Dáil Éireann díospóireacht -
Thursday, 13 Nov 1952

Vol. 134 No. 11

Control of Imports (Quota No. 48) (Woollen and Worsted Yarns) Order, 1952.—Motion of Approval.

Mr. Lemass

I move:—

That Dáil Éireann approves of Control of Imports (Quota No. 48) (Woollen and Worsted Yarns) Order, 1952.

This motion refers to the old problem of woollen and worsted yarns. The House will remember we had a discussion some months ago upon the difficulties of the principal firm engaged in this industry. Because of the decline in business of the worsted and hosiery industries, orders for yarn contracted considerably and the spinning industry was considerably curtailed in its activity. At first we thought it would be adequate to restore that situation if we imposed a customs duty, and that would have been so but for an exceptional and temporary feature. Towards the end of 1950 or early 1951 a request was conveyed to the firm concerned from the Government then in office, through the Industrial Development Association, to carry an emergency stock of wool tops, which that firm agreed to do on an undertaking given to them by my predecessor that they would be protected from any ill-effects arising out of market variations. The market variations came with a vengence, as the House knows, and the price of wool slumped very considerably——

Mr. O'Gorman

Too well we know it.

Mr. Lemass

——and the firm concerned was involved in substantial losses because of their compliance with that request to carry that emergency stock. The imposition of the customs duty was intended to fulfil the undertaking which had been given to it by my predecessor, but the market position continued to be so uncertain that it was obvious that the users of yarn were still holding off from placing orders because of the possibility of a further fall in price which would permit of the importation of wool yarn, even subject to payment of duty, at a price less than it could be produced here from the stock of tops held, or apart from that, because of the general uncertainty of the whole position.

I thought then that it was necessary, in order to get the position clearly understood by everybody concerned, to ask the Government to pass this Quota Order. By doing so it was intimated to all firms normally using this type of yarn that variations in market prices would not matter, that they would have to draw their supplies of yarn from the home producers. In fact, the market has recovered since and more normal conditions are now operating in the trade. So far as this firm is concerned the current difficulty is that it is unable to meet in any reasonable time the orders which it is receiving. It seems to be still necessary, however, to maintain the Quota Order because under the arrangement which has been made with it to liquidate the losses upon that emergency stock, we have agreed that prices may be maintained slightly above the prices at which yarn can now be produced from tops purchased at the current prices and sold in Great Britain.

That situation is not an easy one. I am not pretending it is an easy one. The emergency stock of wool tops was carried by one firm. Although it is not the only firm in the country making worsted yarn it was the only firm affected by the loss upon this emergency stock of tops. Furthermore, the suspension of new orders for yarn for a long period, with the sudden revival of these orders has created this situation where they can now promise delivery only for some time ahead. We have been in consultation with hosiery manufacturers and other users of yarn to try to tide over the situation and bring conditions back to normal, working as quickly as we can. We are not there yet and I do not pretend we are there, but until we are, control of imports by Quota Order is necessary. I do not think it will be permanently necessary.

Normally the worsted yarn produced in this country was available at world prices. There was no reason why it could not be produced here as cheaply as anywhere else. It was so produced as cheaply here as elsewhere and I hope that as soon as these abnormal circumstances have passed and the losses upon the emergency stock, to the extent that the Government is accepting responsibility for it, have been written off, the maintenance of the Quota Order will be reconsidered. Until then it is clearly desirable that we should do what we can to get out of the situation.

Mr. Dillon

Are we now to take it that the Government, finally and irrevocably, abandon the position that there was no stockpiling?

Mr. Lemass

Oh, no, and what is more, I would like to make this clear: that the stockpiling of wool tops was about the most sensible thing they did in the circumstances in which they decided that stockpiling was necessary.

Mr. Cosgrave

But there was stockpiling?

Mr. Lemass

I was criticising the method.

Mr. Dillon

At 5 p.m. on November 13th, three and a half hours after the declaration of the poll in North-West Dublin, the Fianna Fáil Government have at last come down on the side of saying: "Forgive us our trespasses. We have lied; we have misled the country; we have denied what we knew to be true; and now we confess, in the light of the verdict of the electors of North-West Dublin, that we were liars, we were frauds, and when we went through the country saying that there was no stockpiling, that there was just an irresponsible orgy of buying consumer goods to have a spree we were frauds, liars and rogues." Is it not an astonishing thing that we had to wait until five o'clock on November 13th, 1952, to get a solemn public withdrawal of a White Paper and a Government policy on which a general election and four by-elections have been fought? I ask the Minister for Industry and Commerce, is not it hard for people to be patient and to observe decorum——

Mr. Lemass

It is extraordinary patience I have shown in face of all that balderdash.

Mr. Dillon

——when for 18 months, as the Leas-Cheann Comhairle has heard, the case has been made, under that Minister's leadership, that there was no stockpiling, that that was a fraudulent alibi raised by an inefficient Administration to justify their extravagance? He has now come into the House and he says: "I am asking the House to endorse my action in admittedly dislocating the whole woollen trade, a course of conduct I would never have contemplated except for a difficulty of exceptional dimensions created by a perfectly understandable precaution taken by the previous Government, to wit, to stockpile so great a quantity of wool tops that the only way we can redress the situation is to work it off over a protracted period and that is what we are in process of doing now." Is not that an astonishing confession, after 18 months of campaigning through this country and after, I believe, misleading the country? I think a lot of the poor innocents who sit on the back benches of Fianna Fáil believed the Minister for Industry and Commerce. I think the Parliamentary Secretary to the Taoiseach, an innocent poor man, who is sitting behind him, believed the Tánaiste and he stumped the country and said: "The Tánaiste says so and therefore it must be true". What does he feel like now when he hears the Tánaiste telling him: "I was pulling your leg"?

Donnchadh Ó Briain

I agree with him when he said "balderdash".

Mr. Dillon

No matter what he says, the Parliamentary Secretary agrees. If he says it is balderdash, he agrees. If he says "midnight" the Parliamentary Secretary agrees with him. If he says it was day-break, he agrees.

An Leas-Cheann Comhairle

That has no relevancy to the motion before the House.

Mr. J. Brennan

He is beginning to see the light.

Mr. Dillon

Thanks be to God, the scales were struck from your eyes by Tommy Byrne in North-West Dublin.

Mr. J. Brennan

It was not Tommy. We never heard of him.

Mr. Dillon

Maybe it was Alfie and well able he was to do it for you.

An Leas-Cheann Comhairle

We are not discussing North-West Dublin now.

Mr. Dillon

Something has happened, as you yourself know, A Leas-Cheann Comhairle. You have sat in that Chair for 18 months listening to the Government telling this House and the country that there was no stockpiling done. I do not think any Deputy can deny that. Now you hear the Tánaiste justify his proposals, onerous and complex as they are, on the ground that so vast a stockpiling was done that to liquidate the accumulation is a matter of the first necessity. Having got over that—and I must say the boys have stood the shock well; they are all still sitting upright—I want to make a suggestion to the Tánaiste. I agree with him and I think here, oddly enough, he and I are in entire agreement, our injunction to certain persons to stockpile in 1950 placed on us if we remained in Government and on our successors when they came into Government a moral obligation to help them through and in taking steps—whether I agree with the actual steps or not—the Minister for Industry and Commerce is perfectly right and is entitled to the full forbearance of this House for any transient inconvenience these immediate remedies may cause.

Compare this Order for the assistance and relief of this firm with the injunction given by the Minister for Finance to the banks. If this firm has an overdraft, his injunction was: "Bankrupt them; raise the rate of interest on their overdraft and, if they cannot pay, close them up." I much prefer the Tánaiste's approach, who says: "We stockpiled with our eyes open and, when the problem of liquidating the stockpile which, by the mercy of God's Providence was not wanted in the event, the Government is prepared to stand four-square behind any manufacturer who, bona fide, went out and did what the Government asked him.” If every manufacturer in the country was as co-operative and as public-spirited as the people who put themselves in economic danger, financial danger, by buying this stockpile at the Government's request, this country would be well off. I think the country is beholden to a man who finds himself in difficulties to-day as a result of trying to help 18 months ago.

I think the Minister knows, and said so, that the remedial measures he is now taking are causing a good deal of difficulty for other trades which use the yarns spun by this company in their manufacturing processes. Has not the problem been reduced to a dimension which could be liquidated by the payment of an agreed sum to this firm to compensate for the reduction in the value of the stockpile they had accumulated and which they were unable to sell at the price level of 18 months ago? Would not it be to the advantage of all those other industries who must use yarns of this kind to have the road block blasted out of their way and let trade return to normal channels?

I was this morning in a small industry which found themselves in the position, not through any blameworthy fault of the domestic supplier, but for the reasons explained by the Minister here now, that their operations are held up because they cannot get wool of the special quality which they require without a delivery delay of about six or eight weeks. If these circumstances are reproduced in 40 or 50 industries that use wool, it would be much better from every point of view if a Supplementary Estimate was brought in for an agreed sum and the stockpiler was given that sum in liquidation of the loss he experienced and told: "Let us do away with all the quotas and quantitative restrictions of this kind and let trade resume its normal swing."

Would the Minister now or at an early stage consider that alternative method of dealing with the specific problem he is trying to solve by this device? I think I can speak in this matter for the Opposition; I think the Opposition would say: "We take the view that those who helped the Government in 1950 to stockpile certainly ought to be helped by the Government to overcome any inevitable consequence of their public-spirited co-operation invoked by us at that time, with clear implied understanding, as far as I know, that we would stand to them if the occasion of liquidation ever presented itself as a difficulty in the event of the stockpile not being required.

Mr. Lemass

In so far as I have given an account of the difficulties in this industry, it is precisely the same as I gave on two previous occasions in the last six or eight months, so Deputy Dillon has not had the revelation that he assumes. Secondly, I want to say that if the Government in office decided that international circumstances required that people should be encouraged to stockpile in 1950, they were quite entitled to give them that advice. I did not criticise that. On the contrary, I think I was myself an advocate of the policy of laying in stocks of essential materials. My criticism was of the encouragement to stockpile manufactured goods. I thought that it should be confined to raw materials, such as the wool tops involved in this case.

Also, it is quite obvious from the difficulties I have encountered in resolving this situation, that it is wrong to put the burden of stockpiling essential materials on one private firm. Either the Government should take the responsibility itself or, alternatively, all the firms in the industry should be combined in some co-operative arrangement to maintain the stock. One of the main difficulties resulting from the present situation is that you have one firm of worsted spinners trying to wipe off a heavy loss incurred in that stockpiling whereas another firm of worsted spinners which carried no emergency stock is able to expand production and sell at a lower price. I think we will get the situation righted, but I do not say we have it righted yet. We have already given an additional import licence in respect of worsted yarns to help the hosiery manufacturers. Further discussions upon the situation were due this week, but unfortunately they had to be postponed owing to a bereavement affecting one of the principal individuals concerned. There will be discussions next week at which the whole situation will be again reviewed between all the interests concerned and the necessary arrangements made to get over the transition period—it is only such—and I hope that by early next year all the arrangements will be working smoothly again.

Question put and agreed to.