Seanad Éireann debate -
Tuesday, 10 Mar 1959

Vol. 50 No. 13

Imposition of Duties (Confirmation of Orders) Bill, 1959—Second and Subsequent Stages.

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

Minister for Industry and Commerce (Mr. S. Lemass)

The purpose of this Bill is to confirm Orders which were made during 1958, under the Imposition of Duties Act. There were 39 such Orders. That Act requires that Orders made under it imposing or amending duties must be confirmed in the subsequent calendar year by legislation of this kind.

Six of these Orders were made to afford protection to new industries which came into production, and nine of them to protect the manufacture of additional lines which were commenced by existing concerns during 1958. Thirteen of the Orders increased the rates of duty to protect certain of our industries against low priced goods from Far Eastern or Iron Curtain countries, and against dumping from certain other countries. Seven of them amend earlier Orders as a normal tightening up operation where methods of evading duties had been devised, and one Order permits a modification of the restriction imposed by an earlier Order permitting the importation of unprinted paper without payment of duty where the paper was intended for use in connection with the manufacture of corrugated paper board.

Three of the Orders refer to agricultural products. One of these amended the duty on raw tomatoes and the purpose of the Order was to give growers a measure of protection which would encourage them to cater for the earlier market by installing heating apparatus. Another Order related to the duty on dried peas which was amended to provide an incentive to the pea processing firms to extend the acreage of peas grown in this country.

The duty on wheat was imposed as part of the arrangements made by the Government to deal with the situation arising out of the failure of the 1958 wheat crop. The proceeds of that duty are paid over to An Bord Gráin to reduce the loss on the disposal for animal food of wheat purchased from growers and unsuitable for manufacture into flour.

An explanatory memorandum on the Bill has been circulated to Senators but I shall, of course, be willing to answer any questions which Senators may wish to ask about the Orders.

Mr. McGuire

Once again we have a list in relation to import duties and this time it is quite a formidable one. I always feel slightly on the wrong foot when I speak on the subject of duties and the protection of industry because there are always those who want to say one is anti-Irish industry, and so on, if one even dares to make reasonable comments in that regard. I hope such a charge will not be levelled against me if I make a few critical but constructive remarks.

When the question of duties arises the public are always interested to see in what category the imposition finds itself. There are three reasons for duties: first, there is the protective reason; secondly, there is the revenue collecting reason — very often the public are suspicious, especially traders, who say: "As far as we can see it is nothing but a revenue collecting proposition"— and, thirdly, there is the imposition which is designed to deal, as we had to deal a few years ago, with balance of payments problems.

On this occasion the duty seems to fall into the purely protective category. When we are dealing with anything in this category we should always ask ourselves, and we do ask ourselves, several questions, for example: Are the industries deserving of the protection being provided? There is also the consideration of the number of people employed, the quality of the employment provided, the nature of the product — is it good, fairly good or not so good? We must also ask: Is the whole enterprise efficient? What is the price on the home market and how will the price compare in the export market, which we need so badly? Finally, there is a point that is often overlooked: Is the disturbance to other firms from the point of view of employment justified? An enterprise which will employ 50 people may, invisibly, unfortunately, disemploy other people or decrease the forms of employment in which they can be engaged — say, distribution.

We all agree that protection should not be protection for inefficiency or lack of knowledge. The Minister has, quite rightly, stated that. If the right operating conditions were provided here, we would get the right kind of industries and the right kind of industrialists. I do not think that up to now we have had the best conditions here. So far, the emphasis has been on protection, subsidies and grants to people who want to start industries. I suggest that in relying on protection, subsidies and grants, one does not get the right kind of people. Rather, it entices in people who do not know the job because they are not asked to put up enough of their own capital and they have not got the know-how. Rather than give these forms of protection and bolstering, to use a rather crude word, I suggest it would be much better if we could provide opportunities for profitable trading here through a benevolent taxation system. In other words, instead of giving people setting up industries subsidies, protection and so on, we should provide here a profitable market in which to operate, where profitable results could be got from business. I suggest that in that way we will get people to put their own capital into business here, people with know-how, who know what they are about. In that way we would get industries that would give more competitive prices at home and at the same time would be in a position to export as well. In other words, we would have cheaper goods in the home market than we are getting at present and we would also have goods capable of competing in the export market for which we are making such a drive nowadays.

As I said, mere protection, subsidies and grants inevitably attract the wrong kind of industry and industrialist. At present the home market is flooded with many goods. The home market is bored with many products which offer the consumer little or no variety of choice. They are also incapable of competing in the export market. This limits trading expansion in the home market with no compensating value in the export market. I must not be taken as ignoring the good industries and industrialists of which we have very many here. There are many industries and industrialists here justifying themselves fully both in the home and export markets, but I feel these people are not getting the encouragement and fair crack of the whip they deserve. Sunbeam Wolsey is an absolutely marvellous factory that can take its place with any in the world both as regards efficiency and product. The chairman of that organisation said last year that in the past ten years the company had paid £1,000,000 in taxation to the Government. That is a terrible state of affairs. If they were only allowed to keep half that and plough it back into their business, look at the wonderful things they could have done. It is an example of an industry which is a splendid industry despite the present conditions. If it only had the conditions I should like to see prevail here that industry would make even greater strides than at present. At present we have not got the atmosphere here that we should have in order to have the right kind of industry and industrialist rather than rely on this heavy protection.

I suggest that in future the emphasis should not be on this sort of thing but rather on economic and fiscal incentives for profitable trading to encourage the industrialist with capital and know-how. The Minister himself has been making the same sort of recommendation recently. At least he has been appealing for efficiency and insisting that in future we should have efficient industries able not only to serve the home market but to compete in the foreign market. I do not think that can be done by exhortation or subsidies. It can only be done in one way: by making such conditions here for setting up and running industries that they will be profitable and that when they make money they will be allowed to keep it and plough it back, thus making their businesses bigger and better in every way. There is no other way of creating the industrial economy here that will carry the burden we want it to carry in giving employment to our people.

As regards the particular list of duties we have here to-day, all I can say is we can only rely on the Minister himself to see that the protection is given to the people who deserve it, and that it is being given only where it is deserved and that it will be given only as long as it is needed to give them a fair chance of getting going and of competing, perhaps, with ad hoc invasions from abroad of uneconomic goods produced in other countries. I do not think these duties should be used to compete against goods fairly produced under fair conditions and offering fair competition from people in other countries. If we are not able to compete fairly with people in the ordinary way, I do not see how we will ever be able to compete in the export market. This country cannot live for ever on the limited home market. We will not get anywhere if we are to rely on 2,500,000 people.

Finally, I should just like to say I trust that in this coming year we will see a new line taken on this whole question of the protection of industry. It is generally felt by the man in the street and by the people in the distribution side who see the thing at close quarters as the go-between between the manufacturer and the public, that the time has come when we really should take a major look at ourselves and see can we not get good results here without bolstering methods. Let us use the ordinary economic laws, the laws of incentive. This all comes back to one thing: in all forms of life, not only in the material but in the spiritual life, there is the incentive of fair reward for work done. As they say on television, it is the end product that people want to see; they want to see a job well done rather than be given grants and subsidies and protection at the beginning.

Dr. Sheehy Skeffington

I would regard this Bill as the 1959 edition of the Incompetents' Charter. We are in the position that we have put before us every year an Imposition of Duties (Confirmation of Orders) Bill. It varies in some details, but, in fact, as I have said on several occasions, it seems to me to allow the continuing of certain inefficient manufacturers in business, despite the fact that since they started in production they apparently have not been able to cut costs of production, administration or marketing by one iota. On the contrary: because some of these items, as the Minister has told us, represent an increased protection for goods already being manufactured. We are asked to approve and confirm these 1958 Orders. They were made last year, but we have to confirm them, and they could be nullified by us to-day. We are asked to confirm to-day 39 different Orders of which 38 represent increased duties of one kind or another. Only one represents a concession.

The Minister's predecessor, who did not differ particularly from him in his line in this matter, would nevertheless when introducing a Bill of this kind always introduce proposals confirming Orders for the reduction of several duties. You can see that from the records. I heard him here defending such reductions, by saying that his advisory committee had investigated the industry and had decided that it was now producing in a way and at a rate which would justify a smaller measure of protection. Even with the Minister's predecessor, that was exceptional; I would submit that it should be the rule.

For some of these industries the Minister is asking for a protection of as high as 200 per cent. There is one item with 200 per cent. duty being imposed and many of them are around 50 per cent. I should like to ask the Minister in relation to such industries is there any sign since they were set up that they have increased at all in efficiency? I have put the point again and again here, and I do not want to over-labour it. But it seems to me it should be remembered that when an industry first starts up behind a protective duty barrier, it will have in its first five, or possibly ten, years certain growing-pains, certain initial problems, which it can only conquer behind such a barrier; and it seems to me obvious that in the initial years for a new industry costs will be higher than they will be subsequently, if the industry is any good at all. In other words the new industry must progress in administrative and marketing and productive skills after the early years. It must learn something, surely, if it is worth its salt. Consequently if at the end of five, ten or 15 years it requires precisely the same rate of protective duty as in the beginning, either it has not increased in efficiency at all, in which case I would suggest it does not deserve this continued protective barrier, or it has in fact increased in efficiency and decreased its costs of production and marketing, but has failed to pass on any of the benefit of that increased efficiency to the consumer.

In both cases I suggest that the duty should at least be reduced, and in many cases abolished, because protection at a higher level than is necessary is bad for an industry, bad for the community, and bad for the consumer, the consumer especially, upon whom these duties are a form of tax. It is an indirect tax, but the effect upon the consumer's home is felt very directly. These are protective barriers thrown up around Irish industry at the consumers' expense, and I think we should fully recognise that it is the consumer who is paying.

In other countries, not dissimilar from ours in opportunity and available resources, countries like Denmark, they have had a different policy on industrial development. They have sunk most of their finances and directed most of their efforts into building up a first-class agriculture upon which has grown an industry based upon agricultural demands for machines, churns and the rest of it, with the result that their home market for that kind of industry is a first-class market, to such an extent that they can export agricultural machinery, and we in fact buy it. That seems to me to be the type of industrial policy which we should follow.

Senator Baxter has spoken well and surely justifiably about the burdens that the farmers have to carry. They have to carry not only the burdens of farming, but the burdens of inefficient industrial production. Three or four of these items refer to items of industrial production which constitute the raw materials, or tools of the trade, for the farmer, and the extra cost represented by the extra duties is paid by the farmer in order to keep these industrialists in business.

I ask the Minister and the Seanad to consider whether this is a sound industrial policy such as they have in Denmark, or a patchwork structure to foster those industrialists who happen to possess that very valuable piece of organic matter, the ear of the Minister. It seems to me that access to the ear of the Minister is really the central element in a lot of our so-called industrial policy, which in my opinion represents an extremely patchwork piece of machinery.

Another illustrative point which occurred to me was the habit, in rather second or third-rate retail enterprises, of advertising a "Monster Sale" with the "slashing" of prices, and, in anticipation of the sale and before the prices are "slashed," they are all put up. I suggest that we in Ireland, in anticipation of the day when we enter the European Free Trade area, when it will become mandatory on us to reduce our tariffs progressively by 10 per cent. or 20 per cent. are now pushing them up far more than is necessary, in order to say later that we are quite prepared to reduce our tariffs all round by 10 per cent. with the air of making a big concession.

Now, we have in this Bill 39 different items. The Minister may say: "Yes, but perhaps the Senator has forgotten that we now get this Bill once a year. We used to get it twice or three times a year." But I have gone into the figures for the last five years. In 1953 when there were two Bills there were 11 items in one case and 11 in the other making a total of 22. In 1954 there were eight items plus eight, making a total of 16. In 1955 there were ten items plus 13 items making a total of 23. In 1956 there were ten plus one plus nine making a total of 20. In 1957 there were only nine, but now there are 39. I feel the Minister should advert in some way to the curious inflation that we find here in the number of items upon which he finds it necessary to put import duties.

Senator McGuire referred to the three purposes for which duties may need to be applied. He referred as the third one to the necessity to redress the balance of trade. It has not surprised me, incidentally, but I have noted with interest that where the inter-Party Government put on special import levy duties the only difference in policy between them and the present Government, in most cases, is that the present Government turn those special levies into permanent duties. It seems to me regrettable that most people on both sides of the House seem to be agreed on the necessity for practically every new duty at the ultimate expense of the Irish consumer. It is for that reason that I want to advert to some of these items, and as a matter of fact I intend putting down on the Committee Stage recommendations for the deletion of certain items in the Schedule.

I should like now to turn to certain individual considerations and put them to the Minister. I am familiar, of course, with the Minister's manner and his skilled debating device in dealing with this kind of question. He says one of two things. He says that the Minister does not understand what the Senator means or alternatively he says that the Senator does not know what he is talking about. When the Minister says he does——

Mr. S. Lemass

They are not alternatives.

Dr. Sheehy Skeffington

No, not alternatives, but they can be said arising out of similar circumstances. When the Minister tells me that he does not understand what I mean, I know that I am getting pretty near the truth, but when he tells me that I do not know what I am talking about, then I know that I have really got at the truth.

I should like to ask some questions about some of these items about which I feel concerned and there should be public concern. The first deals with Order 18 of 1958, which is the second item on the Memorandum, dealing with files for filing cabinets and component parts thereof. We are told that the minimum rates are to be 1/- full and 8d. preference per article or component, or per part of per article, as they say in the North country. I should like to know what percentage duty does that represent, because it may be very small or it may be big.

Then I notice that Order 30 imposes a duty on silk and artificial silk. I noticed rather to my surprise that there is a duty of 2/6 full and 1/8 preference, United Kingdom and Canada, per square yard on certain artificial silk, costing not more than 1/3 per square yard. At the very lowest, unless my mathematics are very much gone astray, that is a duty of 200 per cent. I would ask the Minister to consider what kind of effect on retail prices does a duty of that kind have here, as the stuff apparently coming in even from the United Kingdom under a preferential rate of 1/8 costs initially less than 1/3 per square yard. Does the Minister think it necessary to impose this exorbitant duty? I should like to hear something in justification of that.

Order 37 imposes a duty on tomatoes. The Minister has said that this is for the purpose of encouraging Irish growers to grow tomatoes in heat. I would like to hear some more details of the effects of that. Has the Minister satisfied himself on the costs of producing tomatoes in the early season in heated greenhouses? I do not pretend to have any expert knowledge of the matter, but I would be surprised if it is not so, that all the major growers in this country are already growing tomatoes with heat. I know that there are a number of small growers who grow them in cold greenhouses but I should be surprised if large numbers of the growers are not already using heat. I am surprised to find that this is to encourage them to put in heating which they have already. I should like also to advert to the fact that our rivals in this trade are mainly the Dutch, and I should like to ask how do the Dutch do it. What are their advantages over us in the way of heated greenhouses? You may say that they get more sun in summer time but this is not summer time; it is spring, and it depends on artificially produced heat.

I should like to relate this question to the very apposite remarks of Senator Seán O'Donovan when he asked would it not be possible, instead of wasting the heat of the turf-burning power stations, to use it for the production of heat in greenhouses. That was one portion of Mr. R.N. Tweedy's plan for the production of electricity from turf, at a time when everybody was saying that he was mad, and the present Minister was just as pessimistic as he accuses other people of being now, because, after all, this was not started in Ireland until we had learned the hard way from the war, when it became perfectly feasible to produce electricity from turf. Mr. Tweedy long before the war cited as an added advantage in the production of electricity from turf, the fact that you could use the surplus heat, instead of in cooling towers, in heating the greenhouses all around the turf power house.

Those who are familiar with the not very beautiful Battersea Power Station near Victoria Station are aware that they pump hot water under the river to give heat and hot water to blocks of flats on the other side. If that is possible, then it is highly possible in relation to glasshouses growing tomatoes in Ireland. I would like to be satisfied that the best policy in such a thing as this is simply to slap on a duty, because I am not satisfied that that is the best way.

I should like to ask about Order 36 under which the duty on dried peas is being raised from 2d. per pound full, 1?d. preferential the United Kingdom and Canada to 6d. full and 4d. preferential. What percentage does that represent? I would like to hear justification of it, for it appears to be very high.

Order 38 refers to sections for beehives. Is this duty really necessary? I should like to hear justification for it. Who are the main people using these? Large numbers of them are smallholders who have been encouraged to keep bees and produce section honey. This means an almost punitive duty placed upon them, for it is not a small duty—it is 50 per cent. full and 33? per cent. preferential. Is it really worth while, in the Minister's contention, to give this enormous protection to an industry which will not employ very many people at the expense of these small beekeepers? I doubt if there are many large enterprises of that kind in the country. The raw materials of beekeeping are costly enough as it is without putting higher costs still on the wood for making the sections.

Order 49, in this slightly bemusing way, does not mention a percentage, but a sum of money — a duty of 5/7½ full and 3/9 preferential on berets and other similar articles not made wholly or mainly of felt or felted materials. I do not know what they cost initially, but it seems to me that that duty must represent something like 150 per cent. Are the producers of these things producing them efficiently? Has the Minister satisfied himself that that is the case?

Again, I should like to know something about the implications of Order 57 which refers to what the paper before us rather coyly calls "certain electrical accessories" and promptly slaps on a 75 per cent. duty. I did not have time to check the Order again to-day but it is available of course. It was made on the 7th March, 1958. I should like to ask what are those "certain accessories" that require a duty of such a high order.

Order 157 refers to door and window fittings—imposing a duty of 75 per cent. full and 50 per cent. preferential. I do not know what is covered by that but, in fact, window sashes come in and are assembled here, frequently rather unskilfully. I do not know if the Minister has ever noticed that many window frames are so assembled that when the window is theoretically fully opened it is not at right angles to the frame, because the drilling has been badly done. It is not because the raw materials are wrong, but because the drilling, which is about the only operation done here, is done in the wrong place. I have tried on two different occasions to get a properly fitted window of this kind but it is impossible apparently to get satisfaction. What are the door and window fittings which are so unsuccessfully produced in many cases in Ireland that they require a duty of 75 per cent. or 50 per cent?

Then, No. 128 of 1958 is an extension of a duty which I opposed when it first came before us here. It puts a duty on milk cans. Again, this hits the agricultural community. The milk producer is asked to pay more for the milk cans. This is an extension of the duty. I have forgotten what the amount of the duty is. This merely extends it from 12-gallon cans to 14-gallon cans. I am not satisfied, and I do not know whether or not the Seanad is satisfied, that that is the way to help agriculture. I do not think it is. I doubt, if that duty is justified. I thought the same thing the last time. I am sorry to say that, in this Seanad, where the farming community is vocationally represented, my memory is that I did not even get a seconder when I moved the deletion of this duty originally from the Bill. A lot of people in this Seanad speak vocationally for the farmer but vote vocationally for the protected industrialist.

There are three other items which I want to mention. No. 190 of 1958 refers to the duty on certain wire webbing, netting and fencing. What I said about the milk cans applies here too. Here is a duty from 33? per cent. to 50 per cent. going on to fencing and netting. Again, this is an impost upon the agricultural community in order to keep industries going. I should like to have some assurance as to whether the efficiency of these industries has increased a little since they started.

Then, Order No. 194 of 1958 refers to certain portable oil-fired space heaters and component parts therefor. These had a 60 per cent. duty full, and a 40 per cent. preferential. In this Order, No. 194 of 1958, there is a clause which disturbs me — Clause No. 3. It is common form but I think it should be more commonly disturbing. It provides:—

"Whenever the Minister for Finance, after consultation with the Minister for Industry and Commerce, so thinks proper, the Revenue Commissioners may by licence authorise any particular person, subject to compliance with such conditions as they may think fit to impose, to import without payment of the duty imposed by this Order any articles chargeable with such duty or, in the case of any such articles already imported, to take delivery thereof without payment of such duty either as the Revenue Commissioners shall think proper without limit as to time or quantity or either of them or within a specified time or in a specified quantity."

That means that any person having the ear of the Minister can get a licence to import these space-heaters duty-free in any quantity at all.

I am not suggesting that this right would be improperly used. I am suggesting it is a right we should be reluctant to give. This is a statutory Order. It places within the power of the Minister the right to make this concession to anybody he likes, with any conditions he likes, or no conditions, as to time or quantity. Some people would be paying a 60 per cent. duty and having to sell the articles with that duty while others would be importing them and paying no duty at all. That is unsatisfactory. It is another of these Orders which I should like to see deleted.

The final one is Order No. 206 of 1958 which puts a duty of 50 per cent. on imitation cotton wool. That may be what our Irish industrialists are wrapped up in; I am not sure if that is the genuine or imitation article. Again, it seems to me that this is a very high percentage of duty to be imposed. This imitation cotton wool is used largely in homes where there are young children. It is an ordinary item of household expenditure and here we have this exorbitant duty.

I desired to put down some recommendations. I thought from the Order Paper the last time that this Bill would come first to-day. It came to us first but the Turf Development Bill was taken first. I should like to propose recommendations. I am quite happy to allow them to stand over for a week, if the Committee Stage is to be taken then. However, I took the precaution of handing them in beforehand. I want to give the Seanad an opportunity to vote in accordance with a concern that is often expressed here for the consumer and the farmer in relation to some of these matters and move the deletion of certain of these items from this Bill which seems to me to be inordinately long.

Mr. S. Lemass

Senator McGuire referred to the fact that this Bill contains a formidable list of duties. I agree that the Schedule is fairly long. As Senator Sheehy Skeffington pointed out, the practice was to confirm Orders made under the Imposition of Duties Act by legislation within six months of the making of the Orders. That generally required that, towards the end of every session of the Dáil, a Bill of this character had to be produced. My predecessor thought of the idea of providing for confirming in one year the Orders made in the previous year. From an administrative point of view, it is a more practicable approach. However, I can see that it does present Senators and Deputies with a substantial list of Orders of this kind and there is likely always to be more.

Senator Sheehy Skeffington wanted to know why the number of Orders this year is larger than in previous years. I suppose the answer is that there is more activity on the industrial front at present. Senator McGuire said these Orders are of a protective character. That is true with, possibly, the exception of the Order relating to wheat which is a temporary arrangement to deal with what we hope will be a very temporary situation. I do not accept his contention that the maintenance of a policy of protection for new industries means that we are attracting into industrial activities the wrong type of industrialist. I certainly reject absolutely Senator Sheehy Skeffington's sweeping assertion that all protected manufacturers are inefficient manufacturers.

Dr. Sheehy Skeffington

May I say that that was not my contention, and that what I said was that there ought to be, for the efficient industrialist, evidence of a recognition of that efficiency in a reduction of tariff? I did not say that they are all inefficient but some may be making too big a protected profit.

Mr. S. Lemass

We have to take into account, in considering policy in this matter of protection for industry, possible developments in the international field. While the prospects of the emergence of a European Free Trade Area Agreement were strong, it would obviously be injudicious to start applying substantial tariff reductions on our own initiative.

When we come to consider the matter of tariff reductions, whether we do so under an international agreement, multilateral or bilateral, or on our own initiative, we will need to supplement existing legislation for the protection of industry by something similar to the British anti-dumping law. In circumstances where tariffs are frozen, whether because of international commitments or our own decision, the prospects of dumping are enhanced. This country is particularly liable to suffer from competition by dumping. We are in very close geographical proximity to great industrial countries where large firms not infrequently have surplus stocks to dispose of, at or below cost, or find themselves with goods prepared for delivery to other markets which become closed to them and have to get rid of them somewhere. The quantities involved are often so substantial in relation to our requirements that they could put existing Irish industries out of business for many months.

We have not anti-dumping legislation at the moment. We have the practice of making variations of existing duties. Many of the Orders became necessary because of evidence of dumping. In the White Paper on economic expansion it was mentioned that the Government were preparing and would introduce, when required, anti-dumping legislation. That decision was, of course, related to the possibility of a European economic agreement which would limit our freedom of action in regard to tariffs but circumstances may require its introduction in any event.

It is true, as Senator McGuire said, that it is desirable that persons who promote new industrial undertakings should have a considerable personal stake in their success but we are not in our circumstances seeking to apply sound theories only. We are trying to get practical results and our practical need for industrial expansion and the employment it gives is such that we must do what we can with the weapons at our disposal.

By and large, it is true to say that a shortage of capital is not the limiting factor in our industrial development. It is lack of opportunity for utilising the capital resources we have arising out of deficiencies in technical knowledge and experience and, perhaps, in export possibilities represented by market contacts abroad. To the extent that we can associate our capital resources with technical experience or market contacts available to firms elsewhere then we can get results of the kind we require. I do not think we should stop ourselves from doing so by the theoretical consideration that it would be preferable to have the original promoters, the controllers of technical processes and skills, themselves financially involved in the capitalisation of new undertakings.

Indeed, Senators may have noticed that I have been invited by the Italian Government to lead a small economic delegation to Italy next month. The Italian Government consider that Italian technology might be able to contribute to the industrial development of this country to the mutual benefit of both countries and are anxious to discuss possibilities in that regard. I think we should consider these possibilities. It may be that substantial capital participation in Irish industrial development from Italian sources will not be forthcoming but noticing the skill which Italians have acquired in industrial technique and organisation and the fact that they have introduced many products on the world markets it seems probable that some substantial advantages to us might follow from closer contacts with them.

While I say that, I again want to make it quite clear that it is desirable that persons promoting new industrial undertakings should be involved themselves in a substantial way in the financing of them and stand to lose if the undertaking fails to make good.

Senator Sheehy Skeffington referred to this Bill as the incompetents' charter. I must not say that I do not understand him as he would regard that as vindication of his point of view. When Senator Sheehy Skeffington spoke about industrial policy he seemed to be arguing in favour of industrial policy with no industries. That does not make sense to me.

However, let me refer to the specific matters that the Senator mentioned in order to make it clear to him what the reason for the Orders was. I do so as briefly as possible while at the same time trying to satisfy the Senator's thirst for information.

I have said that many of these Orders were imposed for the purpose of dealing with specific instances of dumping which arose in the circumstances of a slight trade recession in other countries during the past year. It may be that our experience in that regard was somewhat abnormal. That certainly applies in the case of the first commodity the Senator inquired about —the suspension files. I have good reason to think that there was a systematic attempt made to put out of business the firm engaged in the production of these goods. I am satisfied that the quality of the Irish product is as good as that of the imported product, while their prices were higher when they were unable to get their production up to the economic level. Now that the tariff has been imposed and their production is increasing, their prices are going downwards. An undertaking has been given that price reductions will be effected when production reaches a level which represents a much higher proportion of the home market than was achieved heretofore.

Dr. Sheehy Skeffington

What percentage does the 1/- duty represent?

Mr. S. Lemass

It is a minimum duty. The percentage rate would vary according to the price of the article. It could not be given on an ad valorem basis. With regard to silk and artificial silk, we carried out a recasting of the duties last year. As well as imposing certain minimum duties, the recasting was effected to deal with any instances of duty evasion by various devices all of which had to be countered by one method or another. The minimum duty was provided consequent upon a problem which is not merely ours but one experienced in every European country. It is how to handle this Far Eastern competition in textiles. We have handled it by means of the minimum duty. Great Britain, which is certainly stronger in industry than we are and has a much longer tradition and experience in the textile field, has met it by a quantitative restriction of imports. Other European countries have done the same. By reason of the very low labour costs and other factors in the Far Eastern countries, their textiles come to the European markets at such low prices that the most efficient European country cannot compete with them. Some come from Iron Curtain countries where economic considerations do not enter into the determination of the selling price at all.

Dr. Sheehy Skeffington

There is a duty of 1/8 put on against the U.K.

Mr. S. Lemass

It will not be applied because British cloths do not come in at that price. That is imposed as a consequence of the obligation under international agreements to impose some duty at the basic rate for British goods but in so far as British cloths do not come in at 1/2 per square yard, no cloth will carry that duty. That is the explanation there. As I said, it is a problem which is not merely ours but which affects all European countries. It is one of the problems which helped to delay and complicate the European Free Trade Area discussions because it was clear that some countries saw the possibility of securing a greater share of the European garment trade on the basis of utilising Far Eastern textiles and thereby reducing their selling prices.

In the case of tomatoes, the objective the Minister for Agriculture had in mind was to encourage tomato growers to get into the production of tomatoes earlier in the year. The duty applies only for certain months of the year — from the 1st June to 31st October. The belief is that by the assurance given by this duty greenhouse owners will be encouraged to install heat, lengthen their production season, and increase their efficiency. The duty is not payable from the beginning of November to the end of May.

In the case of dried peas the duty, which I should say is a prohibitive one, is not paid by anyone. If it were not for the obligations which we have undertaken to the O.E.E.C. we would probably have imposed quantitative restrictions instead of a duty. The intention is to confine the duty-free import of these dried peas to firms in this country which have entered into contracts with farmers for the growing of peas and to relate the duty-free import facilities to the area represented by their growing contracts. In fact, that duty will not be paid by anybody. The full quantity of peas required to supplement home production will be admitted free of duty to the canning firms on the basis of the extent that they have contracted to have peas grown for them. They will be allowed duty-free imports to make up the balance of their requirements.

As regards sections for beehives, this is a very small industry in a rural area; I am not pretending it is anything else. However, it did appear that the failure to secure business from manufacturers here was due to the reluctance on the part of traders, for not known reason, to use the Irish product in preference to the Canadian one they were used to importing. Before imposing this duty I was satisfied, by means of enquiry carried out through the Department of Agriculture, that the quality of the Irish product was as good as the imported product. Its price was considerably less than the imported product and yet for some reason they were not getting sales. By reason of the duty their sales are increasing. I have had no adverse representations from any source as a consequence and no application for duty-free import facilities or any representations regarding the quality or price of the product.

In the case of berets, again the only consideration that arose was substantial evidence of dumping. The evidence showed that goods of this character which were normally being sold to wholesalers in Britain by British firms at a particular price were being offered to wholesalers in this country at two-thirds of that price.

Dr. Sheehy Skeffington

What was that price?

Mr. S. Lemass

The standard price in Britain was 66/- per dozen and these goods were being offered here for 40/- per dozen. The quality of the Irish product is satisfactory over the whole range of different varieties being produced. Prices do not exceed those prevailing in Britain and the undertaking given by the manufacturers is that prices here will not exceed the prices prevailing in Britain at any time. I have always contended that an Irish manufacturer who produced and sold goods here at the same price at which goods of similar quality were produced and sold in Great Britain was meeting the only reasonable test of efficiency we could apply.

In relation to electrical accessories, these are manufactured principally in Carrick-on-Shannon, though other firms are engaged in the production of some of these goods, and the scope of the duty was enlarged to cover new items which they have undertaken. If the Senator wants to know these I shall tell him. They are: junction boxes, batten lampholders, 3 pin plugs, screwed lampholders and multi-sockets.

In connection with door and window fittings, the items covered by this duty do not include metal window frames. The items relate to door handles, sash handles, hat hooks, coat hooks and other doors and window fittings. In this case it was clear that the price at which the goods have been produced here was considerably higher than that at which they could be imported by reason of the inability of the firm to get its output up to a completely economic level. In the case of an industry of this kind, when goods are manufactured at a place like Tubbercurry in Sligo, there is naturally a strong desire to nurse the industry along, to help it to get into economic production even if it means carrying increased prices for a time. One would naturally be less ruthless with a firm which was giving substantial employment in Tubbercurry than one would be with a similar firm, say, in Dublin or Cork because the disappearance of the employment from that village would be far more catastrophic than the disappearance of a similar volume of employment from a larger centre. With the imposition of this duty production has expanded and already the prices of all the products of the firm have been reduced. It is confidently expected that further reductions will be made as the efficiency of the firm increases and as its output rises so as to reduce its production costs.

In the case of milk cans, that was only a minor alteration in the definition of a milk can for the purpose of preventing evasion. The definition related to milk cans under 12 gallons capacity, but it was found that cans of a capacity of 12½ gallons were being imported duty-free. Consequently the Order was amended to cover milk cans under 14 gallons. They are manufactured satisfactorily here and are sold at prices similar to those in Britain, which is the test of efficiency which applies in such instances.

In the case of wire webbing, netting and fencing, the problem there was again one of quite substantial dumping, dumping which represented the sale of the manufactured products at lower prices than the cost of the wire for making them. We had to handle that situation. This webbing, fencing and netting is manufactured here from wire which is also manufactured here and it represents a substantial part of the total production of important firms. They are as efficient as they could reasonably be expected to be. It was desirable to maintain them in production, notwithstanding the temporary advantages that might be secured through the low prices at which these products were being offered in certain continental countries.

The manufacture of oil space heaters represents a new development. There are three important firms engaged in the production of these goods, all with external associations which give them the right to patents and designs developed abroad, and there is a substantial market for these goods which should be met by Irish production. Senator Sheehy Skeffington quoted in that connection the licence provision attaching to the Order. That is the standard licence provision. There was nothing unusual in it. He could have read the same section in any other Order. In fact, no duty-free licences are given for the importation of these oil heaters, but during the transitional period while the firms were getting into full manufacture, they were given duty-free licences for parts of assembly, parts which they ultimately intend to make but which they require to import during the period in which they are trying to get the industry properly organised.

As regards cotton wool, the only question here is the amendment of the definition. Senator Sheehy Skeffington asked if this was the genuine article. The purpose of the Order is to extend the duty from the genuine to the synthetic article. The definition is extended to cover not merely cotton wool made out of cotton but cotton wool made from synthetic material.

Question put and agreed to.

An Leas-Chathaoirleach

Next stage?

Tomás Ó Maoláin

Since this is a Money Bill, I suggest we should take the next stage after tea.

Dr. Sheehy Skeffington

I am afraid I did not realise that this would extend to this evening. It is not, in fact, possible for me to be here in the evening. I do not intend to make a long speech on these recommendations, but I should like to see some decision taken on them.

Agreed to take remaining stages.

Bill considered in Committee.

Sections 1 and 2 agreed to.

SCHEDULE

Dr. Sheehy Skeffington

I move recommendation No. 1:—

To delete the following:—

"

No. 37 of 1958.

Imposition of Duties (No. 16) (Raw Tomatoes) Order, 1958.

Increase in duty on raw tomatoes imported, between 1st June and 31st October each year.

"

I do not want to repeat what I said before. I should like to make it clear that in the case of some of these things, such as this imposition of a duty of 6d. on tomatoes, it is not in our power to reduce it. I think a case could be made for something, but 6d. is too high. The only power we have is to reject, and the Minister can then make a fresh Order. In that light, I propose the deletion of this Order in the hope that the Minister will make a more modest Order in place of it.

Mr. Murphy

Could the Minister give us any idea of the number of glass-house producers who have in fact introduced heating in order to produce early tomatoes?

Mr. S. Lemass

This only came into operation last year. I expect the installation of heating equipment in these glass-houses is proceeding at the moment, so that nobody would have that information in any precise form.

I find it difficult to answer the argument that a lower rate of duty might be equally effective. Possibly it would. In a matter of this kind one must appreciate that the people who undertake the production of tomatoes in glass-houses require very specific encouragement to effect the capital investment involved. Only the imposition of a duty that appeared to them to be likely to secure the market for them would be strong enough as an inducement, particularly having regard to the knowledge that in other years, when market conditions were such as to produce a big surplus in other countries, very low prices were offered.

Recommendation put and negatived.

Dr. Sheehy Skeffington

I move recommendation No. 2:—

To delete the following:—

"

No. 36 of 1958.

Imposition of Duties (No. 17) (Dried Peas) Order, 1958.

Increase in duty on dried peas.

"

I wish to propose this recommendation without making a speech. I have made the point already. The duty seems to me to be very high. The Minister says it is intended to be prohibitive. In the light of what the Minister says, I would be inclined to withdraw that recommendation.

Recommendation, by leave, withdrawn.

Dr. Sheehy Skeffington

I move recommendation No. 3:—

To delete the following:—

"

No. 38 of 1958.

Imposition of Duties (No. 18) (Sections for Beehives) Order, 1958.

Imposition of duty on sections for beehives and component parts therefor.

"

I have given my reasons for this recommendation on the Second Stage.

Mr. S. Lemass

The amount of employment given in the manufacture of beehives is not important in the overall picture, but it is of some importance in Ballintaggart, Callan, where they are made. Personally, I should like to encourage that type of little industry in these country places, particularly where it is clear, as in this case, that the product is first class in quality and lower in price than the imported article. The only reason they were imported was because of old associations between the importing firms here and the firms abroad.

Dr. Sheehy Skeffington

The Minister is under a misapprehension about the Order. It does not apply to beehives; it applies to sections.

Mr. S. Lemass

Yes.

Dr. Sheehy Skeffington

It is the woodwork frame with which the honey sections are made.

Mr. S. Lemass

Yes, sections for beehives.

Dr. Sheehy Skeffington

It has nothing to do with the manufacture of beehives.

Mr. S. Lemass

I am clear on that.

Dr. O'Donovan

I think the beehives are made in Dublin.

Mr. McGuire

It seems to me from the Minister's explanation that this is the kind of imposition of duty we could stand over. As the Minister has explained, if the Irish industry is able to produce either at the same price or at less than the price of the foreign article as good an article, I do not see why we should object.

Dr. Sheehy Skeffington

I should like to press this because this imposition falls on the very small producer of honey.

Recommendation put and negatived.

Dr. Sheehy Skeffington

I move recommendation No. 4.

To delete the following:—

"

No. 49 of 1958.

Imposition of Duties (No. 20) (Berets) Order, 1958.

Amendment of duty on nonfelted berets.

"

Mr. Murphy

On the Second Stage, the Minister said that the products of the Irish factory were sold at about the same price as the products in Britain. Could the Minister tell us if the wages paid here are at anything like the same level as in Britain?

Mr. S. Lemass

I would not know that. The firm has given an undertaking that the prices they will charge will, quality for quality, be no higher than the prices in Britain. I do not know how it becomes possible for it to do so. This Order relates to unfelted berets — berets made of fabrics other than felt. There was a duty on berets made of felt. The evidence of systematic dumping in the Irish market by suppliers in Britain was quite emphatic, and certainly it justified the imposition of the duty upon these unfelted berets.

Mr. Carter

I do not think that the Senator showed that these berets are, in fact, made in Britain. They could be made in Hong Kong, imported into Britain and re-exported here. In fact, they could be made in China, where the Chinese Communist Government are engaged in a campaign of undercutting prices in this type of goods all over the world. They have succeeded in undercutting the Japanese who were the masterhands in that particular business. When the Senator queries the wages paid in that particular industry, I might say to him that he should read the statement in the Hong Kong papers recently relating to workers in China who were looking for a rest. Mao told them that if they wanted a rest he had a salt mine similar to that in Siberia where he could send them for a short holiday.

An Leas-Chathaoirleach

We do not want a discussion on wages in China.

Dr. Sheehy Skeffington

I would be inclined not to accept the view that these are exclusively Communist Chinese berets or any kind of odd fruit! It seems to me that 3/9 duty per item, preference U.K. and Canada, is too much. The price of these things is too high.

Mr. S. Lemass

That is disputable.

Recommendation put and negatived.

Recommendations Nos. 5 and 6 not moved.

Dr. Sheehy Skeffington

I move recommendation No. 7:—

To delete the following:—

"

No. 128 of 1958.

Imposition of Duties (No. 34) (Milk Cans) Order, 1958.

Amendment of duty on milk cans.

"

We were assured a short time ago that the duty put on the 12-gallon cans would make every farmer buy Irish cans but apparently the Irish farmer is determined to buy the non-Irish can. The Minister thinks it is purely from the profit he gets. I think it is because he gets better value.

Mr. S. Lemass

I should say in defence of the Irish producers that not merely are they supplying requirements here at prices which are the same as those at which British-made cans are sold in Britain but they have succeeded in obtaining a very substantial part of the Six Counties market by reason of their quality and price. It is true that some of these cans are occasionally available from Germany and other continental countries at lower prices than prevail here, and by this device of making cans 12½-gallon instead of 12-gallon, they are able to get outside the duty.

Mr. McGuire

I should like to say that on the Second Reading I made some critical but, I hope, constructive remarks and I would not like it to seem that I am not making any comment on these proposals of Senator Sheehy Skeffington. Although I do know of certain duties and impositions that I should like to criticise there is nothing here with which I find myself in opposition, especially in view of the Minister's statement. Nothing has come to my knowledge as a commercial representative, and nobody has brought to my knowledge any objection to these proposals in the Orders.

Dr. O'Donovan

I should like to say that on this one I agree with the Minister.

Recommendation put and negatived.

Dr. Sheehy Skeffington

Division.

An Leas-Chathaoirleach

Will Senators seeking a division stand in their places?

Dr. Sheehy Skeffington rose.

An Leas-Chathaoirleach

The Senator will be recorded as dissenting.

Dr. Sheehy Skeffington

I move recommendation No. 8:—

To delete the following:—

"

No. 190 of 1958.

Imposition of Duties (No. 42) (Wire Webbing, Netting and Fencing) Order, 1958.

Amendment of duty on certain wire webbing, netting and fencing.

"

I am inclined to accept the Minister's statement that this duty was to meet a specific case of dumping. I am sure all of the agricultural community would like to get wire netting and fencing cheaper but if the Minister says this is merely to meet a case of dumping——

Mr. S. Lemass

The Senator may take it that it is for that purpose. We have a very efficient firm which manufactures the wire for these products, and a number of other appliances as well, and it does a substantial export trade in them. In the case of this fencing, in a specific instance, the fencing was actually offered here from a continental source at less than the cost of the wire to the firm making the fencing.

Recommendation, by leave, withdrawn.

Dr. Sheehy Skeffington

I move recommendation No. 9:—

To delete the following:—

"

No. 194 of 1958.

Imposition of Duties (No. 44) (Oil Space Heaters) Order, 1958.

Imposition of duty on certain portable oil fired space heaters and component parts therefor.

"

I am inclined, in the light of the Minister's statement on this, also to withdraw this recommendation. I trust that there is no exorbitant concealed profit arising from this?

Mr. S. Lemass

I want to be quite clear on this. This is a new manufacture and the demand for these oil space heaters has grown enormously and quite a number of firms of well-known repute have gone into their manufacture. The licensing device has been used solely to enable certain component parts to be imported free of duty by these firms so that the completed product could be produced in their factories pending the installation of the necessary apparatus. Once the full degree of manufacture to be undertaken by the firms is reached the licensing provision will become inoperative except in special circumstances.

Mr. Murphy

Can the Minister tell us how prices compare between here and Britain? I have a feeling that prices are lower in Belfast.

Mr. S. Lemass

There will be quite keen competition between a number of well financed firms——

Mr. Murphy

Yes, we have had firms with that type of competition before but the prices were still very much lower in Belfast.

Mr. S. Lemass

I have heard no complaints in that regard. I should perhaps say that in relation to some of these firms which are manufacturing heaters which are of a design which is patented by firms in Great Britain their undertaking was that the prices here would not exceed prices in Great Britain.

Dr. Sheehy Skeffington

In begging leave to withdraw this recommendation I should like to express the opinion that on occasion we should like to hear from the Minister that in due course, in the course of five or ten years, he foresees the time when an imposition will disappear.

Mr. S. Lemass

Yes, on cotton wool.

Dr. Sheehy Skeffington

I am talking about space heaters.

Mr. S. Lemass

I have great hopes of some of these firms developing an export trade.

Dr. Sheehy Skeffington

Does that mean that they will be reduced?

Mr. S. Lemass

In view of the proposed revival of the Free Trade Area negotiations, do not press me on that.

Recommendation, by leave, withdrawn.

Dr. Sheehy Skeffington

I move recommendation No. 10:—

To delete the following:—

"

No. 206 of 1958.

Imposition of Duties (No. 47) (Cotton Wool) Order, 1958.

Amendment of duty on cotton wool and wadding, etc.

"

I should like to press this recommendation for the reason that cotton wool and wadding are most certainly used in households, hospitals and so on. It seems to me that they are items which should not have a heavy imposition put upon them to the extent of the present duty.

Mr. S. Lemass

I should like to make it quite clear that the firms manufacturing cotton wool in this country have been doing so in a highly competitive and efficient way and the price of medical cotton wool produced here to the British specifications is lower than in England and so far as it is intended to extend the duty to goods made from synthetic fibres the firms are prepared to manufacture them too if there is demand for it.

Recommendation put and negatived.

Schedule and Title agreed to.

Bill reported without amendment and received for final consideration.

Question proposed: "That the Bill do now pass."

Mr. McGuire

I should like very much to compliment Senator Sheehy Skeffington on his careful examination of these proposals here to-day. He has done very good service not only to the Seanad but to the country as well, because on several occasions we have had these Orders going through with very little examination in this House. He has obviously gone to a lot of trouble in going through each one of these Orders and coming here to speak about them and has put down practical suggestions. He is to be complimented on that.

Mr. S. Lemass

May I add that on this occasion I understand fully what Senator Sheehy Skeffington was trying to say?

Question put and agreed to.

Business suspended at 6.15 p.m. and resumed at 7.15 p.m.