Dáil Éireann debate -
Wednesday, 16 May 1973

Vol. 265 No. 9

Financial Resolutions, 1973-74. - Financial Resolution No. 4: Spirits.

The Taoiseach

I move:

(1) That in this Resolution "the Act of 1971" means the Finance Act, 1971 (No. 23 of 1971).

(2) That the Finance Act, 1920, shall as on and from the 17th day of May, 1973, be amended by the substitution in Part I of the First Schedule thereto of the matter set out in Part I of the Schedule to this Resolution for the matter inserted in the said Part of the said First Schedule by section 28 of the Act of 1971 and section 3 (1) of the said Finance Act, 1920, shall have effect accordingly.

(3) That—

(a) this paragraph applies to spirits which at importation are shown to the satisfaction of the Revenue Commissioners to have been manufactured in, and consigned from, the United Kingdom and to have been manufactured therein from materials other than materials falling within Tariff Heading number 22.08 or Tariff Heading number 22.09 in the Schedule to the Imposition of Duties (No. 200) (Customs and Excise Duties and Form of Tariff) Order, 1972 (S.I. No. 220 of 1972).

(b) the duties of customs to which paragraph (2) of this Resolution relates shall, as on and from the 17th day of May, 1972 be charged, levied and paid on spirits to which this paragraph applies at the rates set out in Part II of the Schedule to this Resolution in lieu of the rates chargeable under paragraph (2) of this Resolution.

(c) the provisions of Section 8 of the Finance Act, 1919, shall not apply to the duties imposed by this paragraph.

(d) section 28 (3) of the Act of 1971 is hereby repealed as on and from the 17th day of May, 1973.

(e) in this paragraph the expression "the United Kingdom" means Great Britain, Northern Ireland, the Isle of Man and the Channel Islands.

(4) That the duty of excise imposed by section 3 (2) of the Finance Act, 1920, shall, as on and from the 17th day of May, 1973, be charged, levied and paid at the rate of £17.990 the gallon (computed at proof) in lieu of the rate chargeable by virtue of section 28 (4) of the Act of 1971.

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

(6) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

SCHEDULE.

SPIRITS (RATES OF ORDINARY CUSTOMS DUTY)

PART I.

Description of Spirits	Preferential Rates	Full Rates
(1)	(2)	(3)
	£	£
For every gallon of Perfumed Spirits entered in such manner as to indicate that the strength is not to be tested	36.236	36.436
For every gallon of liqueurs, cordials, mixtures and other preparations in bottle entered in such manner as to indicate that the strength is not to be tested	30.573	30.740
For every gallon computed at proof of spirits of any description not heretofore mentioned and mixtures and preparations containing spirits	22.647	22.772

PART II.

Description of Spirits	United Kingdom Rate
	£
For every gallon of Perfumed Spirits entered in such manner as to indicate that the strength is not to be tested	28.765
For every gallon of liqueurs, cordials, mixtures and other preparations in bottle entered in such manner as to indicate that the strength is not to be tested	24.270
For every gallon computed at proof of spirits of any description not heretofore mentioned and mixtures and preparations containing spirits	17.978

Mr. Colley

I want to ask the Taoiseach two questions on this resolution. Could he indicate the estimated yield from the increase in tax on spirits this year and in a full year, and secondly, could he indicate the reasons for and the meaning of Paragraph 5 in relation to immature spirits?

The Taoiseach

The estimated yield this year is £3,800,000 and that will be reduced, by the reduction in the Customs and Excise duties on spirits with effect from 1st September next to compensate for the increase in the rate of Value-added Tax, to £3,200,000.

The paragraph continues certain additional duties and surcharges on immature spirits, that is, spirits under three years old, whether imported or homemade, imposed by section 9 of the Finance Act of 1926. Under the Immature Spirits (Restriction) Acts 1947-1972, spirits may not normally be delivered for home consumption unless they are at least three years old. The age restriction does not apply to certain categories of spirits, for example, liqueurs, perfumes and the spirits used in the manufacture of such products. Retention of spirits in bond for three years involves the holder in certain expenses, cost of storage and loss of the product through evaporation. Earlier withdrawal from bond of the exempted categories minimises such expenses. The purpose of the surcharge which ranges from 0.125 in the £ to 0.2 per gallon is to equate the position of such spirits with that of spirits compulsorily retained in bond for the full three years.

Mr. Colley

I am grateful to the Taoiseach for that information but I want to say on this resolution that as in the case of one at least of the other resolutions which we have dealt with, this I think, speaking from recollection without recourse to the record, is the greatest single increase in our history ever imposed on spirits in a budget. The increase is three new pence per glass of whiskey which is 7.02 old pence. Since many of us are of an age when we still have to put prices into old pounds, shilling and pence if we want to compare what is happening in this budget with what happened in budgets of other years I am putting in that figure of 7.02 old pence.

This would in any circumstances be described as a savage increase in tax on spirits. I do not think there is any other more appropriate word for it. Even though it is so big in the right circumstances, and for sound social purposes, this party would consider supporting even such a tremendous imposition on spirits if the purposes for which the money was required were socially desirable. Of course they are not. They are required in order to raise the many millions of unnecessary taxation which the present Government propose to raise. I do not want to repeat what I said before but I am making the same point because it is as valid in relation to this as it is in relation to the other resolutions.

This Government propose to raise unnecessary taxation for the purpose of giving relief to people and to commercial firms who, viewed from any reasonable social point of view, are not in need of relief. It seems when you are faced with such a savage increase in taxation on spirits it can only be justified if the money is required for really socially desirable purposes. Nobody can argue that that is so in this budget, having regard to the amount of money required by the Minister for Finance in order to subsidise the rates on commercial properties, to give increased children's allowances to those who do not need them and other purposes which he has outlined here today. As I said, there are circumstances in which this party could and would support even such a savage imposition. Those circumstances do not exist today and this party will certainly not support this kind of taxation for the purposes I have outlined.

Mr. Tully

It appears that the Opposition have not learned how an Opposition should act. This is becoming more and more evident as time goes on. That is not surprising because when they were in Government they did not know how a Government should act either.

Mr. O'Kennedy

The Minister could teach us because he was in Opposition long enough.

Mr. Tully

The Deputy should not start talking. The position seems to be that the gentlemen across the way, having found that the budget was a good one, so good that they could not believe their ears, are trying to raise matters. Deputy Colley said a minute ago that he was repeating what he had said before. A typical example of how confused they are is Deputy Colley's reference to the granting of additional children's allowances to those who do not need them. He should know as a former Minister for Finance that there is a clawback arrangement which will take this money back from those who will not need it. His colleague, a short while ago, complained that it was being given and that there was no arrangement being made to take it back.

Mr. Colley

That is because the Minister for Finance could not explain it to the House.

Mr. Tully

The former Minister for Finance could not understand it. He could not believe his ears. That is what was wrong with him. We had a budget, which we are not bragging about bringing in, which could have been brought in any time in the last 16 years by Fianna Fáil if they had the guts to do it but they had not.

Mr. Colley

If the Minister had his way it could not have been done today because we would not be in the EEC today.

An Ceann Comhairle

The Minister, without interruption. When Deputy Colley was speaking he was accorded the best of order and respect.

Mr. Colley

I appreciate that.

An Ceann Comhairle

The same good order and decorum should apply when the Minister for Local Government is speaking.

Mr. Lalor

I hope we will get the same co-operation.

An Ceann Comhairle

Absolutely, without distinction.

Mr. Tully

The position is that we have a group of people in Opposition here this evening who are complaining because of a number of things which should have been done before now. They did not do those things so therefore they must be wrong. A moment ago Deputy Allen referred to what he called the rates swindle. The only rates swindle which was attempted was the one attempted by Fianna Fáil. They attempted a rates swindle and it did not buy the election for them.

Mr. C. Murphy

On a point of order, does this debate refer to Financial Resolution No. 4 or is it simply high spirits?

An Ceann Comhairle

We shall have to get back to the terms of Financial Resolution No. 4, which deals specifically with customs and excise duty on spirits.

Mr. Tully

The funny thing about it is that the high spirits of some people who have only come in for the first time can be understood.

(Interruptions.)

An Ceann Comhairle

The Minister, without interruption.

Mr. Tully

We cannot understand, in dealing with these Financial Resolutions, why Deputies who have been here many years and have been Ministers—one of them a former Minister for Finance—do not understand what resolution we are discussing. We are now discussing Financial Resolution No. 4 and if anybody tries to tell me that it is better not to put the extra duty on spirits and to leave the old age pensioners, the sick and unemployed with the miserly allowances they were getting from Fianna Fáil then he does not know what is happening in this country.

Mr. O'Kennedy

I suppose one could argue at some length as to who has the greatest concern for a particular section of people although it is a little touching to hear the Labour Party take so much credit for the increased social welfare benefits when they engaged in such a determined campaign to ensure that this money would not be available.

An Ceann Comhairle

This is the resolution dealing with excise duty on spirits.

Mr. O'Kennedy

This relates to overall taxation and the moneys being applied to widows, pensioners and those in need. It is very touching to hear the Labour Party refer to the great increases which are given, which they fought against so determinedly not so long ago.

Mr. Tully

The Deputy will now vote against them.

Mr. O'Kennedy

A figure of £30 million has been mentioned today. Now the Minister for Local Government wants to lecture us on concern for the old and the sick.

In regard to tourism, with which we are all concerned having regard to the difficulty that industry is experiencing at present, one of the points of the Government's programme was that they would carry out a new dynamic programme for tourism to enable the industry to overcome its present difficulties and to get back on the road of progress. I suggest, from the experience we all have of Irish holidaymakers going abroad to enjoy the attraction of cheap food and drink and also the barrier this creates for people coming here, that this particular measure by one stroke has done as much damage to our tourism as many of the problems that are beyond our control.

Mr. L'Estrange

Or as the arms trial.

Mr. O'Kennedy

I do not suggest, and I hope nobody will so interpret me, that the function of a budget is to provide cheap drink for tourists: I am not saying that. I appreciate that we are particularly concerned with the alleviation of hardship among the social welfare classes but all of us who have travelled abroad on Parliamentary delegations or otherwise have, over a considerable time, been concerned by the fact that cheap drink in particular in Europe is becoming a magnet for Irish people. This budget will ensure that magnet will become so much stronger. It will also ensure that those who might otherwise have considered visiting our shores, particularly from England, where they are very much aware of the price of beer and liquor, will have second thoughts. The Government may have cause to rue the effect this measure will have on tourism and no doubt the Minister for Transport and Power, with responsibility in this area, will have much to tell us in the future about what the Government are doing. I hope that, even in some little way, they will alleviate the damage they are doing by this one resolution this evening.

An Ceann Comhairle

I should like to advise the House that it is necessary that these Financial Resolutions, of which there are still five or six left, be disposed of tonight. Members will appreciate the importance of that.

Dr. O'Connell

I was surprised to hear Deputy Colley refer to this as a savage increase in tax on spirits. I do not think anybody would today begrudge an extra amount for luxuries such as spirits in the interests of improving conditions of the unemployed, the disabled and the old age pensioners. The problem of alcoholism is a very big one and I do not think it is wrong to tax spirits a little more. I am delighted that we are hearing something from the Opposition because I note that their present Front Bench have not very much to say. The best attempt is being made from the back benches.

Mr. G. Fitzgerald

It would appear from what Government speakers have said that the only people who drink are those who can afford it and that it is a luxury. I think also of the many old people such as pensioners who also like the small quantity of spirits that they can afford from time to time. Surely this should be a consideration also. I am particularly surprised by the previous speaker talking about luxuries, a man who has stood by these people for so long in the past. All the increases affect all sections of the community. The aggression we have seen from Government benches reinforces the feeling that this budget, which is an anti-climax to all of us, is as big a disappointment to some of them as it is to us.

An Ceann Comhairle

We must confine our remarks to the resolution under discussion.

Mr. G. Fitzgerald

I agree but I must also draw your attention to the fact that the previous speakers spoke about the best contributions coming from the back benches. That was not relevant to what we are discussing either. That is all I have to say.

Mr. C. Murphy

Do I take it from what Deputy Dr. O'Connell said that the present increase in duty on spirits will cause a drop in the incidence of alcoholism. I was not very clear——

An Ceann Comhairle

We cannot have a debate between Deputy Dr. O'Connell and Deputy Murphy.

Mr. Lalor

I would like to address a question to the Taoiseach as I think this has a certain significance. This 3p increase on the glass of spirits is equivalent to 7.2d which would have been an unheard of increase in a budget two or three years ago. The magnitude of the increase makes it appear to be designed by the Minister for Health to tackle the problem of alcoholism. Apart altogether from the yield of £3.8 million, which the new tax is expected to produce this year, is the projection that it may produce a lesser amount in future years arising from this suggestion which has come from the back benches? I noticed that the Minister for Local Government went up to Deputy O'Connell to prompt him and encourage him to make this contribution.

Mr. Tully

On a point of order, I went up to Deputy O'Connell and said: "We want to get these resolutions through tonight——

(Interruptions.)

An Ceann Comhairle

Deputy Lalor on Resolution No. 4.

Mr. Lalor

In view of the fact that Deputy O'Connell did mention the imposition of 3p a glass on spirits I was assuming that he was Government-inspired, arising out of what I saw myself. I accept what the Minister for Local Government has said and, as usual, Deputy O'Connell did not obey instructions.

Mr. Tully

There were none.

Mr. Lalor

I still think it would be useful if the Taoiseach would indicate if it is the Government's intention in impossing this colossal increase on spirits, even when a great many people who take spirits are taking them as medicine, despite what Deputy O'Connell says——

Dr. O'Connell

I do not prescribe it.

(Interruptions)

Mr. Lalor

There is also the question of the effect of this on tourism when spirits will be priced out of the tourist trade market entirely.

Mr. Brennan

I should like to know what amount of this tax is in respect of social welfare. We were told by the Minister for Local Government that we are using this imposition of almost 7½d on spirits to finance social welfare. The Government had almost £30 million handed to them for social welfare this year and did not need to impose anything on spirits. We did almost as well last year when we had no EEC money without imposing a penny tax.

I should like also to know what change has taken place in the social conscience since the Coalition came into power on the strength of abolishing the duty we had imposed on what they called the poor man's pint in order to subsidise foodstuffs in 1948. Immediately the Coalition came in they reduced it in order to get votes.

Mr. Tully

Fianna Fáil took it away in 1952.

Mr. Brennan

There is a good deal of nonsense but the Government parties will not get away with it. I should like the Taoiseach to spell out to us the price of popular brands in the case of brandy, whiskey, gin and rum per glass as from tonight.

The Taoiseach

I have not got a list of those.

Mr. R.P. Burke

Would the Taoiseach tell us how much of the 6.75 value-added tax which is going on top of the 7.5 new pence is going on?

The Taoiseach

None of it. If the Deputy would listen. I explained that earlier and it is hardly necessary to explain it again. Is it not better to tax whiskey in order to give an increase to old age pensioners?

Deputies

Rubbish!

Mr. Brennan

We will not accept that.

The Taoiseach

I sympathise with the view of Deputy O'Kennedy. Unquestionably any increase for anyone is not palatable, but I have to make a choice. It is better to increase the allowances of the worse off sections of the community. Deputy Fitzgerald said this would be a substantial increase. They are, in this Budget, getting the biggest increase ever. They will have more money in their pockets with which to buy and I think that is a better way of doing it.

Mr. Cluskey

It is £38 million compared with Fianna Fáil's £8 million.

Mr. T.J. Fitzpatrick

(Dublin Central): It is only £1.

Mr. Brennan

Is it not a fact that the increase in social welfare need not have imposed taxation by as much as one penny?

Mr. O'Donnell

Wrong.

Mr. Cluskey

If we kept it at the level Fianna Fáil did, it would not.

Mr. Moore

With regard to the old age pensioners——

Mr. Tully

They are doing quite well in this budget. If the Deputies opposite were over here they would not do so well.

Mr. Moore

There has been some over-simplification with regard to what happens to the money collected in this extra taxation. Could the Taoiseach give us a breakdown of the figures showing how much will go to social welfare and how much to the distillers and brewers?

The Taoiseach

The short answer is that the whole lot is tax.

Mr. Moore

I know that, but we want to ensure that the Government will spend the money properly. There is no poor distiller. I am asking the Taoiseach for a breakdown of the figures. How much will go to social welfare and how much to relieving the distillers and brewers of their rates in regard to health charges?

The Taoiseach

None. It is all tax for distribution on social welfare.

Mr. Coughlan

What is the Taoiseach going to do with the £1 million he saved on the executive jet?

Mr. Lemass

Have the usual precautions been taken to prevent spirits being removed from bonded warehouses?

The Taoiseach

The usual precautions have been taken, the precautions that have been taken since the State was founded.

Mr. Lemass

What quantity of alcoholic beverages have been taken out of bonded warehouses since the change of Government? I know a lot of people stocked up last week.

Mr. Cluskey

Has the Deputy a particular person in mind?

Mr. Lemass

I have.

Mr. Cluskey

I have, too, and he is not sitting on this side of the House.

Mr. Lemass

On your side.

Mr. Tully

That is quite wrong and nobody should make a statement like that unless he can prove it. Name the person. Do not be so cowardly.

Question put.

The Committee divided: Tá, 64; Níl, 61.

Tá

• Barry, Peter.
• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Belton, Paddy.
• Bermingham, Joseph.
• Burke, Dick.
• Burke, Joan T.
• Burke, Liam.
• Byrne, Hugh.
• Clinton, Mark A.
• Cluskey, Frank.
• Coogan, Fintan.
• Cooney, Patrick M.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Coughlan, Stephen.
• Creed, Donal.
• Crotty, Kieran.
• Cruise-O'Brien, Conor.
• Desmond, Barry.
• Desmond, Eileen.
• McMahon, Larry.
• Malone, Patrick.
• Murphy, Michael P.
• O'Brien, Fergus.
• O'Connell, John.
• O'Donnell, Tom.
• O'Leary, Michael.
• O'Sullivan, John L.
• Pattison, Séamus.
• Dockrell, Maurice.
• Donegan, Patrick S.
• Donnellan, John.
• Dunne, Thomas.
• Enright, Thomas.
• Esmonde, John G.
• Finn, Martin.
• FitzGerald, Garret.
• Fitzpatrick, Tom (Cavan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Griffin, Brendan.
• Harte, Patrick D.
• Hegarty, Patrick.
• Hogan O'Higgins, Brigid.
• Jones, Denis F.
• Kavanagh, Liam.
• Keating, Justin.
• Kelly, John.
• Kenny, Henry.
• Kyne, Thomas A.
• L'Estrange, Gerald.
• McDonald, Charles B.
• Reynolds, Patrick J.
• Ryan, John J.
• Spring, Dan.
• Staunton, Myles.
• Taylor, Frank.
• Thornley, David.
• Timmins, Godfrey.
• Tully, James.
• White, James.

Níl

• Ahern, Liam.
• Allen, Lorcan.
• Andrews, David.
• Barrett, Sylvester.
• Brady, Philip A.
• Brennan, Joseph.
• Breslin, Cormac.
• Briscoe, Ben.
• Browne, Seán.
• Brugha, Ruairí.
• Burke, Raphael P.
• Callanan, John.
• Calleary, Seán.
• Carter, Frank.
• Colley, George.
• Connolly, Gerard.
• Crinion, Brendan.
• Cronin, Jerry.
• Crowley, Flor.
• Cunningham, Liam.
• Daly, Brendan.
• de Valera, Vivion.
• Dowling, Joe.
• Fahey, Jackie.
• Farrell, Joseph.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin Central).
• Flanagan, Seán.
• French, Seán.
• Gallagher, Denis.
• Geoghegan, John.
• Gibbons, Hugh.
• Gibbons, James.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Herbert, Michael.
• Kenneally, William.
• Kitt, Michael F.
• Lalor, Patrick J.
• Lemass, Noel T.
• Loughnane, William.
• Lynch, Celia.
• Lynch, Jack.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Meaney, Tom.
• Molloy, Robert.
• Moore, Seán.
• Murphy, Ciarán.
• Nolan, Thomas.
• Noonan, Michael.
• O'Connor, Timothy.
• O'Kennedy, Michael.
• O'Malley, Desmond.
• Power, Patrick.
• Timmons, Eugene.
• Tunney, Jim.
• Walsh, Seán.
• Wilson, John P.
• Wyse, Pearse.

Tellers: Tá, Deputies Kelly and B. Desmond; Níl, Deputies Andrews and Browne.

Question declared carried.

An Ceann Comhairle

May I advise the House at this juncture that I understand that it is not only desirable but very necessary, as the House will appreciate, that the Financial Resolutions before us be passed tonight as they involve taxation imposed today? Members will appreciate that they will get an opportunity of debating the budget in great depth on the General Resolution. There are as yet some six more Financial Resolutions to be passed tonight before we come to the General Resolution, on which there can be a debate on the budget proper. So I would ask the indulgence of the House. I understand it is in accordance with procedure and tradition that Financial Resolutions of this kind are passed on the same day as taxation is imposed. I may advise the House of this important aspect of the matter and crave their indulgence for the passage of these essential Financial Resolutions on the understanding that we shall have a full debate on the pros and cons of the budgetary proposals on the General Resolution.

Mr. J. Lynch

We on this side of the House are mindful of that position and know exactly what the implications are. We have no intention whatever of carrying this debate over. The day is not yet finished. In the meantime we propose to discuss the remaining resolutions within the limit of the tradition.

An Ceann Comhairle

Thank you, Deputy Lynch.