I was saying, before we adjourned, that the effect of this tax on our agricultural industry could not and should not be ignored. Individual Deputies have mentioned the percentage reduction in their own constituencies with regard to contracts for the growing of malting barley. I am told that, generally speaking, in the past year there has been a reduction all round in the growing of malting barley and the placing of contracts for it, of 35 per cent. That is a very serious consideration to the tillage farmers of the Midlands, Kildare, Carlow - Kilkenny and, other parts of the country—and, of course, as Deputy Collins reminds me, there always has been traditionally a considerable amount of malting barley grown in the County Cork. I mention this matter because it is clear that the tax to which we take objection has had its effect not merely on the production of whiskey and on the employment that the industry formerly gave but in addition on the agricultural industry.
There is also the fact—it may be peculiar to the Midlands but it is so, nevertheless—that the distillation of whiskey has traditionally made available an important market for hand-won turf. Here in this House from time to time we are accustomed to hear Deputies making appeals for the hand-won turf producer. The production of hand-won turf has for many years been a production occasioned and delimited by the market available for it. In two distilleries in the Midlands there always has been a market for turf. That market is now jeopardised to a very serious degree.
These particular considerations that I have mentioned certainly suggest that this tax is not one that should be supported by this House when we realise that what we are in effect killing is one of the oldest Irish native industries, an industry that 40 or 50 years ago was endangered by competition from abroad but an industry that met that competition and overcame it. It is now being threatened by the action of an Irish Government and an Irish Minister.
I do not know whether the answers which the Minister has given to criticism of this tax should be confined merely to his intervention in the debate to-day, because in fact in the last six months or so a variety of cases has been advanced on behalf of the Government as to why this particular tax should be continued and as to the manner in which it should be defended. I would like briefly to refer to one or two of the points that have been made by the Minister on different occasions. The facts with regard to the tax and its revenue have been referred to already. It is clear that the Minister expected in April, 1952, from the spirit duty as it fell to be collected from home distilled and also from imported spirits, to get an increased revenue of slightly more than £1,000,000. In fact, the revenue in the last financial year fell by close on £500,000. That particular reduction in revenue must be regarded as one of the most signal failures of any kind of taxation. As has been said by other Deputies, the only reason the Minister for Finance can advance for any taxation—if he is not to be in the rôle of a social reformer—is to collect revenue. The result of this taxation has been to reduce the revenue which he could collect as Minister for Finance.
In dealing with that marked reduction in revenue, the Minister on other occasions has advanced two or three reasons why that reduction took place. First of all, he suggested that the imposition of the tax was at an unhappy time, because there was a decline in the consumption of spirits. In fact—and it is well to have the figures on record—it appears from the Revenue Commissioners' report, Table21, that in 1951 there were 993,314 proof gallons of whiskey consumed. In 1952 that had slightly declined, by a little over 13,000 gallons. That decline is so trivial as really to make very little difference to the quantity of whiskey consumed and to the position of the industry itself. In the last financial year, while the revenue fell by £1,500,000 from expectation, the drop in consumption fell by 267,631 proof gallons or well over 300,000 bulk gallons of whiskey. That is a drop, if my mathematics are correct, of over 27 per cent. in consumption. That particular decrease in consumption could not be explained, even by the most enthusiastic defender of this tax, by suggesting that the tax was imposed at a time when consumption of whiskey was in any event declining. A drop of over 27 per cent. is such a colossal decrease in the operation of the industry as to bring very serious consequences.
The Minister also said some time ago that another consideration why he did not attain his expected revenue and why revenue had dropped was that there was advance buying by those in the licensed trade, prior to the Budget of 1952.
I do not know whether that particular contention is still pursued by the Minister. He did not put it forward to-day. But the fact is that all those engaged in the licensed trade prior to April, 1952, were on a strict monthly quota in relation to their purchases of whiskey and no publican, no matter what his standing in the trade might be, could purchase from any distillery, and accordingly take out of bond, any quantity of whiskey in excess of his monthly quota. In fact, every Deputy knows that there was no serious advance buying of whiskey prior to the Budget of 1952. There might have been the usual movement out of bond when a Budget is about to be brought in, but it certainly could not have been to any serious extent. In addition, Deputies will recollect that the Revenue Commissioners, at the instance of the Minister, took very definite steps to prevent any large scale withdrawal of whiskey from bond, because before the Budget of April, 1952, there was a sealing of bondand a prohibition on the withdrawal of any spirits from bond. Accordingly, that particular case does not seem to be worthy of consideration.
In addition, of course, as Deputies will appreciate, in April 1952, while conditions were I suppose better in the country than they are now, the effect of the restriction of credit was very keenly felt by those in the licensed trade. That restriction of credit had commenced to operate and be felt the previous autumn and certainly, prior to the Budget of 1952, no person in the licensed trade had the necessary capital to engage in lavish capital expenditure on the purchase of spirits.
Those are one or two of the reasons advanced by the Minister to explain away the very serious fall in revenue. Deputies will realise, however, as people outside do, that the Government must be concerned about the condition to which they have reduced this industry. Recently, the Minister for Industry and Commerce suggested to the licensed trade that we should have an Irish "nip" which would be sold over the counter at 1/2. I do not know whether "nips" appeal to members of the Government, but that certainly suggests that at least one Minister is now beginning to realise that parlous condition in which the whiskey industry and the licensed trade now find themselves.
Other suggestions were made by the Minister on the Second Reading of the Finance Bill to deal with the present condition of the industry. He asked: "Why do not those engaged in the production of whiskey here develop an export market?" The example was held up of what the Scottish distillers have done. My colleague, Deputy Sweetman, has referred to that and it is not necessary for me to go over the same ground. I should like merely to say that the Irish distillers have a very legitimate grievance against the Government owing to the loss of an export market. During the war years, when the production of American whiskey began to wane and when whiskey was a very scarce commodity in the dollar area, case after case was made by the ‘Distillers' Association to the then Government,which was also a Fianna Fáil Government, for some freeing of the restrictions then in operation in this country. Despite all the representations made, the Government still continued to control in a very rigorous manner any movement of whiskey from this country. The export market was strictly controlled and only a mere trickle of whiskey was allowed to be exported.
Deputies will recollect that those restrictions occasioned much publicity some years ago when it was suggested that the stocks of a particular distillery in this country might be exported, I think, to Switzerland. Right through the war and until 1948, I think, at any rate some time ago, there was a very rigorous clamp down on the export of whiskey from this country. That was at a time when the world market was favourable to the development of an export trade in whiskey. It was at a time when the Scottish distillers, backed by the British Government, began to roam over the American market and build up an export trade that now even rivals that of Seagram's Canadian whiskey and other whiskeys of that kind. We lost that opportunity because the Government were not prepared to permit the free export of Irish potstill whiskey. Accordingly, I think the four or five distilleries now left in the country have a legitimate grievance if they are attacked in this House by the Minister or by any Deputy for not building up some years ago an export trade. They were not allowed to do it.
What is the position now? It is suggested that a way out of their present difficulties would be to export whiskey. It is very easy to make a suggestion of that kind without examination of what it entails. It certainly would be a very doubtful foundation for a flourishing export trade were Irish distillers to do it at a time when the home market is dwindling away and the very source of our export trade is endangered. Our own Irish distillers are facing a 27 per cent. decrease in turnover in business and they now have to search for world markets when conditions have turned against the export trade and when there is an abundant supply in England and in the hard currency areas of allother whiskeys. In addition, as Deputy Sweetman pointed out, there could be no comparison between Irish whiskey and Scottish whiskey. In Scotland there is a stock figure of blended whiskey of over 150,000,000 gallons. Here the stock figure is less than 10,000,000 gallons.
