Dáil Éireann debate -
Tuesday, 5 Dec 1972

Vol. 264 No. 5

Imposition of Duties (Confirmation of Orders) Bill, 1972: Committee and Final Stages.

Sections 1 and 2 agreed to.

SCHEDULE.

Question proposed: "That the Schedule be the Schedule to the Bill."

Mr. Donegan

I referred earlier to the first item in the Schedule, S.I. No. 191 of 1971, which has particular reference, as can be seen from the explanatory memorandum, to the non-reduction of tariffs on certain products. The Minister mentioned in his speech that the negotiations on this matter have not been concluded. The Minister has assured us that the negotiations began in April, 1971, and in reply to the debate the Minister said that the difficulty was to relate Article 19 to the particular problems in relation to the industries concerned. He said that in relation to the worsted and the woollen industries as discussed by Deputy O'Donovan, he could have taken temporary action which would have given us time to alert all the organs of State —Fóir Teoranta, Córas Tráchtála and the Industrial Development Authority —get in advisers and do everything we could for these industries. His problem was, he says, that he could not fit into the requirements of Article 19 (68) the particular position in those industries at that time.

I put it to him: why did he not invoke paragraph 69 (2) of the Article? Here is a description of paragraph 69 (2) of the Article which says that the Article enables advance action to be taken where an appreciable rise in unemployment is anticipated in a particular sector of industry or region due to the causes described in the preceding paragraph. I hold that the causes described in the preceding paragraph, the removal of duties or quantitative restrictions—the duties were being removed at the rate of 10 per cent per year and we were in our fifth successive year of their removal, the half-way stage—were operating. I submit the Government, even if unemployment had not become as bad as it is now in these two sensitive industries, could have fitted the anticipated situation referred to in paragraph 69 into the requirements of paragraph 68. They did not do it and when they opened discussions in April, 1971, with merely the months of April, May and June to discuss the matter, they were far too late and should have been discussing this a year earlier.

Dr. O'Donovan

Of course they were too late.

Mr. Donegan

For the whole of that year I had been demanding ad nauseam—everybody who has listened to industrial debates in this House knows that —that they should do it and that was probably one reason why eventually they did it in April. How does the Minister, when paragraph 69 enables him to take into account anticipated unemployment, explain his non-action under Article 19?

Minister for Industry and Commerce (Mr. Lalor)

We were in discussion with the British Government in connection with footwear.

Mr. Donegan

I am not being difficult. We are trying to give all Stages today, and we are doing so; but we have had the Minister's assurance about ten times in this debate that he was not in discussion and that he opened the discussion in April, 1971. How he can get away from that, I do not know. After saying about ten times: "I opened negotiations on something that had to do with the year of review with the end date, July 1st, 1971, in April, 1971", he then says: "We were having discussions." He cannot have it both ways.

Dr. O'Donovan

He must be talking of different discussions.

Mr. Lalor

The Deputy talks about my right to take action. Action under paragraph (2) of Article 19 requires British agreement.

Mr. Donegan

No.

Mr. Lalor

It does.

Mr. Donegan

Article 19 provides for unilateral action up to a period of 18 months and, after that, bilateral action. I could nearly quote it from memory. The Minister can look up all the files he likes. I should like the Minister to explain his non-action or the failure of the Government to act in relation to the amount of redundancy occurring in the footwear and clothing industries as a result of non-action. If the Government are guilty let them have the blame; if not, let them have the credit.

Mr. Lalor

I am saying positively the situation is that the redundancy created or which arose in the boot and shoe industry did not arise from non-action by the Minister for Industry and Commerce. We had action. We have two major industries that are sensitive in this regard, the boot and shoe and the woollen and worsted industries. The situation was that, arising from the CIO reports of ten years ago, this warning was given and the type of protective action that might have been taken was not the proper type of action that should be taken in regard to these industries to maintain further protection or cushion them against something inevitable. The exhortations since I became Minister, and previous to that by my predecessor, to both sections of industry were to endeavour to get themselves re-equipped and geared to deal with this type of challenge. There is no point in the Deputy saying that action by the Minister for Industry and Commerce in relation to the Anglo-Irish Free Trade Area Agreement for the prolongation of temporary protection would have any long-term effect in protecting this industry.

Mr. Donegan

I am fully aware that, as far back as 1962, the CIO reports referred to both industries. I shall not go over that again. We have thrashed that out and we have reached the stage where the Minister will not answer in regard to his non-action prior to April, 1970. Let those who heard the debate look up the references and then decide who is right, whether it is I or the Minister. I know who is right and anybody who takes the trouble to check will find out. Having said that, I now ask if there was not non-action, why is it that in reference to 14 woollen mills which are in trouble we have just had the Atkins report. Incidentally, Deputies have not been given it. I have not seen it; the trade unions have it. I agree it should not be made public. The people involved in the industry have got it but Deputies who are interested and might need it even for their own purposes have not got it, as I thought they might when I asked for it here. This report indicates that six of these industries will be in serious trouble. The report was the cause of considerable disagreement here a fortnight ago. What is the point of talking about sensitive industries referred to in the CIO's reports of 1962 and what is the point of talking of the Anglo-Irish Free Trade Area Agreement, the half-way stage of which was reached on July 1st, 1971, when we have an admission by the Minister that the first discussion on sensitive areas where action could be taken under one or two sections of the agreement—Article 1 (5) or Article 19—opened only in April, 1971? We have at the same time the second most sensitive one the subject of the Atkins report a fortnight ago? If that is not fiddling while Rome is burning I do not know what it is.

Dr. O'Donovan

I fear I shall have to continue on the subject of textiles, but first I want to point out that, when the Department did not start negotiations with the British until April, 1971, the British must have assumed that everything was rosy. Why should they concern themselves? They should not, and, of course, did not. Imagine anybody in an international agreement beginning negotiations the day before it was due to wind up——

Mr. Lalor

It was not due to wind up.

Dr. O'Donovan

The day before this particular phase ended, that had been quoted time and again to this party, the day when we can do a deal with the British at the half-way stage. The Government allowed the half-way stage to creep up on them because of the rumpus inside the party which entirely diverted them from their Governmental duties and which went on from May, 1970. Presumably, the Minister got a little breathing space in April, 1971, and his mind got around to the job.

Mr. Donegan

No, he was kicked into it.

Dr. O'Donovan

Sorry, The Deputy can claim a lot of credit for asking questions but with all respect to him, there were many questions asked from these benches also.

Mr. Donegan

I am saying we all did it.

Dr. O'Donovan

The Deputy did a fair amount of it but, of course, we all did it. We were all the time asking him about it. I asked a number of questions myself, not that it was primarily my duty to do it. We were assured that everything in the garden was rosy. I did ask the Minister a specific question; let me come back to it. Why did the Minister not attend to the woven textile fabrics when he was attending to the outerwear? It is the textile industry that is now in real trouble, not the clothing manufacturing industry. There are all kinds of pretended explanations here: "The nature of the textile industry is such that it is more subject to ups and downs than other industries." My answer to that is: "It is, like Hell." Do we not all use the same amount of clothes every year? Admittedly, with mini skirts being worn, the women use less cloth than they used to, but the rest of us use much the same amount of material, except that, perhaps, we have gone in for two-piece suits instead of three-pieces like I have on me at the moment. However, this is a serious matter Why did the Department of Industry and Commerce, when it was starting these discussions with the British, not take the whole conspectus of the woollen textile industry under observation? Why did it leave the major part of the woollen textile industry to get into the situation in which it is now? I am not talking about something that happened ten years ago. This was last year.

Furthermore, could I ask the Minister if it is the awful condition of the textile industry that is partly responsible for the delay in bringing this Bill forward? I am not saying it does not comply with the law; it is being passed before the end of the year 1972, but it is a lot later than it should be. Again, let me ask the Minister why did he not take the manufacture of woven woollen cloth into the discussions with the British, or if he did, did he not succeed in persuading them?

Mr. Lalor

Deputy Donegan can bang away at the footwear industry but I still insist it was part and parcel of the discussions with the British that were to commence during the course of the year ended 1st July, 1971. Quota restrictions on footwear of United Kingdom origin were to be terminated under the Anglo-Irish Free Trade Area Agreement on 1st July, 1968, and as a result of the problems in our footwear industry an agreement was come to with the British that these restrictions would be maintained for a further two years, up to 31st July, 1970. There was no doubt but that the Government were mindful of the situation in this regard. In fact, there was a difference of opinion even in the trade as to whether it was advantageous to try to hold the quota restrictions which originally should have gone in 1968 and which were maintained up to 1970. Special terms were also negotiated arising from those discussions that commenced in April, 1971.

In reply to Deputy O'Donovan, about this time last year I made an order, No. S.I. 355, in relation to the woollen and worsted industry. It was an order relating to outerwear and it was made bearing in mind its importance to the woollen and worsted industry. The House should realise that the textile and clothing industries between them employ about 40,000 people. The clothing sector has the greater employment content, but, on the other hand, the distribution of mills throughout the country gives the spinning and weaving sectors a particular social significance. However, any increased protection for yarns and fabrics could undermine the competitiveness of the clothing industry by increasing the cost of raw material and it was felt that the better course was to restrict the importation of the finished outerwear, thus giving an impetus to home clothing manufacture and increasing home demand for Irish manufactured yarns and fabrics. Therefore, in addition to helping the apparel industry to overcome any difficulties, the woollen and worsted industries would be assisted as well. If the order had not been made before 1st January, 1972, then it could not subsequently be made effective. It was done from the point of view of giving the assistance that Deputy O'Donovan refers to.

Dr. O'Donovan

The Minister is now being quite honest with us. He sacrificed the weaving industry, that is, the manufacture of Irish cloths, to the manufacture of clothing. I am not passing judgment on whether that was right or not but the cat is out of the bag at long last.

Mr. Lalor

Is the Deputy saying that putting a duty on imported outerwear could be described as sacrificing the woollen and worsted industries?

Dr. O'Donovan

The Minister did not listen to me. Why did he not get the same protection for cloth as he did for garments? The Minister knows the argument as well as I do. In the different aspects of the clothing industry there has always been competition. The men who manufacture clothes got first protection and they raised cain when the protection was extended to the people manufacturing cloth. In other words, at each stage the chap who was already well protected shouted to high heaven when the protection was extended to the fellow in front of him. The Minister cannot say to me that it is a help to the woollen and weaving industry to increase the tariff on cloths. To a minor extent, it is, but it is not a direct help. If, in fact, the woollen industry requires extra assistance or requires to be put back where it was previously, let me put it quite specifically, the Minister should have covered both aspects of this great employment-giving industry. There are 42,000 persons employed in the industry. Why did the Minister not protect the employment of the entire 42,000? That is my point. The Minister has not answered it.

Mr. Lalor

That is what I was doing.

Dr. O'Donovan

We have seen the results. Let me go back to what the Minister said originally, in addition to what I have read out already:

The nature of the textile industry is such that it is more subject to ups and downs than most other industries. Recessionary trends which had continued to create problems for the industry on a worldwide scale throughout 1970 showed little sign of recovery during the year 1971.

All I can say is that if there was this serious recession that we have heard so much about from the Government, our woollen industry must have been pretty good so that it is only now it is beginning to get into serious difficulties. What I am saying is that if there was this recession that the Minister admits in the year 1970 and in the year 1971, why when this order was made at the end of 1971, the end of a two year period, did he not protect the cloth industry as well as the clothing industry? It is as simple as that. That is all I am saying. Personally, I am convinced the British would have agreed without question. I may be wrong in that. I must say that I think the thing was very badly handled by the Minister.

Mr. Donegan

In relation to the question of the discussions in 1971 as to the date 1st July, 1971, the operative date, being the half way period under the Anglo-Irish Free Trade Area Agreement and the year of review, the Minister is on the hook, the barb is truly in and he cannot get off it. The debate has him well hooked. Perhaps it will help the Minister if I say that if he started these discussions in April, 1971, as he admitted in this House during the year, he did not succeed then in bringing about the position that although the date, July 1st, was passed, discussions could continue.

The explanatory memorandum tells us that the discussions did not finish and are still continuing.

Every person in the footwear industry who became redundant prior to 1st July, 1971 whose case was first discussed only in April, 1971 is worried because he does not know whether or not if the Minister had opened the discussions a year earlier he might not have become redundant. He does not know whether or not, in those circumstances, money would have been available for rationalisation, export promotion and so on, which would have saved his job. Neither I nor anybody else can get the Minister off that hook. I am quite ready to let the Bill through the House because anybody who reads the records will know what way the cat jumped.

Question put and agreed to.

Title agreed to.

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

Acting Chairman (Mr. T.J. Fitzpatrick

Cavan): This Bill is certified a Money Bill in accordance with Article 22 of the Constitution.