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Seanad Éireann debate -
Thursday, 20 Dec 1934

Vol. 19 No. 10

Imposition of Duties (Confirmation of Orders) (No. 2) Bill, 1934—Second Stage.

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

As the House is aware, Orders made under the Emergency Imposition of Duties Act, 1932, unless confirmed within eight months from the date of the making thereof by an Act of the Oireachtas, lapse. The purpose of the Bill is to confirm a number of Orders which were made under the Act, the validity of which, in the normal course, would lapse by the 28th February next. In addition to these Orders, the opportunity has also been taken in this Bill to confirm a number of other Emergency Orders, the validity of which, unless confirmed, would expire upon dates which would not make it opportune to bring in a separate confirming Bill or to confirm them in the principal Finance Act of the year. The Orders covered by the Bill are set out in the Schedule and I do not know whether it is necessary for me to do more than enumerate the articles and commodities to which the various Orders apply.

Orders Nos. 32 to 41 inclusive relate to boot and other laces, elastic, buttons, tape and tape holders, electric wires and cables, vegetable oils and fats, safety razor blades, agricultural forks, automatic machines and statuettes. Orders Nos. 42 and 43 are designed to prevent abuses which grew up in connection with certain agricultural and industrial products whereby commodities on which export bounties were paid had some of their parts cut off after export, the articles being subsequently reimported free of duty into the Saorstát. Under this procedure a position could quite easily have grown up whereby a bounty would have been paid on articles exported, such articles being afterwards reimported free of duty and sold here at the ordinary price, the manufacturer or purveyor in either case getting the export bounty. The practice did not develop to any extent, but one or two instances were noted and Orders Nos. 42 and 43 have been made to stop the practice. Orders Nos. 44 to 50 cover tanks for domestic purposes, cisterns, drums, yarns, partly of wool or worsted, rope, cord, twine, and dead rabbits.

Order No. 51 relates to the emergency duties imposed upon sugar on the 12th October last. With reference to that Order, it might be desirable that I should say something in regard to the sugar duty. On the Second Stage of the Sugar Manufacture Bill in July last, in discussing the protection which would have to be afforded to the new beet sugar company, I emphasised that, as the company would be in a position to supply the major portion of the country's requirements, it would be essential, in estimating the measure of protection which might be necessary in order to maintain the new industry, to have regard to the fact that sugar constitutes an important source of revenue. I indicated then that an Excise duty on home-manufactured beet sugar would have to be imposed and the Customs duty on imported sugar increased so as to maintain both the protection which the home-manufactured article required and the revenue which was essential to the Exchequer.

In my forecast of the additional duties which would have to be imposed to meet the requirements of the Exchequer, I indicated that it would possibly be necessary to increase the price of sugar by ½d. or ¾d. per lb. In order to counter the dumping of foreign sugar, the Executive Council, by Order, under the Emergency (Imposition of Duties) Act, imposed an additional duty of 4/- per cwt. on imported sugar, bringing the Customs duty up to 16/4 per cwt. A subsequent examination of the position before the opening of the new factories disclosed the fact that a protective tariff of at least 16/4 per cwt. would be required in this year in order to enable the new industry to establish itself. Every effort was made to reduce this figure, but, owing to the fact that the new factories will not operate to their highest efficiency during their first seasons, protection to the amount I have indicated was unavoidable. Furthermore, in order to enable the new factories to dispose of all their products between now and the opening of the next campaign, a Quota Order was made restricting imports of sugar to a very small fraction of what had hitherto been the normal quantity during this period. By the operation of this Quota Order, the normal inflow of revenue from the Customs duty was reduced to an insignificant amount and, accordingly, it became necessary to consider immediately the amount of Excise duty which the sugar from the new factories, which were about to come into operation, and which did, in fact, come into operation in November, would have to bear as from that date.

As I have already pointed out, I indicated in July, 1933, that the erection of the new factories might involve an increase of as much as 3/4d. per lb. in the cost of sugar to the consumer. The protection which had previously been offered to Carlow sugar, as a result of the imposition of the Emergency Order of February last had resulted in an increase of ½d. per lb. in the price of sugar to the consumer. Accordingly, an additional Excise duty of ¼d. per lb. was imposed on Irish manufactured sugar and I should like to emphasise here that this is the only duty which Irish manufactured sugar at the present time has to bear. In order to preserve the minimum margin of protection, a corresponding increase of ¼d. per lb. in the Customs duty had to be made. Owing, however, to the operation of the Quota Order, to which I have already referred, our revenue from that Customs duty will be infinitesimal and, in fact, as a result of the rearrangements which I have outlined, the Exchequer in the current year will receive £85,000 less from sugar duties than was originally estimated.

I should like—I think I might use the phrase—to protest against the method which is being adopted by the present Government in the imposition of tariffs. I am not objecting to any of the specific tariffs introduced here. A few of them I know something about but of most of them I have no direct knowledge. It seems to me, however, that the method now being adopted is anything but a democratic one. The Imposition of Duties Act, 1932, under which these Orders were made, was intended to give the Government adequate powers to deal with a specific situation arising out of what is commonly called the economic war. It has now become the method by which practically all import duties are imposed and they are produced then to the Oireachtas in a form in which they cannot be amended except by a defeat of the Government. One cannot in fact propose any adjustment, any exemption or any improvement in any of these Orders. One must take the Order or not.

The method which was adopted by the late Government, and by this Government until comparatively recently was, to my mind, more democratic and much better from the point of view of the public generally. Import duties were then either introduced in the General Finance Act or by Special Customs Duties Bills, of which there were generally three or four in the year. It was possible, in connection with these Bills, either to move the rejection of or an increase in the particular duty, or to move the exemption of an article which was found to have been tariffed inadvertently, and generally to criticise the details in a helpful way. With this particular method, all one can do—and I think it is all that was done in the Dáil—is to move the deletion of a particular Order which means that you are opposed completely to any tariff on the goods concerned. I think that is not really a desirable way. I am not objecting to tariffs being put on before they come before the Oireachtas because I recognise that you cannot put tariffs on in any other way, but after they had been put on, the function of the Oireachtas is to criticise them and to express the opinions that come to those of us who are members and generally, to see whether improvements, particularly in detail, cannot be made. This method cuts that out and I think that even if you are to have these Emergency Orders, it would be better if the details of the specific duties were embodied in the Bill so that they could be amended or suggestions made in Committee which, I gather, is impossible on a Bill of this kind.

With regard to the Bill before us, there are one or two questions I should like to ask the Minister. I should like him to tell us how many of the commodities included here are not yet being made in this country and when they are likely to be made. I think that applies to boot-laces—I am not quite sure about elastic—and it applies to a large extent to buttons, and it also applies to one article which is included, but which I think was not read out by the Minister and with which I am most concerned—cotton thread. I think it comes under Order No. 48, and I think the Minister referred only to rope, twine, etc. The most important part of that Order is the inclusion of cotton thread, which is not yet being manufactured in this country and which is the raw material of a very large number of our manufacturers. These manufacturers are entitled to get and, so far as I know, are getting, licences to import, but I think that if the Minister was managing an Irish manufacturing concern he would appreciate the delay —inevitable and not the fault of the officials—the aggravation and the extra expense, in having repeatedly to apply for licences for things which you cannot get here and which are not made even in any quantity in this country.

I recognise that the idea is to prevent any quantity of forestalling, and if that were done for a period of two or three months before the goods were likely to be available, I could understand it, but it seems to me that an error has been made in the case of cotton thread by putting the duty on far too soon. I know that the Federation of Irish Industries, which is interested in this from the point of view of Irish industrial development, has had a great many complaints from its members—not complaints that they are not being properly treated when they apply for licences. Some might have grounds for complaint, but very often it is their own fault, but it does seem to me that this is a commodity on which it is very doubtful if it was wise to put a 40 per cent. tariff so soon.

To some extent, the same remarks would apply to buttons and boot-laces. In the case of boot-laces, this particular order provides, I think, for a duty of 100 per cent. It also provides a prohibitive duty on laces imported with the boots and shoes. If these laces were manufactured in this country, I could appreciate the 6d per pair being placed on laces imported with boots and shoes. They are not, however, being manufactured here. All that is happening is that the outside manufacturer of boots and shoes gains by not having to include the value of the laces. They cannot be included now. They have to be bought, and the price has to be paid by somebody. If there was a gain in that, if they were being made here, I could understand it; but why impose that portion of the duty when they are not being made here?

You cannot forestall to any serious extent by importing one pair with your boots or shoes. You might forestall and damage the ultimate manufacture if you were to bring in large quantities; but the one pair that comes in the boots or shoes, and which is included in the price by many manufacturers, seems to me to make it impossible to forestall to any extent and to affect persons ultimately going to make laces here. That, to my mind, is quite an unnecessary thing, trifling as it is, though the sum total comes to a fair amount of the cost to the public who have to buy boots and shoes. It is admitted that it is not possible to obtain more than from 45 to 55 per cent. of the boots and shoes in this country. Therefore, they must be imported. Why not let the laces come in with them until such time as they are made here? Then I would be in favour of the prohibitive duty.

I would be glad if the Minister would let us know when boot-laces will be made here; when elastic will be made in quantity; and when buttons that are dutiable will be made, sufficient to meet, at any rate, the demand of the manufacturers. I should also like to know the position with regard to electric lamps which, I believe, are going to be made here, and are not yet being made; and, particularly, how soon the cotton thread—which is a very serious matter for a very large number of manufacturers, particularly manufacturers in the making-up trade which has grown up in the last few years, and who are being definitely handicapped by that order—will be made.

When I am speaking on the subject generally, although this does not deal with quotas—the Minister, however, referred to possible quotas on sugar— perhaps I may not be out of order in referring to quotas which are kindred to the Orders here. In the case of the Boot and Shoe Quota Order, with which I do not quarrel in principle or object to, there is a very considerable amount of dissatisfaction at the fact that the Order is made for three months instead of a longer period. I imagine this is largely a matter for the Minister for Industry and Commerce but, as he is not here, I hope the Minister will convey it to him. In what I am stating now, I am speaking on behalf of certainly 75, if not 80, per cent. of the persons who have to import boots and shoes. They wanted the quota Order made for six months instead of three, and the reason was not solely because it would save them trouble in only having to apply once instead of twice, but because of very practical reasons.

The first reason is that when the quota Order is short—and I would remind the House that you only receive your licence for the quota a day or two before, possibly only the day before, and possibly only on the day on which the quota period commences—it is not possible within that short period to order goods and obtain delivery in time from the best manufacturers; with the result, in my opinion, that there will be an increased amount of purchasing from factors, which means, in the long run, that the public will get less value. The second reason is that many people who import boots and shoes import, say, during the first three months of the year a comparatively small quantity compared with what they would import in the next three months. If you have a six months period it is possible to place your orders in bulk and to adjust them according as trade develops or can be reasonably anticipated. If your quota Order is for three months, you have either to do without supplies which you cannot get here, or you have to get in during the first three months more than you need, which means that capital is being wasted and there is a loss in profit. I think that if the Ministry, after a quota Order is made and the preliminary period has elapsed, would then take into consultation a number of persons who have to import, and find out what the difficulties are, some of these aggravations would be avoided.

In his speech on the Bill under which these quota Orders are made, the Minister for Industry and Commerce promised that he would have consultations. The manufacturers, of course, are consulted, and properly consulted, before a quota Order is made, because that is essential. I do not suggest that the distributors could be consulted wisely before the Order is made, but I say that, after it is made and has come into operation, and before the second period, it would be easy to get some representative persons and consult them and that some of these difficulties would be avoided. I would say—and I believe it applies to most quota Orders—that the longer the period can be made the better and that it should not be less than six months if the public are not, to some extent, to lose through buying not being done as well.

There is one other point. I think it will be quite obvious that if Irish importers are to buy in the best market, it is desirable that they should place as large orders as possible. When the quota Order period is short and you do not know what your licence will be for the next period, you cannot place a large order. With a six months period you can place a much better order, with delivery spaced over the period. With three months you can only give half or less than half that order—certainly not more than half. When orders are small, the public generally cannot buy from as good houses and as good manufacturers as they could if giving large orders.

I, therefore, urge on the Government to consider whether a six months period would not meet their requirements under the quota Orders. What I am saying now is derived partly from my own experience, but it has been put to me by a large number of persons and has nothing to do with party politics. I do not know a single person who is affected who does not hold the views I have expressed with regard to the length of the quota Order, and I urge the Government to consider that carefully on the next occasion.

There are two small points to which I wish to refer. The Minister has given some information as to the estimated effect of the change in the sugar duties on the anticipated revenue. Could he give us an estimate of the effect of the whole range of these duties on the revenue? There is another small point. I refer to Order No. 47 and read it through, but I cannot tell what it refers to unless I go back to the Customs Duty (No. 4) Act, 1932. It would be comparatively easy for me to do that, but I suggest to the Minister that it would be very valuable and certainly very helpful if some indication were given on the face of these Orders as to their effect or purpose. In this Order No. 47 the First Schedule of the Act of 1932 is to be amended at Reference No. 1 as follows: by the insertion in the second column of the said reference number of the words "or partly" after the word "wholly" where that word occurs in the second column of the said reference number and by the deletion of the word "of" where that word secondly occurs in the said column of the said reference number.

We may read that Order 25 times and not know to what it refers. Orders by reference are even worse than legislation by reference, and I would express a hope that the Minister would somehow devise a method by which these Orders themselves would be explanatory of their purpose.

On one point in connection with the cotton thread item I happen to have more or less personal experience, inasmuch as when that proposal about the cotton thread was made I was in contact with those who proposed to manufacture thread in this country. I am now in a position to state that the proposal to manufacture this thread is so far advanced that the Articles of Association of the company have been drawn up, the capital subscribed, and the building erected. Everything is ready except the getting in of the machinery. Those who propose to undertake the manufacturer of cotton thread here have as competitors the Coates people in Scotland. I suppose they are the greatest manufacturers of cotton thread in the world and they are in a position, unless protection is available, to swamp any cotton thread industry or any proposal to establish a cotton thread industry here.

It would cost Coates very little to dump sufficient cotton thread in here so as to leave any factory that may be opened in such a way that it would be unable to get any sales for its thread for two or three years. Obviously, those people who are engaging in this industry were not going to sink their money in putting up a factory if they were not guaranteed some protection. That is the position with regard to cotton thread. When the 50 per cent. duty was put on thread, all the facts were before the Government and they were satisfied that this factory was to go ahead. They were satisfied that not only was it to go ahead but that in all probability the article manufactured here would be as good as any used up to the present, and that in all probability it would be sold at as low a price, if not lower, than the present price because we are paying 15 per cent. more here than the price at which Messrs. Coates are selling their thread throughout Great Britain. I believe that will not operate here in the future. This factory is being set up in Westport, almost in the heart of the Gaeltacht. It will give employment to from 250 to 500 people when it is in full working order. Under those circumstances, I think, the Government are perfectly justified in taking the steps they are taking to protect those engaged in this industry.

First of all, on the question of the Quota Order to which Senator Douglas has referred, I should like to say that I understand that Resolutions confirming these Quota Orders are necessary. It would, possibly, be better if the Senator would raise the point during the discussion on these Resolutions. However, I shall convey to the Minister for Industry and Commerce the substance of what Senator Douglas has said and I am sure he will, if possible, give sympathetic consideration to the point.

I am very much obliged. I raised the matter now because I knew that three or four months would elapse before these Resolutions came before us and then the harm would be done.

The point raised by Senator Johnson is not one on which I am competent to speak because on this matter the lawyers have their own phraseology. Again, I have only to say that I will draw the attention of the draftsman to it and shall request that the article to which the Order refers shall be stated on the face of the Orders. On the point raised as to what is made in the Saorstát, I have to say that the following are some of the articles:— buttons, advertising tape, electric wire and vegetable oil. These are all made possibly to the fullest extent. Other articles the manufacture of which is about being started are razor blades, yarns, rope, twine. Cotton thread, as Senator MacEllin has informed us, will be available in a few months. As to boot laces a firm is at present installing machinery in Ennis for their manufacture.

On the general criticism made by Senator Douglas on this procedure, I should like to point out that this is under democratic machinery. In point of fact all these Orders come to the Dáil and Seanad and have to be confirmed by an Act of the Oireachtas. It is quite true that there are difficulties in the way of amending Emergency Orders, but there is nothing to prevent the Executive Council from amending these Orders. In discussing Emergency Orders in another place the line taken by Senator Douglas to-day has not up to this been followed. We have not had the Orders discussed in point of detail in the other House. The general validity of the Orders has been challenged there and the wisdom of adopting this industrialisation policy which the Government is following has been criticised. But no attention has been paid to the items covered by the Orders. No attempt has been made to have any Order in its general terms modified in any way.

It is quite true that the Rules of the House, I think, preclude an amendment being put down to amend an Order but I have not any doubt whatsoever, if there were a reasoned discussion as to the advantages and disadvantages of applying the Order to any particular variety of commodity, that the Minister for Industry and Commerce would have given very serious consideration to the points put forward. Unfortunately, however, the discussion hitherto on these matters has not taken this line. If a good case were made for the exemption of a particular variety of commodity I have no doubt that the Emergency Order could be altered in any detail if found advisable. Again, I think the Senator is wrong when he thinks there is more chance of an amending proposal being brought forward in the principal Finance Act of the year than there is in amending the terms of one of those Orders.

It has been done them but it cannot be done so well now.

I do not think that the Senator will find that it has been done on any considerable scale. The proposals that have been brought before the Oireachtas in the Finance Act as a rule are a fundamental part of the Government's policy for the year. In the main, they are proposals in which the revenue element is a very big consideration. The amendment of them in any vital part would mean the recasting of that particular motion and the resignation of the Government. These conditions do not apply in this case.

That does not apply to the Imposition of Duties Bill?

In the main, I think it does apply. There were four Financial Resolutions before the Dáil last week and they will come before the Seanad in due course. In connection with every one of them revenue was the vital consideration. Now, in connection with the Orders covered by this Bill, revenue considerations do not enter into the question at all, because most of the duties are designed to prevent the inflow of revenue into the Exchequer. With the exception of the sugar duties to which I have already drawn attention, they are purely protective in their purpose. If, on the Committee Stage, the House desire any further information in relation to the various proposals, I should be prepared to give it.

Question put and agreed to.
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