Dáil Éireann díospóireacht -
Wednesday, 19 Nov 1952

Vol. 134 No. 13

Imposition of Duties (Confirmation of Orders) (No. 2) Bill, 1952—Second Stage.

Minister for Industry and Commerce (Mr. Lemass)

I move that this Bill be now read a Second Time. The House is aware of the fact that under the Emergency Imposition of Duties Act, 1932, Orders made imposing or amending customs duties have to be confirmed by legislation. The purpose of this Bill is to confirm 22 Orders made by the Government in recent months. The Orders are those scheduled to the Bill. Of these, the duties, imposed on crystal glassware, venetian blinds, adhesive gums, and iron and steel wheelbarrows, handcarts, etc. are new protective duties. The Orders relating to razor blades, drinking glasses, knitted woollen fabric, glue, gelatine and size, tanks and cisterns, leather and malt extract and fish liver oil increased the existing customs duties on these commodities. The Orders relating to lampshades, artificial silk piece-goods, brace elastic, woven labels, dolls' clothing and component parts of dolls, hack-saw blades, statues and cotton-wool either extended the scope of the original duties or amended the definitions in regard to them for the purpose of making them effective.

I presume the House will wish me to give a brief indication of the considerations which led to the making of each Order. The first relates to the duty on razor blades. It was previously at the rate of 75 per cent. with a minimum rate of 12/- per gross. The minimum was increased from 12/- to 24/- per gross. The original duty was, of course, imposed before the war and changes in values since reduced the measure of protection which it had given. There are two firms engaged in the production of safety razor blades in this country. They are selling blades at a variety of prices from a penny each upwards, and their prices have not been increased in consequence of the imposition of the higher duty. Incidental to the development of the manufacture of razor blades in the country increased business is also made available for the manufacture of waxed paper wrappers and similar commodities used in connection with their sale.

The duty upon drinking glasses and crystal glassware is a more complicated business. As the House is aware, the development of the manufacture of glassware in this country was resumed recently. The company engaged in that industry in Waterford is aiming at the development of an export trade in hand-cut crystal glassware, and to enable it to train staffs in that highly skilled work it was necessary for it to engage first in the production of ordinary soda glass domestic ware. Approximately, 300 people are employed there at the moment. The ordinary glassware produced during the training period was accumulating and it was desired to increase the sales of it. It is in competition with machine-made glassware imported from abroad which is very much inferior in quality and cheaper in price.

It is, I understand, the intention of this firm in Waterford to undertake the manufacture of this machine-made glassware at a later stage of its development, but it cannot do that until it has fulfilled its plans for the development of an export trade in crystal glassware when it hopes to be able to shift its workers producing ordinary glassware into that end of its business, leaving scope for the development of the machine-made glass end. The expectation is that when full machine manufacture of ordinary glassware is possible, the costs of production here will not be higher than elsewhere, but in order to get the industry established we have for a period to create a situation in which the ordinary glassware available here will be hand-made glass from Waterford, superior in quality, but also somewhat dearer in price than the imported machine-made glassware.

The Government took the decision to encourage the development of this industry, recognising that we would have to regard it as a long-term project, and that full-scale development, including the export of crystal glassware, could not be expected for two or three years.

The industry, as the House is aware, in so far as the crystal glassware end is concerned, depends entirely on the skill of the operatives. The technique, so far as the manufacture of hand-cut glassware is concerned, has not changed over the centuries. It still rests entirely on the individual skill achieved by the operatives. During the period in which the training process is going on, it is not possible to have the complete development ultimately contemplated. In order to assist the industry, and to speed up the stage at which the full development contemplated will be reached, a minimum specific duty of 6d. per article under a preferential rate, increased subsequently to 8d. per article, was imposed on drinking glasses.

Breanndán Mac Fheórais

Did I hear the Minister say that there was a duty on machine-made glasses coming into this country?

Mr. Lemass

Yes.

Breanndán Mac Fheórais

Even before the Waterford people were in a position to supply them?

Mr. Lemass

Certainly. The position, as I explained, is that at this stage they are producing a very considerable quantity of ordinary drinking glasses of the cheaper type by hand. The market for these glasses must be available in this country and it would not be available to the extent necessary if the inferior machine-made glasses were coming in at the same time. It is only at a subsequent stage that this firm will be able to undertake the manufacture of machine-made glasses. In the meantime it must dispose of the products of its workers during their training period.

Breanndán Mac Fheórais

We trust it will not be a long period.

Mr. Lemass

One must think at least of the term as being something between one and two years.

Breanndán Mac Fheórais

In that case the duty will be reviewed?

Mr. Lemass

Certainly. It will not be necessary at this rate once the full-scale development contemplated takes place.

The next Order relates to knitted woollen fabric. The effect of the Order is to increase the rate of customs duty on knitted woollen fabric from 37½ per cent. full and 25 per cent. ad valorem to 75 per cent. full and 50 per cent. ad valorem. Before the war the duty was at the rate of 60 per cent. and 40 per cent. It was suspended entirely in 1943 and restored last year at the lower rate. The decision to increase the rate of duty was consequential on the measures taken to rectify the whole position in the woollen industry, including the spinning end of it.

As the House is aware from a statement I made last week in relation to a motion regarding a quota Order, the liquidation of losses arising from emergency stocks of wool tops imported at the request of the Government of the day, involves the maintenance here of wool yarn prices slightly above the prices of imported yarns. The slump which hit our woollen textile and hosiery industries was of course repeated in other countries and for a time manufacturers abroad were willing to dispose of their production often at cost price and sometimes even below cost. By permitting that importation, we could have had the benefit of the fall in wool prices earlier but only at the cost of putting our own woollen and hosiery industries out of action. It was considered preferable to maintain our own industries and to restore employment in them and for that reason the various protective measures to which I referred were taken. This is one of the measures.

Mr. Davin

Is it suggested that there were losses on the imported wool tops?

Mr. Lemass

Very substantial losses.

Mr. Davin

Did you read the balance sheet?

Mr. Lemass

The Deputy must not misread the balance sheet.

Mr. Davin

I know what an increased dividend means in a balance sheet.

Mr. Lemass

The valuation of stocks for balance sheet purposes is one matter; the price at which the stocks can be realised in the form of manufactured goods is another.

Mr. Davin

Is the Minister aware that in at least one firm there was an increased dividend?

Mr. Lemass

There was only one firm involved in the matter of emergency stocks.

Mr. Davin

Do you agree that it was wise to stockpile wool tops?

Mr. Lemass

I agree that if stockpiling is necessary it should be in the form of raw materials. But where one private firm is asked to fulfil a national policy in that regard, it creates complications if by doing so it was involved in losses which other firms in the same business had not encountered because the request was not addressed to them. My experience in disposing of this situation confirms me in my belief that, if at any future time national stockpiling is required, the Government will have to take some responsibility.

Mr. Davin

How can the Minister assert that certain firms that imported wool tops incurred losses when their balance sheets prove the contrary?

Mr. Lemass

So far as I am concerned, I made it quite clear to them that I am regarding myself as having no obligation to help to avoid losses on stocks carried by them in the normal course of trade. I was concerned only to redeem the undertaking given by my predecessor in regard to the emergency stocks, that if the market situation was likely to involve them in a loss they would be helped out of that situation.

Mr. Cosgrave

Has the Minister considered the question of a monetary payment?

Mr. Lemass

It was one possibility, but the Deputy will realise the complications which would arise. The next Order relates to venetian blinds. This is a small Order of not very great importance. There is one firm engaged in the manufacture of venetian blinds. It is able to produce blinds of all types and it is doing it with reasonable efficiency. My feeling is that we should be able to make venetian blinds in this country and that if we are not we can do without them. The normal market here is not worth more than roughly £15,000 per year, apart from the occasional special order which comes along, such as the one for the Store Street building.

The next Order relates to woven labels. We had a duty of long standing on printed labels used in connection with garment manufacture. For some time past, the trend of fashion has been going from the printed to the woven label and the firms manufacturing the printed labels under the original inducement given to them were being affected by that position. I would not have regarded that by itself as a sufficient argument to justify the imposition of the duty on woven labels, but when I was informed that there were arrangements for the production of woven labels and that both would be available from home sources, I recommended an extension of the scope of the duty to include woven as well as printed labels.

The next is another Order of minor importance and relates to plastic lampshades. The production of plastic lampshades for our market will not involve very much employment, but there seems to be no reason why we should import them when there are firms able to produce them here efficiently and they are being encouraged by this Order to do so.

The next Order is of more importance and relates to certain artificial silk piece-goods. The effect of the Order which was made was to bring within the scope of the existing customs duty upon artificial silk goods all spun rayon cloths, and cloths which are less than two and a half ounces in weight per square yard, and also cloths which are patterned in colour and which are 60 inches or over in width. I mentioned here last week in connection with a motion regarding a quota Order the problem that was created by reason of this development in the production of spun rayon cloths which did not come under the scope of existing quota Orders. The manufacture of linings, shirtings, sheetings and tickens has been proceeding here for a considerable time and we had in fact reached the stage at which our own mills were capable of meeting requirements. It was only, however, when the trend of demand switched over from cotton and union cloths to spun rayon cloth that they entered into the business of producing spun rayon cloth themselves. That is now being done. New plant has also been installed by a number of concerns for the manufacture of these lightweight artificial silk fabrics. It is a very desirable tendency which we are anxious to encourage.

The third qualification to which I referred—cloth patterned in colour over 60 inches in width—was imposed to catch artificial silk bedspreads. There was a duty on these goods before when they were imported separately but the practice had developed of importing them in the piece, that is, with only the warp threads holding one bedspread to another, and in that category they were held by the Revenue Commissioners to be exempt from duty——

Breanndán Mac Fheórais

Hanging by a thread.

Mr. Lemass

——although the only thing needed was to cut the threads. The effect of this Order is to prevent evasion in this way.

The next Order deals with dolls' clothing and the component parts of dolls other than rubber dolls and is being imposed at the request of Gaeltarra Éireann. They are, as the House is aware, manufacturing these goods at Spiddal in County Galway and Crolly in County Donegal. They have urged that they have reached a stage of development at which protection to some degree would be necessary to enable them to extend their production. The surprising thing is that the protection appeared to be necessary judging by the imports even though the prices at which Gaeltarra Éireann were selling these goods were lower than the average prices of similar imported goods. There are approximately 87 people employed at present by Gaeltarra Éireann in these factories and it is obviously desirable that we should try to maintain and, if possible, extend that employment in the areas concerned, Spiddal, County Galway, and Crolly, County Donegal.

The next Order relates to glue, gelatine and size and has the effect of increasing the rate of duty from 45 per cent. to 75 per cent. full and from 30 per cent. to 50 per cent. preferential rate. The position regarding this industry has been causing me some concern because it was difficult to understand why the cost of production here should be higher than in other countries, having regard to certain advantages which it seemed to me manufacturers here enjoyed. The volume of imports was not merely heavy but tended to increase and I had received some complaints— not very many but some—regarding the quality of the gelatine produced which is, as the House may know, the raw material used by manufacturers of jelly. Some of our firms have an export trade in jellies and those with an export trade were tending to import gelatine under the drawback arrangement permitted by the Revenue Commissioners when export is involved.

Having examined the position very carefully I thought it justifiable to recommend to the Government and to the Dáil an increase in the rate of duty provided that satisfactory measures were taken by the firm concerned to improve their manufacturing technique and increase the resources available to them for the development of their business. These steps have now been taken. The services of a very wellknown and technically competent French firm have been associated with this undertaking and a complete reorganisation is now in progress.

Mr. Morrissey

It is nearly time.

Mr. Lemass

I am disposed to agree with Deputy Morrissey in that remark, but it is in progress now and I am hopeful that it will produce the position, which I think we can reasonably expect to reach, where the cost of production of these commodities in this country certainly should not exceed the cost of production anywhere else.

The next Order, surprisingly enough, decreases a duty. Under the terms of the trade agreement with Great Britain the British Board of Trade may require the re-examination of a duty by the authorised body in this country which is at present the Industrial Development Authority. Some time ago they requested a re-examination of the rate of duty on abrasives and following an examination of the matter the Industrial Development Authority recommended that the preferential rate of duty should be decreased from 30 per cent. to 20 per cent. In accordance with our obligations under the trade agreement we are required to make that change. I have received some representations from the firm concerned that the reduction in the duty will adversely affect their output. Import statistics to-date do not suggest that it will, but if the situation should develop in which it is clear that the reduction in the rate of duty is having too serious an effect on home manufacture then the matter can be remedied only by consultation and agreement with the British Board of Trade.

The next Order relates to hacksaw blades and was made for the purpose of amending the definition of blades in the original Order. That Order applied to blades which were 1/2 inch wide or more. Information conveyed to me, supported by trade and shipping statistics, indicated that blades 3/8 inch wide were being imported instead of the 1/2 inch blade so that the duty could be avoided. The purpose of the amending Order is to bring blades 3/8 inch wide within its scope.

The next Order applies to leather. Some time ago I received representations from the Federation of Tanners and Curriers regarding the serious situation with which their industry was faced. When the trade slump developed last year it particularly affected for a time the footwear industry, and in due course repercussions of that slump came back upon the tanners. The similar slump in other countries created a situation in which, despite certain advantages held here, there was a danger of substantial imports of leather to the detriment of our tanners —not that leather could be produced better or cheaper than at home but because of accumulated stocks abroad and a desire to dispose of them. In an effort to get over the slump and to get trade moving again it was decided to impose a customs duty upon leather. The duty now operates at the rate of 75 per cent. full and 50 per cent. preferential. Since then, of course, the situation has changed completely and the demand for leather is now so strong that many of our tanneries are working overtime. In fact, it looks as if that situation is likely to develop in other countries as well, so that the firms which had ventured into the export business in leather are reporting substantial orders. It should be possible to have another look at the rate of duty in this case at a later stage if the present improvement in the industry should be maintained.

The next Order amended the duty on tanks and cisterns. The existing duty applied to tanks which were cylindrical or elliptical and it was extended to cover tanks of all shapes, including square tanks. It was also framed so as to amend another Order applying to tanks of a capacity exceeding 50 gallons by increasing the rate of duty on them. We have had considerable difficulty in deciding the line of policy to take in regard to a number of our industries using steel. As the House is aware the price at which steel is charged to this country by British manufacturers is substantially higher than the price charged to British manufacturers. It has not been possible up to the present to procure steel in Belgium or Germany on more advantageous terms. The position, therefore, frequently arose where it was possible to import from Britain, subject to duty, articles made of steel at a cheaper price than the steel to make the articles could be imported by the manufacturers here.

That situation is easing now but when it developed we had this very considerable decision to take whether to increase the rate of duty upon articles of steel even though we recognised it would mean that the higher cost steel used in the manufactured product would involve higher prices, or allow our existing steel fabricating firms to go out of business until normal conditions had been restored in the steel industry. The view that it would be very unwise to allow those firms to suspend operations, the probability that their trained staffs would emigrate and might not be easily replaced, and the general desire to maintain employment in the country, led us to the decision that it was better to try to carry over this temporary but difficult situation and to increase the rate of duty in each case in which it was required. The effect, we recognise, will be to establish for many of these industries a higher rate of protection than was originally considered necessary or would normally be required. Therefore, I endeavoured to make it clear to the firms concerned that the raising of the rate of duty now is not to be regarded as a commitment to maintain the higher rate of duty indefinitely, that, if and when normal conditions return to the steel industry, when it is possible for our manufacturers to import steel, whether from Britain, Germany or Belgium, at prices comparable to those prevailing in Britain, all these customs duties will be reconsidered. In a number of cases we felt it was necessary in order to keep production going here to increase the rate of duty and this is one of the cases.

Breanndán Mac Fheórais

There will be no reprisals from the other side as the result of this duty?

Mr. Lemass

The whole position in regard to steel is now easing. It is possible to procure supplies from continental sources without restriction in quantity but not equivalent to the British home prices. The British home prices are subsidised out of higher export prices but with the development of production and a falling off in demand it will not be possible to maintain that situation indefinitely.

Mr. MacBride

Can the Minister give an indication of the differential price which exists in regard to steel?

Mr. Lemass

We are paying about 40 per cent. more than the British home market price.

Breanndán Mac Fheórais

I wonder did the Minister understand my question. I asked did he expect that there would be any reprisals in consequence of this duty?

Mr. Lemass

I do not think so. I do not anticipate difficulty in that sphere. I am hoping that within the next 12 months this whole situation will resolve itself.

Breanndán Mac Fheórais

I have in mind a particular industry in which the Minister knows I am interested. However, I can talk to him privately about it.

Mr. Davin

Will the situation be affected by the denationalisation of the industry in Britain?

Mr. Morrissey

Deep waters.

Mr. Lemass

The Deputy has sources of information on that subject which are not open to me.

Mr. Davin

The whole thing was brought about by the rearmament policy in Britain.

Mr. Lemass

That is so. The demand for steel increased more rapidly than its output and it is only in that situation that these differential prices can be operated. Now the output is increasing and the demand is tending to taper off, so normal conditions should be restored fairly soon.

Mr. Davin

The Minister for Finance, who is in touch with Eisenhower, will be able to post you on that.

Mr. Lemass

The Deputy also has his contacts. The next Order applies to statues and statuettes, and again it is only for the purpose of adjusting the definition. The duty applied to statues of 12 inches in height or higher, and latterly there has been quite a substantial import of plaster statues ten inches in height. We are therefore amending the Order to apply to statues ten inches in height.

The next Order is an amending Order dealing with adhesive gums. It is reasonable to expect that we can produce adhesive gum in this country. It is not possible to give any indication of the number of people employed in its manufacture because the firms that make it are engaged in a number of other lines, but the value of the market has been estimated at over £10,000 per year. One of the consequences of undertaking the manufacture of these commodities in this country is that there are indirect benefits secured for the manufacturers of packages, bottles, labels and other articles of that kind.

The next Order deals with malt extract and preparations of malt extract and fish liver oil. This is another industry about which I was very much concerned because there did not seem to be any reason why it did not develop with greater speed as was contemplated when the duty was originally imposed at the rate of 50 per cent. full and 33? per cent. preferential. Having regard to the circumstances under which the commodity is marketed it did not seem likely that adjusting the rate of duty would help very much, but the two firms that are concerned in the production of this commodity considered otherwise. They felt that the handicap they suffered by reason of the better-known names under which imported products are marketed would be overcome if there was an adjustment of the duty. The Government accordingly agreed to make it.

The estimated annual demand here is around 250 to 300 tons per annum valued at between £40,000 and £50,000. The home firms, despite the customs duty, had only about half that market. Various tests which I had made regarding the quality of their products appeared to indicate that they were first-class and that there was no reason to think that the failure of those firms to get the whole of the market was due to any defects of quality. Neither did it appear to be due to any excessive cost of production. In fact the situation appeared to exist that, irrespective of the cost of production here or the import duty that we imposed, in pharmaceutical stores selling these goods both the home product and the imported product were sold at the same price. Whether that is a restrictive trade practice or not is something that we may investigate later. In any event, it was regarded as a type of industry that we should seek to develop as the basic material is one we produce in the country and, as a further effort towards that end, it was decided to recommend this higher rate of duty.

Mr. MacBride

Does that include cod liver oil?

Mr. Lemass

It includes preparations of malt extract with fish liver oil. It does not include cod liver oil by itself.

The next Order was also designed to amend a definition so as to make a duty previously established effective, that is, the duty upon cotton-wool and wadding and manufactures thereof. That duty was expressed to apply to cotton-wool and wadding made wholly or mainly of cotton. Latterly, imports have been taking place of a mixture of cotton-wool and cellulose material which the Revenue Commissioners held was outside the scope of the Order and the purpose of this Order is to amend the definition of the duty so as to make it apply to cotton-wool whether or not it contains a proportion of cellulose material.

The next Order is also a small Order. We had a duty on braces but apparently the cut parts of braces were held not to be within the scope of the duty, that is, cut parts of braces of an elastic character, and the purpose of this amending Order was to apply the duty to brace elastic so prepared as to require nothing except stitching to make it into a pair of braces.

The final Order deals with iron and steel wheelbarrows and hand-propelled cars, trucks and trolleys. This is a new Order. There are three firms which have commenced the manufacture of these iron and steel wheelbarrows and while, until recently, they have been developing and developing quite satisfactorily without the aid of any duty, fluctuations in steel prices tended to affect their position as in the case of other firms using imported steel, and they applied for the imposition of a protective duty. Having regard to the quality of their products, the satisfactory prices at which they are being sold and the capacity of the three firms concerned, it was considered reasonable to give them protection at this juncture and a duty at the rate of 37½ per cent. full and 25 per cent. preferential was imposed by the Government.

These are all the Orders to which this Bill relates. If any Deputy wishes to single out any particular Order for discussion or desires to secure the repeal of any of these Orders, it would be more appropriate to attempt to do so by amendment on Committee Stage rather than at this stage.

Mr. Morrissey

I do not propose to oppose this measure but it is a very important measure and it presents an opportunity to the House for what I hope would be an important discussion. I am sure that, so far as the majority of the Orders are concerned, the Minister was satisfied that he had to make those Orders amending existing duties either up or down, whatever way it was necessary, because of changing circumstances. I am equally satisfied, of course, that the Minister made some of the Orders with a certain amount of reluctance. I do not think there is a shadow of doubt about that. Unless there has been a very substantial improvement in the position since my time in relation to some of them, I would be very reluctant to make the Orders.

This is a measure which should be, and I hope will be, discussed here, in so far as there will be a discussion on it this afternoon, in an entirely non-Party manner. All of us are interested in safeguarding our industries and helping them to expand and to meet in an ever-increasing degree our own requirements at least, apart altogether from an export market. We ought not to forget that there are at least three parties concerned. Generally we concern ourselves with and talk about the manufacturer and employees and are inclined to forget, or to give less attention to, the people who have to purchase the products of the factories and use them.

The Minister gave us some very useful information and a fair review of each Order and the reasons for it. But there is an aspect of this matter that should be brought under review. I am inclined to think the Minister would agree with me on this. We have in this measure, and in other duties that are not covered by this measure, a range of duties that have applied to particular industries over a great number of years, industries that received a very considerable measure of protection in their earlier years in order to give them what they were entitled to get—an opportunity of getting on their feet and trying in a reasonable way to meet competition. The House and the country are entitled to know to what extent these industries which got protection, some of which costs the community very considerable sums, have progressed. To what extent have they increased their capacity to meet the requirements of the home market? To what extent has their management improved? To what extent has the skill of their operatives improved? We are entitled to know whether production and quality have been stepped up. Or are we to take it that because a particular industry was protected, protection must be maintained for all time irrespective of lack of effort on the part of those engaged in the industry?

We must remember that the purchasing public are entitled to a fair break just as the manufacturer, the management and the employees are entitled to a fair break. It behoves us, particularly in present-day circumstances when the cost of everything is tending so high, to examine each proposal very carefully indeed and see that only the minimum amount of duty that is required to safeguard the industry is given. Making full allowance for the abnormal conditions, particularly of the last two years and more particularly of the last 12 months, in relation to certain industries, we would require a good deal of satisfying that it is necessary to double the duty as some of these Orders propose to do.

It would not be right, in the absence of the fullest information, to single out any particular industry covered by these Orders, but I think the time has arrived to review the effectiveness or otherwise of the protection we have given to various industries over a long number of years, to see whether those industries are doing all they can to put themselves on a footing to meet outside competition. I know that many of our industries have made very considerable progress and have brought themselves to the stage where they are able to put on the market here articles that can compare more than favourably in price and quality with anything from outside. I know also that you can have an Irish article of equal if not better quality than a British article, selling at the same price or slightly less, and still the British article will get preference from those engaged in the wholesale or retail trade.

It is our duty to deal with the situation such as the Minister has outlined in relation to steel. That did not arise for the first time in the last 12 months or two years. On more than one occasion over the last five or six years British manufacturers could put fabricated steel on the market here at a price equal to or even lower than that at which our people here could buy the raw steel. One has to take very special steps to deal with a case like that.

I am handicapped in this discussion, as it would not be right or desirable to go into details. Probably it would be misunderstood and misrepresented outside and used to the detriment of the particular firms. There are one or two of those Orders I would like to criticise in some detail, but it probably would not be fair to do so. At the same time, one must have very conclusive evidence when one agrees to double an existing duty. We do not want to find that, in order to preserve a particular industry and keep a certain number employed, we are inflicting on the consumer a far heavier load than he should be expected to carry. It has happened—I do not know if it is still happening—that in relation to certain products here the cost to the community was far in excess of the whole amount that was paid in salaries and wages to all the employees of that particular industry. There were certain products where it would have paid the State, acting on behalf of the community, to tell those engaged in that particular product: "Close the door and go home and sit at the fire and we will send your wages and salaries every week." The State would have saved money by doing that. It might be desirable to keep certain industries going, even at some cost to the community in excess of what we would pay by way of keeping the people in employment.

I do not want to go into the question of woollens and worsteds and wool fabric. There is a good deal which might be said one way or another about that. I have to satisfy myself that the Minister has gone very fully into it and has given only what he felt was due in justice to those who did stockpile. I would suggest to him that he might keep a pretty close eye on the situation there and keep a very close eye also on the situation in relation to tanners and leather. I do not want to see any manufacturer victimised or unfairly treated, but on the other hand I do not want to see them getting more from the community than that to which they are justly entitled. I know it is easy to say that and that it is not so easy for the Minister to devise measures to bring about that exact balance we all would wish to have.

I would like to say something about the Waterford glass factory. I agree entirely with what the Minister proposes to do in relation to this factory, even though for a considerable time our people may be deprived of the opportunity of buying a cheap type of glass that might suit them. I think there is something in that Waterford glass factory we can be proud of, that there is something to be built there, that what they have placed on the market already, certainly in the crystal glassware I have seen, is very creditable indeed to them. I can only hope that it will be possible for them to bring that hand-made, hand-cut glass within the reach of a greater number of our own people. I think it is a very fine industry and I fully appreciate that an industry of its kind that has to train its operative must get a reasonable chance to make progress.

As I have said, I am rather handicapped because I cannot particularise or deal with particular industries. Perhaps this is not the time to widen the scope of this debate, but may I respectfully suggest to the House that, if the Minister provides the opportunity, the House should take the opportunity to discuss fairly fully this while question of protection? There is very little difference, if any, between us here on this matter. Our obligation is to give what protection is necessary to enable people to start and maintain an industry for the production of goods which otherwise we would be importing. The great majority of our manufacturers have played the game. A number of them have not—quite a considerable number. Some of them, when a certain situation was reached for which they were largely responsible themselves, came to the Department looking for assistance, demanding assistance, almost dictating to the Department, with the threat in the back of their minds of using the workers' employment—that if they did not get what they required from the Department they would dismiss employees—and they used that as a big stick to beat the Minister. I want to say this for the Minister if he will not say it himself. Unfortunately some of these people have been supported on many occasions by Deputies and trade union leaders in that attitude.

Breanndán Mac Fheórais

They have got to protect the workers' interests.

Mr. Morrissey

I am saying that if an employer, when there is no justification for it, tries to use his employees as the stick with which to force from the Department or the Minister something to which he is not entitled——

Mr. Davin

It has happened.

Mr. Morrissey

And you know that.

Mr. Davin

We do.

Mr. Dunne

Who is going to determine whether he is justified or not?

Mr. Morrissey

It is not as difficult as it might seem.

Mr. Dunne

For the ordinary person?

Mr. Morrissey

I can assure Deputy Dunne that the ordinary person can get the information. While saying that, I want to say in all fairness and for no other reason that the majority of our manufacturers have made a good job of their business. We ought not forget that in many cases they have had to establish and try to build and expand their industries over a period that has been at no time, I could safely say, within the last 15 or 16 years, in this country normal. I do not think you could say that we had one normal year from the point of view of business, industry and agriculture during the last 15 years.

When it appeared that the market was open to them, then our industries were handicapped because they could not get the raw materials or get them at a price that made it possible for them to produce articles economically.

As I say, I am not opposing this measure. I think it is a necessary measure. I may have and, indeed, I have certain doubts in relation to a couple of Orders, but I suppose one should not do anything drastic until one is perfectly satisfied that one has done everything that one could be reasonably expected to do and that a person who is seeking and enjoying this particular protection will do his part.

Mr. Burke

I was very interested listening to the Minister going through the various Orders and I must compliment him because of his anxiety to encourage Irish industry. Irish industry has a great deal to be thankful for to the Minister. I hope that the people who have benefited by his encouragement will act accordingly.

What I mean by that is that we as a Party have always been anxious to encourage Irish industry. To encourage Irish industry the Minister and his Department have put on tariffs. I hope that the people who are getting the benefits of those tariffs will be as honourable with the Minister and his Department as they have been with them.

There is a great deal in what Deputy Morrissey said a few minutes ago. He was honest enough in certain criticisms and to that extent I can go some of the way with him.

Mr. Keane

More power yourself.

Mr. Burke

Instead of being critical of either our Party or the Minister, industries which have enjoyed protection over a long period should now give a lead to the country. A number have done so and have done well. The Minister is trying to create employment for the worker and in order to do so he has to give reasonable protection since our industries are up against competitors who have been in the field of industry for generations. It is very hard for such industries to carry on here and it is very hard to encourage people to invest money in Irish industries unless they are assured of some return.

The present Minister succeeded in encouraging a number of them to put money into Irish industry. A number of the tariffs introduced by the Minister affects factories in my own constituency and I welcome them because it is good to create more employment.

The Minister, when speaking, mentioned that a number of our manufacturers, when selling a particular line, were up against prejudices with wholesalers and importers who say: "We have been buying from the old firm for ever so long. My grandfather, my father, my relatives, directors and co-directors bought from this particular firm and we have long associations with them and they gave us satisfaction."

No matter how you look at it people are conservative and it takes a long time for them to change. I hope the action the Minister has taken to-day will be appreciated by all concerned. I hope it will be appreciated that anything he has done was done in the interests of the country as a whole.

Breanndán Mac Fheórais

He is a good man.

Mr. Burke

He is and will be a good man. Will that do the Deputy? He has always been a good man and I hope he will be a good man in the future.

Mr. Davin

With your blessing.

Mr. Burke

As I told the House already, the Minister has a grave responsibility towards the country and to everybody in it. He is endeavouring to see that an even keel is maintained and that the burden of any increased tariffs is fairly distributed and is in the interests of creating Irish industry. A Minister who takes a decision of that kind has a grave responsibility to the country as a whole and to everybody else concerned.

It is nice to see the historic Waterford glass factory going strongly again. I hope it will continue to do so. The outlook seems bright in regard to the other small industries that were started here. The manufacturers have a grave responsibility to this nation and I hope that each and every one of them will give the same amount of goodwill to the Minister as he is giving them in affording them this encouragement and protection.

Mr. Keane

As Deputy Morrissey said, the Minister has undoubtedly gone a long way to help home industry in a very substantial measure and I feel that the greatest indication of appreciation that could be shown to the Minister and his Department would be a reciprocal gesture by the manufacturers towards the Minister. It will be gratifying to the Minister to know that, by the imposition of these duties, he has assisted Irish industrialists to produce and put on the market stuff which is well able to compete with material manufactured in any part of the world. I am afraid, however, that, at times, these industries which have been safeguarded by tariffs and quotas more or less exploit the advantages afforded to them by the Minister.

There was a case quite recently in my constituency of a small company which started in a modest way. I do not propose to mention the line of goods they produced, but, like Deputy Morrissey, will confine myself to generalities rather than pinpointing. A certain home-made product was required for that industry and the difference in the quotations by two Irish manufacturers was such as to appeal anybody. If the Minister would like to know the details, I can let him have them, but I do not propose to mention them here because the particular line of goods I am speaking about would be known. That is not fair to the Minister, to his Department, to the Government or to the House, where every Deputy, irrespective of Party, will be wholeheartedly in favour of the imposition of these Orders.

As Deputy Burke, whom I may describe as the panacea for all evils— he proved that quite recently—says, there must be, even on the part of labour, a fair return given for the advantages which are put in the way of both labour and employers by these Orders. We must try to provide the best article at the best price, and by that I mean the best price to the purchasing public who will have to pay when these impositions are put into operation. The honest industrialist, I agree, will make his goods available at the very minimum cost. Other industrialists may think that, by handling the minimum amount of stuff, they will make the maximum amount of profit by charging maximum prices, but I am sure that the Minister under another Bill will keep his eyes open, so far as those people are concerned.

I have experience of old established manufacturers in this country who put articles on the market that compared very favourably with any article manufactured outside and these manufacturers, let it be said, have very little trouble with their employees. Any amenities to which the employees are entitled they get. They get a fair wage for a fair day's work and, in addition, these people are progressive. If there is any modern machinery to be got, they will get it in and will keep abreast of the times, and they will not go to the Minister every second day, hats in hand, asking for assistance. The Minister has undoubtedly gone a long way to give very substantial relief and assistance to Irish manufacturers and I hope that, as a gesture of appreciation, the Irish manufacturers will pass it on to the purchasing public. That will be the best token of appreciation that can be paid by them to the Minister.

Mr. Davin

I agree with the general policy of the present Government and of past Governments so far as they have made provision for protective tariffs as a means of developing our industries, and I will continue to give support to that policy, whether operated by the present Government or a future Government. We have to be very careful, however, and Deputy Burke will realise what I mean, not to allow the protection we are now giving to various firms to be used as part of a machine for fleecing the public.

It is not my intention to deal with any particular industry—I could if I wished, but I will refrain from doing so at the present—but I want to remind Deputy Burke that if he wants any proof that such a thing has been and is being done, or is being attempted, he can find the justification for my statement in that regard in the Restrictive Trade Practices Bill. That Bill is not being brought in, I assure him, without genuine reason and justification. It is brought in for the purpose, amongst other things, of preventing firms who have got the benefit of protection through this House from fleecing the public through trade rings and other such methods.

We had a statement made in public quite recently by one of the biggest traders in this country that were it not for the activities of rings, including manufacturers who got the protection of Orders of this kind, the prices of certain essential commodities could be brought down by 20 per cent. That man knows what he is talking about because he speaks from experience. Over a year ago I reported a certain manufacturing firm to the Minister for taking orders, confirming orders and subsequently refusing to fill those orders. I do not know what action was taken by the Minister at the time in relation to that particular Donegal firm—that is the nearest I will go to identification—but recently I received some correspondence.

An Leas-Cheann Comhairle

The Deputy seems to be widening the scope of the debate. His remarks would be more relevant on the Restrictive Trade Practices Bill.

Mr. Davin

I suspect, and I have good grounds for suspecting, that one of the Orders we are now discussing confers a benefit on the firm concerned, otherwise I would not raise the matter. If I am wrong, I am sorry. I do not think I am far out, though. I would ask the Minister to say, and I am sure he will have no hesitation in saying it, that any firm that gets the benefit of Orders of this kind to help it to build up an industry to supply our people with essential commodities should be established on some rule or standard of honour and that when such a firm takes an order from a reputable firm it will not be allowed later on to refuse to fill that order thereby leaving the wholesale firm and its 3,000 customers without essential commodities. I doubt if the Minister would give such a firm the benefit of an Order of this kind and it is with some reluctance, because I support the general policy, that I would vote for an Order amongst the many we have before us now that would confer such a benefit. Something should be done to bring a firm of that kind to some sense of its responsibilities because the firm is responsible to the community as a whole which is indirectly taxed to keep the particular firm in operation.

With regard to the general policy of developing industry, I was led to believe—I may have been misled or I may have misunderstood—that when we give the benefit of protection and trade loans and all the other assistance that can be given to our own citizens, plus the aid of technical advisers from outside, we do so on condition that the financial structure of our major industrial concerns will be reviewed at the end of a reasonable period, say, at the end of ten years. I know reputable firms which have made an honest attempt to comply with that policy. I know others that have made no attempt to do so. I know some that are trying to evade their responsibilities in that particular regard.

I read the balance sheets of some of these industrial concerns. Naturally enough I take an interest in the ones that are situated in my own constituency. I can read and understand a balance sheet fairly well. Half my business experience over 40 years was confined to the preparation and examination of balance sheets. I am not a certified chartered accountant but I can assure the Minister that I know the meaning of a reserve fund, the meaning of a 12 per cent. dividend plus bonus and the meaning of a huge amount set aside for reserve. If a firm can set aside more than the subscribed capital inside a period of ten years for reserve purposes, somebody must pay for that, plus paying for a dividend of 10 or 12 per cent. and a bonus.

I assume that it is an easy way of hiding reserves and hiding profits in so far as those who do not understand balance sheets are concerned. The shareholders understand perfectly well because they get the scrip and they are able to cash it. It is the community who must provide the excessive profits. I hope I am not wrong in thinking that the Minister will deal with many of these firms under the Restrictive Trade Practices Bill when it comes into operation. I do not want to develop this discussion on a line that might be misunderstood and would certainly be misrepresented.

Anybody who says anything here or is any way questions the activities of any of our manufacturing industries is supposed to be opposed to protection and opposed to the development of our industries, but I know what that protection means to some people. It means that manufacturing concerns which have no regard for their responsibilities to the Minister or to the public, who provide these tariffs and have to pay for them, want to cover up excessive profits and cases of the kind that I have briefly mentioned here to-day.

It is with considerable reluctance that I would vote for one of these many Orders giving further protection to an industry that would regard it as decent in trading circles to accept orders from reputable firms and subsequently refuse to fill them because of a desire to get a higher price for the commodity for which they originally accepted the order and make a higher profit. I hope the Minister, through the ordinary administrative and supervisory methods of his Department, will deal with glaring cases of this kind and apply to them the full force of the Restrictive Trade Practices Bill when it becomes law. The public should not be fleeced by manufacturing concerns of that kind and wholesalers should not be at the mercy of these people.

Mr. D. Costello

I think Deputy Davin has expressed the anxiety many people feel because of the manner in which tariffs are granted and because of the manner in which they are maintained. While realising that this may not be the appropriate occasion for a general discussion on the tariff policy of the present Government, I would like to make one suggestion at this stage. I believe the existing method of granting tariffs should be altered. Some independent body such as the Industrial Development Authority, should have control over the recommendation and issue of tariffs and over the review of tariffs. An annual report giving information to the House and to the country generally of the operations of industries subject to tariffs should be available. The matters which have to be taken into consideration when the granting of tariffs, or their maintenance is under review are frequently not at the disposal of Deputies when they are presented with a Bill of this kind. Details of a number of matters which we have to decide are not at our disposal. For instance, we cannot know what the proposed exportable capacity will be of the industry which is to obtain the tariff. We may not know— the Minister himself may not know— what the retail cost of the goods will be. We should like to have an estimate of the employment which the industry will maintain. These are matters of vital importance in deciding whether a tariff should be given or maintained.

It is well known to every Deputy that there are industries in this country which have been carrying on business for many years behind the protective tariffs while, at the same time, the goods which they produce and the employment which they give do not warrant the high cost of the goods which the public have to pay.

While agreeing with the Minister that it is right, in principle, to give a tariff to a new industry which is starting, as, for example, the Waterford glass industry, it seems to me to be proper that an independent body such as the Industrial Development Authority should be there to watch over the manner in which this particular industry and other industries with a tariff works and should be in a position to report to this House and to the public on the matter.

I should like also to hear from the Minister, when he is replying, the figures of the proposed employment in the Waterford glass industry and the existing employment in the two factories which he mentioned and which at present manufacture razor blades.

Mr. Lemass

In reply to Deputy Costello, the number employed in the manufacture of drinking glasses and crystal glassware is at present slightly under 300. In the case of razor blades, my information is that approximately 90 persons are employed at the present time.

I want to say, in connection with Deputy Morrissey's observations—particularly with regard to the Orders scheduled to this Bill which provide for increased rates of duty—that I would not regard these higher rates as permanent. In the majority of the cases, the duty was increased to offset difficulties arising from a temporary situation and provides protection at a higher rate than I would regard as justifiable or necessary in normal circumstances. I agree that at some time we shall have to have a review of all our protective duties to satisfy ourselves that the developments which were anticipated when they were imposed have in fact been secured and that the maintenance of protection at the rate originally deemed necessary is still required. One would naturally prefer to undertake a review of that kind at a time when material costs and wage rates were more or less stable so that a fair comparison between productive efficiency here and elsewhere could be made.

I have said already and I repeat now that in my view any industry in this country which is producing goods at a higher cost than similar industries in Great Britain is under an obligation all the time to justify that higher cost. I do not say that it may not be justifiable in some cases either because of higher material costs, adverse factors arising out of local conditions, or the scale of operations here. The onus of justification is on the firm which is unable, in normal times, to get down to the level of the prices operating in Great Britain.

I want to say this to Deputy Davin, because I think it is important. The existence of a higher level of production costs here is not necessarily due to the avarice of industrialists or the inefficiency of their equipment. Other factors can operate also. If we find that some industrialist is taking too much profit or that he is not keeping his machinery at the proper level of efficiency, it is comparatively easy to deal with him. It is much more difficult when, behind the protective tariff, a level of labour costs is established— either because of the elevation of wage rates or the institution of labour utilisation practices—which is substantially higher than in Great Britain. That cannot be so easily dealt with. In any review of our industries, in any investigation of their production costs, in any inquiry which might lead to a revision of protective rates, that is a factor to which account would also have to be given.

I am personally perturbed to see that in some industries a tendency is developing to establish not so much wage rates as labour utilisation practices which put the labour costs of production here permanently higher than those in Great Britain—and in some cases at the instance of trade unions which operate also in Great Britain and which seek a different type of agreement here. It is clear that at some stage, if that operates—it may not necessarily so operate—but if it operates here to put our costs on a basis permanently higher than in Great Britain we may have to take a look at the level of protection afforded.

Mr. Morrissey

In fact, it is already operating to some extent.

Mr. Lemass

In some industries I am afraid it is operating already. I was very glad that Deputy Morrissey found it possible to approve of what we have done in regard to the glass industry in Waterford and of his acceptance of the fact that it involves the maintenance of that policy over a period of time. I am the last to forecast the possibility of any political changes but it is satisfactory to know that, if the worst should happen, the present policy will still be maintained in relation to that industry.

I am not quite clear what Deputy Davin had in mind when he referred to a reconstruction of the financial structure of industrial undertakings after ten years. I think he must have misunderstood some provision of the Control of Manufactures Act in that regard.

Mr. Davin

What I mean is this. Outsiders—people who are not natives of this country—were allowed to come in here on the basis of the 1949-1951 period. It was generally understood that the particular industries would have developed here inside a period of nine or ten years so as to relieve those people and let them pass out, thereby getting complete financial control of the particular industry.

Mr. Lemass

Agreements may have been made between the partners in a particular enterprise to that effect but there is no such statutory obligation in regard to time limitation set out in the Control of Manufactures Act. It is to be remarked that many of the companies which started here under a licence under that Act—companies with a predominance of external capital—have since been transformed into Irish companies which can operate without that licence. There is no time limit for such change in the Act itself.

Mr. Davin

I know it is not fixed in the statute but is it not desirable?

Mr. Lemass

It may be, but it is difficult to lay down a general rule in a case of that kind. I think it is true to say that the majority of our industries have substantially increased in efficiency since they started. No doubt, there is always the temptation. where protection is afforded and comparatively easy marketing conditions prevail, to fail to modernise production technique or to install new equipment as it becomes available. I think we can, however, by various devices keep up pressure which will ensure that these improvements will come about. The Department of Industry and Commerce is at present engaged in a systematic review of all industries. On the basis of these reviews, decisions are being taken as to the action which the industries concerned should be required to take in order to secure better results than they appear to be getting at the present time. While at the moment these reviews are being undertaken by departmental officers, and the action following on them is administrative, I agree that at some stage, when conditions are more suitable than at the moment, greater publicity can be given to the situation in each industry and public attention directed, not merely to the progress made or the progress possible but to the immediate changes which are desirable and which, if applied, would either increase output or reduce production costs.

Question put and agreed to.

Committee Stage ordered for Wednesday, 26th November, 1952.