Dáil Éireann debate -
Thursday, 23 Jul 1970

Vol. 248 No. 12

Committee on Finance. - Imposition of Duties (Confirmation of Orders) Bill, 1970: Second and Subsequent Stages.

Minister for Industry and Commerce (Mr. Lalor)

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 two orders made during 1969 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. 178, was necessary because of a decision by the customs co-operation council regarding the classification of certain trailers in the Brussels tariff. As the House knows this country's customs and excise tariff is based on the internationally accepted Brussels nomenclature form of customs classification. The effect of the council's decision was that some trailers, which were already liable to duty, were being reclassified at a tariff heading where duty was not payable. The order ensured that the trailers in question remained liable to duty on reclassification.

The second order, No. 180, was made by the Government on the recommendation of the Minister for Finance. It provided for the fourth tariff reduction on goods of United Kingdom origin in accordance with the terms of the Free Trade Area Agreement. In addition, the order provided for the maintenance of the special tariff concessions in favour of certain goods of Northern Ireland origin and implemented the remaining tariff concessions, at 55 headings, arising out of the Government's accession to the General Agreement on Tariffs and Trade. The order also transferred the licensing powers in respect of a number of duties on wheaten products from the Minister for Industry and Commerce to the Minister for Agriculture and Fisheries and made a number of minor changes in the Customs tariff.

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

Mr. Donegan

The Minister's speech is refreshing after a rather garrulous day in the House. Apart from that, it seems to treat mildly the fact that we are discussing the fourth reduction in tariffs under the Anglo-Irish Free Trade Agreement and also we are discussing under 55 headings the harmonisation of tariffs in relation to the Kennedy round on our accession to GATT. These are majjor matters and should be accepted and discussed as such in the House. This is, of course, an absolute necessity in the preparation for freer trade. We are facing a further freeing of trade and a move towards Europe. If Britain is there, then we shall have to be there with them, and there is nothing exceptional in the harmonisation of our trading relations so that we will find ourselves wading into the waters of Europe rather than jumping off the deep end of the pier when we have not learned how to swim.

Therefore, this present exercise is one of necessary self-discipline, it is not one we may enjoy; and for certain of our industries it is not one that will bring greater profits and greater employment. For certain industries it may bring at worst complete destruction or at best no greater employment and less profits.

Nevertheless, it would be a very stupid politician or business man who would not accept what I have said: that the freeing of trade is happening through the EEC and through the Anglo-Irish Free Trade Area Agreement. Then the only sensible thing that could be done was that we should harmonise our tariffs so that we would be ready for accession to the EEC when the necessity for such arose—and that will arise when Britain goes in because 74 per cent of our external trade is with Britain. Without Britain we could envisage a reduction of living standards, a reduction in employment, heavier emigration and many other ills. That does not mean that the self-discipline we must impose upon ourselves will not bring some of the ills I have mentioned. It may be that the action we may have to take over the years may have that effect.

There arises now something our party have been discussing in great detail. I had two interviews today with the leader of my party in relation to the serious nature of this matter. At this stage, there should be a definite policy direction to the effect that there is a great necessity for us, in our approach towards EEC and in relation to the Anglo-Irish Free Trade Area Agreement, to defend the jobs we have. Previously I quoted the old Irish proverb: An té nach bhfuil láidir ní foláir dó bheith glic—Those who are not strong must be clever. We must remember that proverb in our approach to the harmonisation of trade, the reduction of tariffs, and the removal of quotas in certain areas one of which, of course, is the removal of the quotas on footwear on July 1st.

We must ask are the Government doing their job. Yesterday we had an amendment on the question of whether growers of tomatoes for export should be free from income tax. The Minister felt we could not do this because now that we are negotiating with the EEC any new removal of taxes or any departures would place our negotiators in a difficult position.

Mr. Clinton

That was only one of the excuses.

Mr. Donegan

It was an interesting excuse from the point of view of the matter we are now discussing. The Anglo-Irish Free Trade Area Agreement was intended as a preparation for entry into the EEC. In their approach to this, the Government are like a train on railway lines. They are running along with 10 per cent on the 1st July each year for every year commodity. In relation to our accession to the GATT and our support for the Kennedy round, we have taken 55 specific commodities and reduced the tariffs on them to harmonise with this international arrangement.

In this party we think there is a necessity for an individual approach to the problems of industry and particularly of individual industries. The Government should not have approached this with a global 10 per cent but on the basis of 10 per cent for the industries that could take it. There should have been a different approach to the industries that could not. There is an absolute contravention of that agreement by Britain in respect of the deposit scheme which Britain introduced to prepare herself for entry into the Common Market. I have already indicated to the House the subject matter of a very well thought out paper presented at the Council of Europe which seemed to prove that the only way Britain could prepare herself for the Comon Market was by budgeting for a surplus for 12 years. That would be 12 years in which they would transfer a great deal of money from abovethe-line expenditure to capital moneys from direct taxation during the year. The purpose of this was to see that her balance of payments would come completely into line.

In direct contravention of this agreement, Britain took a different stand. Some economic adviser discovered a different method of doing it. As we know, you had to deposit vast millions when you exported to Britain. This discouraged many exporters to Britain. By a happy accident, we had at that time, in the hands of the Central Bank and the Department of Finance, overseas securities which had gone, to a certain extent, out of date so far as interest rates were concerned and this cushioned us against the sad results of Britain's policy. In fact, it was advantageous for the Government to sell some of them and, even though they lost the interest rate in respect of the deposits, they will eventually find themselves better able to re-invest at higher interest rates, if they so wish, to preserve our overseas investments if that is the proper financial policy, which it would not be in order to discuss now.

The fact is that Britain contravened entirely and absolutely the Anglo-Irish Free Trade Area Agreement and did so for far longer than the statutory period of 18 months which is available under the agreement. If any sector of your industry, your employment or your people are being hurt, you have the right to invoke a clause and to reinstitute tariffs or quotas for a period of 18 months. Britain continued to do that for more than 18 months and that is a direct contravention of the agreement.

I also want to point out in relation to the 10 per cent reduction that the difference between the Anglo-Irish Free Trade Area Agreement and the EEC is that there is no court of justice in that agreement. The decision on the deposit scheme was taken unilaterally by Britain.

Mr. Clinton

Might is right.

Mr. Donegan

Britain did it, as Deputy Clinton has reminded me, on the basis that might is right. There was nothing we could do, short of perpetrating another economic war, the results of which would be far too serious to contemplate.

As a small nation we must consider how we should approach our accession to Europe. If one is to take the broad spectrum of industrial production in which we have reduced the tariffs on imported goods by 10 per cent and in respect of which there is a tariff book as thick as my wrist and which includes thousands of items, there must be certain items which cannot bear the 10 per cent without going to the wall. The Fine Gael Party are absolutely certain that we must prepare for Europe and for the freer trade conditions that are coming. It is absolutely necessary to impose disciplines on ourselves. Perhaps the Government were too involved in other matters which were serious for their own party and could not address themselves in detail to the economic problems, but that is no excuse. Surely over those thousands of items, there were items on which a tariff reduction of less than 10 per cent or no reduction should have been imposed. We could have invoked the section of the agreement under which that could be done for 18 months. Surely that would have been the right policy?

I refer in particular to the footwear industry and to the electrical goods industry. We are not certain if the electrical goods industry will be hit to a very serious extent, but we know it is one of the vulnerable ones. There should have been discussions with the Department about how those industries could be made viable and how inside the 18 months their jobs could be preserved. We are now at the top of the hill in relation to the fourth reduction of 10 per cent. The first 10 per cent reduction did not hit anybody. The second made a few people worry. The third was more serious. The fourth is getting very near the bone. An individual approach should have been adopted by the Department of Industry and Commerce.

I want to refer now to items of choice. Let us take the footwear industry and imagine a young lady going into a shop to buy a pair of shoes. She may be going to a dance or having an evening out. Ten pairs of shoes are produced to her and seven of them are continental or British on which the total tariff at the moment is 22½ per cent. She would buy by choice. People in this House who are nearer to the matter might insist on buying Irish. Anyway we do not need fashion shoes. We probably have big flat feet as it is. That lady would buy by choice and the likelihood is that she would buy a pair of foreign shoes because the range of Irish shoes available to her since this quota was removed on 1st July would be smaller than the range of shoes from abroad.

I remember Deputy Maurice Dockrell telling me about the situation in regard to wallpapers. Choice is very important. To give an example. In relation to this highly detailed 10 per cent reduction there should have been an individual approach. I understand that if you go to a wholesale builders' provider in Britain you may find in the wallpaper room 8,000 different types of wallpaper manufactured by 30, 40 or 50 firms. We have been happily carrying on here on the basis of one wallpaper factory producing perhaps 50 or 100 designs—I do not know. Certainly, the figure is nothing near 8,000. If wallpapers were to be bought on choice in this country there is no doubt there would be trouble. Therefore, this is also a sector where the individual approach should have been made.

There should have been some nursing of the ailing child, a realisation that there are sectors where individual attention is necessary, a removal of the global approach in regard to grants, a removal of the global disqualification, very often, in the case of grants and substitution of the approach that would ensure that we got the very best results.

My short term in the Council of Europe and some association in business with continentals have led me to believe that when we move from the Anglo-Irish Free Trade Area and become members of EEC we shall find that continentals are absolutely unscrupulous, that from France to Italy and right across the Iron Curtain they will take the pants off you if they can. This is the sort of business approach that has not existed in these islands where, if you are doing business successfully, it is likely to continue. Often, it is done on a great measure of trust. That is not so on the Continent. I warn the Minister and the Government they must approach Europe in this way. Surely there should have been an individual approach in regard to thousands of these items? Perhaps in the British environment you would be all right but not in the background to the EEC environment. While we may not be able to invoke any section of the Anglo-Irish Free Trade Agreement in regard to these items, statements should have been made by the Minister's predecessor and by himself in regard to these sectors.

There seems to be—it may be a political thing—great reluctance on the part of every Minister for Industry and Commerce to say: "Things are not so good in that sector." It might seem that to say that would lose votes but I would disagree with that. Probably there would be great condemnation for a Minister and a Department that would announce that it was necessary in certain sectors to have special tactics and arrangements. If one were to judge the British performance in regard to the deposit scheme solely on what was done, one might say that the British were as bad as the continentals, that they also deal on the basis that might is right to get away with as much as they can. I do not think this is so.

Nevertheless, in regard to this set of tariff reductions I am utterly convinced that there was a case over the line for an individual approach and for invoking the 18 months clause in the Anglo-Irish Free Trade Agreement whereby certain items might be exempted at this stage from the 10 per cent tariff reduction. When that had been done there was also a need, having given the child its medicine, to attend to the child's general health, to look at those sectors and see what injections of special grants could be given to ensure that those industries would preserve themselves and that every job here would be fully preserved. The preservation of these jobs in my view is probably far more important than the creation of new ones. If one takes the number of new jobs created each year and compares it with the number of jobs provided in manufacturing industry at the moment, a loss of 20 per cent in present jobs of long standing would set us back, not-withstanding all the millions we spent on grants and all the incentives we gave, decades rather than years.

Mr. Desmond

I want to point out very strongly that the Minister might have indicated rather brutally under this imposition of duties legislation that the tariffs are beginning to bite rather sharply. Admittedly, it is with the fifth reduction in 1971 that the real bite will come. That gives us merely 12 months. Even now, with the fourth reduction of 10 per cent there are many selected items on the list which will undoubtedly begin to bear increasingly the brunt of competition from imports. On that basis it is as well that the fore-bodings and concern expressed, and the points the Labour Party have made in respect of the Anglo-Irish Free Trade Agreement should get a further hearing on this occasion.

I want also to point out that the Government anticipated that when these successive 10 per cent reductions were being introduced there would be parallel reduction with simultaneous accession to the EEC. Even by the most conventional assessment it appears that we shall have gone to the sixth reduction—to put it that way—and it will be in two years time, after successive reductions, that Ireland will be entering the EEC and, therefore, the full effect of the Anglo-Irish Free Trade Agreement and simultaneous entry into the EEC itself will be felt only then. Certainly, the timing and the anticipation of the Government seem to be rather cockeyed in this case. I point out this because, after all, this was one of the fundamental criteria of the whole operation of acceptance by the Government of the Anglo-Irish Free Trade Agreement. It was an interim preparatory agreement prior to entering the EEC. It has begun to bite rather sharply even though, as yet, the birds have not come home to roost in respect of the EEC negotiations. It is important to point out to Irish industry the imbalance which now exists.

We are not speaking in any sense as economic Jeremiahs, or deliberately raising the white flag, or suffering from any undue inferiority in respect of our industrial and economic growth but we would point out that, with the reduction of tariffs this July and another reduction coming in July, 1971, the economic situation will be worsened.

I do not want to digress unduly but we must bear in mind the dislocation caused to industry by the bank strike and its effect on our manufacturing credibility throughout the world. There is also the substantial downturn which has occurred in the tourist industry in the first half of 1970. Then there is the regrettable, almost intractable, absence of an effective prices and incomes policy. I do not think it is unduly hysterical or lacking in objectivity to say that with a 10 per cent tariff reduction on top of all those difficulties, we are in an extremely difficult economic position.

Next week on the adjournment debate we shall be discussing the general political and economic competence of the Government. That is not an awe-inspiring prospect from our point of view but we shall send the Government off on their holidays in a reasonable frame of mind. However, it behoves the Government during the summer recess to put their collective Cabinet imaginations together—and admittedly, they are very limited now with the departure of certain Ministers, notably Deputy Haughey—and find a solution for the economic situation. I do not believe an emergency autumn Budget or anything like that would be adequate. However, with the sharp bite of the fourth tariff reduction together with the extremely dangerous inflationary tendency and the fact that our imminent entry into the EEC has fallen apart, the situation certainly merited more than a one-page comment from the Minister on the introduction of this Bill. Admittedly, after two full days in the Dáil there is not much inclination to discuss the matter in depth. Nevertheless, with these misgivings and, speaking with some hindsight, which is the privilege of the Opposition, I should like to hear the Minister's views on the total effect of the 10 per cent reduction in tariffs we face.

Mr. Clinton

I rise to support the line taken by Deputy Donegan in relation to this Bill. It is unwise to have an across-the-board tariff reduction when it is possible to avoid this and when we have industries that need nursing a little further and need whatever additional assistance we can give them for a further period.

Deputy Desmond has just said we are going through serious economic difficulties at the present time and that we should use every device at our disposal to assist people in industry and at least to keep in employment the people who are in employment and make sure there will be no further reduction. There are at present 70,000 people unemployed. In a serious situation of that kind we should take a very keen look at every move we can make lest any such move should have the effect of reducing employment still further.

Under this Order, No. 178, it has been possible—I do not know under what authority—to reclassify a certain commodity, a commodity which, under the Brussels nomenclature, is not now dutiable. It has been possible for us to take these trailers out and put them in under a different classification. I do not know where this authority is given to the Minister, but it is a good thing that it is there. If it can be done in the case of certain trailers, I see no reason why it cannot be extended somewhat further without breaching any existing agreement.

Like Deputy Donegan, I personally would not be over scrupulous in our approach to the Anglo-Irish Free Trade Area Agreement. I have discussed with some members of the British Parliament what I consider to be a number of breaches of the agreement of which the British side have been guilty since this agreement was entered into and they agree quite frankly that they have breached the agreement. As Deputy Donegan says, if it was breached it was because might was right and there was very little or nothing we could do about it.

We should protect industries that need this extended period of protection by being selective and by going through the large number of items of the various industries and saying: "We will not reduce in this case. We cannot because the industry would suffer and employment would be reduced" or: "This industry needs further nursing and while we can reduce by a small amount we certainly cannot reduce by the full 10 per cent." There is no question but that this would be accepted. It probably would be resisted but while they were fighting against it and while we were opposing them, all the time this industry would be getting the benefit of this period. It would not be advisable to adopt this procedure on a broad basis and without being selective, because our industry must be prepared for the competition it will meet in the circumstances of free trade. We must move as fast as possible towards that competitive position in industry, but we must do it carefully and selectively. There are industries and sectors of industry where, if we were to provide this shelter for as long as possible, we could do a certain amount of good, sufficient good to carry them through to a point where they would be able to stand up to the European competition we shall meet in the future. I have a feeling, which I think is shared by Ministers, that commitments into which we have already entered will be honoured and that we can make a strong case for honouring them if and when we get into the EEC.

I was surprised and disappointed to hear the Minister for Finance trying to make the case, when opposing an amendment of mine recently, that we were in a straitjacket, that we had now made our application and there was nothing further we could do, that we could be accused of all sorts of things. The British could not care less about what they are accused of and I would say the same about continental people I have met. I would not describe them as being unscrupulous but I would describe them as being hard-headed business people who realise that in industry and commerce the world over you have a hard fight and you make whatever case you can and do whatever you can possibly get away with for as long as you are allowed to get away with it.

If it is to the advantage of any sector of our economy to refuse to carry out this reduction at the present time, or for a further period, we should resist it. I am at least as anxious as any other Deputy to ensure that industry will succeed and that employment should arise from making things at home. Here we have a particular item, trailers and these, as far as I know, are made only by one firm which is tantamount to a monopoly. I understand that these are really good trailers which nobody could fault and I understand that this industry gives a lot of employment and we should be anxious to ensure that employment would continue to be provided. I understand also that they are making the maximum effort to build themselves up to the point at which they will be competitive even within the EEC. This industry needs to be supported but it is quite a dangerous thing to do if there is no opposition. I should like to hear the Minister tell the House that protecting this single industry will not impose on the people who buy these trailers, the farmers, a much bigger price for trailers than otherwise they would have to pay.

I would agree, that even if they are somewhat dearer, that because of the employment and because of the desirability of having an industry that can be built up still further, we should permit this and we should be anxious to do it. However, there is a danger which I should like the Minister to recognise. I should like him to assure the House that we are not protecting the industry to the point where we are putting a serious burden on the backs of people who in some cases are probably less well able to pay. Otherwise I agree with this protection. I have the greatest admiration for the industry and the manner in which it has been built up as well as for the product being turned out.

Having said that, I think we have taken the easy way out in this Bill. We have just carried out this tariff reduction across the board. The Minister could find himself in difficulties that if it were known he was going to do this he would have a clamour from every industry. However, he is in the happy position that he now has a fairly detailed report on every industry because such a survey was carried out over a number of years in order to find out what these industries would be up against in the circumstances of free trade. Having this information, the Minister should go through it with a fine comb and decide that a further 10 per cent tariff reduction in this case is going to deal a very severe blow to this industry, a blow from which it is unlikely to recover, and if it gets this extra bit of time and if it is desirable because it is giving good employment, then the Minister should take out that particular industry and be man enough to say: "We are going to protect you regardless of what the other industries will say, regardless of what the people will say, that this is picking out and favouring a certain industry." If he were to set up an independent board to look at the report they could pick out the weak spots and take them off the Minister's shoulders so that he could not be accused of being politically partial to one industry or to one sector.

I am sorry to say that I think this is taking the easy way. In taking the easy way and, perhaps, being too impetuous about getting this extra effort put in by industrialists to equip themselves to meet the competition which they will definitely meet in a very short time, we may be too impetuous to get to that point. It would be well worthwhile if we had set up this body to examine and select the industries in which we think this tariff reduction should not take place, certainly on the full 10 per cent or at a reduced rate.

Mr. Carter

I listened to Deputy Donegan and Deputy Clinton and Deputy Clinton seems to confuse the issue. I am a bit confused about what he is advocating. On the one hand he asked the Minister to be selective and when he is selective, or if he tries to be selective in order to protect some firm, the Deputy comes down on the other side and says: "Take care that you are not going to impose a burden on the backs of the community which the community is not able to bear." I heard all this talk before. I remember the time when we were told that a great number of our industries were a burden on the backs of the primary producer but I am not going to refer to that. I do not see how the Minister could set out here to justify selectivity.

Mr. Clinton

He has done it in this case.

Mr. Carter

He has.

Mr. Clinton

And good luck to him if he can justify it.

Mr. Carter

But the Deputy wants to set up a board to go into other cases. Deputy Donegan said that he was in favour of free trade and talked of harmonisation but he left out rationalisation. No more than any other Deputy I have no desire to see tariffs reduced at the expense of employment, but we either mean what we say or we do not. I believe there is no such argument as "I will" and "I will not" in this. For the last six or seven years the Government have been advocating adaptation, encouraging firms to adapt their current methods in order to propel us into Europe, if this comes about.

We still have a high tariff wall. Bear in mind, this is a preferential tariff. It does not apply all round. The Anglo-Irish Free Trade Area Agreement was mentioned. That agreement helped our industries. Those who slated it made no reference whatever to the increase in industrial exports since that agreement was negotiated. Admittedly we suffered a setback when Britain introduced levies against certain of our products. As I said earlier, trade is not a one way traffic. We cannot hope to face for Europe without taking some medicine of some kind. Several industries here were well protected from the start and if some of these are not now able to meet reasonable competition there is just nothing any government can do for them. The Government and the various agencies of the Government would be prepared to go a long way, but there is a limit. In a matter of this kind one cannot be too selective because, if one is, Deputy Clinton, Deputy Donegan, or some other Deputy, will accuse us of being selective. Most of our industries are small. Early on we set out to give them all the necessary advice so that the skills required would be there. If some did not heed that advice, then it is just too bad for them. One side of the issue is argued and there is no reference whatever to what is happening on the other side. That causes me to think that there is a certain amount of confusion. I do not see what the mythical board about which Deputy Clinton talked could do.

Mr. Clinton

There is a prices board.

Mr. Carter

It is only a myth. I think we have been reasonably successful and I cannot see all the hazards the Deputy visualises on the road to Europe. We live in changing times. There are elements which can hamper and hamstring. Some of these are very real at the moment. The only hope I have is that, faced with an element of competition, we will be able to purge ourselves of some of this inward thinking. I know more about the footwear industry than Deputy Donegan does; I am actively engaged in it.

Mr. Donegan

Half the footwear operatives in this country live in my constituency.

Mr. Carter

If there is any industry which should be reasonably equipped and reasonably competent to face competition it is the footwear industry.

There is one point on which I should like some information from the Minister. Recently I have noticed large imports of secondhand machines. Some of the earthmoving equipment is fairly obsolete. It is lying idle in yards throughout the country. The equipment is repainted and shellacked to look like new but, when one puts it to work, one discovers that it is anything but new.

Mr. Lalor

This has been an interesting discussion. Before we go any further it may be no harm to remind the House that Order No. 98, which attracted most attention——

Mr. Donegan

Order No. 180.

Mr. Lalor

Yes, 180. It provided for the fourth tariff reduction. It is the order of 1st July, 1969. The House has been talking specifically about next year when we will have the fifth order. We have already had the fifth order and the next one on 1st July, 1971, will be the sixth. In actual fact, therefore, we are 10 per cent further down without this catastrophe about which Deputies talked.

Deputy Carter has to some extent stolen the show from me in the comments he made. They were the kind of obvious comments that would automatically arise on Deputy Clinton's each way backing——

Mr. Clinton

Only each way because it is a monopoly. There is no competition. That is the only reason.

Mr. Lalor

I thought it rather fortuitous that Deputy Donegan should leave the House prior to Deputy Clinton referring specifically to an industry in Deputy Donegan's own constituency, Deputy Donegan having made the case for a sizeable industry in his constituency. It was entertaining to find Deputy Clinton having a bash at an existing industry in Deputy Donegan's constituency.

Mr. Donegan

If the Minister likes to take it that way he can. His hide will have more marks on it in the next six months.

Mr. Lalor

We had this picking out of this particular industry by Deputy Clinton. On the one hand, he criticised the other side to the agreement for their breach of the agreement and, on the other hand, he made a very strong case for our going ahead and breaching it.

Mr. Clinton

We should turn the other cheek, in other words? That is the Minister's view.

Mr. Lalor

As a representative of the party which supported this agreement, the Deputy suggests here tonight that we should breach this agreement at will.

Mr. Donegan

On a point of explanation, our party did not vote on the occasion. We did not support the agreement. The Minister was looking after something else then and he does not know.

Mr. Smith

Did you vote against it?

Mr. Clinton

This is a deliberate effort on the part of the Minister to misrepresent and to mislead the House.

Mr. Donegan

Play the honest line and we will let the Minister off.

Mr. Lalor

I am referring to the fact that Deputy Clinton is taking it each way. Deputy Donegan's saying you did not take sides on this issue is the same as taking it each way also.

Mr. Clinton

The Minister has tried to talk himself out of an awkward situation.

Mr. Lalor

Deputy Clinton spoke about unemployment. There is far less industrial unemployment here than ever before despite the allegations about the effect of the fourth or fifth round of cuts in duties that have taken place. I agree with Deputy Donegan when he says that a number of our industries need a certain amount of nursing, encouragement and protection at this stage. The agreement entered into provides in this year, the year that commenced on 1st July, 1970, that our Government may conduct a review as to where specified difficulties will exist. Two industries are threatened by reason of modification or elimination of import duties.

Mr. Donegan

I told the Minister that an hour ago.

Mr. Lalor

Check the records. The Deputy did not. I listened carefully to the Deputy. I did not hear him make such a reference. He was suggesting we should do this. I am saying provision was made for so doing. This is a particular exercise which my Department is actively engaged in at present in relation to seeing what can be done in regard to the minimum number of industries that now appear to be in some little way affected. Certainly, there is no reason at all why any impression should be created that there are a huge number of industries suffering from this. Deputy Donegan loses no opportunity—fair play to him—of referring to the footwear industry. He knows there was a postponement of the withdrawal of the termination of the quota over a two year period. This sort of quota restriction was terminated on 1st July of this year without any serious objection from the manufacturers. I am sure the Deputy is pretty fully aware of this. In actual fact——

Mr. Donegan

What about the 10 per cent of the tariff?

Mr. Lalor

I am in close contact, naturally, with the industry as a whole. There has been no outcry against what Deputy Clinton calls the across-the-board reduction of 10 per cent. Both Deputies on the far side of the House stressed the fact. In fairness to Deputy Donegan, it must be conceded that at all stages he stressed the necessity of industry here being prepared and endeavouring to prepare itself as fully as possible for our entry into the EEC. This was the purpose of this exercise by way of preparation for this. Certainly, it would be wrong were I to accept what Deputy Clinton says, namely, that we should pick out single industries for protection because of this desperate difficulty of appearing to give preference to one industry rather than another. Again, I do not want to refer to the one to which the Deputy himself referred but you cannot have this thing both ways. In that, we should endeavour to come to agreements and abide by agreements. I do not think that two wrongs at any time make a right and I certainly would not support their approach to the problem.

As I have said, the Anglo-Irish Free Trade Area Agreement does make provision for dealing with difficulties of particular industries. These provisions are being availed of.

Mr. Donegan

In what case have you availed of this provision?

Mr. Lalor

I say they are being availed of.

Mr. Donegan

In what case has there been any action by the Government in relation to the provision of the Anglo-Irish Free Trade Area Agreement in regard to an industry that is very hard pressed and employment is being affected?

Mr. Lalor

Dunlops.

Mr. Donegan

That is quite true— one; go on. It was debated in this House for months. In what other cases?

An Leas-Cheann Comhairle

The Minister should be permitted to conclude and then the Deputy may ask a question.

Mr. Lalor

The Deputy challenged me to name one.

Mr. Donegan

I challenged the Minister to name many—two, three, four, five, six, ten.

Mr. Lalor

The point is that the agreement was drawn up so comprehensively and so properly from our point of view that the necessity for making use of the provisions of protection has not arisen to any great extent, and as I have said, when the necessity arose in connection with a particular industry the provision was availed of.

Mr. Donegan

In one case.

Mr. Lalor

Yes and this is the only one where we were seriously affected.

Mr. Donegan

What about the other cases?

Mr. Lalor

What industries is the Deputy suggesting?

Mr. Donegan

Footwear and all the choice industries, the industries that demand a choice—household fixtures, electrical goods, and so on.

An Leas-Cheann Comhairle

The Minister must be allowed to conclude without interruption.

Mr. Lalor

I do not accept—and I have said this before—that the footwear industry is on its way out and is in a broken down state as Deputy Donegan says.

Mr. Donegan

I did not say that.

Mr. Lalor

Deputy Donegan has insisted that special provision should be made for the footwear industry.

Mr. Donegan

Yes.

Mr. Lalor

As I see it, special provision needs to be made for an industry if it has become so seriously affected that it is on its way out.

Mr. Donegan

Special provision can be made and must be made for an industry when it looks as if there is grave danger. There is grave danger of redundancy in the footwear industry. It is not, as the Minister says, on the way out.

Mr. Lalor

I have not said it is on the way out.

Mr. Donegan

The record will correct the Minister.

Mr. Lalor

I said Deputy Donegan alleged it is on the way out.

Mr. Donegan

I have not alleged that

Mr. Lalor

Then both of us are saying it is healthy, so

Mr. Donegan

No, I am saying it is in grave difficulties. It is not on the way out.

Mr. Lalor

I would point out that we already had an extension period in the retaining beyond two years of the quota for the footwear industry, and the manufacturers were fully in agreement with the withdrawal of the quota this year. This was the duty free importation quota, a quota which would allow a certain amount of shoes to be imported. Now there is a duty where there was not a duty before.

Mr. Donegan

I know all about it.

Mr. Lalor

This is why I suggested that Deputy Donegan could not possibly have it each way. On the one hand he was suggesting that we should endeavour to prepare for Europe and on the other that we should try to cushion and protect our industry, so that we would not be ready for Europe.

Mr. Donegan

We could do this very easily.

Mr. Lalor

I have a note about Deputy Donegan's reference to being worried about wallpaper but for fear that he might——

Mr. Donegan

The Minister should not start that or he will not get out of it.

Mr. Lalor

——threaten me with various other repercussions, I will not deal specifically with his suggestion that there are not sufficient shades of wallpaper. I will keep off that.

Mr. Donegan

I do not know what the Minister is talking about.

Mr. Lalor

Before I get the message through I think I had better leave it.

Mr. Clinton

Everything said from this side of the House is derogatory comment. That is the Minister's appraoch and it is deplorable.

An Leas-Cheann Comhairle

The Minister must be allowed to reply. We cannot have interruptions.

Mr. Lalor

I wrote down what I understood Deputy Clinton to say. He said that our efforts to mesh in the development and redevelopment of our industry for entry into the EEC had fallen apart.

Mr. Clinton

What does the Minister mean, "fallen apart"?

Mr. Lalor

Meshing in for entry had fallen apart.

Mr. Clinton

I did not use the word "meshing".

Mr. Desmond

I was meshing.

Mr. Lalor

I am sorry. It was Deputy Desmond who said it. He said that the meshing in of our development had fallen apart. This speaks for itself. It is not the case. The whole object of the reduction in the impact of the duties is to enable us to be ready to mesh in. I could not possibly accept the allegation made by Deputy Desmond. The whole object of the exercise—and a success is being made of it—is to become more and more prepared for entry into the EEC. Deputy Donegan said my Department were not making plans and were not giving enough advice to the various sectors of industry in relation to preparation.

Mr. Donegan

They keep their mouths shut.

Mr. Lalor

My predecessor set up a committee on industrial progress with a view to helping a number of those industries across the board.

Mr. Donegan

Was that not a most original thing to do, to set up a committee?

Mr. Colley

A very useful operation.

Mr. Donegan

I know a man who set up a committee to stop all other committees.

Mr. Colley

Did Deputy Donegan read the report?

Mr. Lalor

The Deputy did not seem to be aware of the fact that this committee had been set up and had done quite an amount of useful work. I have endeavoured to deal as adequately as possible with the points raised. I am sorry if I seem to have provoked some Deputies but I felt quite provoked sitting here listening to the comments made about the two orders.

Mr. Clinton

I asked the Minister what was the basis of the authority for transferring an item from one tariff heading to another. If this could be used in one case, could it not be used in a number of cases? I do not know. That is why I asked the question.

Mr. Lalor

It is accepted that goods reclassified under these headings should carry their existing rate of duty into the new heading. It was possible to do this and it was done.

Mr. Clinton

This does not carry the custom tariff into its new position. This is now dutiable but, if we accepted the Brussels nomenclature that this was no longer dutiable, it would be excluded. How does the Minister get the authority to select items of this kind and reclassify them for the purpose of evading continued duty or no duty?

Mr. Lalor

Arising from my study of the situation, I discovered that it was generally accepted that where goods are reclassified they should carry their existing rate of duty into the new tariff headings. There is provision for this under the Free Trade Area Agreement.

Mr. Clinton

It does not make sense at all.

Mr. Lalor

That is the position.

Question put and agreed to.

Agreed to take remaining Stages today.

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

An Leas-Cheann Comhairle

This is a certified Money Bill within the meaning of Article 22 of the Constitution.