I move that Seanad Éireann hereby approves of Sugar (Prohibition of Import) Order, 1956.
Sugar (Prohibition of Import) Order, 1956: Motion of Approval.
Would the Parliamentary Secretary tell us more about this?
Could we not take this Order with the second and similar Order which appears on the Paper?
We can discuss the two Orders together.
One is an amendment of the other. I do not think that for practical purposes they can be very well segregated. Article 5 of the parent Order is being removed. The purpose of Article 5 was to enable the exporters of goods in the manufacture of which sugar is used to import sugar at world prices and so be in a position to compete with similar manufacturers from other countries in the world market.
The reason for its removal in the amending Order is largely due to the fact that the world price of sugar has been rising and, therefore, there is no inequality between our price and the world prices of sugar. The facility afforded to the manufacturers of sugar-containing goods here is no longer required. That, in a few words, is the sense and purpose of the Order and I do not think there is anything further I can usefully add to it.
I am a little puzzled by the feeling that it is necessary to rescind Article 5 of this Order which comes before us for the first time to-day. The Parliamentary Secretary told us the reason is that the world price of sugar is going up and that, therefore, there is no longer any point in permitting the import of sugar under licence; but the Order, as it stands before us, is simply a permitting Order and the Minister would have to give his certificate before such sugar could be imported. I fail to see the necessity for immediately rescinding Article 5 for the reason stated. It does not seem to me to be a sufficient reason to rescind the granting to the Minister of the power under certain circumstances to allow the import of sugar at world prices. I was a little surprised to hear that the world price of sugar is more or less the same as the home price. Would the Parliamentary Secretary like to quote a figure?
I would not.
It seems to me that there is still a margin, as it were. There is something Gilbertian about our procedure. We are asked to confirm an Order and, when we confirm it, we are asked to revoke portion of it. It is like the old Dublin Opinion picture of a treaty conference at which one delegate said: “Don't tear up the treaty yet. I haven't signed it.” It seems to me that in respect of these Orders we are doing something somewhat similar.
I cannot see what embarrassing situation is created by leaving in Article 5, even though it might not be used at the moment. It is quite possible that the world price of sugar may go down again, in which case we would have a further Order introducing something like Article 5 again. On the other hand, if we leave Article 5 in as it is now, all that it does is to give certain power to the Minister for Industry and Commerce, which he may or may not have to use. Rescinding the Order, on the facts stated, does not seem to be necessary.
The reason this Order was made last December was that people were not satisfied with the conditions under which the monopoly importation of sugar was carried on at the time. I have not seen the debate in the other House on the new Order. The Irish Sugar Company has had a monopoly of the importation of sugar here since the Act was passed in 1936. Under that Act, there was only one importer of sugar, that is, the Sugar Company. Some complaints were made to the Government by certain responsible firms in regard to the conditions imposed on them by the Sugar Company. These conditions were not satisfactory and the Government made this Order in the interests of private enterprise. It was a perfectly proper Order to make.
I do not know what the circumstances have been since which have led the new Taoiseach to rescind a part of the old Order or what the change is for. I thought I would explain why the Order was made in December. It was made in the interests of private enterprise. The firms engaged in the export industry were not satisfied with the price and the conditions under which they were getting sugar from the Sugar Company.
We all know there is a great tendency on the part of State companies —the Sugar Company is not the only company—when they have the monopoly, to put on people conditions that business people would not regard as reasonable. I am not passing judgment at all on this case because I do not remember the details, but I remember the circumstances in which the Order was made. Whether it had anything to do with the price of the sugar, I cannot say. I think it had to do with the price at which people were obtaining sugar. I think there were other conditions also, apart from the price—dissatisfaction in the case of certain firms—and that was the reason the Government of the day made the Order.
There are many different types of sugar. I presume the sugar referred to in the parent Act is cane sugar or beet sugar. In Article 3 of this Order, it says that: "The importation into the State of sugar not manufactured or produced in the State is hereby prohibited." Would the Parliamentary Secretary tell me what that means? Suppose you start making milk sugar, does it mean it cannot be imported? A man could also start making starch sugar or glucose. I think it would really be much better if the definition of sugar were made more precise in the specification in this Order and sugar were described as cane or beet sugar, which I presume it means.
In view of what Senator O'Donovan has said, I am a little unhappy about the removal of this fifth part of the Order. Does it mean that if we rescind this part of the original Order the sugar company will regain a monopoly over the importation of sugar? If that is so, it is a grave matter. Senator O'Donovan also said that some firms have expressed the opinion that it put a disadvantage upon them. We should be quite clear on these points before we make a decision.
On the point raised by Senator Sheehy Skeffington as to the sense of coming in here to confirm an Order and, at the same time, to amend it, perhaps I should advert to the fact that an Order is allowed to run for six months before confirmation becomes necessary. There must have been some reason for fixing a period of six months. I take it that the reason was that some changes might emerge as desirable during the course of the six months and that, on confirmation of the Order, effect might be given to them. I think the amending Order really just does that.
No disadvantage is being caused to the commercial users of sugar by this amendment. For Senator O'Donovan's information, perhaps I should say that the extent to which the facility was availed of was very small indeed, which shows that, in fact, there was no hardship in what has been described as the "monopoly". It is true that the Sugar Company were the sole authority that could import sugar. To that extent, if one likes to apply the term "monopoly", it is applicable. However, it has been the position all down the years. Now, with the equality in world prices as compared with our own price so that the consequent disadvantage which an inequality would impose on our manufacturers no longer exists, and as there is not any reason for this certifying of importers other than the Sugar Company, I do not think there is anything in the facts behind these Orders which would warrant any sort of apprehension whatsoever.
The flexibility of making such Orders is, in itself, a guarantee that any untoward situation that may arise in relation to the manufacture of sugar-containing goods can be just as easily dealt with in a subsequent Order as is now being done in respect of this Order.
The fact that very few importations were made under this Order does not prove anything, for the very reason that once the Order was made these firms had the right to go elsewhere. In other words, the company was brought to heel in relation to the importation of sugar.
The fact that perhaps only a few cwt. or even only a few lb. were brought in under it does not prove anything at all. My recollection is that when the Government made this Order in December, there was a good deal more to it than the question of the price of sugar. There were other conditions as well. I am not familiar at the moment with the way in which the trend of sugar prices on the world markets has moved. However, this is an enabling Order and why do away with an enabling Order? Who made the representations that it be revoked? Why is it being revoked? We have not been told any of these things.
It is all right to say that the price of this or that has taken a certain turn, but the Minister for Industry and Commerce has the power, under the first Order, to act as he likes. He is now being deprived of that power. It is putting back the complete monopoly into the hands of the Sugar Company. I take it that the Government of the day—who at that time had been nearly three years in office-did not just make this Order on the spur of the moment or out of chagrin. I think they had good reasons for doing so and certainly my recollection is that they had. I take it, also, that the Government of to-day have good reasons for making the revoking Order, but we have not heard them.
I accept that there were good reasons for making the Order, but these reasons no longer obtain. The occasion of confirmation has just been used to amend the Order. There is nothing more to it than that. The quantity of sugar affected by Article 5 of the parent Order was very slight and had no bearing whatsoever on the Sugar Company's dealings in sugar. If the reasons which operated to produce Article 5 of the parent Order should again supervene, then a new Order can be made.
Could the Parliamentary Secretary tell us what danger would ensue if the powers which Article 5 gives to the Minister for Industry and Commerce were to continue to be vested in him? That seems to me to be the point at issue. We are asked, in revoking Article 5, to remove certain powers from the Minister. That is all it does. What danger would reside in continuing to vest those powers in him?
I cannot indicate any danger. All I say is that the reasons for the making of the Order no longer exist and that, in so far as the best advice indicates, the position will improve in favour of home manufacturers using sugar in their manufacturing processes. The occasion of confirmation of the original Order is just being used to insert an amendment which gives effect to the facts of the situation as it now exists.
Having listened to this discussion, I should say that there seems to be something which has not been brought out here. As a protagonist, always, of private enterprise, may I point out that at the moment there is in existence a Fair Trade Commission inquiring into restrictive practices and monopolies? It would seem that this Order is giving the Sugar Company a monopoly.
We frequently hear about the great success of State companies as against the so-called "failure" of private enterprise. These State bodies can be a great success when they are in a position to have monopolistic control of markets. It seems fair comment on this particular Order that we should be very careful. We should like to hear more about cases where monopolies are being given to State bodies, whereas private enterprise is supposed to trade in the open market and under a Fair Trade Commission.
What effect will this have on the chocolate crumb industry? The success of that industry is tied up entirely with the price at which that industry can purchase raw sugar. If they cannot purchase it at the right price, they cannot compete in the world market with that very important product.
It will not have any adverse effect. They will get their sugar at a price that will enable them to compete with similar manufacturers from other countries.
As regards the monopoly element, that does not apply at all in this case for the reason I have given, that the trend of imported sugar prices is such as to nullify any advantage of monopoly. It is because of that that our manufacturers no longer require protection.
If the terms of trade run otherwise, it means that the Government may have to revoke that Order in order to allow these manufacturers to buy sugar at the imported price. That might take a month or two and this very large, important industry has to wait while the Government is revoking the Order. If they did not bring in the Order at all, the whole procedure would be unnecessary.
I cannot see how the Senator thinks it would take a month to produce an Order of this kind. After all, they are produced very rapidly, a fact of which I think the Seanad took notice here a few years ago.
Is the suggestion being made that the price of imported sugar is less than the price of homemade sugar, because that is not the situation as I understand it?
No; we are not making any such suggestion. We are suggesting that a monopoly is being given to a State body for the importation of sugar and nobody allowed to buy, except with the acquiescence of that body. That is a bad principle and I think people on the Senator's side of the House will agree with that. All we are saying is that we would like to hear more on this question. We have not had a full explanation. Maybe the Parliamentary Secretary has not had a proper brief. He may have been handed this as he came into the House to-day. If that is the case, perhaps it is not fair to question him, but we are doing so in good faith. We are not challenging the Government. The Government has made some statement recently with which I agree, that it is about time we cleared up the decks in this country and got going on purely business lines. I think monopolies, whether by private enterprise or State bodies, are bad for business and for our future economic position. It is in that spirit we are asking this question. Perhaps it is not a good idea to have this Order and there might be second thoughts on not giving the Sugar Company a monopoly.
The Minister might reconsider the Order.
Nobody can object to the general remarks on monopolies. Nobody likes them and nobody wants them. I do not think anybody has ever recommended them, except where some vital interest required them. We must remember that the monopoly, as we know it in relation to sugar, has a very close relation with an important agricultural industry for the production of beet. I take it it is no different from the protection afforded to other agricultural and industrial activities in this country over the past 30 years.
In regard to the monopoly on sugar imports affecting manufacturers, I do not think there is anything I can say to emphasise what I have already said, that the retention or the removal of this Order does not adversely affect their interests in any way.
Question put and agreed to.