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Seanad Éireann debate -
Wednesday, 19 Feb 1930

Vol. 13 No. 10

Finance (New Customs Duties) Bill, 1929 (Certified Money Bill)—Second Stage.

Question proposed: That this Bill be now read a second time.


Senator Johnson is anxious to have some explanation of this Bill.

I do not know what explanation the Senator requires. This is a Bill imposing a duty on down quilts. It gives effect to the recommendations of the Tariff Commission. The matter is more fully dealt with in the report of the Tariff Commission than I could deal with it. Unless Senators wish to raise some particular points I do not know that I need take up the time of the House in going over the matter now.

My object in moving that the consideration of this Bill be postponed was not primarily that I wanted an explanation from the Minister, but that I thought it necessary that when a Bill, particularly a Bill imposing a tariff, was before the House, somebody with a responsible position in the Ministry should be present to deal with any questions that might arise on the proposal. I am not going to oppose this Bill in any way, but I would like to draw the attention of the House to the fact that this is somewhat peculiar. It is a tariff on down quilts, which obviously is not a very important matter except to those hundred or so people who are obtaining their living by working in that industry. The business is one conducted by a single firm. There is no expectation of any possible opposition, and it is provided in the Bill that the tariff shall continue for five years. I am not sure whether in proposing any previous tariffs there was a specific time limit in the Bills dealing with them, though on more than one occasion it has been intimated in the report of the Tariff Commission that a tariff might be only temporary, that is to say, for a reasonable period to enable the industry to become established. I draw attention to the fact that the Tariff Commission, in its report, states:—

We do not anticipate that there will be any increase in the prices of the down quilts manufactured under a tariff, and we have not thought it necessary to obtain from the applicants any formal guarantee in this respect. Reference to the applicant's price lists will in future help to show whether distributors in the Saorstát are being asked to pay higher prices than those prevailing in Great Britain. If, in accordance with our recommendation, the tariff is imposed only for five years, the action to be taken at the end of that period will no doubt depend to some extent on the policy followed by the applicants in the interval in regard to prices.

What I want to suggest is that if we are putting in the Bill a stated period we are practically binding, statutorily, no matter what may happen in the meantime, that the tariff shall continue for five years. In view of the fact that this is a single firm without opposition, or likely to have opposition in the Free State, it seems to me that there ought to be some power left with the Ministry to revoke the tariff if the promise of no extravagant charges under the aegis of the tariff by this monopoly be not fulfilled. I think that if such extravagances were perpetrated, the Minister should have the power to revoke the tariff within that period of five years. One of the factors that prevailed in most of these cases has been that there has been a certain amount of competition, of numerous firms engaged in industries. The outstanding exception where there was a promise given that there would be no advance in prices during the continuation of the period of the tariff was in the case of margarine. In that case there was no time limit.

It occurs to me that this is a rather peculiar case, probably justifying peculiar action of preventing inordinate charges upon the consumer under cover of this promise. I do not want to see the cause of tariff protection spoiled by giving opportunities to producers in these circumstances of taking the fullest possible advantage of their monopoly during the period of five years in anticipation that, at the end of the five years, they can go out of business and continue their trade in England. In this case it is clear that the whole object of the tariff is to retain the industry within the country in the interest of the work-people in the industry. I can see that at once. I think that is the whole object and, possibly, the only value of the tariff; but if under cover of a monopoly, plus the tariff, manufacturers were to take undue advantage of their position to overcharge for their goods, then some safeguard should be afforded, and some authority should be in a position to revoke the tariff without necessarily breaking the bond which, I think, is contained in the Bill. I make that suggestion to the Minister and would like to know what he thinks of it.

I know very little of this particular tariff, and practically nothing of the particular industry. I know from my association with other businesses which deal with down quilts that it is not a fact, as Senator Johnson says, that although no other firm makes down quilts in the Free State there is an absence of competition. The firm that has the monopoly had previously established a factory in Cork which gave a considerable amount of employment and it also has a factory in London and one in Manchester. The original proprietors have left this country and are carrying on I have no doubt that their factories in London and Manchester have a good connection there. I think this factory in Cork has been sold to one of the employees. The tariff will give him some legitimate protection in the Free State market. I think there is very little market across Channel for him.

I have no intention of opposing this measure, which is a very small one. It does not even extend to all down quilts but only to down quilts which are covered with silk. Perhaps a measure of this description would be a proper measure in which to remind the Minister of certain principles which ought to govern the imposition of tariffs. I agree with Senator Johnson that this is a small measure, though it should not be made the means of enabling people to charge extravagant prices. I think the Minister might well consider whether when he imposes a tariff for the protection of industry he should not at the same time take power to secure that the prices under the tariff should not be extravagant, or that the profits should should not be excessive. As I said, it is a very small measure. I have been almost tempted to say that it is a very trifling measure, in view of the problem which the Minister has to solve. It is quite possible in the existing conditions of this country and in the existing state of taxation to levy a tariff on manufactured goods to the extent of £3,000,000 or £4,000,000 without in any way increasing the cost of living to the ordinary man. That could be done by a proper adjustment of the customs and excise duties in the Free State. I do not see that the Minister is facing the problem as it ought to be faced.


I do not think we can have a tariff debate on such a small subject as a duty on down quilts.

I was thinking that perhaps this would be the most convenient occasion for a debate on the matter.


Not for a debate on tariffs.

I support the Bill because it goes a little way, one halting step, in the direction in which I think the Minister ought to go in the protection of local industries.

The point raised by Senator Johnson is one of considerable importance and, I think, of great difficulty. The principal reason I rise is that I do not agree that the imposition of any tariff is in itself an undertaking that it shall be continued, but I do hold very strongly that if you are going to put on protective tariffs you must make up your mind to continue them for a reasonable period, as otherwise they would fail in their effect. If new machinery or additional capital is going to be put in under a tariff there has to be a reasonable understanding that the tariff will get a fair trial. I was not quite clear whether Senator Johnson proposed that the Minister should have the power without the direct sanction of the Oireachtas to end a duty if he was not satisfied with the prices. I think that was what the Senator suggested. That, to my mind, would be a most objectionable procedure, and—I will not say would lead to abuse—would make the life of the Minister for Finance considerably worse even than it is at the moment. I think it would be a most unwise provision. In this particular case I do not think there is any particular danger of prices soaring beyond what I think is inevitable in any protected article. Where there is protection you almost inevitably get an increase in price. If you did not the advantage would be very little, or possibly none, to the manufacturers concerned. In this case the duty is on down quilts which have silk or artificial silk covers. If the price rises abnormally people will stop buying them and will buy cotton covers instead. I am perfectly certain that if the prices rises absurdly high, which I think it will not, the public will promptly remedy that by buying a cheaper article which can be imported without a duty.

This Bill is not very important from the point of view of the number of people employed. I understand there are about 100 people—mostly poorly paid workers—and this Bill is brought in to protect that industry. Does the Minister believe that this is going to have any real effect on the progress or otherwise of the industry, or is he merely following out the policy of adopting the recommendation of the Tariff Commission? If the tariffs are a success, I wonder has he any explanation of the fact that during 1929 nearly 5,000,000 pairs of boots and shoes were imported into the Saorstát, or about five pairs of boots and shoes for every three people, men, women, and children? That means an increase of 200,000 pairs of boots and shoes as compared with 1928. We have also the extraordinary fact that, notwithstanding the tariff on woollens, there were 830,000 yards more of woollen material imported in 1929 than in 1928, which was before the imposition of the tariff. Can the Minister give any explanation of that, or is he in possession of any information showing the extent of the increased output of Irish manufactures in the protected industries; for instance, the increased output, if any, in the boot and shoe industry and in the woollen industry? I admit the woollen industry has only been recently protected and cannot be expected to show much of an increase, but that is not true of the boot and shoe industry. What is true of the boot and shoe industry will also be true of the little industry with which the Bill before the House is concerned. I think it is time, in view of these amazing developments, for the Government to consider the whole policy in regard to tariffs, whether they are effective at all, or whether in order to make them effective they should not be to such extent as to make almost prohibitive the importation of the article the Minister now seeks to protect in the manner he does in this particular Bill.

Senator O'Farrell went on the lines of raising a debate on tariff policy such as you, Cathaoirleach, had ruled out.


I do not think so. He has given some reasons why the Bill would be useless and gave instances as regards tariffs to show that.

I think it would be well if the Minister would show us that this is a totally different Bill to an ordinary tariff Bill, and that the reason for this motion is absolutely different to the reasons for an application of tariffs for the other industries to which the Senator has referred. It really arises out of the duty on silk in Great Britain. The whole trouble is that the British trade of this firm is ended and they cannot compete on that side, and to keep the thing alive the Free State market is to be kept open to them. That does not apply to boots, shoes or anything else. I think if the Minister would give the reason why he wants this particular Bill there would be an end to the discussion upon it.

If there was any danger that this little Bill might go through without discussion Senator Johnson might plume himself upon having prevented that happening. Some of the points raised by Senator Johnson have been dealt with by Senator Douglas. I do not regard the State as being pledged by the enactment of this Bill to continue the tariff for five years under all circumstances. I think in respect of this particular industry we are less pledged to the continuance of the tariff than perhaps in other cases. This tariff is not going to lead people to instal new plant or to invest money in the industry to any considerable extent, which would be useless if the tariff were suddenly taken off.

Unless grave cause were given it would be unjust for the Oireachtas to repeal the tariff, but certainly the Oireachtas would be justified in removing the protection given to this particular firm if the firm was found to be charging excessive profits. I do not think it would be possible for them to charge excessive profits for, as has been pointed out, it is only the dear end of the trade that is protected, and the protection is only for a period of five years. The case in which a promise was given not to raise the price beyond the British level was obtained from the manufacturers was different to this. First, in the case of the margarine tariff there was not a time limit; and, secondly, it is the cheap end of the trade if you take margarine and butter as one trade.

If the margarine prices were put up some of those who consume margarine would not have been able to turn to a cheaper article. In the case of down quilts, if the prices were put excessively people who could least afford the higher prices might turn to the cheaper substitutes, and cover the quilts with material other than silk, so that I do not think there is any real danger of abuse, and if there was the Oireachtas would be perfectly free to remove the tariff without feeling that there was any breach of an implied pledge, or any injustice being done to anybody who might have been affected by it.

I think Senator Jameson answered the point raised by Senator O'Farrell. It is not, I think, necessary in this Bill to discuss the effect of tariffs on particular industries. I cannot give figures as to the increased output in any industry, but figures have been given from time to time as to increased employment. If we find that 10,000 or 12,000 extra people are employed in protected industries we must assume there is an increased output, although steps have not been taken to measure precisely that increase. This is a tariff to compensate an industry for a market that has been lost by the action of an outside authority, and by compensating it for that market to enable it to continue in existence, so that it is, as Senator Jameson has pointed out, on a different footing to other tariffs, though it arises on a report of the Tariff Commission much in the same way as other tariffs. As to the secret of obtaining an increase of £3,000,000 or £4,000,000 in revenue without imposing any burden on the taxpayers, I would advise Senator Comyn to patent that.

On a point of explanation, I did not say that. I said that by re-arrangement of the Customs and Excise duties the Minister could have a tariff on imported goods, and he could remit the duties on tobacco, for instance, and on other commodities.

Question put and agreed to.
Committee Stage ordered for Wednesday, 26th February.