Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Thursday, 21 Apr 1927

Vol. 19 No. 13


I move:—

(1) That whenever the Revenue Commissioners are satisfied that any articles liable to any duty under Section 19 of the Finance Act, 1924 (No. 27 of 1924) imported into Saorstát Eireann on or after the 22nd day of April, 1927, are so imported for further manufacture and subsequent exportation, they may, subject to compliance with such conditions as they may think fit to impose, permit such articles to be imported without payment of the duty imposed by the said Section 19.

(2) It is hereby declared that it is expedient in the public interest that this resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

The effect of this resolution is that duty will not be charged on boots or shoes or the dutiable parts of boots and shoes imported after 22nd April for further manufacture and exportation. There is a similar exemption in regard to parts of apparel imported and manufactured and afterwards exported. At the time this boot tax was imposed there was no demand at all for such exemption, and no exemption was inserted in the Bill. The general policy is that anything that is imported and undergoes a process of manufacture and is then exported should be exported duty free, so that it may be possible for manufacturers here to sell outside.

I think this opportunity might be taken by the Minister to give us some information upon the effect of the boot tax generally. I dare say this proposition is quite reasonable and that boots may be brought into the country so as to be finished, by the addition of a printed tag, "Made in Ireland," attached to them. This further manufacture would then enable them to be exported with a false trademark and a false statement. However, apart from that, I think this opportunity should be taken by the Minister to tell us something about the boot duty, and what are the views of the Ministry as explaining the curious anomaly that while there has been very little of a decrease, if any, in the total number of boots and shoes imported, there has been quite clearly an increase in the number manufactured in the country. It may be said it is because of a wider prosperity that there has been a greater purchase of boots and shoes by people, but judging by the very considerable increase in the number of boys and girls in the cities having no boots at all—in their bare feet even during the winter—it is not quite clear to me how the curious anomaly of an increase in the imports or the maintenance of the imports and at the same time an increase in the production at home can be explained. It has been suggested to me that the explanation lies in the fact that there is a much poorer quality of boots being imported. Some people even allege that a poorer quality is being made as a consequence of the tax. I am very slow to believe that, but I would like to have, if possible, the views of the Minister's Department on this aspect of the boot tax. When the Minister brings forward this resolution has he reason to believe that there is a considerable number of boots imported into the country, partly manufactured, then finished here and afterwards exported?

Does that to any degree account for this increase or maintenance of the imports, notwithstanding the tax and notwithstanding an increase in the number of home-manufactured boots? I think if the Minister would give us some enlightenment on this it would help to clear away a few misconceptions and to understand the actual results of the tariff more clearly than we do at present.

I desire to support what Deputy Johnson has said. This was the one duty that I felt a considerable objection to at the start. I felt that it would certainly increase the price of boots. I thought that would be a very objectionable thing as far as the poor people of the country are concerned, especially in the matter of providing boots for their children, who have to walk perhaps three or four miles to school in the winter time, and with perhaps a large family of six or seven children. There was no doubt whatever but that the cost of boots would be increased. Like Deputy Johnson, I have been struck by the fact that as far as the import of boots is concerned there seems to be no diminution. Like him, too, I have been told that there is a cheaper class of boot being made. When I ask in any of the shops that I frequent what the Irish boot trade is doing they all shake their heads and say: "It is doing nothing." I suggest to them that possibly its boots are being exported. I do not know whether there is any ground for the belief that there is any substantial export of boots from the country. At all events, I would like to know what the reactions of this tax have been, whether the amount of the revenue has diminished as it would diminish if the class of boots that were imported were of an inferior character to what formerly came into the country. I remember that on one occasion the Minister for Posts and Telegraphs made a statement here with regard to boots. He said that there was no increase, as well as I remember, in the price of boots; that he had gone to the people who manufactured the boots. He had not, however, gone to the people who purchased them to find out whether there was any actual increase in the cost. If, as Deputy Johnson says, it is going to be an import of pieces or parts of boots, I think it is advisable that there should be some limit to the condition in which these parts would arrive in this country. The Deputy, I think, was going a little too far when he suggested that they might only be brought in here and have a tag attached to them with the words "Irish manufacture." At all events, this is one of the taxes as to the implications of which I would like to have some information. I would like to know how it stands at present.

It must be admitted that the tax on boots has not been a success. When it was proposed Deputy Good said that instead of being a tariff of fifteen per cent. it should be a tariff of thirty or forty per cent. It should be a tariff that would enable the Irish manufacturer to compete with the British, or any other foreign manufacturer and, if the charge could be made against the Irish manufacturer that he was lacking in enterprise or initiative, it would be open to the British manufacturer, or anyone else, to come in, like the manufacturer of cigarettes, sweets and other commodities, and make the industry a success. It is also questionable whether we should not have led off in this tariff by specialising in one line of boots. I sympathise with Deputy Sir James Craig when he talks about the workingman having to pay increased prices for children's boots in these depressed times. That is attacking the tariff in a very vulnerable point, but it is not a point against the whole policy of protection. There are as many boots and shoes, both for young and old people, bought in this country as were bought before the tariff was introduced. Our case is that they could be made in this country, and there is no reason why they should not be made. If everything that could be made In this country was made here, the workingman, about whom Deputy Sir James Craig talked, instead of having empty pockets, would have his children working in factories and would have money to buy boots for them. The tariff of 15 per cent. on boots has not been a protective tariff, but has been a revenue tariff.

Take it off.

No. I would try to have more things done. If Deputy Wilson got a boot factory in the town of Wicklow he would get more votes than he will get at the next election. I know that in this Dáil there is no Deputy more desirous of having boots made at home than Deputy Wilson.

You want the tariff increased.

I certainly want boots made in Ireland. Perhaps some of the Deputy's friends might like to see the boot trade diminishing in this country. There should be some discrimination in this tariff which, as it stands, is almost a failure, and it is quoted by the uninitiated as an argument against protection. That is not true and it should deceive nobody.

I am rather surprised at the speech of Deputy Sears. He gives it as his opinion that the tariff in the case of boots has been a failure, and, in order to make that failure worse, he suggests an increase to the extent of double the amount of the present import duty. Has the Deputy given any serious consideration to the reasons why the tariff has not been a success for the people engaged in that industry? Does he realise that a large manufacturer, say, in Northampton, can send a traveller over her and say to a retailer, "Here are 1,000 pairs of boots. In twelve months' time I will expect a cheque"? Compare that position with that of a traveller, say, from a factory in Dundalk, where the tariff has proved a partial failure, who goes to the same retailer and says, "Here are 1,000 pairs of boots. I want a cheque on delivery." In my opinion there is not sufficient working capital at the disposal of people who have got the protection of such a tariff in this country. Before the Minister considers the question of any increase in import duty, either in the case of boots or anything else, he should take into consideration the amount of capital at the disposal of firms engaged in these industries.

I have supported, generally speaking, the policy of the Ministry in regard to tariffs, but I think we will have to be a little bit more careful in examining the real issues involved than Deputy Sears has been, judging by the speech he has just delivered. To impose a 30 per cent. import duty, without having in this country people in sufficiently large numbers with the necessary capital, would, in my opinion, be a suicidal financial policy. I hope that the Minister will not pay any serious attention to the suggestion of Deputy Sears. It has been circulated—it is one of those canards which are usually circulated previous to the introduction of a Budget—that the Minister proposed to increase the import duty on boots by 10 per cent. I believe that there has been an increase in the import of boots as a result of that false rumour. I would object to any increase in the import duty for the reasons I have given, and I hope that the Minister will not be rushed into ill-conceived schemes of that kind in regard to any article until he is satisfied that there are people with sufficient capital which will enable them to compete with those who send in boots from foreign countries.

I see in the speech of Deputy Davin the influence which a tour in his constituency has had on his mind.

I assure Deputy Wilson that what I have said has nothing to do with any tour I may have made in my constituency. I have given my own personal opinion on the matter, and will stand or fall by it.

I am led to believe that what I said is true, because, when Deputy Davin is brought up against the fact that poor in his district, about whose poverty he is always speaking, have to pay 15 per cent. more for children's boots, owing to the fact that there is no factory here for making boots for children, he has to shove off this question of protection and say, "We will not give protection unless these people are capable of producing the article." That is a perfectly reasonable suggestion. There has been a decrease of £77,784 in the value of boots imported last year, as compared with the year before. There has been collected from the general public the enormous sum of £272,228 11s. 10d. for boots and shoes, and the Government tell the farmers: "We give you that back, because we are doubling the agricultural grant."

No. It is the apparel.

This is part of it.

I want to point out the fallacy of that argument.

Part of the reduction in the tea duty was given at a time when the boot tax was put on, and we gave a reduction in the tea duty to an extent equivalent to the amount we thought we would get from boots, and it has worked out about right.

Agreed, but it is time for you to consider the relief you give to poor people by way of the agricultural grant. It is time for you to examine its effect. Take the case of a man with a £10 valuation. He gets 15/- as an agricultural grant and he may have ten children. How far would 15/- go in paying for boots for ten children? On the other hand, a man with £100 valuation will get £15 by way of agricultural grant, and he may have no children. I interviewed my constituents, particularly shopkeepers, in connection with this tax. They are very anxious to do what they can for Irish industry. They try to push the sale of Irish-made boots, but they find that they cannot give the same value as they could in the case of imported boots. They point out that children's boots ought to be free of duty. The Minister would confer a great advantage on poor people if he did that. These people cannot afford to buy children's boots at present. The Minister will say that it is hard to differentiate between children's and adult's boots. If it were possible to let in, free of duty, children's boots not manufactured in the Free State, there would be something in the argument as to the fostering of industry. I am willing to admit that boots of a certain type made in this country are good value, but I cannot agree with the proposal to put a tariff on boots which are not, and cannot be, made here.

I think it is time to deal with this argument that the extra agricultural grant can only be given because of the import duty on boots.

It never was said that the boot tax had any relation to the agricultural grant.

Take the remission of the tea duty. We acknowledge that it is because of the extra tax raised by the import duty on boots the Minister has been able to reduce the tax on sugar, but these taxes were imposed primarily as protective taxes. The position is really, misleading, and farmers are told, not by the Minister but by members of his Government, that they are given the agricultural grant as a result of the extra tariff and that therefore protection is good. That is not an honest argument, and I believe that the people who use it know that it is not honest. If they do not know that, they are really not capable of arguing the question of protection at all. There is one fact emerging very clearly in regard to this particular form of protection, and it is this, namely, that if the Government were justified, and I deny that they were, in establishing tariffs it is now clearly shown that there was not a proper examination made into this tariff on boots. It is quite impossible, and will always be impossible, that a tariff of 15 per cent. will enable an Irish boot manufacturer to make even half the number of grades of boots used in Ireland.

Deputy Sears is right when he says, if you want to protect boots, you will have to put on a tariff of 50 per cent. I am not sure that that would not be justified in certain circumstances. That may seem an extraordinary thing for me to say, but, if you want to protect an industry, you should protect it so as to give it a chance of getting control of the home market. With a tariff of this kind now prevailing you will not protect the boot industry. I do not say that I stand altogether against protective tariffs on principle, but if the Government embark on tariffs they should make them effective. This tariff is quite ineffective. In England you have factories, and even towns, specialising in the manufacture of a particular grade of boot or shoe. At present it is quite impossible for us to specialise and to compete in the open market with British manufacturers. We have had a clear indication of that in the case of Dundalk where they attempted to make a high grade boot but failed to do so. The factories here were making a certain type of boot with which they could compete in the open market before any tariff was put on. They are, in fact, still competing, and this protective duty is of no advantage to them. They could not, however, jump into the market and compete if they made various other kinds of boots. I am not supporting protection. I agree with Deputy Sir James Craig that it is a desperate thing to make a man pay 3/- or 4/- per pair extra for boots for his children in the circumstances existing in the country. If we are to have protection the least we might do is to inquire sufficiently so as to make it a protective and not a revenue duty, because this form of revenue is most expensive and troublesome to collect.

I should like to find out from the Minister what is the value to the country and to the export trade of the parts imported here partially manufactured, and having sustained a further process of manufacture here, re-exported. It seems to me, as far as I can judge, that the trade in that particular line is very small, and I am wondering whether it is worth while that these remissions should be given. I am not against the theory of remission, but I do say if the value of the trade is very small you are going to impose a burden upon the taxpayer, and you are going to complicate the system of account keeping. For instance, you are going to put up the cost of collection of revenue under those heads, because I believe you will have to maintain a larger staff, not necessarily very large, but a larger staff to keep the increased accounts which your resolution must impose on you. You cannot give a rebate without keeping full particulars of the imported article. You will have to verify that the article is re-exported and that nothing else is substituted for it. That, I say, is going to put a very great amount of work upon the revenue collection department, and is it worth while to impose this extra cost upon the Saorstát for, perhaps, a few hundred pairs of boots partially manufactured and imported into this country and re-exported? The Minister, of course, can give us some definite figures to show whether this remission ought to be granted and whether it is worth while. I agree, I repeat, with the theory of it, because, after all, any boot industry in this country must build up an export trade if it is to succeed.

I agree with Deputy Sir James Craig in what he said in condemnation of the boot tax. At the present time, in my opinion, it is about the cruellest tax you could inflict upon the community, and particularly upon a community depending upon agriculture, most of whom are small proprietors with large families. I say that it is striking at the health and the vigour of the country to have this manifestly unjust tax upon boots imposed. As a matter of fact, as a protection, as has been very well pointed out, it is not an effective tax. The British boot manufacturers are able to cut in here, to jump over the barrier, without any difficulty whatever. The reason is because they have a big export trade, and while your boot manufacturers have, perhaps, only two or three lines the manufacturers in Great Britain have, perhaps, two hundred lines of trade. In the days before the duty was imposed our boot manufacturers only turned out, perhaps, one kind of boot—a farm boot. They never went in for a high-class trade. They had not the machinery nor the capital to turn out the other boots imported into the country. Of course, on the face of it, it would be absurd and utterly wrong to impose a tariff upon the lines analogous to the boots manufactured here—that is to say, imported farm boots. It seems to me to be absolutely absurd. That £270,000, I say again, is levied off some of the poorest people in the country. It is levied off your semi-starved peasants in the West of Ireland, off the people in Connemara, the people in Achill, the people in Donegal and parts of Glare, Cork and Kerry, where the families are very large and where they can receive no contingent benefit from the imposition of the tax. I say this boot tax must be fought and must be repealed. It is inimical to the health and the weal of the country.

Before this vote is put may I ask on what vote I can refer to articles of wearing apparel?

It can be done by way of amendment to the Finance Bill, or you can do it on the general resolution.

I only intervene in this discussion again to correct a misapprehension which appears to exist in the mind of Deputy Wilson. Deputy Wilson is, in my opinion, one of the most fair-minded members of his party, but he has no right to misrepresent, either consciously or unconsciously, any remarks made by me. If he will read the official report of what I said, I think he will find nothing that will lead him to believe that I am withdrawing from the position I have already adopted on the general question of tariffs. I was merely dealing with the question that was raised by Deputy Sears or the demand for the increase of the existing import duties on boots. If Deputy Wilson has any doubt with regard to my attitude on that, and if his party has any further political life in this country, he can nominate one of his agents in Leix and Offaly, and I will join issue with him on that matter.

Of course, Deputy Heffernan is for and against, which is the usual attitude he adopts. Deputy Heffernan in one part of his speech says that they should protect the industry by a 50 per cent. tax, if necessary, in order to get control of the home industry. Is there a sufficiency of factories in the country at the present time? Is there a sufficient amount of working capital and the necessary number of men and women working in the boot industry to supply the needs of the population? If not, what would be the use of putting a 50 per cent. import duty upon boots when we have to import about 75 per cent. of the boots that are required by the people? If you have to import 75 per cent. of the boots that are needed for the people's requirements you are merely giving a lever to the people who must import the boots to pass on the amount of the tariff to the purchasers. I have always supported the tariff in the hope that in the near future there will be a sufficient number of people with capital to invest in the home industry, and that as a result of the encouragement given in the shape of tariffs the industry would be able to provide for the requirements of the population. The imposition of a tariff, even on a low scale, is an encouragement by the Government of the day to people who have capital and who have a patriotic outlook to invest money in the home industry as against the foreign industry. I hope the reduction of income tax by a shilling will induce Deputy Wilson and other members of his party to put their money in the boot industry and to provide the working capital that is necessary in order that the Irish industry will be able to compete with the people who have been importing boots into the country for generations past. Deputy Heffernan is against having the duty merely a revenue-raising medium. I do not see how he can have it both ways. So far as I am concerned, the tariff should not be imposed merely for the purpose of raising revenue. I do not know whether Deputy Heffernan made himself clear or not, but he seems to advocate, on the one hand, that there should be a prohibitive tariff of 50 per cent., and, on the other hand, that it should not be a revenue-raising medium.

I say that you should not have the tariff at all, but if you do have it that you should insist on making it an effective one.

I would like Deputy Heffernan to say whether or not he is against the tariff.

We are not discussing tariffs in general.

I intervened because Deputy Wilson, apparently, misunderstood what I said. I am not withdrawing from the attitude I have always taken in giving support to the Government on this experimental issue of tariffs. I am prepared to stand or fall by that issue as between Deputy Wilson's people and the people that I represent in the coming election.

I do not know how far I should discuss tariffs in general on this particular motion. I do not think that I should try to defend the whole policy of tariffs, nor do I think that I should, perhaps, follow on the remarks that have been made. I think Deputy Sears was premature in his conclusions about this particular tariff. Deputy Johnson asked certain questions. Frankly, I could not give him any certain answer in regard to them. I think we had only statistics of our trade for a year before the boot tariff was put on. We could not know, with any certainty, what was the normal import of boots before the tariff and, consequently, we have not the figures to show with any preciseness or certainty what change has come about. When it is said that the import of boots has been practically maintained we really do not know; to know that with certainty we should have the figures for a period of years, because the one year which we have may have been an abnormal year.

I do not believe that there has been a great fall in the quality of boots imported. I know that there has been a fall in prices. I know that from an examination of the prices quoted for Army boots, which are a standard quality. The prices have come down substantially, both the prices of the British firms that were quoting and the prices of the Irish firms that were quoting. It is possible that the substantial fall in prices that has taken place may have led to some further import than otherwise would have taken place.

Then there is the question of stocks. I think that the first impost causes a good deal of disturbance. Sometimes there is an abnormal reduction of stock. Traders have not only to pay for the price of the article but they have to pay for the duty. They may find it impossible to get their stocks up in time. I think we have not had these figures for a sufficient period to enable any certain conclusions to be come to, but it is true that employment has increased. The factories were small and there were few people in them, I think about 300 or so. The number has gone up. The number has gone up by what is equivalent to 720 people, or thereabouts, on full time. I know that there are at present people here from the other side of the Channel. I have quite lately met one British boot manufacturer who was over here considering the possibility of starting a factory. I think anybody who says that this tariff has been a failure speaks prematurely. I do not think, even when we are looking to the starting of new factories, we ought to put the duty very high in order to get very speedy results. I think it is better to keep the tariff low and let the factory be fairly efficiently run from the beginning. One justification of the tariff is that the factories cannot be really efficiently run. We should, at any rate, have the tariff low enough to ensure that they will be fairly efficiently run from the beginning.

There is at present very little export of footwear which has come in in a partly-manufactured condition. But there is some such export. Because of that, we propose to give the people who are dealing in that line of business the same facilities that people in other lines have—manufacturers of confectionery and apparel, for instance. Because this export is very small, it will require no increase of staff at the moment, and it will lead to no increase in cost. If it became a big thing, it would, of course, lead to additional administrative work and consequent expense, but, then, it would be justified. I think we must give to a manufacturer who can export a fair opportunity of exporting. So far, I think there are only two firms concerned. One of them deals in boots. The other firm deals in clogs, which is included in the definition.

Has the Minister any reason for thinking that any boot-manufacturing firm is going to specialise in a particular portion of manufacture? Is it to meet that kind of specialisation that this resolution is proposed?

No. Let us suppose, for the sake of argument, that a manufacturer imports his heels made up. He will have to pay duty on the heels. If he exports the whole boot, getting a market for it outside the Saorstát, he ought to be repaid the duty he has paid on the heels coming in, just as a manufacturer of confectionery, when he exports the finished product, is repaid the duty which he paid on the sugar.

In my opinion, the Minister is proceeding on a very bad principle if one is to judge from his recent statement. He says that the trade involved by this resolution is very small. Therefore, he is not legislating for the normal, but for the exceptional. He is not legislating for the general, but for the particular. I think that is a very undesirable system in legislation.

I think the Deputy is talking very generally at the moment.

The Deputy is laying down general principles.

The Minister said that there were only two firms covered by this resolution, one engaged in clog manufacture and the other in shoe manufacture. I do not think, in the circumstances, it is a fair thing to ask the House to pass such a resolution. I accept the Minister's statement that the resolution is not going to impose additional administrative expenses, and, therefore, I am not disposed to challenge a division. But I think the principle ought to be laid down that we ought not to deal with exceptional cases of hardship. It is a bad practice in legislation. We ought to deal with the general rather than with the particular.

We are not dealing with particular cases of hardship. We are simply giving a concession that has been given in respect of other tariffs, but which was not given in this case, in the first instance. We did not make any move until some firms made a demand. They made a demand that they should get the same facilities that people engaged in other manufactures were getting. If we did not give them those facilities, it might not be long until we would not have any such exports.

In connection with the clog manufacture, are the tops imported and the pieces of wood added to the clog here?

I could not say.

Motion put and agreed to.