1970. If that assumption is no longer possible, if the idea of entering into Europe has receded into the distance, then the entire basis for this agreement has disappeared. It is not a question of breaking the agreement if one says now something else has to take its place. It means that there never has been a consensus ad idem in the proper sense to bring about an agreement if the terms upon which it is based no longer apply.

It is because three years later, at the end of 1968, that we now must regard the possibility of European membership as having receded into the distance that we are forced now to regard the terms of this agreement in a very cold, analytical and realistic manner. The agreement does not suit the trading relation between Great Britain and Ireland in the circumstances that both countries are outside Europe. I hope no one in this House will ever forget that prior to 1921 there was a free trade area between this island and the island of Great Britain and that free trade area had existed for many hundreds of years. We know the consequences. We know the desire of our people to end it. It would indeed be an extraordinary thing if it were ever thought in the national interest to restore that kind of free trade, completely isolated and removed from free trade in the larger community of European nations.

In accepting this agreement, in the sense that it was to be regarded as part and parcel of our advance into Europe, there were two or three features of it that we welcomed. One feature undoubtedly was the provisions in Article 18. Article 18 is the Article which deals with balance of payments difficulties. I think it is no harm to remind the House that, in the autumn of 1965, the people of this country, particularly those involved in industry, were shocked at the sudden imposition by the new Labour Government in England of import levies on our goods going into the British market. Our people were shocked because here was a sudden imposition which, in fact, was a tariffing of our exports to Britain. That was done in the autumn of 1965 without consultation by the British Government. Concerned, as they were, and as British Governments traditionally are, primarily with the interests of their own economy, and without thinking of the harm they might do to others, they proceeded to impose import levies. They offended every member of EFTA. They offended us. They were acting in defiance of the 1948 Anglo-Irish Trade Agreement: they were acting in defiance of the EFTA Treaty—but they did not mind. Comparatively speaking, they were the powerful economy and they were doing just what suited them.

I always thought it extraordinary that, stemming from that breach by the British of the 1948 Agreement, there should have come the Fianna Fáil initiative of 1965, the initiative of which the former Taoiseach was so proud, the initiative to seek permanent agreement with the British—but it came from that. One of the extraordinary things about this agreement when it was introduced here was that it adopted the import levies: they were never repealed. They were adopted—swallowed by us—but a lesson was learned and, in Article 18, provision was made that, for the future, never again would we have anything like tariffs or import levies even in the interests of balance of payments difficulties. That Article specifically provided that, while either parties to the agreement would be entitled to take unilateral action in relation to balance of payments difficulties, the action would be limited to the application of quota restrictions.

I want just to say this about that particular Article. As was stated at the time on our behalf, we welcomed that Article because it was a pity the illegal imposition of import levies by the British had been tolerated by our Government and at least they had come back with this safeguard that import levies or duties could never be imposed again and that the only action the British could take would be the imposition of quotas—because we knew that the British could never, in fact, impose quotas. I must say I thought—we thought—that Article 18 represented a brilliant victory for Irish negotiation. We thought our team of Ministers had codded the British into a situation in which they could not take any action against us in relation to balance of payment difficulties. One might think that if they were restricted to quota restrictions then, under the GATT set-up, they could not impose quotas upon us unless they imposed them upon every other country concerned in GATT. One might think that under the non-discriminatory clauses in the GATT organisation, they were prevented from imposing a quota on us unless they imposed it upon everybody—and, in Britain's trading position, that would be unthinkable. Therefore, Article 18 appeared to us to be the one redeeming feature in the Free Trade Area Agreement of three years ago. It meant, in fact, that, in relation to balance of payments difficulties Britain had deprived herself—probably because of the gain she was going to get—of the wide powers which she had exercised so callously in the past of imposing duties and tariffs on our goods coming into her markets.

It is because of that background that we asked the House to view—with the dismay and anxiety which, from these benches, we seek to express— the action actually taken by the British Government in the past few weeks in relation to their present balance of payments difficulty because what they did was to do, under another name, what precisely they did in the Autumn of 1965. They have now, by calling the requirement an "import deposit" provided for the imposition of duties upon Irish goods entering the British market. By no means can what they did be termed a quota restriction. Under no circumstances could it be regarded as a quantitative restriction nor, under any circumstances, could it be regarded, under the definition of Article 24, as any prohibition, quota, licence or other measure with equivalent effect.

So, it is not a quota. It is not a quantitative restriction nor is it something with equivalent effect. If an importer or exporter, as the case may be, wishes to send in £1 million worth of goods, he can send in as much as he likes but, in relation to each part of what he sends in there will have to be a deposit or a duty.

It is not, therefore, a quantitative restriction or a quota, or anything of that kind, or anything happening with an equivalent effect. It clearly is a duty and a levy on goods coming in. It really becomes a matter for concern when one finds, in fact, that Ireland's cause is raised in the British House of Commons by the Conservative or Tory Party. It is worth recalling that on a motion two weeks ago by the present Opposition Party in the British House of Commons that Party raised with the British Government what they said appeared to them to be a clear breach of the Free Trade Agreement with Ireland. They referred to the fact that what was done by their Government appeared to be the imposition of a levy or a duty and not a quantitative restriction which alone was provided for under the Agreement. I read the debate that took place and I must confess I found it very difficult to follow the case made in defence of the British action by the British Attorney General. I do not think he was able to make any case. He seemed to concede, in fact, that the imposition of a deposit was equivalent to the operation of a duty but he said that, under the definition of quantitative restrictions, pretty well anything was permitted. If that is the interpretation by the British in respect of their own language then we obviously speak a language of our own. It is perfectly clear that what was done was done in defiance of the terms used in both Article 18 and Article 24.

It is in the circumstances of the British doing something which appears to us, unless we are completely confused, to be a flagrant breach of the Agreement that we view with concern what seems to be the complacent attitude of our Government. Deputy Corish says the Government have been acting too much like gentlemen. Perhaps they have. Certainly for the Leader of the Government to describe what the British have done as being in breach of the spirit of this Agreement is making a tremendous concession. Surely the correct attitude is and should have been the attitude we are expressing on these benches, that this is in breach of the terms of the Agreement, and that is the attitude we should maintain at all times in relation to our discussions with the British.

Just think of the British Government ! Their own Opposition, the Tory Opposition, say they broke the terms of their Agreement with the Irish. But the Irish Government say no such thing. What, in heaven's name, did the British Prime Minister think of the cri de coeur from Government Buildings here: “Will you ever spare me half an hour or so. I want to see you”? It was, of course, a token visit. Nothing else. The Taoiseach, before he went to see the British Prime Minister, had prevented himself from having any grounds for argument or complaint. He started off by approving the proposition that this was a breach of the spirit of the Agreement and he then went across to London to say “Tut, tut” to the British Prime Minister. He said himself he was like the boy who went to the fair—he did not expect to get much and he came back not disappointed. Of course, he was not disappointed. Of course, he did not expect to get much. How could he when he had carefully ensured that no member of the British Government would take his visit as anything more than a token gesture to prevent misunderstanding and criticism at home.

It is an extraordinary thing—I think it is Gilbertian—that a trade agreement made by a Fianna Fáil Government on behalf of this country should be upheld not by them but by the Tory Opposition in the British House of Commons. That is the position in which our country now is. We appear to have in office a Government which is clueless, which does not appear to know the strength of its own position, which does not appear to prize or value the agreements which it negotiates on our behalf. It does not even appear to understand the import of and the necessity for having in international discussions and bargaining a position from which one can fight. It is an intolerable situation. It is for that reason, before the drift gets worse and a bad situation becomes really intolerable, that we want to get certain assurances from the Government.

We are told that civil servants are at the moment discussing matters with the British. What are they discussing? Why cannot we be told? Remember what is involved in this is the bread and butter of thousands of Irish families——

Deputies

Hear, hear.

Mr. T.F. O'Higgins

——of thousands of workers in industry, workers who are entitled to know what the Government are doing to protect them, their jobs and the livelihood of their families. What is being discussed with the British? Is what is going on at the moment merely an assurance that we understand that the British are entitled to act in their own interests contrary to the letter and the spirit of arrangements made with us and that we will not hold that against them; we will swallow it and wait for the next time. Surely, if there are to be discussions with the British, they must be in the context of making a new deal with the British, a new agreement.

Mr. Corish

Hear, hear.

Mr. T.F. O'Higgins

They must be in the context of a new agreement more balanced in the interests of this country. Europe has receded into the distance. The circumstances set out in the Preamble to this Agreement no longer apply. We are, and will remain, a weaker economy. We are a small economy with a small population. If we are to survive, in those circumstances, as an independent, economic entity we must get particular and special guarantees in relation to any trading arrangements with the British. That seems common sense. I cannot understand how any member of this Government can be so utterly complacent in relation to certain important aspects of our country's future. Jobs are at risk. Industries are at risk. Factories and plants are in danger. If this Agreement continues to operate and if we cannot get into Europe many facets of our Irish economy are at considerable hazard and risk.

We are asked in this Bill to approve the reduction by ten per cent of the tariff level last July. Fair enough. That is so much water under the bridge. But what will happen next July when another ten per cent is supposed to go? Are we to stand idly by like so many pretty little gentlemen observing not merely the letter but the spirit of our Trade Agreement with Britain, and allowing the hard-headed Saxon to have it both ways? Surely the time has come to have a bit of common sense. I would not be sending high-powered civil servants across to London trailing their coats with their opposite numbers in the British Board of Trade. I would have high-powered ministerial delegations across in London hammering out a good bargain on behalf of this country, a realistic bargain, a bargain which would be expressed in terms which could be understood and operated.

If Britain and Ireland are to go into Europe some day, whenever it may be —perhaps when other voices are heard in France and elsewhere—surely it should be the aspiration and wish of both Governments that each should go in with a greater degree of mutual trust than they now have, with their economies stronger than they now are, and with more people in profitable employment than there are at the moment? Surely that should be the aim of any mutual arrangement and relationship between these two islands? If it is to be the aim it cannot be achieved under an arrangement which dismantles the Irish economy long before the possibility of entering Europe is a reality. That can only mean that the economy of this country is sucked dry by the comparatively powerful British economy and, if and when Europe becomes more proximate, we will be entering as a tattered limping invalid on the heels of Britain. That is not a desirable prospect. It is something that should be avoided.

We have tabled this amendment to urge again upon the Government that clichés and phrases and bromides issued at dinners and luncheons will not do. A serious situation is looming up and there should be evidence before this Dáil goes into recess that our Government know what they are doing and are proceeding to do it. Let us have no more phrases such as we had from the Taoiseach about the boy going to the fair not expecting to get much and therefore not being disappointed. That will not do.

Mr. Corish

"I did not get much and I did not expect to get much."

Mr. T.F. O'Higgins

That does not measure up to what is required from the Leader of an Irish Government in these circumstances. Let us have no more of the Minister for Industry and Commerce issuing clichés to the effect that we will be able to face up to the challenges when they come. I am sure our people will, and I am sure those engaged in industry will. When I say I am sure those engaged in industry will, I do not merely mean the owners of the plant and the owners of the capital, because there should be a partnership between management and workers. There is certainly a joint interest, and definitely a joint responsibility, and I am certain that the challenges that are waved around the place, whatever they may be, can be met only when that partnership goes into action with a determination to win. They cannot do that in this atmosphere of uncertainty.

The Trade Agreement appears to operate now as a one-sided arrangement, with us observing both the spirit and the word and, so far as Britain are concerned, neither the spirit nor the word being applicable if it suits them. Added to that we have vague talk about discussions with the British and visits by civil servants, but no one is told for what purpose. We now have the situation in which the Leader of the Government refuses to give time to discuss this important matter, a matter which is of vital concern to all sections of our economy. Time is refused. A measure of recognition is due to the fact that it was Deputy Donegan on reading this Bill who realised that under the terms of the Bill and the amendment he tabled, this discussion could take place today. For that reason it is taking place not in any partisan spirit, and not seeking to score any Party political advantage, but in the exercise of our right as the Opposition to ensure that we will get from the Minister for Industry and Commerce, if we cannot get it from the Taoiseach, some account of what is being done in our name and on our behalf by nameless civil servants in some peculiar refinement of the terms of the Agreement. At least I hope we will be able to get this, and also an assurance that the anxiety we express in relation to this entire Agreement with Britain will be reflected in Government action.

It is not difficult to imagine having fresh discussions with the British. It is not difficult to imagine a new arrangement being worked out with the British. Both the British Government and our people here have a very definite joint interest in mutual growth and understanding. I am certain the British will appreciate that we are peculiarly vulnerable and sensitive because we are developing our economy and we have to be very certain about any arrangement we conclude with them. I am certain that with the proper approach, not cap in hand for that would not be right, and not going to the market expecting to get nothing but a kick or a blow, not an approach in any servile sense, but in the same traditional way as we have sought in the interests of our people to build up and safeguard our economy, we would make progress, but it is urgent that we do it and it is urgent that this Government be spurred into doing it. Let us hope that the next few weeks will be spent thinking along these lines and that as Europe disappears, as it may, as it recedes certainly, this Agreement will be put on the shelves, put aside and a new transitional agreement pending our entry into Europe concluded with the British, an arrangement which would recognise that a liberalisation of our country visá-vis the British cannot be a three or four years operation. If we are to think merely of the British our protection must be spaced over a much longer period. Other terms, other provisions obviously will require immediate attention; but just hammering in a nail to cover over a slight little aperture that has appeared in this Agreement is not going to solve the problems of our country vis-á-vis the British in present circumstances.

Mr. Donegan

The amendment standing in my name has ensured that this Dáil can discuss the Anglo-Irish Free Trade Agreement at this juncture and that was the purpose of my Party. I want to make it clear that we understand that the legislation that must now go through would affect the Dunlop Tyre Company in Cork if it were delayed and many others and this would be extremely serious. Therefore, this amendment will not be pressed to a vote. However, it has shown one thing. I do not claim myself, even though Deputy O'Higgins attributed it to me, credit for having this discussed but my Party were in a position to see that it would be discussed. Any ill effects that might arise if this Bill did not become law within 18 months shall not arise because this Party will not impede certain provisions that are necessary.

At the same time, it is absolutely necessary at this juncture to discuss the position in relation to the Anglo-Irish Free Trade Agreement.

I want to approach it, as the spokesman on matters of industry and commerce in my Party, on the basis that I am quite clear that at the time the Agreement was signed there was no other course, that in fact when the Fine Gael Party took that line and agreed with the Government at that time they were correct. I would also point to the fact that certain good results have ensued. It would be wrong and churlish to say that the whole thing was wrong, to say that the whole business was improper, ill advised from its birth and that in fact it has brought no advantages to this country. Of course, it has.

We must face the fact that the removal of duties on Irish industrial goods into Britain has had a very good effect. It is also true that it has endangered very many jobs in industry here because of the reduction in tariffs that is proceeding at this time. It is of the utmost importance that we now have a second look at it and in fact the Government should come to this House quite soon and tell us of the results of the operations of their civil servants in London and what benefits have been got. The Taoiseach's admission that he did not go hoping for much and he did not get much either must be improved upon. The matter is too serious for industry and employment here to approach it in any partisan spirit. It is quite clear that at this time there is need for a look at this Agreement, a very serious look at it and decisions by both Parties in good will to try to get the most for everybody and particularly in our case the most for ourselves. There is a provision in the Free Trade Agreement whereby after five years we could look at the situation here as these tariffs were removed. There is a provision also whereby if unemployment were caused or there was a serious situation in any sphere of industry or any industry here that certain quantitive restrictions could be put on for a period of 18 months. These were safety provisions. They could be implemented by us if there was any danger that we were being affected by the imports of British goods.

At this time of course, the boot is on the other foot; but I would like to point to the fact that, while newspaper reports last week giving the figures from the British statistics available indicated that the gap had widened, the difference between the imports and exports of Britain and Ireland vis-á-vis one and the other was £15 million last year and £31 million this year. I would suggest after sober reflection that this is not the end statistic and that, in fact, the truth is that our exports increased spectacularly. That is something we must face. I have my criticisms of the Government, of the Taoiseach and of the Minister for Industry and Commerce to make later but we may as well face the fact that our exports did increase spectacularly.

We may as well face the other fact, too, that the action taken unilaterally by Britain concerning exports was to try to stop the demand for goods which was putting wrong their balance of payments. Perhaps we could look at our own position in that regard. When we look at a statistic that was in one of the papers last week—that the gap had widened by £31 million—we might take into account the fact that our own imports here of consumer goods may have something to do with it. There are two sides to this coin—the imports here from Britain and the exports from here to Britain—so that if we have consumer goods coming in here in greater quantities this could be something we must look at. Let us face it: the Government—wrongly, in my view—introduced the mini-maxi Budget to try to stop consumption of these goods here. The real truth is that when one rules out politics or the desire to criticise the other side and comes down to the hard economic facts of industry, one finds that the Anglo-Irish Free Trade Agreement is to some extent working. One must admit that, and while it has its very bad aspects it has its very good aspects, too.

Mr. Colley

The Deputy is the first one to say that in this debate.

Mr. Donegan

I am approaching this matter honestly. I have my criticisms to make later but I am approaching this, as I have done over the last few days when preparing my speech, as seriously and as responsibly as I can. I must draw attention to the facts and that does not mean I am not going to criticise the Minister and the Government. I am, but among other things one must point to the 25,000 tons of beef which is now included in the British subsidy. We must point also to the fact that in our man-made fibres, which have got free access, there has been a spectacular increase in exports. However, that does not mean that everything is right. That does not mean that the first cause of the Agreement, namely movement towards Europe, still exists. As Deputy O'Higgins pointed out we have gone further away from Europe. Britain is hoping perhaps in seven, eight, nine or ten years to become a member of the EEC. At the same time, we have in this Agreement a chapter which I read last night which indicates that, where the policies of either country are going to affect the situation in the other country, that country will have regard to that. Mark you, the British had not great regard for this when they announced they were going to increase their agricultural production by £160 million. In fact you could read into that the prospect that they might not need 638,000 store cattle or the amount of beef they are importing from us at present. In fact, they have acted in many ways—there are two instances in the last month—quite against the spirit of the Agreement. If they are going to increase their agricultural production for home consumption by £160,000,000 worth, surely that is against the spirit of the Agreement, apart from anything else?

One examines the Agreement in detail and comes to the conclusion that the British when they took action to stop imports, in their desire to keep themselves within the framework of the GATT took it unilaterally, against everybody. This was quite improper and was against the spirit and word of the Agreement. They should have acted unilaterally and then come to us. Let us face it, GATT allows a free trade area to operate. The EEC is a customs union where you must have a common external tariff. Within the terms of the GATT, as I see it, if they desired, they could have excluded us from the unilateral provision of 50 per cent of all imports and so informed their customs officials and they could have talked to us about what the problem was or could have excluded us completely and allowed us to carry on in the normal way.

Let us now come to the question of whether or not the British did impose a fiscal charge in asking for this deposit. I hold that they did impose a fiscal charge, as mentioned on page 67 of the Free Trade Area Agreement published by our own Stationery Office and that, in doing so they acted absolutely contrary to the spirit and word of the Agreement. My reason for saying that is that, if we are going to lodge £25 million the interest on that £25 million, as has been said, would mean, if this went on long enough—if we did it by taking it from the taxpayers or providing for it in the Capital Budget and refunding it in the usual way—spending some £5 million of our people's money. That seems to me to be a fiscal charge. Article IV of the Agreement says:

Neither party shall—

(a) apply directly or indirectly to imported goods any fiscal charges in excess of those applied directly or indirectly to like domestic goods, or otherwise apply such charges so as to afford effective protection to like domestic goods;

I do not want to weary the House. Deputies can read it for themselves. When they have read it they will find that there was a direct breach of the spirit and word of the Agreement. That is the statement that I want to emphasise here today and to get across absolutely and completely. I know the Minister may argue back that it was not a fiscal charge, that the fact of having to deposit money does not mean that.

Mr. Colley

I have no intention of arguing the British case.

Mr. Donegan

All right. Then we come to the Government gaffe. This was, in my view, a breach of the Agreement. If you study this Agreement, as I have done in detail in the last couple of days, you could probably produce arguments for two or three other breaches of the Agreement in the action taken by the British; but I am pinning my colours to the mast in respect of page 67 of our publication and am saying unequivocally that they broke the Agreement. The British having broken the Agreement, what should have been the action of our Government here?

I would have thought that what should have happened was that our Ambassador in London should immediately have delivered a note to Downing Street on behalf of the Irish Government indicating that the British had broken the Anglo-Irish Free Trade Area Agreement and, at that stage, such a note would have been of such a serious nature that I would have expected that Mr. Wilson would immediately have made himself available to see the Taoiseach and that the strongest team, including the Minister for Industry and Commerce and many others, that could have been provided from here, would have been in Downing Street with no action taken by the Irish Government but an absolute determination on their part to impress upon the British that the Agreement was broken and that we were not having it.

That would have placed Mr. Wilson and the British Government in a very different situation from the position in which the Taoiseach placed them. The Taoiseach went into conclave with the bankers—there is nothing wrong with that—and produced his own scheme, that he would pay the deposit and, if there was interest thereon, he would pay the interest. Nobody has been informed, and the city is rife with rumours, as to the method by which this shall be done within the banking structure of the city. If it is done by the repatriation of £25 million of Government securities lying in Britain—and a lot of them are getting bad interest in any case—that is one way of doing it. The expenditure of £25 million would appear to be a very improper method. If this is done, the interest factor may be delayed. If our banking institutions are going to say however, that the amount of extra credit this year will be so much—so much of which will be available for the private sector and so much for the public sector—and that, of course, they are allowing this amount of extra credit and are not reducing the amount of credit available by £25 million because of this lodgment we have to make—that would be another way of doing it.

We are not being told but signs are on the wall. If one reads the leading article in the Irish Times of yesterday one sees an undefined credit squeeze because the Central Bank has indicated to the banks of this country that they should see to it that their advances are for productive purposes and that there should be no advances for non-productive purposes. That is a bit of a change from the announcements that have been coming for the last two or three years. The people of this country, the Opposition and Parliament have not been told what is the manner in which this £25 million is being produced. So that we will not know until we see the figures, maybe a year and a half later, whether it is being produced by giving out less credit here—which will result in less employment and certainly a slowing-down of the industrial pace—or whether it is being done by the repatriation of certain Government securities in Britain, or how it will be produced.

The most important thing of all is that, instead of delivering a note to the British Premier, instead of notifying him that he had broken three or four sections of this agreement in the spirit and the word—but I am pinning my flag on one, that in relation to the fiscal provisions—the Taoiseach, without going near Downing Street, without protesting, without stating that the Agreement was broken, produced £25 million and nobody knows from whence it will come.

The Taoiseach committed the greatest gaffe of his career—and mark you he has committed a few and he has allowed Ministers to commit a good many more. I do not want to go into details but we know all about the activities of the Minister for Agriculture and Fisheries and of the Minister for Local Government, and the gaffes in regard to the referendum and of the Minister sitting opposite because he was so slow in allowing the prices of raw materials to adjust themselves. On two occasions he reduced the profits of a certain public company by £½ million and on one occasion had to come in here seeking £½ million for another industry.

Mr. Colley

Which industry?

Mr. Donegan

The flour milling industry. The Minister had to come in here last year looking for £½ million because he would not agree to the——

An Leas-Cheann Comhairle

This is getting away from the Bill.

Mr. Colley

It is also grossly inaccurate.

Mr. Donegan

It is not.

Mr. Colley

The facts are on the records of the House.

Mr. Donegan

The Minister came in here with a supplementary estimate. I want to suggest that the Taoiseach made a complete mess of the job. He did not protest and he produced £25 million as if it were 25 million pence. He has now created a precedent whereby the British can again, if they want to, try to break this agreement. We on this side of the House wish to support the Government in this particularly serious matter to let the British know, if they read the Irish papers, or if anybody reads them, that the Opposition here is saying to the Government, as Deputy O'Higgins said: "Spur on and make every effort to see that the Anglo-Irish Free Trade Agreement is adhered to." What my colleagues said is obviously true. The question of looking at this agreement after five years is not sufficient now. We have got to look at it on the basis of the changed situation in Europe. We are much further away from Europe now than we were when we made the agreement. Therefore, the agreement with its advantages and disadvantages must be looked at again.

The sort of silence we have had when civil servants, or the Taoiseach, or various Ministers returned from talks in London, will just not do. A militant attitude should have been followed when we saw what was being done by what some people call "perfidious Albion". It should not have been allowed to pass without a spirited protest. As the Taoiseach had not got the guts to do it the Opposition, by the artifice of putting down this amendment, have ensured that the discussion which had been refused, did take place. I am proud that my Party were capable of producing the artifice that has allowed the Government to be spurred on and to be whipped—like the donkey that is reluctant to move— to do their job. The gaffe of the Taoiseach, the greatest in his career, has meant that we have to lodge this £25 million when we could have protested and fought the case with all the vigour that was demanded.

Mr. James Tully

As the House is aware, the Labour Party asked for a debate on the Free Trade Area issue and the Taoiseach refused it on the grounds that time was not available. Subsequently we asked him, in view of the fact that the business would be finished today, to sit tomorrow and then we found that it was not time that prevented this; it was because he did not desire to have the debate. He did not want these matters discussed. Even though, as Deputy Donegan said, the artifice of the Fine Gael Party did have the matter opened up here, I am afraid it does not give us the scope we would have liked to have to discuss all the matters that should have been discussed before we make any more mistakes with Britain.

Hindsight is a wonderful thing. I am glad that the Fine Gael Party can now see this agreement as it is. Although they did not vote for it they did not vote against it in 1966 and I believe they decided that while it was not as good as the 1948 agreement we were still going to get something from it. What has been the result? We have not got anything out of it and, as a matter of fact, we find ourselves in a much worse position as a result of the agreement. What is the use of making an agreement when the other party make up their minds that it does not suit them and if they want to they can back down? What is the use of making an agreement which one party considers to be one thing and the other party another?

Is it not true that after 1966 the Taoiseach, the Minister for Finance and the Minister for Agriculture and Fisheries repeated again and again the wonderful victory they had won over British negotiators? Right down through the ages, if one reads history, one sees scattered around the scrapheaps of the world the people who felt that they had beaten the British negotiators but who later found that they had been codded, just as our negotiators have been codded. Indeed, I am not clear that the agreement has been broken except in one respect, in regard to the giving of notice, where I think they did break it, but you will probably find that Britain will claim that they did not break the agreement, that the loopholes were there in the small print and they found them while our people apparently did not see them.

Sending a large number of civil servants over to Britain to negotiate with their opposite numbers in Britain after the Taoiseach met the Leader of the British nation and found that he could not move him an inch, seems to be a futile exercise. I do not know what the Taoiseach hoped to gain by going over there, going over in secret, sneaking off without anybody being aware that he was going. Even members of his own Party here were unaware that he had left. The agreement is being held out to the country as a way in which the industries of this nation will be saved as far as exports are concerned but it appears to me to be a rather shabby trick by the British Government because surely the whole object of the arrangements they are now making was to reduce their imports by £400 million? If they are going to allow this and other nations to subsidise imports into Britain, is it not true that they are getting a loan of cheap money for which they will have to pay no interest and that they are not interested at all in stopping imports into Britain? Is that not what they are doing? This is just another trick.

The other point about it is the effect of the 10 per cent reduction. Again and again in this House I have heard various Ministers of Industry and Commerce, including the present occupant of that office, saying that Irish industrialists were becoming prepared or were on their way to being prepared for the Common Market and that they were gearing themselves to such an extent that they would be able to compete with Britain. It was almost suggested that they could drown the British with their industrial goods because they would be able to gear themselves so well. What has happened? Although only a few weeks old, this idea is already having its effect on closing factories. I do not know whether the Minister is aware——

Mr. Colley

Mention one.

Mr. James Tully

The Kells boot factory.

Mr. Colley

That had nothing to do with this.

Mr. James Tully

Last week they laid off 30 men. The Minister very nearly made a good job of closing it last year and except for the pressure brought by the boot and shoe operatives it would have been closed down. This sort of thing is just not good enough. It was agreed that the speeches would not be long. I do not want to go into a lot of detail, but I am sure the Minister is aware, and, if not, his colleague, the Minister for Transport and Power, must be aware, that because of a little tricking which was done on the fuel supply front, the generating stations for the production of electricity that were to be in operation in 1972 have not been built. Nobody heard about it until now, until hundreds of men are being laid off from work.

Mr. Colley

Would the Deputy mind explaining in what way the boot factory to which he refers is in danger of closing down because of the recent British action?

Mr. James Tully

The simple answer is that until the Minister and the Government reach a position where they can agree to have a continuation of the existing arrangements, people who are running factories on a shoestring are unable to go along on promises. The Minister must be aware of this just as well as I am, and if not, he will be hearing a lot more about it within the next few weeks from people who are badly affected by it.

As I was saying when the Minister intervened, literally hundreds of people on the bogs are being laid off because of a trick worked behind backs by the Department of Transport and Power with the co-operation of the Department of Industry and Commerce. Surely we should not have a situation such as we have had in this House where, on the one hand, a Minister kicks up a row because he is allowed only an hour and a quarter to reply to a debate which took only about seven hours, and, on the other hand, the Taoiseach says the House has not time to debate such an important item as the Anglo-Irish Free Trade Area Agreement?

I do not propose to take any more of the time of the House, but I want to state here very emphatically that when the debate was held here in 1966 the Labour Party opposed the agreement tooth and nail, and if one gets the Official Report of the debate one will see what was said from the Labour benches and, to a certain extent, from the Fine Gael benches, and one wonders why the wonderful agreement we were supposed to be getting, which was so full of milk and honey, now can produce nothing but ashes in the mouth of those who negotiated it.

Minister for Industry and Commerce (Mr. Colley)

I think I might first deal with the one query that was raised in regard to the Bill by Deputy Corish. The information he sought is that the rate of duty on completely knockeddown parts for motor vehicles is 17½ per cent irrespective of the country of origin.

Mr. James Tully

Will that be 21½ per cent for the German ones with effect from 1st January? Is there not a four per cent export duty?

Mr. Colley

I have in mind our duty, which is 17½ per cent.

Mr. James Tully

There would be an extra four per cent from the other side, which will make it 21½ per cent.

Mr. Colley

I do not know what steps they may take to counteract this. I am speaking only of the duty we imposed. In regard to the amendment proposed in the name of Deputy Donegan, I want to confess quite frankly that I find myself in some difficulty, and the difficulty in which I find myself arises from the fact that, as the House knows, there have been discussions which have concluded at official level; there are likely to be further discussions next month at Ministerial level, and possibly even a further meeting between the Taoiseach and the British Prime Minister in regard to the operation of the Free Trade Area Agreement with Britain. That being so, while there are a number of things which I would normally like to say, I feel myself precluded from saying them in order not to make the task of our negotiators more difficult.

Since some doubts seem to have been expressed here in the course of the debate, I should, perhaps, say that the consultations which have been taking place at official level were, in the first instance, the normal consultations provided for under the agreement to take place at regular intervals, but on this occasion they were extended in order not only to deal with the normal review of points of difficulty which might have arisen since the previous meeting on the operation of the agreement but also to cover, in effect, a full-scale review of the operation of the whole agreement. The further negotiations which may take place following on that meeting will be on that basis.

I said in reply to something Deputy Donegan said that I have no intention of arguing the British case in relation to any aspect of this agreement. I do say, however, that the action which was taken by the British was clearly and without any doubt a breach of the spirit of the agreement. As to whether it was a breach of the letter of the Agreement, this is not something on which I propose to expound my views in public at this stage. The arguments which may be advanced in negotiations between ourselves and the British would not be enhanced, in my view, by being advanced here in public. I do, however, want to make clear a few points that were raised in the debate. We are not being spurred on by the Fine Gael Party, as suggested by Deputy T. O'Higgins, followed on by Deputy Donegan, to negotiate with the British on a full scale review of the operation of the Agreement. We had arranged and announced this before Deputy Donegan put down his amendment. Let us be quite clear about that. I mention it only for the record.

Mr. Donegan

But we got our debate.

Mr. Colley

That is another point. Furthermore, I want to say that the action which was taken by the Government in conjunction with the banks to counteract the effect of the British deposit scheme was prompt and effective. This is very much appreciated not only by managements but also by all the workers concerned in the industries affected. Any suggestion that we should not have taken that action will not be welcomed, particularly in Deputy Donegan's constituency, by the workers concerned in the industries so much dependent on exports to Britain.

Mr. Donegan

Why not deliver your note first?

Mr. Colley

I am coming to that. Deputy Donegan's suggestion is that we should have protested and argued with the British before we took this action. I may say we considered that possibility, but rejected it because we were convinced that the effect would have been that we would be arguing for days—we might still have been arguing—with the British, and yet their scheme was coming into operation within a few days. Our overall approach was that we were not going to allow our industrial exports to be interfered with in any way because they are too important to this country, and to employment in this country and to the prospects of increased employment.

Mr. Donegan

Could the deposits not have been made day by day while we were arguing, and nothing would have been interfered with? The Government have made a complete hames of it.

Mr. Colley

I want to make quite clear to this House and to anybody outside who is in any way interested in this debate that the difference in the situation in having Fianna Fáil in power and in having a Fine Gael Government or a Coalition Government in in power with the Fine Gael Minister for Industry and Commerce —and perhaps Taoiseach— is that, with a Fianna Fáil Government in power, action is taken to ensure that our exporters and all their employees do not suffer. With a Fine Gael Government, we would still be arguing and, in the meantime, our whole exporting situation would be in jeopardy and the employment of thousands of people would either be gone or about to go.

Mr. Donegan

I must protest at this. May I ask the Minister a question? The Minister is implying about my Party and myself that if there were a Fine Gael Government and a Fine Gael Minister for Industry and Commerce we should go on arguing and do nothing. Why not make your deposits as the days go on and argue and then nothing would adversely be affected? It is quite improper and dishonest of the Minister to suggest that the workers and management would find themselves in a quandary if there was a Fine Gael Government. We could make the deposits as the days went on, and argue.

Mr. Colley

I did not deal with that suggestion, which Deputy Donegan made in the course of an interruption, because I did not think it was necessary. However, since he wants me to do so, let me point out, in the first place, that if he suggests that the deposit could be made day by day he should talk to the people concerned in exporting and hear their views as to whether they think it would work. Administratively, what kind of a mess would they be in?

Mr. Donegan

None.

Mr. Colley

You cannot run your business from day to day: Deputy Donegan should know that. Secondly, if you pay deposits—I presume the Deputy is making the claim that we have accepted the principle the British have adopted——

Mr. Donegan

Fianna Fáil have swallowed it hook, line and sinker.

Mr. Colley

To pay the deposits one day would be exactly the same as acceptance—if there were such.

Mr. Donegan

Not at all.

Mr. Colley

The Deputy should not waste the time of the House in making silly suggestions. He is the shadow Minister for Industry and Commerce in the Fine Gael Party. If he had been where I am now, they would still be arguing about it and our people would deliberately being dishonest. It is not his form.

Mr. Donegan

I take the greatest exception to that statement by the Minister. He cannot say that thousands would be out of work. The Minister is deliberately being dishonest, as such. It is not his form.

Mr. Colley

That is what the Deputy said.

An Leas-Cheann Comhairle

The Minister must be allowed to make his speech without interruption.

Mr. Colley

I endeavour to be as kind as I can with his suggestion. I am not prepared however, to accept these suggestions and his accusations of incompetence against the Government and the Taoiseach, in particular.

Mr. Donegan

Gross incompetence.

Mr. Colley

I listened to suggestions that would have this country in an absolute catastrophic state.

Mr. Donegan

Why not make the deposits day by day and then argue?

Mr. Sweetman

Who made a botch of the drafting of the Agreement?

Mr. Colley

There is none——

Mr. Sweetman

If it is a breach of the Agreement, why have you not taken it to the Hague or to the United Nations?

Mr. Donegan

To insult Fine Gael and any Deputy of that Party is absolutely no substitute for a reasoned reply to the debate.

Mr. Colley

If the Deputy insists on demanding replies to such suggestions, he must accept the consequences. A question was asked as to the payment of interest on these deposits. As has already been said in this House by the Taoiseach—but I shall repeat it—it will be paid out of taxation unless other methods of paying it may be found, arising out of our negotiations with the British. The question also was raised as to whether or not we shall continue with the tariff reductions next July. The possibility of not making these reductions or of having reductions of less than ten per cent is something we certainly would contemplate depending, again, on the situation and the overall situation for us is the effect of such steps on our economy, not on the British or any other economy.

As most Deputies will, I think, appreciate, it is not necessarily the position that if we postpone the reductions we do a good turn for Irish industry: we may not do that at all. But whether or not we take such steps will depend on our assessment of its effects on the economy and also the consequences of our negotiations with the British. This is a possibility: I am not saying it is a probability. It is an option which we have and I want to keep that option open.

Mr. T.F. O'Higgins

God help Ireland

Mr. Colley

Deputy O'Higgins seems to be making the point that he and his Party believed, when the agreement came before them, that the effect of it was that if the British—only in the circumstances which have recently arisen of a balance of payments difficulty—wished to impose quantitative restrictions by way of quota they would not, in practice, be able to do this because, under GATT, they would have to apply it to every country Am I interpreting the Deputy correctly? If the Deputy thinks there was ever any real possibility of the British applying quotas to our exports only, he is away off the mark.

Mr. T.F. O'Higgins

They would never do it.

Mr. Colley

There was never any question of their doing it.

Mr. Sweetman

They could not do it under GATT.

Mr. T.F. O'Higgins

This was one of the best parts of the agreement.

Mr. Colley

There was no reason— unless a political reason but not on a trade basis—why they would do it to us. Whether or not they could do it under GATT, the fact is that they would not do it to us because it would not make sense. It is quite independent of GATT.

Mr. Sweetman

Is that not the reason for the slipping in of "or otherwise" that you did not spot at the time?

Mr. Colley

The Deputy is quite wrong.

Mr. Sweetman

I should be glad to hear why.

Mr. Colley

I said earlier that I am in some difficulty in this debate inasmuch as we are at present negotiating with the British. I shall make all our case here for them.

Mr. Sweetman

The stronger the case the Opposition make, the easier it will be for you to negotiate.

Mr. Colley

I shall not dispute that. On the other hand, I do not propose to allow some of what I regard as misrepresentations of the position to go unrefuted.

A point was made in relation to what I might call the statement of intent by the British Minister of Agriculture, Fisheries and Food and the effect it may have on the benefits accruing to us under the Free Trade Area Agreement. I think it was suggested that the Government here said nothing about that. I want to say again something that was said about that by the Taoiseach to the effect that he had received a clear assurance from the British Minister of Agriculture, Fisheries and Food that the implementation of what I would call the statement of intent will not frustrate the agricultural objectives of the Anglo-Irish Free Trade Area Agreement. Subsequently, the British Prime Minister, Mr. Wilson, not only endorsed this assurance but agreed that our respective Ministers for Agriculture should maintain close contact in order to ensure that this does not happen.

There has been some suggestion made—not, I think, in this debate, but in previous reference to this whole matter both here and in the press— or some impression created that this is what might be termed the second occasion on which the British have committed a breach of the Free Trade Area Agreement in regard to our exports to them. Just to keep the matter in perspective, I want to say that the British imposition of imports levies occurred in October, 1964, while the Free Trade Area Agreement did not begin to operate until July, 1966, so that whatever one may say about the imposition of the levies by the British in the past, it was not in breach of the Free Trade Area Agreement because that agreement was not then in existence.

Mr. T.F. O'Higgins

But it was a breach of the then existing agreement, the 1948 Agreement.

Mr. Colley

I believe it was, but I am not speaking with any authority on that.

Mr. T.F. O'Higgins

We can, I think, agree on that. It was.

Mr. Colley

Deputy Cosgrave referred to the fact that, in regard to whatever agreements we enter into, when it comes to special difficulties arising for a country governments take action and "to hell with the agreement". That is true to some extent, but agreements such as our Free Trade Area Agreement recognise this fact and endeavour to control the kind of action taken to deal with difficult situations like balance of payments problems. They also recognise other kinds of difficulties that can arise and we have already availed of some of the provisions of the Free Trade Area Agreement to deal with the problem that arose, for instance, in Dunlops. I should point out, too that any action which may be taken by the British Government and whatever may result from the negotiations between our Government and the British Government will be a two-edged weapon. What the British are entitled to do we may be entitled to do but any steps we take must naturally have regard to our circumstances and to the fact as to whether or not they would be to our advantage.

There have been some suggestions that we ought to apply restrictions on imports from Britain. I do not think it has been suggested that that should be done in a spirit of retribution but rather because we have had difficulties with our balance of payments and we are, therefore, entitled to take action. We are.

Mr. T.F. O'Higgins

The Minister made the suggestion himself and I can sympathise with his point of view.

Mr. Colley

I am not the only one who made it.

Mr. T.F. O'Higgins

No.

Mr. Colley

There were references to it in this debate.

Mr. T.F. O'Higgins

The Minister is now dealing with a suggestion that came from him.

Mr. Colley

No, with a suggestion that came in the course of the debate. What I want to make clear is the fact that in the application of any such restrictions we might impose we must have regard to the effect of those restrictions on our employment position. We are much more vulnerable in that respect than most other countries are, particularly having regard to the fact that the raw materials for many of our industries are imported, sometimes in a completely unmanufactured state and sometimes partly manufactured, and any such restrictions, therefore, would have to be very delicately imposed and applied in order to ensure that we do not do more harm than good.

To listen to the speakers in this debate, apart from Deputy Donegan, one could reasonably be forgiven for concluding that this Free Trade Area Agreement has operated disastrously for us and that the Government were crazy to have entered into it and are even crazier not to see that now and do something about it. I do not think that is an unfair paraphrase of the speeches made, with the exception of the speech made by Deputy Donegan; he was the only one, as I commented at the time, who said that there was evidence we had benefited under this agreement. It really is not good enough for Deputies to come in here and make speeches, full of innuendo, about the disasters which have befallen and will befall us under this agreement, without being specific. I do not recall, apart from the points made just towards the end by Deputy James Tully, which, as far as I can gauge, had nothing whatever to do with the action of the British Government, as he alleged they had, any evidence being produced to substantiate the general theme. Now I want to remind the House of some facts, which will show, I hope, that we have benefited, and benefited considerably, from the operation of the Free Trade Area Agreement to date. Deputy Corish said that we had got the worst of this bargain; he was talking about what had happened up to now. I want to point out that in the two years since the agreement began to operate our imports from the United Kingdom increased by 17 per cent over the level of the 12 months preceding the operation of the agreement. In the same two years our exports to the United Kingdom increased by 32 per cent and, in the case of exports of manufactured goods, other than food, drink and tobacco, the increase was over 50 per cent.

Mr. Cosgrave

And, despite all that, we have a balance of payments problem.

Mr. Colley

Of course, we have because we trade with countries other than Britain. An aspect of this agreement which is not always obvious but which is of great importance is the setting up of new industries here. It is not merely a question of trade between the two countries. There is also the fact that the agreement opened free access to the British market for all our manufactured goods. This has had an important effect as far as the attraction of industry is concerned. Although there have been restrictions on capital exports from Britain for this kind of purpose and, indeed, from the United States of America and, although these have operated to our detriment, the number of new industries set up and the amount of employment created have steadily increased since the operation of the agreement. I do not say this satisfactory position is due entirely to the agreement but it has undoubtedly been a contributory factor, a contributory factor to the extent that, in the present year, we will be away ahead of anything we have ever had before.

I want to make it quite clear that restrictions on investment abroad by both Britain and the United States have operated to our detriment. Had these restrictions not been in operation our position would be considerably better but, even despite that, the facts show that there has been a very considerable improvement in the number and size of new industries, in the capital investment involved and, of course, in the employment involved since the coming into operation of the Free Trade Area Agreement. The Labour Party, as I understand Deputy Corish, say that this agreement should be scrapped. I do not know what alternative the Labour Party have in mind. I do not know how they propose to provide the considerably increased employment we need. They have never told us that.

They keep on telling us what is wrong with the agreement, but they have never told us what the alternative would be, especially in the light of the movement of world trade at the moment, in the light of the impending Kennedy round tariff cuts, and in the light of our enormous dependence on foreign trade. It is no use telling us that the Free Trade Area Agreement is bad, that it is to our detriment, without producing evidence to support that contention, and if they do not offer a reasonable alternative which will take account of current trends in the world, of our dependence on foreign trade, and the enormous job that has to be done in providing more employment for our people.

We have yet to hear of any alternative to the existing Free Trade Area Agreement which would have regard to the factors I have mentioned and be to the advantage of this country, and give us an opportunity not only to expand our trade but consequently to expand our employment. The industrial growth, particularly in the export oriented industries, has been spectacular in the past few years. The employment involved has been very important. It has been growing at a considerable rate and that is where the only hope for the future lies so far as this country is concerned.

Mr. Corish

That is nonsense. Employment has not been growing at a tremendous rate and the Minister knows it.

Mr. Colley

If the Deputy would listen he would know I said employment involving "export oriented industries", and I stand over that statement. The next time the Labour Party tell us what is wrong with this agreement, and that we should scrap it, they should suggest an alternative and tell us how they propose to provide the employment we need.

Mr. James Tully

Give us the civil servants and we will make the plans.

Mr. Colley

If the Deputy wants to depend on the civil servants let him say so out loud and not be pretending it is Labour Party policy. If the Deputy is suggesting that we depend on the civil servants he may take it that whether we accept advice it is we who make the plans. I am challenging the Labour Party the next time they get up and say how bad this agreement is to tell us what they propose instead, and how they will provide employment.

Mr. James Tully

Did the Minister not hear Deputy Lemass, when he was in Opposition, saying it was not the duty of the Opposition to make plans for the Government? Does the Minister agree?

Mr. Colley

If the Labour Party have no alternative they should not pretend they have. They should not try to mislead the people.

Mr. Corish

Why would the Taoiseach not allow a debate on the Anglo-Irish Free Trade Area Agreement?

Mr. Colley

I have already explained that.

Mr. Corish

He said he was too busy. He said he had not the time.

Mr. Colley

He did not say that. He said the House had spent a great deal of time recently on an economic debate. He did not say I think—though he might have—that this is not the most timely debate we have ever had in this House, and when Fine Gael have finished congratulating themselves on their attitude on this they might consider that aspect.

Mr. T.F. O'Higgins

What did the Minister say?

Mr. Colley

I said this is not the most timely debate we have ever had in this House.

Mr. Sweetman

On the contrary, and the Minister acknowledged that a while ago in response to an interruption of mine.

Mr. Colley

I did not.

Mr. Sweetman

I do not expect the Minister to admit that with love and kisses.

Mr. T.F. O'Higgins

It is a bit thick that the Tory Party are debating an Irish problem in the British House of Commons instead of its being debated here.

Mr. Colley

I am coming to that. Deputy O'Higgins tried to make a point, which he is now trying to make again, that the Tory Party in Britain were arguing the case for the agreement entered into by the Fianna Fáil Government and that the Fianna Fáil Government should be doing this. That is the case he made, I think. Let me point out that in their contributions to the debates in the British House of Commons the Tory Party can say what they like but undoubtedly in those debates they have an eye on the interests of the Tory Party.

Mr. T.F. O'Higgins

Hear, hear.

Mr. Colley

Furthermore, the Fine Gael Party, when they take part in debates in this House, have an eye on the interests of the Fine Gael Party.

Mr. Corish

The Minister is a soldier of destiny.

Mr. Colley

Let me finish.

Mr. Corish

The national interest.

Mr. Colley

As a member of the Government, I am responsible for the national interest in this matter.

Mr. S. Dunne

The Minister and Deputy P.J. Burke.

Mr. Colley

Despite the cynicism and sneers of Deputy Dunne, I intend to carry out my responsibilities.

Mr. S. Dunne

It will not be for long. It is a matter of months.

Mr. Colley

The Deputy tries to divert attention——

Mr. Donegan

Three more votes last night and they were defeated.

Mr. S. Dunne

Two were in the bar.

Mr. Colley

The Deputy would have had a heart attack if that had happened.

Mr. S. Dunne

When the Minister has harrowed what I have ploughed in the political field he can talk.

Mr. Colley

Deputy Dunne always produces the same few exercises. If he is arguing with someone younger in politics than he is he talks as if they still have much to learn, and when he is arguing with someone older he takes the line that they have been there long enough to learn, and that they are senile.

Mr. S. Dunne

The Minister is the same age as I am. He could have been in politics at the same age but he was not.

Mr. Colley

I was saying that I hoped the next time we heard from the Labour Party on this matter they would have some alternative to propose.

Mr. S. Dunne

Why should we solve the Minister's problems for him?

Mr. Colley

They did not provide an alternative even by way of general policy.

Mr. Corish

We did and we will again.

Mr. Colley

The possibility of expanding the economy depends on an expansion of our export trade, particularly in the manufacturing industry. Any agreement which does not provide for expansion of trade is detrimental to our interests.

Mr. Corish

I agree, but the Free Trade Area Agreement does not help that situation.

Mr. Colley

I have demonstrated what has been happening for the past two years under it. The Deputy does not want to be confused with facts. The Fine Gael Party's attitude in this matter is, perhaps, somewhat more reprehensible than that of the Labour Party. The Labour Party at least opposed the agreement.

Mr. Corish

For valid reasons as the Minister will find if he looks up the record.

Mr. Colley

As I have said, they have provided no alternative. They just oppose it. Fine Gael appear to be saying: "We were for it but we have doubts. Now we think we are against it but we are not sure." This type of thing which Deputy O'Higgins made a valiant attempt to describe as being responsible is simply indecision. The country could not simply afford this kind of thing if it were to be unfortunately afflicted with members of the Fine Gael Party in Government. We cannot afford this kind of shilly-shallying. This is the kind of thinking that was behind Deputy Donegan's suggestion to which I referred earlier. You go on arguing about your rights and you forget all about the realities of trade in this country and people's jobs. The main thing we have got to do is to keep the existing pattern of trade on an even keel and as far as possible to expand it and go to almost any lengths to prevent interference with that.

Mr. Donegan

I will let the Minister go that far without interruption but not much further.

Mr. Colley

I know the Deputy cannot take it.

Mr. Donegan

I had to deal with the Minister a few minutes ago and it is no bother for me to do it again.

Mr. Colley

I also know that it is an indication of how much I am getting under the Deputy's skin when he reacts in that way.

Mr. Donegan

The opposite was the case. The Minister became abusive because I got under his skin.

Mr. Colley

I dealt analytically with the proposition made by Deputy Donegan. He can look it up afterwards and see. There was a suggestion that our allocation of cheese in the British market was going to be reduced. I want to make it clear that this is not so. The matter is still the subject of negotiation with the British Government but it is not going to be reduced.

Mr. Corish

What are the negotiations for?

Mr. T.F. O'Higgins

Surely the cheese agreement was based on the cheese expansion under the Second Programme?

Mr. Colley

I am talking about a point that was made here that it was going to be reduced. I am saying that it is not going to be reduced. I am also saying we are negotiating about cheese. I do not want to say any more about it.

Mr. T.F. O'Higgins

The British guaranteed to take our increased produce under the Second Programme for Economic Expansion. That is written in here.

Mr. Colley

What point is the Deputy making about that?

Mr. T.F. O'Higgins

It is no good saying it is not going to be reduced to the 1965 levels. Are they going to take our increased produce?

Mr. Colley

I am dealing solely with the point that was made which was that it was going to be reduced. I am saying it will not. I am also going to say that the matter is at present being negotiated. I do not want to talk any more about it beyond refuting the point made.

Mr. Corish

The Minister says it is not going to be reduced and he says there are negotiations going on. What are the negotiations for?

Mr. Colley

The Deputy will have to speculate on that.

Mr. Corish

The Minister is not able to give us very much information this morning. He did not know whether we are going to reduce our tariffs by ten per cent or not, he did not know whether the spirit or the letter of the agreement was broken and now he does not want to talk about cheese.

Mr. Colley

I will repeat for the benefit of Deputy Corish what I said a few times already and that is that the timing of this debate is inopportune. I am not prepared to allow certain things that have been said in the House to go unrefuted but there are many things I should like to say that I feel inhibited from saying in order not to make the task of our negotiators with the British more difficult.

Mr. S. Dunne

And you with the child in your arms.

Mr. T.F. O'Higgins

Go in fighting instead of apologising all over the place.

Mr. Colley

We have been teaching Fine Gael how to fight for so long that I do not know why they have not learned something about it by now.

(Interruptions.)

An Ceann Comhairle

Will Deputies allow the Minister to make his speech?

Mr. Colley

The Deputies do not wish to allow the Minister to make his speech because he is getting under their skins.

Mr. Corish

Come back next week and we will discuss the Free Trade Agreement.

Mr. Colley

We can discuss anything with you at any time.

Mr. Donegan

The last time you said something like that you were beaten by 267,000.

Mr. Colley

You will go on deluding yourselves about that as you did with previous things.

Mr. Donegan

All we want is the 76.

Mr. Nolan

It will be a long time before you get that.

Mr. Colley

Deputy Corish asked a question about hand-operated lawnmowers, why they were allowed in free of duty. The fact is that they had been made here but they were quite uncompetitive so that the people making them stopped making them. This is the reason for the order.

I talked about the innuendo situation being created by almost all of the speakers except Deputy Donegan. Deputy O'Higgins talked about bromides, clichés and such things delivered by the Taoiseach and myself. He then proceeded to give us the greatest list of bromides and clichés that I have heard in a long time. Then he made the, in my view, very naïve suggestion that I ought, when replying, be able to say to the House exactly what was being discussed in the negotiations with the British. I do not think that even the Fine Gael Party is that naïve. I do not think Deputy O'Higgins is that naïve. I think he just got carried away by his own eloquence but do not talk to us about bromides in a speech in which that kind of suggestion is made.

Mr. T.F. O'Higgins

What is wrong with telling the country what is being discussed in London at the moment?

Mr. Colley

The Deputy is quite serious in this question?

Mr. T.F. O'Higgins

Is it the question of the further liberalisation of our trade? Is it the question of cheese or butter or what is it?

Mr. Colley

I told the House already that the negotiations which are going on and will be continued probably at ministerial level will relate not only as would happen in the normal way to any difficulties that have arisen during the year but also to a full scale review of the operation of the agreement. I have already said this.

Mr. T.F. O'Higgins

Now you are beginning to talk.

Mr. Colley

I said this already but the Deputy did not listen. Do I have to say it ten times before Deputy O'Higgins will let it sink in?

Mr. T.F. O'Higgins

We were told a discussion was taking place in relation to chinks that appeared in the agreement. Now we are told it is a fullscale review of the Agreement.

Mr. Colley

I said it and the Deputy was not listening and if he did maybe he would appreciate the reason why I am saying that there is a limit to what I can disclose in the House at the moment.

Mr. T.F. O'Higgins

A full scale review in any event. Well, that is something worthwhile.

Mr. Colley

Deputy Donegan asked about the bank operation, the scheme announced to counteract the British regulations. I want to make it quite clear that the operation of that scheme will not in any way affect the amount of credit available here. Deputy Donegan complained that there was no information about this. In fact, this was said at the begining and said since by the Taoiseach. It is being achieved by way of an adjustment of Irish investment in Britain and it will not in any way, I repeat in any way, affect the amount of credit available here.

Mr. T.F. O'Higgins

The Central Bank does not quite agree with the Minister.

Mr. Colley

The Central Bank's report is based on something quite different as the Deputy knows or he should know if he would think about it.

Mr. Donegan

It depends what we are thinking.

Mr. Colley

The Deputy talks about being responsible. That is not a responsible interjection to make. The matter of the credit available is an important matter to everybody——

Mr. Donegan

Very important.

Mr. Colley

——and if I have explained how the thing is being done in Britain and if I have said and repeated a few times that it is not going to affect the credit available here, I do not think Deputy O'Higgins should say anything to the contrary unless he can back it up. If it is just a smart remark he is tossing across the House——

Mr. T.F. O'Higgins

A very serious remark.

Mr. Colley

Deputy Tully asked about the closing of a boot factory and said it was due to the operation of the scheme we brought in.

Mr. James Tully

The operation of the scheme which the British brought in.

Mr. Colley

I understood the Deputy to say that it was the scheme we brought in which he considers is ineffective in this case.

Mr. James Tully

Yes.

Mr. Colley

I have no knowledge of this case but I suspect that Deputy Tully's version of the trouble is not correct, because the scheme is so designed that if a firm has export orders it can get the deposit. If this firm cannot do this, there is some snag, that it has not got the export order or is not going about the scheme in the right way. I have urged the representatives of industry whom I met, various groups, the Federation of Irish Industries, the Irish Exporters' Association, the Congress of Trade Unions, and so on, and I now want to urge again, that any difficulties found in the operation of the scheme should be brought to the attention of my Department immediately.

Mr. James Tully

I hope the Minister is right. I give him credit for being anxious to effect that but 30 were laid off a few weeks ago and I understand that more are to go.

Mr. Colley

I am certain the Deputy will find that it is not due to the operation, or failure to operate, of this scheme.

Mr. James Tully

If I find it is, I will get in touch with the Minister.

Mr. Colley

I want to take the opportunity of saying that if any difficulties are experienced in the scheme we want to know about them immediately because the overall approach all along on this and the approach we still have is that we want to ensure as far as it is humanly possible that the growth of our exports, industrial exports particularly, to Britain will not be interfered with in any way and that we will ensure that we maintain the potential for growth which is so important and which has been demonstrated in the last couple of years.

As I said, in that last two years, our industrial manufactured goods exported to Britain increased by 50 per cent. The importance of this, not only to our balance of payments but to the workers involved in the industries, is enormous.

Mr. Corish

How enormous? How many new jobs?

Mr. Colley

We are not prepared to jeopardise these jobs and the potential for new jobs involved in this in any way and this is why we are not prepared to have time spent arguing instead of making sure that our exports went on and that our jobs were maintained and that new jobs could be created. This is the approach of the Fianna Fáil Government. It does not appear to be the approach of the Fine Gael Party and, as far as the Labour Party is concerned, I think it would claim that it was its approach but its only way of demonstrating that that is the approach the Labour Party has is simply to say that the Agreement does not work, ignore the fact that is has worked well and offer no alternative.

I want to conclude by saying this much: I have tried to demonstrate that this Agreement has so far worked satisfactorily as far as this country is concerned. The things which have occurred recently are matters which, in my view, do not help the operation of the Agreement and, clearly, are not to the advantage of our economy, although it may be that the action we have taken to counter them may put our exporters in a better position in the British market than they were in before they took place; but I do want to make clear that as far as we are concerned, if there are possibilities of detrimental effects coming from the operation of this Agreement, then we want to take steps to deal with those detrimental effects and this will be very much in the minds of our negotiators in the negotiations with the British. As I said at the beginning, I am somewhat handicapped in this debate because of that situation of negotiations taking place but, within these limits, I have endeavoured to answer the points raised in the debate.

Mr. Sweetman

And to strengthen them.

Amendment, by leave, withdrawn.

Question, "That the Bill be now read a Second Time", agreed to.

Agreed to take remaining Stages today.

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

An Ceann Comhairle

This Bill is certified as a Money Bill in accordance with Article 22 of the Constitution.