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Seanad Éireann debate -
Thursday, 12 May 1938

Vol. 21 No. 3

Finance (Agreement with United Kingdom) Bill, 1938. (Certified Money Bill) —Committee Stage.

Sections 1 and 2 agreed to.
Question proposed: "That Section 3 stand part of the Bill."

I want to draw the attention of the Minister to a possible difficulty surrounding the operations under Section 3. The direct effect of the section is that there will be a prohibitive duty on artificial silk which is not of United Kingdom origin. I do not want to be taken in any way as objecting to that, but the effect will be that the manufacturers and the makers of garments who have been using cheap foreign silks will in future have to use silk which is produced in the United Kingdom. That is part and parcel of this Agreement and it is not an unreasonable provision. It will make the goods a bit dearer, but my opinion is that it will be a better article and the public will not lose. But there is this possible danger: that artificial silk can be imported from countries outside the United Kingdom and the duty paid on it; but when that silk is re-exported the duty can be refunded. It is very important there should be no question that if Japanese silk, which is the cheapest type of artificial silk, is imported into Great Britain and there made into an article of clothing, it will not be possible to call that article an article of British origin. Because, if that could be done, it would be very serious indeed for certain of the manufacturers here. I know that in certain certificates of origin which we accepted in the past something varying from 25 per cent. to 75 per cent. of British material and workmanship was admitted as of British origin. I am connected with a company that is exporting to the Dominions and some of them insist on a certificate of 100 per cent. British origin.

I suggest to the Minister—and I do not think it would be in any way contrary to the Agreement—that it will be very important that the proof of United Kingdom origin should require a certificate of 100 per cent. I think if he looks into the matter he will find that, as far as certain British possessions and, I think, certain Dominions are concerned, that is required. I just draw attention to it here, not that I think that the Minister will overlook it, but that it is a thing in which a certain amount of publicity is desirable.

Under the existing law, articles are deemed to be of a particular origin if 25 per cent. of their value results from labour within the particular country concerned; but the Senator will notice that in Section 16 of the measure we are taking power to increase the percentage of labour which must be added in order to qualify an article as coming within the definition of origin. I think it will be probably found necessary to utilise that power in relation to the class of goods to which the Senator refers. It would be unfair to the persons engaged in the making of these clothes in this country if British manufacturers of the same class of goods could import Japanese or other cheap cloths and re-export them to this country, getting a draw-back here. If the existing requirement as to the added percentage of value is not sufficient to exclude goods of that character, these powers in Section 16 will be utilised for that purpose.

I would suggest that 25 per cent. is not sufficient to exclude several classes of goods which do not come within that section. I have proof that under the existing system 25 per cent. is not sufficient.

Section 3 agreed.
Question proposed: "That Section 4 stand part of the Bill."

I want to secure some elucidation of the point raised yesterday in regard to Article 16 of the Agreement and I think this is the proper section on which to deal with it. The Minister was not here yesterday and I had, therefore, better re-state, as briefly as I can, the point I want to make. My reading of Article 16 of this Trade Agreement leads me to the conclusion that it has been imperfectly drafted and that it makes it mandatory on the Government of Eire to charge 3/- per ton on fuel which has its origin in this State. I know that it is not the intention. I know that, if my impression is accurate, probably it is entirely due to an oversight but we are not competent, as I understand it, to alter a word of these Agreements. It states that there shall be 3/- per ton charged on fuel the place of origin of which is other than the United Kingdom. The United Kingdom no longer extends to Eire and I want to be informed whether or not an accurate reading of this Article, as drafted and as printed here, does place upon the Government of Eire the duty of imposing this tax upon fuel of Eire origin. I do not know whether that has been brought to the Minister's attention or not but I think it is an important point and I think that this section does not clear it. The omission as I see it from the Article is this: that this 3/- per ton should be levied only on imported fuel of other than British origin but it says a duty of 3/- per ton shall be levied on coal, coke and manufactured fuel of other origin than the United Kingdom. The fuel of this State has an origin other than the United Kingdom. I hope I have made my point clear on this matter.

The Article clearly relates to imported fuel and imported fuel only. There can be no possible interpretation of it which would oblige us to put a duty of 3/- per ton on fuel of Irish origin. It certainly was never intended that the Article should have that meaning and there is no intention on the part of the Government to impose such a duty.

I am sure that it was not intended, but it states specifically that this tax has to be imposed on fuel the origin of which is other than the United Kingdom. That is as clear as language can be.

In any event it is quite clear that Section 4 of the Bill does not impose a duty on fuel of Irish origin.

I am dealing with the Article by which this State is bound. It does not specify that this 3/- per ton shall be levied on fuel imported from sources other than the United Kingdom but on fuel of origin other than the United Kingdom. My contention is that it can be argued, and argued without possibility of its being challenged, that fuel originating in this State is of origin other than the United Kingdom.

I did not really think, nor do I think now, that the Senator was serious when he brought up that point on the Second Stage of the Bill. I would refer him to line 46 in the section and I would suggest that the word "imported" which appears in that line covers the whole argument, at least unless the sea washes in at this side of Castlecomer.

I would prefer to hear something from the Minister on this matter. Although Senator Quirke may have a very wide range of knowledge, he is not the competent legislative authority on matters of this kind. I suggest that there has been an oversight in this matter.

I do not think that the Agreement could possibly be interpreted as meaning that there was an obligation upon us to impose a duty upon coal of Irish origin.

That is what it says.

I do not care what it says. The Government proposes to act upon its own interpretation of the Article.

Who is going to interpret it?

Have you any guarantee that they will agree with your interpretation?

I do not think that there is much likelihood that they will not.

This Bill puts it right. The Government cannot impose such a charge without coming back to us.

Question put and agreed to.
Sections 5 and 6 ordered to stand part of the Bill.
Question proposed: "That Section 7 stand part of the Bill."

I wonder would the Minister let us know whether the Second Schedule is intended to impose fresh duties in place of some of the duties that are being removed under Schedule 3? Under Schedule 3 certain duties are taken off grapes and fruit of other kinds and duties are being put on some of these Articles in Schedule No. 2. Just take, for instance, one thing, item No. 13 of the Third Schedule, which operates to remove certain duties from grapes completely. But, item No. 5 of the Second Schedule puts on a duty of 1d. in the pound. Do I understand the operation of the Third Schedule is to wipe out the duty and the Second Schedule is to impose a varied duty?

The duty imposed by Section 11 of the Finance Act of 1935 is being removed, and this duty upon grapes will operate. The duty chargeable under Section 5 of the Finance Act of 1937 will operate, as defined in the circumstances set out in the second column of the Second Schedule.

Particularly with regard to the question of fish, the duty is taken off kippered or smoked fish under reference No. 12 of the Third Schedule. In the Second Schedule a duty is put on fish which is both kippered and smoked. I wonder if the Minister would let us know what is exactly happening to the fish position? As I understand it, in regard to fish that are the products of the United Kingdom or Canada, a duty of 3d. the pound on filleted fish is being removed and a duty of 1d. the pound is being put on. Then again, a duty of 1/- the stone is being put on instead of 2/- the stone on fish which are both kippered and smoked. Does that apply to fish that are smoked only, or fish that are kippered only, and, if not, how do the fish that are simply smoked or the fish that are simply kippered come in?

The existing duty on kippered or smoked fish is to be removed.

One member of the Seanad was raising the question as to the relaxation of duties relating to some particular Waterford industry.

The duty on kippered or smoked fish that is defined in Section 8 of the Finance Act of 1934 is being removed and this duty of 1/- the stone is being imposed on fish both kippered and smoked. That will operate in the future.

Are kippers unsmoked going to come in as fish with a duty of 1d. the pound?

Unless they come within the definition of fish which are both kippered and smoked, they will not be liable to that duty.

One point in connection with this motion is that I have a current issue of the Fishing News, which is issued in England, and it indicates that the fish that are sent over here and that compete with our dry fish are actually imported into England. Fully 75 per cent. of them are imported, according to this paper. The curers in Ireland, who have established little factories of their own, are very concerned as to whether these fish, which really originated in Iceland or somewhere else may, when properly done up by the English factories, be imported here under this particular Order as English fish. That is their trouble, and there is the danger that the little factories established during the last four or five years may fall asunder. It would be a great pity if that should be the case.

I understand the fish they are curing in Ireland are of a much superior quality to the fish coming in, and, as a result, the demand for our fish has increased considerably. I hope the officials concerned with the matter will see to it that only fish of English origin, caught by English boats, will be permitted entry. I do not care if they are caught in English waters or caught outside English waters by English boats, they can be looked upon as English fish, but if they are actually imported into England to the extent of 75 per cent., it would be a great pity that they would be allowed into Ireland practically free of duty, to destroy the factories here.

The duty is changed only in respect of fish of British origin.

So far as fish of non-British origin are concerned, the duties now in operation will continue to operate whether the fish come through Great Britain or not.

Can the Minister say if fish caught in Iceland and kippered in England will be regarded as of United Kingdom origin?

I could not answer that straight off.

Who will have the duty of inquiring into the antecedents of these fish?

The Revenue Commissioners will require a certificate of origin to accompany each consignment.

Section 7 agreed to.

In connection with Sections 8 and 9, I should like to know whether a certificate of origin will be required in order to avoid the duty. Will that apply to the parcel post? Manufacturers are not worried about this, but it affects the retailers. There is some question as to whether a certificate of origin is to apply before the minimum duty can be made applicable. Certain traders may not be so very enthusiastic about sending small packets.

I would not like to answer that dogmatically. The remission of the customs entry duty applies in that respect to goods which are shown, to the satisfaction of the Revenue Commissioners, to be grown, produced or manufactured in the United Kingdom. I presume there is no alternative method of meeting that point than by the production of the certificate of origin. That is the present practice of the Revenue Commissioners, and it may be presumed it will continue to be their practice. Possibly the Revenue Commissioners may devise some other method of having their requirements met. I do not think that is likely, and, therefore, I think the Senator can take it that for a long time to come the requirement of the production of the certificate of origin will remain.

My reason for drawing attention to this matter is that the section sets out "solely of British origin." There is no doubt advantage will not be taken of that for large quantities of goods. The advantage will assist London stores that advertise and sell their goods here. I think that is pretty obviously the case. It is quite probable that a mixed parcel of goods, not solely of British origin, may come in, if this is made too easy, and I think the whole thing wants watching.

Steps which are necessary to ensure that only goods that come within that definition will come in without this customs duty have been taken.

Sections 8 and 9 agreed to.

On Section 10, has an estimate been made of the probable loss to the Revenue of the operations of Sections 8, 9 and 10?

An estimate of about £35,000 was mentioned at one stage, but whether it is accurate is hard to say.

Sections 10 and 11 agreed to.

As regards Section 12, which relates to the modification of the rate of motor car duty, will the Minister tell us how many cars are likely to be affected?

It is obviously very difficult to answer that question. The importation of all assembled motor cars has been prohibited and it is now proposed to limit that prohibition to cars of a value less than £750. There has been no experience over recent years which would give any indication of what the number of such cars is likely to be, but I should imagine the number will not be very great.

I hardly think so.

Section 12 to 18 agreed to.
Question proposed: "That the First Schedule stand part of the Bill."

On the First Schedule, Sir, I wonder would the Minister give the House a statement as to what exactly the safeguards are likely to be to ensure that certificates will be really confined to articles that are properly to be regarded as of United Kingdom or Canadian origin?

The normal safeguard is a certificate of origin.

Generally, by a chamber of commerce, or by whatever body the Revenue Commissioners are prepared to accept as a reputable and responsible body, competent to issue such certificates. That practice is not a new one. It has always applied here and also in Great Britain with regard to duties generally, and with regard to any class of goods where there was a differential rate of duty, or, in fact, any class of duty at all, it has generally worked satisfactorily. Of course, goods exported to Great Britain from this country will also have to have a certificate of origin in the same way, because the British authorities will require to be equally satisfied that these goods are produced in this country and, consequently, liable to free entry. The practice has been to accept the certificates of chambers of commerce, and I think that that will continue. The only circumstances under which it would be discontinued, I imagine, would be those in which some chambers of commerce were issuing certificates without proper inquiry or investigation.

With all due respect to the Minister in connection with this matter, I do not think the chamber of commerce has been relied upon generally at all for these certificates. I know that, in the case of goods of British origin, the certificate of origin was signed by the secretary of a manufacturing company and did not have to be verified by a chamber of commerce, but that in the case of foreign goods, or goods from outside Britain, the certificate of the secretary of the manufacturing company had to be countersigned by an official of a chamber of commerce which proved that he was a proper person to sign it, but that did not prove that the chamber of commerce knew anything about the accuracy of the statement. The only thing the chamber of commerce could certify about would be goods which come from a manufacturer. There has always been a very high code in these matters and I have no question that, where the certificate is signed by the secretary of a manufacturing company, it is very rarely wrong. It is only where the goods are sold retail that there is a danger of abuse—not always deliberate or intentional abuse—of the certificates; but I think the Minister will find that it is not necessary to bring your certificate for Great Britain at present before your chambers of commerce, and the only value of the chamber of commerce is in guaranteeing that the person who does sign the certificate is a proper person and competent to sign it.

I think the Senator should not draw conclusions from a single experience. Where a flat rate of duty operated, a certificate of origin was required for certain purposes only, and in such cases no great vigilance was required on the part of the Revenue Commissioners.

I am referring to the matter of getting a preferential duty only.

In that case, it only means that more vigilance is required on the part of the Revenue Commissioners, and I think they have been more vigilant in connection with such duties. The same, of course, applies to our goods going out from this country. During the past four or five years they were liable to the higher rate of duty anyway and, consequently, there was not very much necessity for the British authorities to examine them. The circumstances, however, will be different in the future. In respect of differential duties, I think the Revenue Commissioners, from time to time, will exercise whatever vigilance is necessary to ensure that only goods entitled to the preferential rates are, in fact, imported under them.

Question put and agreed to.
Second and Third Schedules, and the Title of the Bill, agreed to.
Bill reported.