I move: "That the Dáil agree with the Committee on Financial Resolution No. 14." This is the Resolution which reduces the rebate payable to native manufacturers of tobacco from 7d. to 3½d. In that connection, I should like to emphasise that this is not an increase in the tobacco duty. It is a reduction of the rebate granted under the Finance Act of 1932. It represents a reduction of 50 per cent. in that rebate, but it does not represent any increase in tobacco duty.
In Committee on Finance. - Financial Resolution No. 14—Customs.
The Minister is aware that the granting of the rebate of 7d. originally resulted in driving out of existence here a tobacco manufacturing company which gave employment to 300 persons. The 300 persons who were driven out of employment were described by the Minister for Industry and Commerce as "casualties." He implied that they were casualties of the Irish industrial development movement. We were given to understand, at that time, that this differentiation amongst tobacco manufacturing companies was necessary to assist Irish industry. What circumstances have arisen as regards the establishment of a purely Irish manufacturing tobacco industry here to enable the Minister now to reduce the differential preference which he gave these companies? I do not know whether the Minister has come up against difficulties with other tobacco manufacturing concerns in the country which are being prejudiced by this differntiation in taxation. I should like to hear from the Minister his reasons for bringing about this change now. Have the manufacturing industries which were given the assistance of this differential taxation been more firmly established so that they do not want this assistance as much as they did before? Or is the position that other tobacco manufacturing establishments with a considerable number of employees are having their stable foundations in this country shaken by reason of the differential taxation? When we take into consideration the effects which the Minister's former action had in throwing 300 persons out of employment— many of them are still out of employment in spite of the protestations and promises made by the Minister for Industry and Commerce—it is due to the House that it should be explained whether or not this change is being made to avoid other casualties. If that is not the fact, then the House would be glad to know that the manufacturing concerns that got the benefit of this differential taxation are more firmly established now than they were.
Deputy Mulcahy said that the Minister was aware that the granting of this rebate had the effect of driving out of the State one tobacco manufacturing concern. The Minister is not aware of anything of the sort.
What did the Minister for Industry and Commerce mean by "casualties"?
When this tobacco duty was originally under consideration in 1932, the Minister, in the course of his examination as to the probable effect of the duties, came to the conclusion that, after nine years of Cumann na nGaedheal administration, the tobacco concerns owned and controlled by citizens and natives of the Saorstát were in such a position that it would be extremely hazardous to impose upon them an additional duty, that they had been faced with very fierce competition, competition of such a sort that those responsible for it had the temerity to tell tobacco retailers in this State that they should not display in their shop windows the goods of native concerns. I say that the campaign was carried on to such an extent that certain concerns had the temerity to do this. I know that that action outraged the sensibilities of many people in this country, not only supporters of Fianna Fáil, but members of the Cumann na nGaedheal Party as well. Deputy O'Higgins raised the matter in this House and questioned the propriety of a campaign of that sort being allowed to go on. As a consequence of competitive methods of this kind, I say that Irish tobacco concerns were very badly shaken, were in such a position that I felt that if we were to impose the full weight of the duty upon them it was a question of whether some of them would not have to close down. Therefore, since the imposition of the duty was inevitable, I had to consider whether I should not lighten the burden so as to enable them to remain in existence and, if possible, to gain in strength. It was decided, in the special circumstances of this time, when we came into office and found no less than over £1,000,000 deficit left to us by our predecessors in the first year, and towards the next year, such a decline in the revenue that we found we would possibly be faced with a deficit of £3,000,000, that—as must be clear now to every right-minded person—we could not avoid additional taxation. And the question was whether we were to impose that taxation upon concerns that might not be able to bear it. We decided—and Deputy Mulcahy, who raised this question, does not now choose to listen, and does not want to hear what I have to say——
I am listening to the Minister—to every golden word.
When Deputy Mulcahy listens in that way it is easy to understand why some of the speeches made in this House by him are made.
I hope the Minister will try to practise what he is now trying to preach. It is time he did.
I was saying we had to impose taxation, and we were not going, in imposing that taxation, to act, as our predecessors had done, wholly regardless of the consequence of such taxation to Irish manufacturers. We granted this rebate. In granting it we made it quite clear what the circumstances were which made it necessary to take that course. We emphasised, time and again, when the matter was being made an issue in this House for Party purposes; that we were doing it not because we wanted this firm or that firm to leave the country, but because we wanted to make certain that Irish concerns, at any rate, were not going to go down, and that as soon as the position changed and we felt we were in the position to do so, the question of the rebate would be reconsidered.
Was not Gallaher's an Irish firm?
It was not controlled by citizens of this State.
It was only a Belfast firm.
At any rate, they did not fulfil the essential conditions. If they were only a Belfast firm why did the Deputy, when he was a member of the Cumann na nGaedheal Party, impose a tax against their goods manufactured in Belfast? We did not impose any tax upon their goods manufactured here. I had several interviews with the members of Gallaher's firm. I endeavoured to convince them that the exemption which we were granting to Irish manufacturers was a temporary exemption. I pointed out to them what I thought the position was. I told them that in my view there was no reason, having examined the figures put before me, why they should close down here; at least, that it would not be necessary for them to close down here if we granted a rebate to the Irish manufacturers. But, apparently, Gallahers had other advisers. There were some people anxious for a political catchery, who thought it necessary to be able to talk of casualties, and of factories closing down, and of people being thrown out of employment. They did not care, so long as they made that point, whether they stampeded Gallahers or anyone else to close their doors, and to put workers out into the street. All they were concerned about was to make a political point against us. That was why Gallahers closed. Gallahers closed because of the agitation carried on by Cumann na nGaedheal with the intention of stampeding them to close their doors.
The Minister made a point against Deputies on these benches that for political propaganda they induced Messrs. Gallaher to close down——
I am not giving way.
He made that charge against Deputies here.
Is this a point of order?
Is Deputy Mulcahy raising a point of order?
I raise this question as a matter of personal explanation.
I do not say that Deputies opposite induced Gallahers to close down; I say that they stampeded them. People were led to believe that this was going to be such a strong point against the Fianna Fáil Government which came into office in March, 1932, that they would be unable to stand up to the Opposition. People were led to believe that Deputy Mulcahy, who was the Samson in this matter, was going to bring us down. Well the people who were induced to believe that have seen their mistake to-day. We are revising this exemption, not because of any representations made to us from any quarter. No tobacco interest has approached us in the matter. We are revising the exemption because from the examination of the figures for the clearance of tobacco from bond, and an examination of the turnover by Irish tobacco concerns, we are satisfied that they can stand now upon their feet, and can bear the reduction in the rebate which we granted to them.
We are satisfied that just as in the case of the boot and shoe industry the policy of the Government has been justified by results, so, too, in the case of the Irish tobacco industry the policy of the Government has been justified by results. On the part of those manufacturers who have gone out, got busy and developed their industry there has been a phenomenal extension.
Has there been more employment?
Yes.
By how much?
The Deputy has had an opportunity of making his speech.
Yes, and I raised enough points in my speech.
And they have all been blunted now. In any event, what I said is true, that we are withdrawing this not because of any representation made to us, but because we feel now that Irish tobacco concerns are strong enough to bear a greater proportion of the tobacco duty than they were in March, 1932. As I have said those concerns that have been conducted with energy and enterprise have experienced a phenomenal expansion. There have been one or two concerns that lay on their oars, and refused to do anything. I do not know what their fate is to be in the future. There is only one thing I have to say and it is this: that this Government and people have no use for any manufacturer in receipt of special facilities and privileges from the people of the country who fails to take advantage of them. We do not care whether such a manufacturer closes his doors and folds his tent and departs like Gallahers.
Question put and agreed to.