Seanad Éireann debate -
Wednesday, 2 Dec 1953

Vol. 43 No. 3

Imposition of Duties (Confirmation of Orders) (No. 2) Bill, 1953—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Industry and Commerce (Mr. Lemass)

As the House knows, Orders made by the Government under the Emergency (Imposition of Duties) Act require to be confirmed by resolutions of each House of the Oireachtas. This Bill, which is in the usual form, is to confirm 11 Orders made under that Act during the course of the past five or six months. An explanatory memorandum circulated with the Bill gives in a general way an indication of the commodities to which the Orders relate. Five of the Orders imposed new duties; three of them extended the scope of the existing duties to cover additional lines; and three of them provided for the alteration of rates of duty previously in force.

The first two Orders named in the Bill relate to wire mesh netting and certain fabricated iron and steel bars and sections and iron and steel wire. These two Orders imposed a new duty on wire mesh netting and on iron and steel wire, and varied in minor detail the existing duty upon fabricated iron and steel bars and sections. The manufacture of mesh netting was begun this year at a factory located in County Dublin. The market in this country for the types of wire, barbed wire and netting, to which the Order relates, is estimated to be worth £400,000 per year and the aim of the firm which has started operations is to supply the whole of that market.

The products of the firm in question are being sold at prices which are competitive with the prices of corresponding goods produced and sold in Britain. It is to be appreciated, however, that, in respect of metal products, there is a difficult situation now prevailing, partly because of price fluctuations and partly because it not infrequently happens that manufactured goods are procurable at prices which appear to have no relation to and are even sometimes lower than, the prices of the raw materials from which they are made. The arrangement made with this firm manufacturing barbed wire and wire netting is that their prices will be related to the prices of the wire rod which they import, and, while that would ordinarily be a simple arrangement to operate, the present position, as I say, is complicated and is being investigated.

I have in the past said that a firm which produced and sold goods here at prices similar to those prevailing in Great Britain would be regarded as satisfactory, from the viewpoint of its efficiency, but, in the case of these goods, it is recognised that continental prices are more competitive than British prices, and, if the duty were not in force, it is likely that it would be from continental countries that these goods would be brought in. It is fairly certain, however, that, in the course of the coming 12 months, these anomalies in relation to steel and other metal prices will be ironed out and a normal position restored.

So far as single cotton yarns, to which Order No. 309 relates, are concerned, the position is that we had imports of these yarns subject to quota restrictions. Under our agreement with the O.E.E.C., we are required to maintain 75 per cent. of the volume of our trade free of quota restrictions and cotton yarns were included upon the liberalised list we supplied to O.E.E.C.

The council of the O.E.E.C. considered that we were not justified in suspending the operation of liberalisation in relation to the cotton yarn beyond July of this year. Accordingly, the quota Order was revoked and in its stead Order 309 was made imposing duties at the rate of 50 per cent. ad valorem full and 33? per cent. preferential upon single cotton yarn. These yarns are being produced by a number of firms in this country. While it is clear that their installed capacity is not sufficient at the present time to meet the full requirements of the market, that capacity is, I understand, being increased and it is likely that they will shortly be in a position to meet the whole of our internal needs for single cotton yarn.

Order 310 which relates to handbags extends the scope of the existing duty to cover those articles when made from plastic materials. It also brings within the scope of the duties certain trunks, suitcases, travel bags, attaché cases and similar articles. There are a number of firms engaged in the manufacture of these goods and all the information available to us indicates that the prices charged here by Irish manufacturers are no dearer and in some cases lower than those charged for handbags produced in England.

Order 311 is not of very great importance. It extends the scope of a duty which previously applied to spectacles to spectacle frames made of material other than metal. There are three firms engaged in the manufacture of spectacle frames and they produce so wide a variety of frames that a comparison with prices elsewhere would be impracticable but as far as I can ascertain prices here are fully competitive with the British prices.

The next Order, 312, relates to sheet and plate glass. It requires, perhaps, a fuller explanation.

Mr. Baxter

Order 312 does not deal with plate glass.

Mr. Lemass

It does. It is Order 241 of 1953. I may say that the duty applies to plate glass only because the Revenue Commissioners are unable to differentiate between sheet glass and plate glass on importation but in practice duty free licences are given on application for the importation of plate glass and the duty applies effectively only to sheet glass.

The duty on sheet glass was reviewed under the provisions of the trade agreement made with Great Britain in 1938 by the Tariff Commission which, before the war, was the reviewing authority under that agreement. The rates of duty which have operated in respect of sheet glass here were those recommended by the Tariff Commission following that review. They were specific rates of duty —that is to say the duty did not relate to the value of the article on importation. The rates were £1 per cwt. full and 13/4 per cwt. preferential. It is clear that rates of that kind imposed in 1939 afforded lesser protection than was originally intended because of the alterations in values since the end of the war.

The trade agreement did not provide for a further review of duties fixed in consequence of a review held under the provisions of the agreement but the British authority, nevertheless, agreed that there should be a further review which was undertaken by the I.D.A. which is now the reviewing body under the agreement. That agreement provides that duties should be fixed at a rate which will give British manufacturers full opportunity of reasonable competition while at the same time having regard to the requirements of the Irish producers who it was intended should be afforded adequate protection having regard to relative costs of efficient and economical production and taking into account the requirements of a newly established industry.

The position had arisen that under the old rates of duty the British glass could come in here and sell at a price which was very slightly above the price at which Irish sheet glass was produced. In fact, in certain parts of the country where high transport charges operated, it was less than the home price. It was quite obvious that if the firm making the sheet glass and which was losing money on the operation was to be properly protected and facilitated in extending its operation, then it would have to be allowed to secure a higher price. The purpose of the review of the tariff was to consider what change in the rate would permit them to obtain a higher price. The fact is that sheet glass can be produced in England at a lower price than it can be produced here.

The I.D.A., however, took note of the fact that the full operation of competition in Great Britain had, in fact, wiped out competition there. There is now only one large producer of this commodity in that country. The I.D.A. was not prepared and decided it could not accept as reasonable competition something which had that effect in Britain, particularly having regard to the provision of the agreement that the Irish producer should be afforded adequate protection relative to the cost of efficient and economical production and taking regard of the difficulties of a new industry. It is clear that the Irish firm engaged in the manufacture of sheet glass cannot obtain raw materials at anything like as favourable a price as the British combine. That firm has other higher charges, including higher wage rates and higher cost of fuel, power, light and water. Nevertheless, the I.D.A. came to the conclusion—in fact, the conclusion was not challenged by the representatives of the British firm who were heard in this connection with the review—that the concern operating here was as efficient as a concern of its size could be and that the methods of production were as economical as they could be made on the basis of the existing output.

The Irish firm had secured only about two-thirds of the home market at the time this review was made. They, therefore, decided that they could not regard the British price as being a fair standard by which to test the efficiency of the firm. They said if that price had been brought about by the free interplay of the forces of supply and demand their outlook would be different, but having regard to the special circumstances prevailing in Great Britain they decided that prices in other countries, where conditions are more closely comparable to our own, were a fairer standard to apply. They recommended, therefore, that this increase in duty should be brought into force. Under the Order the preferential rate of duty was raised from 13/4 per cwt. to 22/- per cwt. It was recognised that the consequences of the alteration of the terms of duty would be to permit the Irish producer to increase the price of sheet glass from 100/- to 120/- per case, that is per 200 sq. ft. It is possible that that price may be reviewed and reduced again if the Irish producer secures the whole of the home market, but in the meantime a price of 120/-per case is required to enable the industry to carry on. The increase in price makes an addition of about £1 to the total cost of constructing an ordinary-sized house. There are at present 130 people employed in the manufacture of sheet glass here.

Order No. 313 alters the rate of duty applying to articles made of asbestos suitable for use in building or drainage. The old duty was a specific duty of 4/6 full and 3/- preferential per cwt. The duty was suspended for some years and when it was decided to bring it back into operation it was decided also to change from a specific to an ad valorem duty. The new rates are 30 per cent. full and 20 per cent. preferential. All the information available to us is that these asbestos goods are produced here with high efficiency and are sold at prices which are comparable with prices elsewhere in Europe. It is an important industry to develop, giving employment at present to about 340 persons in the town of Athy, County Kildare.

Order No. 314 which relates to tableware may require some more elaborate explanation also, particularly because it was the subject of some Press controversy after it was made. There was in operation upon delf tableware before the war, duties which were both ad valorem and specific, although the specific duties were the really effective ones. The specific duties were 1/3 full and 10d. preferential in respect of tea and coffee pots and 6d. full and 3d. preferential in respect of other delf articles. Again, it will be appreciated that the rise in prices which took place since these duties were originally imposed reduced their protective value, and the effect of the Order was to raise the specific duties on these articles other than tea and coffee pots to 1/6 full and 1/- preferential per article.

These duties represent protection at a high ad valorem rate and it is somewhat difficult to understand why further protection should be required particularly having regard to the fact that all the evidence is that these delf tableware articles are produced here at prices which are entirely competitive with British prices and of a quality which is certainly not inferior and may in many instances be superior to the quality of these goods sold in Britain. Nevertheless there was evidence of importation continuing mainly, as far as we could discover, of delf tableware for hotels. The purpose of the new duty was to check that importation and particularly to give the Irish manufacturers an opportunity of securing the hotel trade.

This matter might not have been dealt with at this particular time but for the fact that a new factory is being established in Galway for the manufacture of chinaware. Previously no chinaware was manufactured in this country and clearly the specific rates of duty which would afford reasonable protection in the case of the much cheaper delfware would not be equally effective in dealing with chinaware and it was thought desirable, from the point of view of convenience of administration and of the trade, that the same rates of duty should apply to all tableware whether made of delf or china.

The factory at Galway has not yet been built. Certain processes are however being undertaken there pending the completion and equipment of the factory for which the workers are being trained and it is likely to be some time before full scale production is in progress. It is a difficult industry to establish. It was thought, however, that in view of the fact that chinaware is not by any means a perishable type of commodity as soon as it became known that a factory for the manufacture of chinaware was being established in Galway, that as soon as the manufacturing processes were initiated there would be a tendency to import considerable quantities of these goods in anticipation of a duty coming into operation. Normally it is not thought desirable to impose customs duties in advance of the commencement of full scale production but in this particular case it was regarded as essential to the project; without it its prospects of a successful beginning would be gravely prejudiced.

Professor Hayes

Might I ask the Minister has it not always been the policy to impose tariffs before production began?

Mr. Lemass

No.

Professor Hayes

Surely, my memory cannot be as bad as that. Surely, they have been imposed over and over again before production starts?

Mr. Lemass

Very rarely; in fact, I have repeatedly expressed a personal disinclination to consider the imposition of tariffs in advance of the expenditure of the capital to be invested in a new project mainly because I do not wish a promise for protection to be used as a lever for the raising of capital. It might in certain cases produce undesirable results.

In connection with this duty we had representations from the Hardware and Allied Trades' Association. Having considered their representations, I decided to relax the operation of the duty for the time being. The relaxation which has been agreed upon will operate until the end of March next. It will be subject to review before then, perhaps continued after that date, perhaps amended at that time.

Under the new procedure, duty free licences will be given for sets of delf tableware on the basis of a licence for the importation of one set for each set ordered from the manufacturers of delf tableware here, subject to the condition that the imported set should be of the dearer class of delfware, that is between 34/9 and 71/5 per set. Up to the present, the Arklow pottery has concentrated upon the cheapest type of delfware. It is only in recent months they have begun to develop production of the higher grades of delfware, but they are not yet in a position to meet the full requirements of the market in respect of these higher grades. Consequently, this easement will permit of a supply of higher and dearer types of delfware being imported on a 50-60 basis with Arklow production.

A similar arrangement has been made in respect of chinaware. A duty free licence will be issued for the importation of a set of chinaware in respect of every order for one set placed with the Galway concern. In that case the condition is that the cost of the imported set must exceed 71/5. It has been decided, however, that chinaware sets costing more than 120/-per set will be freely licensed for importation. The Galway concern is proposing to concentrate—at any rate, for the time being—on the production of the cheaper kinds of chinaware and these more expensive sets will not be produced here and consequently will be imported free of duty.

The effect of these administrative arrangements will be to give the retail traders in these goods what they desire, namely, a greater variety of patterns and designs for sale while the home production is being stepped up. It has to be recognised, of course, that the manufacture of these goods by a limited number of concerns tends to restrict to some extent the varieties of pattern and design available to traders —which, naturally, the traders concerned do not like—but it is hoped that in the course of time a very considerable variety will be available which will meet their needs. May I say that when these matters were being discussed with the association in my Department there were no complaints made regarding the quality of the Irish products? The only ground on which they urged some relaxation of the duty was to permit of the availability of a wider range of designs.

Order No. 315 applies to electric wire and cable. Its primary purpose is to extend the existing duty, which relates to rubber covered cable, to plastic covered cable which is tending to replace the rubber covered variety. It also closed what was in effect a loophole in the duty. The Revenue Commissioners had decided that a length of flex or cable with any fitting, even a wall plug, at the end of it was an electric fitment and not a length of flex of cable. That ruling was being availed of to bring in duty free flex and cable which it was not intended should be imported. This Order was availed of to close that loophole to make the Order apply to a length of flex or cable even with a fitting attached.

Order No. 316, which is in respect of glass packed sterile liquids, represents a very interesting and important development which has taken place here, namely, the manufacture of injection solutions by a firm in Roscrea. This firm in Roscrea, which was manufacturing a wide range of these injection solutions and which is at present exporting more than half its total production, is turning them out to the same standard of quality as imported solutions and at prices which are in all cases competitive and in some cases lower than the British prices. Nevertheless, it was found that they were not getting the orders from the Irish market which in the circumstances they might have expected. I came to the conclusion that that was due to the fact that there is in many cases a close connection between large Irish wholesale chemists and British manufacturing firms and that it was only by the imposition of a duty which might not otherwise have been necessary that the business could be secured for the Irish manufacturers.

The firm concerned has been the subject of a very favourable report by some of these experts who came here upon technical assistance missions to report upon Irish industrial possibilities. Their products have been strongly commended by people who are familiar with them on the ground of their quality and suitability and, as I have said, their prices are competitive and are in many cases lower than the British prices. There has been no change in their prices since the imposition of the duty.

The last Order, if I may mention it, has the effect of extending the existing duty on toilet paper in rolls to toilet paper made up in packets.

Professor Fearon

There are two or three items in this list about which I would like a little further illumination. Three of them will be involved in the operation of the Health Act and I think it might be well to draw the attention of the House to their possible effect on the expenses of the medicines or preparations that will be provided by the Act when in operation. For example, I see, in Order 311, "Spectacle Frames". I take it that when the Health Act comes under way there will be a very large and increasing demand for spectacles and optical appliances of that kind. It seems to me that in consequence of this duty there will be an addition to the cost of the Health Act. I suppose it would be impossible to secure exemption from the duty for the time being until the increased demand will be raised when the Act comes into operation. I am not sure if the tax on plate glass will affect the tax on optical glass and spectacle lenses.

With regard to Order No. 316, dealing with packed sterile liquids, I touched on that—not, I am afraid, very clearly—when we were discussing the Health Bill. When the Act comes into operation there will be an increasing demand for these drugs and if the local manufacturers are not able to meet that demand it means that it will have to be filled by imported liquids, all of which will be taxed, and the Exchequer will be getting the benefit of this tax without necessarily contributing at all to the working of the Health Act. I would draw the attention of the Minister to these points. It is hard to anticipate what the effect of the working of the Health Act will be. If there is any comparison at all with its working in Great Britain, there will be a period when there will be a great demand for a lot of these things and if that demand cannot be met at home it will have to be met by imported taxed foreign substitutes.

The other point arises in connection with tableware. As far as I could follow the Minister, the situation seems to be something like this. If production prices fall on the other side, the duty here goes up. If production prices rise on the other side, the duty here goes up. Therefore, whatever happens, we get the worst of it. That may be as it may be. I feel, in connection with keeping a check on the prices of our home-manufactured articles, that we also want control of quality. Our prices may be lower than, or well below, or competitive with the British prices but unless the quality is kept up and safeguarded the position will be most unsatisfactory indeed. I have had some very unhappy experiences with some of our Irish-manufactured products—I shall not mention their names.

In my opinion, these products were inferior to the British ones in particular conditions and in this connection I might mention that I am not at all biased in favour of any country. If I can, I like my requirements to be Irish manufactured. I feel that, occasionally, there is a relaxation of our standards of quality and it is essential, therefore, that that aspect be perpetually safeguarded. It is said that the cost of liberty is perpetual vigilance. It seems to me that the cost of protection is constant watchfulness.

I draw the attention of the Minister to these matters in view of the effect which these duties will have when the new Health Act comes into operation.

Mr. Baxter

Two of these Orders will make some difference to our farmers. We have all taken this policy of tariffs so much for granted that few have the hardihood to say anything by way of protest or to question the wisdom of what we are doing or to question the prices which the Irish people are asked to pay. At this point, I am only asking the Minister to tell the House what, in his view, will be the result of these Orders so far as the price of the commodities to our farmers is concerned. I hope he will tell us what the effects will be.

When you impose a tariff on a product which everyone must buy it means that we are all put in the same position. I submit that the only people who will buy this wire are our farmers and that they will buy it for fences. The imposition of a duty on steel mesh hits our farmers too. It is very easy to impose a number of taxes like this on the farming community. Other sections of the community are not aware of these taxes because they do not press on them. When the farmers come to claim against all the extra charges they have to carry, and want to have them met somehow or other by our consumers at home—because they cannot do very much about the consumers abroad—many people will talk out with great vigour against the "wicked farmers".

I do not know what effect these Orders will have. If one effect will be a restriction on the use of fencing wire, then it will not be good for our farming economy. It will not be a good thing if the farmer does not make the best use of his fields in the most economic way. Apart altogether from the cost of the labour involved in the erection of these fences, if the cost of the wire itself is increased the farmer will ask himself whether or not the whole thing is worth the trouble and the expense.

Then, again, there is the question of the value of money. That is very difficult to determine. We have an Irish made milk tank on the market at the moment. The Irish manufactured article weighs 25 lbs. and costs 56/-. Also on the market is a German made milk tank weighing about 33½ lbs., the retail price of which is 56/—the same price as the Irish manufactured lighter milk tank. Anybody who has had experience of handling creamery tanks will realise that a tank weighing 25 lbs. will not stand up to much hardship and abuse.

I submit that the Irish-manufactured tank represents a very considerable depreciation in the quality that a man is getting for his money. I do not know what standards the Minister may have in mind by which to judge the value of the home-manufactured fencing wire as against the foreign-manufactured product. Will he judge it on the weight per yard, or what? The Minister says the price will be related to the price of the wire rod, which is imported. I suppose there will be some check, though I do not know who will keep it.

My feeling about all these mounting burdens on our agricultural community is that there comes a point when somebody has to stop or somebody cries out that he cannot go on any longer. I do not say that our farmers are in that position at the moment but I think the best of it has passed.

Senator Fearon fears that certain difficulties may be created from one aspect of the imposition of these duties: I see a danger of difficulties being created from another angle. I realise that we cannot have things both ways. Apparently we are not able to establish a new industry here right away and to put the product on the market at a competitive price. I suppose that is understandable. My fear is that, behind all these duties, we are building up a sheltered community who never want to go out beyond the fence to feel the blast. Such a position is even worse for our community than to have no industry at all. When the sun is always shining, people become lazy and indolent. They love to enjoy the sun and the shelter.

It is said that the most vigorous races on earth are those in climes where they have to battle for existence. It is very important that the Minister should not cease to emphasise to the people in industry in this country, and who want to have the shelter, that a time will come when they can no longer be certain that the shelter which they love will be there and that, therefore, they had better prepare themselves as quickly as possible to feel the blast of the competitive world.

Henceforth our farmers will meet much more intense competition than they have met for some years past and it is well to remind manufacturers of products which farmers buy that they must keep that fact constantly in mind. If our farmers have to carry the burden of people whom the nation is sheltering with tariffs, and if our farmers are taxed while, at the same time, they are battling with outside competition, the job of the Irish farmer will be made even more difficult than it is and that is where the Minister must come in and play his part.

Mr. Hawkins

If one did not know Senator Baxter as well as I do, one might conclude, from the speech which he has just made, that he is an opponent of Irish industry. For some reason known only to himself, Senator Baxter seems to have a very pathetic view on every matter that comes up for discussion. The policy of the development of Irish industry is accepted by all Parties in this State. To achieve that end, it has also been accepted that protection must be given at the outset. That is just what is being done under this Bill, in the majority of cases.

My main reason for speaking on this matter is to welcome Order No. 314. I should like to say how much we who come from the West, and particularly from Galway, appreciate the encouragement which the provisions of this Order give to the promoters of an industry in Galway City to proceed with the work. That appreciation has already been shown by Galway Corporation in making a site available to the promoters, and, while the work on the erection of the factory has not begun, it is expected that it will commence early in the New Year. Already the workers are in training and there is in the premises of one of the largest merchants in the city a display of some of the products of this industry which has gained the admiration of all. If we in Galway have any grievance, it is a grievance in relation to our disappointment that a much greater effort has not been made—it may be more the fault of the local people than otherwise—to give to the people in this area the benefits which were expected from the Undeveloped Areas Act. This is one of the first, and we welcome it, and, as I say, we appreciate the action of the Minister in giving the encouragement he has given to the setting up of this industry.

Mr. O'Donnell

With regard to Order No. 309, I wonder if I correctly understood the Minister to say that this was not a matter of quota but a matter of a commodity being subject to a duty? I understand that the new spinning factories are doing an excellent job of work. I have heard that from users of their products, particularly in the hosiery trade, who tell me that the yarn being spun in the various factories here is quite as good as the imported yarn. Though there is a slight price differential at the moment it is hoped to get over it in a short period. The labour content of the secondary industries, however, would be much higher than that of the primary industry and if there was any adverse reaction, if because of this Order they were unable to get certain types of yarn, the Minister would be well advised to reconsider it.

This is rather a technical matter. I do not know to what counts the Irish factories spin but I take it they spin to the counts which are most popular; but in the case of yarns of certain finer counts which the machinery would not be able to produce it would be advisable if the Minister would include in his Order a licensing clause. I do not know whether that would run counter to the liberalisation agreement with O.E.E.C. but certain secondary industries may be affected if they are confined entirely to the products of the Irish cotton mills. I congratulate the Minister on this further evidence of his desire to develop Irish industry.

Mr. Douglas

I think I ought to say that I have a pretty good knowledge of the working of the single cotton yarn Order and, so far as I know, it is quite amicably operated. I am not aware—and I am chairman of the association—of any manufacturers being unable to get the yarns they require. It is being worked out by the Department on a basis of consultation and if there was any serious problem I am certain I would have heard about it.

Mr. S.T. Ruane

I understand the purpose of the Bill is to encourage the development and expansion of home industries and to increase employment as a result. I believe that the encouragement given has, to a certain extent, justified the legislation, but there are many who feel that certain industrialists—not all—are taking advantage of the sympathetic attitude of every Government towards the development of home industries to charge excessive prices for their products. You will find in the manufacturing class, as in every class, the conscientious man as well as the man with the rather elastic conscience.

It has also been alleged—I do not know with what truth—that certain employers or industrialists utilise legislation of this type for the purpose of increasing the cost of the goods they manufacture. They do it in an indirect way by putting it up to their employees that they cannot continue as they are and they cannot maintain the numbers they have in employment, so long as the article they produce is sold at a certain price, and they look for increased protection. The net result of this action by the employers is that the workers will look for increased wages, and the employer for extra protection. Manufacturers and employees are both organised. Manufacturers have an organisation to look after their interests and the workers have an organisation, and a very good one, to look after theirs; but the consumer has no organisation and he looks to the Government to protect his interests.

It has been alleged from time to time that certain goods which are not manufactured in this country and which have to be imported are sold at a very much higher price than that obtaining in the country of origin. I do not know how true that is, as I have no personal experience of it, but I do know that a Bill went through this House and through the Dáil to protect the interests of consumers. That measure was the Restrictive Practices Act which is now nearly a year old. I do not know if the country has any evidence yet that any good has come from it. There is no doubt that, when the Minister introduced that legislation, he saw there was a reason for it. Perhaps the fact that the Bill has been passed has been responsible for doing away with the practices it was designed to prevent.

Quite an amount of comment is to be heard in the country with regard to a certain matter which was raised in the other House recently, namely, the increased charge for bottles of a certain class, compared with that obtaining in countries to which these goods are exported. I know that the Minister has a very reasonable explanation for that, but people feel that, in so far as other exports are concerned, the reason which justifies an increased price to the purchaser of the home-manufactured bottle at home would not justify the charges for other goods which are produced and sold at a higher price here than in the country to which they are exported. These are matters on which the general public are entitled to get information, and it would greatly settle their views and minds on the matter if they had an explanation as to the reason for these differences.

Mr. Summerfield

I did not intend to speak on this small Bill, but, in view of the remarks made by Senator Baxter and Senator Ruane, I feel that I should not leave it entirely to the Minister to answer what I suggest are some of the reckless statements which were made. I am getting a little tired of having these reiterated charges as to the manufacturers in this country being a sheltered class made on every occasion on which we have before us any measure dealing with tariffs of any kind, whether temporary or permanent. We have had that statement this evening from Senator Baxter, and we have just heard from Senator Ruane that a certain proportion of the manufacturers are taking advantage of the protection they enjoy.

I think it is well to emphasise that protection is not peculiar to this country. The protection of industries is an important factor in the economy of such wonderful nations as the United States and Germany and other countries with an industrial tradition, where there would be no suggestion at all that protection was being used to bolster up prices, a complaint which we are continually hearing here. There are considerations other than price that affect the rulers of these countries. There is this all-important question of the national economy.

I have always refrained in this House from making any criticism of the farmer. I think Senators Baxter and Ruane will agree that the greater amount of employment we can find in factories the greater the consuming public for the products of our farms. The Minister is well able to take care of the direct challenge made to him on the question of the price of bottles. The industries of this country to-day— I make this as a deliberate statement —in the light of the length of their operation, the scope of the domestic market and the difficulties of getting into the export market, will compare more than favourably with the industries established in many other countries of its size and type in the world. I can be taken up on that and I would be very glad to be taken up on it.

I do not think it helps either our industrial activity or general economy to have members of this House on any or every occasion that presents itself to them coming along and making a statement of the kind we heard this afternoon. To the degree that there is protection in any country, protection may be described as shelter, but the word has been given a wrong meaning in this country and I hope we will have an end of that kind of criticism.

Professor Johnston

Arising out of the general policy with which this Bill is concerned, I would like to ask the Minister one or two questions. We all accept the argument in respect of protection for infant industries. That is common ground, but the question arises as to when an infant industry reaches maturity. I do not know what criterion applies as to when an industry no longer requires the protection it originally obtained. In the absence of any other criterion, I would say that just as a human being attains maturity after 21 years so also should industries which have enjoyed protection for 21 years be regarded as coming of age after 21 years. They should throw off protection and stand before the world free to meet competition from all quarters. I look forward to the coming of age of a good many industries, including perhaps the one in which Senator Summerfield is interested.

There is a tax on wire mesh. Net wire is part of the cost of production. It is also part of the cost of extending our plantations which badly need extension as far as afforestation and shelter belts erected by farmers are concerned. If that tax adds one iota to the cost of poultry production, I think it will require a great deal of justification.

I, myself, had some little experience of the effect of taxation on the price of implements used by people in the country. I had occasion to buy a new blade for a Bushman saw. A friend of mind undertook to get it for me. He said it would cost only 4/-. He got it all right, but the next time I saw him he told me that a tax had been put on the Bushman saw-blades and I had to pay 7/- for it. At our time of life we do not look forward to many decades but it would cheer my old age if the new saw-blade industry, when it had grown up, having reached 21 years of age, would enable me to buy a Bushman saw-blade for 4/- instead of 7/-.

Mr. Lemass

With regard to the points raised by Senator Fearon, the Minister for Health was given every opportunity of expressing his views upon the proposed duties upon spectacle frames and injection solutions before the Government took decisions. Senator Fearon will be relieved to know that there is no reason to apprehend that all possible requirements of these goods cannot be produced here and be available at prices which will be no higher, and may, indeed, be lower than the price of corresponding goods imported from Great Britain.

In the case of spectacle frames there are three firms engaged in their production. They have an output capacity considerably in excess of their present sales and the possibility of any scarcity or any need to import goods to supplement their production does not arise. I said when referring to the matter originally that there are some hundreds of varieties of spectacle frames, and it is not very easy to establish an absolute comparison between the prices charged here and the prices of corresponding frames produced in Great Britain. A general review of the situation appears to establish that prices here are certainly not higher than prices in Great Britain.

In the case of injection solutions the firm producing them is in a position to meet all requirements of the type of solutions to which the duty applies. It does not apply to all types of solutions. I said that of their total production in the past 12 months three-fifths was exported. There is therefore a reserve to supply home needs if it should be necessary to call upon it. In fact, of course, the output can expand at a rapid rate to meet any demand upon it. Again, the evidence is that the prices at which these injection solutions are available are in many cases lower than when imported from Great Britain. The sheet glass duty does not affect optical glass.

I am not quite sure what Senator Fearon meant when he talked about the duty on tableware. He said that if prices fell in Great Britain the duty goes up here and that if costs rise here the duty goes up also; that the duty always goes up. It is, of course, possible for any firm to export a surplus production at a lower price than it secures in its home market. British firms can export tableware at prices at least as low as those at which the Irish firms can produce them. The Irish firm can export to Great Britain at prices which may secure sales for it there.

In the case of delf there is a substantial trade in seconds, that is to say, goods which do not come up to the standard of first-class goods. The design may be slightly awry or there may be some other defect. The natural tendency of the firm producing them is to get rid of these slightly inferior products in some market other than that in which they normally operate. That has been one of the difficulties about building up the industry here. It is one of the reasons why the manufacturers are looking for an export market so as not to allow the seconds to be sold in the same market as first-class quality goods. It might happen that the retailer might not always be prepared to distinguish between first-class quality and the other when offering them to the customers.

There is no reason why the production of delfware in this country should not be as economical as in Great Britain. There are certain advantages even from the point of view of supplies from Britain in the location of the factory at Arklow against the location of the potteries in Great Britain. Now that a very high standard of efficiency has been secured by local workers, I hope to see it growing in size and taking the export trade in its stride.

With regard to wire netting and barbed wire, Senator Baxter asked what standards are being applied. I said when introducing this Bill the rule of thumb test we apply is to judge the efficiency of a concern here by comparing its prices with British home market prices. I realise that it is not always a sound one because British home market prices may be subsidised by export prices or alternatively may be subsidising export prices. In regard to these goods, however, I am informed by their manufacturers here that in the case of barbed wire their price is £56 per ton as against a British price of £60 per ton; in the case of wire netting their price is £78 per ton against a British domestic price of £97 10s. per ton. The British export price for wire netting may be lower than their domestic price but even if lower it is still higher than the price at which it is produced here. I recognise, however, that in the case of these two commodities the British price may not be able the sole criterion because continental prices are at the moment lower than British prices.

I do not think it is fair to expect Irish manufacturers to be able to produce the goods they are concerned with at a lower price than they can be imported from any country in the world. There are some countries where social standards are different from what they are here and in any event it is always possible to find temporary conditions in some country which will enable cheap purchases to be made even though a permanent trade upon the basis of these prices is not likely to result. In this particular case the fact that we can produce these goods and sell them at prices which appear to be lower than British domestic prices, is I think, a fair enough test that a good job is being done.

Mr. Baxter

Would the Minister have the figure of the import price for barbed wire from the Continent?

Mr. Lemass

I made inquiries in that connection and I got a price quoted for bright wire which was lower than the price quoted for the wire rod from which it is made. That obviously could not be a permanent price. As I said, I am examining the position of this firm in relation to continental prices at the present time and I do not want to say more than that. They can draw their wire rod from the Continent and the price of their manufactured products must be higher than the wire rod. I have to satisfy myself that these prices are not unduly high, even if below the prices in Great Britain. I want to be quite clear on this because if that is so some other test than the British price may have to be applied.

The price of steel is falling and I think we are in sight of the time when the British will have to change the present conditions where their export prices are higher than their home prices, in which it is possible for them to subsidise the prices of fabricated steel goods in their home market in the way they have been doing. During this transition period we have to make certain allowances and not be too critical of the price of Irish goods in comparison with the price at which occasional lots of similar goods appear to be purchasable. By establishing this industry in this country we admittedly deprive ourselves of the opportunity of making an occasional bargain but I think that on the whole we gain by the development.

Senator Johnston asked what criterion should be applied, why not automatically wipe out a tariff after 21 years? In a publication I received recently containing an article by Henry Ford, of America, in regard to the abolition of tariffs, he was prepared to take a much longer period. After all, America is a much larger country than we are and if they think it was necessary to keep their tariff system in operation to give their manufacturers a fair opportunity of developing, we are hardly to be criticised for doing the same thing.

I did contemplate, however, that over the course of the next two or three years a systematic review should be carried out on all tariffs in operation for the purpose of establishing the progress made in consequence of them and the need to maintain them at the rates originally imposed. We have carried out an industrial review in the Department of Industry and Commerce mainly for the purpose of investigating new opportunities for industrial development and the material which has emerged as a result of that review is of such tremendous interest that we think we should follow it up along the lines I have mentioned.

Senator Baxter said that we are not able to establish new industries on a competitive basis, that we should accept that and proceed accordingly. I do not accept that at all. It is true that a new concern operating a process which was not previously employed in this country, having to train raw labour in the technical aspects of that process is at a disadvantage for a time. But similar new concerns in any other country would almost inevitably be at some disadvantage too. The fact is that most of our new concerns have got equipment and production techniques far more modern and far more efficient than those operating in many British factories at the present time. It may be true that the most vigorous races are those that have the most hardship.

In Senator Baxter's enthusiasm to see a vigorous race developing here through a process of hardship he will perhaps be delighted to know that there is something in the statement I made at a recent meeting that we have the most liberalised trade régime in Europe. That fact is not often appreciated. We have fulfilled in full the liberalisation agreement of O.E.E.C. Far more powerful countries, including Great Britain, have not succeeded in doing that. In other words the restriction of imports into these countries are far more extensive and far more definitely applied than restriction on imports into this country.

Senator O'Donnell inquired concerning a duty on single cotton yarn. Single cotton yarns were subject to quota until July last. In July, the quota Order was revoked and a duty was substituted. We did so by reason of our obligations under the O.E.E.C. agreement.

I do not want to enter into an argument with Senator Ruane with regard to the export price on bottles. It is clear that firms can export their goods at a lower net return than they seek in sales on the home market. That is normally the case. Quite early in my life I had to deal with the flour milling industry. I had the flour millers before me and I asked them how the flour millers in England could sell flour in this country at a lower price than the Irish flour millers were charging. Their mills appear to be as efficiently equipped, they got wheat at more or less the same price and their labour costs were no higher. They said: "We will sell flour in England at a lower price and lower than the British millers are charging because it is always possible to step up production and sell the marginal output at a lower price and still secure a profit."

When I was in the newspaper business I was struck by the fact that the whole of the expenses of the production of a newspaper were the same whether you produced one or a million copies of the paper. When you had the paper made up and the plates upon the press if you succeeded in running off 45,000 copies instead of 40,000 the extra 5,000 cost no more than the paper and the ink and represented a substantial economy in the total production of the firm.

The same applies in almost any industry. In the case of the glass bottle industry it was contended by the manufacturers to me that if they got 17 tons of metal out of a tank instead of 15 tons, the extra two tons would cost only the materials which went into the tank. Labour costs, overhead charges and other costs would remain precisely the same as if they were producing 15 tons. Consequently the bottles made from the extra two tons could be sold, if a market could be obtained, at a much lower price than the bottles made from the 15 tons. By producing them and selling them at a lower price—it was only on that basis they could be sold—they were able to keep down the whole of their overhead costs and sell their entire output at a lower price. If they lost that additional production they would have to increase their price in order to break level.

I certainly would not like to see any mentality developing amongst our people which would operate to discourage manufacturers seeking export markets, even if they have to find them on the basis of charging for export products less than the home market price.

Question put and agreed to.

Agreed to take the remaining stages now.

Bill considered in Committee.

Sections 1 and 2 agreed to.

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

Mr. Baxter

With regard to the point I made about the cost of barbed wire, the Minister indicated that from the information available to him the price at which the Irish manufacturers were prepared to sell was actually lower than the British price. The Minister knows quite well that the Irish farmer is concerned about being able to get what he wants at the lowest price at which it can be bought. My impression is that we have been importing this material from the Continent and that the British price is not a comparable price at the moment. I am no more an opponent or an antagonist of tariff policy than Senator Summerfield but no one does that tariff policy more damage than the enthusiast who is always ready to declaim against anyone who is ready to question anything about it. You are always suspicious about anyone when they protest too much.

The Irish farmer has justification at least for being doubtful about the value of the product he is getting from some of our tariffed industries making things which he is using on the land. I do not want to get 100 yards of barbed wire with thorns at every foot, nor do I want to get the thorns when they are going around about one and a half inches of the wire. I want to get something I have been accustomed to handle in the past, that you can handle and that does not tear the hands off the men. I do not want carelessly manufactured products put on the market for farmers.

Mr. Summerfield

Why do you assume you are going to get it better if imported?

Mr. Baxter

I can only say that I have brought half-a-dozen buckets this year and the hoops were off four of them inside the first fortnight.

Mr. Lemass

What were you carrying in the buckets?

Mr. Baxter

There have been old buckets about the yard for years and the hoops are still on them. This is not my experience alone. It has been the same with spades, graips, forks and other things. For the sake of the good name of Irish industry, Irish industrialists and Irish workers, let us see that we are efficient. I have no use for the person who wants to denounce Irish industry, but less use for the Irish industrialists, on any side of the House or whether occupying a ministerial post, who think we can build up industries and foist a product on the consumer which is not what he has been accustomed to have and which is not as good as we can manufacture.

I am quite convinced that we can have the machinery here, the modern equipment we ought to be able to get. We should have the management ability somewhere. If we have not it amongst the natives, we should be able to buy it for a while and train the workers. If we can teach them to work hard and if they do that, we will have a product which everybody will buy at home and which we will be able to sell abroad. The people who are going to prevent that are the people who protest against voices like mine being raised to declare that the Irish industrialists must become as efficient as they can. We should not expect Irish farmers to buy any type of product merely because they see "Made in Ireland" stamped on it. If they set that as a fixed aim and then told us about their difficulty in achieving it, we would sympathise with them; but we will not understand them when they tell us what they have been making is the best in the world and we should be satisfied with it here, when our experience in some fields points to the contrary and when we have information over which we can stand because it is our own personal information.

Mr. Lemass

In the case of the firm making this wire netting and barbed wire, the opinion expressed to me by the officers of the I.D.A., who carried out an investigation of that industry in Great Britain, is that the plant installed here is of a far more modern type than the plant installed in many British factories.

Mr. Baxter

That is good. We welcome that.

Question put and agreed to.

Title agreed to.

Bill reported without recommendation, received for final consideration and ordered to be returned to the Dáil.