I move that the Bill be now read a Second Time. The purpose of this Bill, as set out in the explanatory memorandum circulated to Deputies, is to confirm 11 Orders made by the Government under the Emergency (Imposition of Duties) Act, 1942. These Orders cover iron and steel mesh netting, iron and steel wire, bars and sections, single cotton yarns, handbags,purses, pouches, etc., spectacle frames, sheet and plate glass, asbestos cement goods, tableware, electric wire and cable, glass-packed sterile liquids and toilet paper. Five of the duties are new duties. Three Orders effected an extension of the scope of existing duties, and three provided for alteration in the rates of duty prescribed under existing Orders.
The first two Orders mentioned, Orders Nos. 307 and 308, may be taken together. These Orders impose a duty of 37½ per cent. full and 25 per cent. preferential ad valoremon certain iron and steel wire, wire netting and barbed wire. It made a number of minor amendments in the definitions in the duty upon bars, rods and sections, such as are made by Irish Steel Limited, Haulbowline. The principal changes are, of course, the imposition of new duties upon wire netting and barbed wire. These are now being manufactured in a new factory which was established and commenced operations this year in County Dublin. We estimate that the internal market for these goods is valued at about £400,000, and it is, of course, the aim of the producers here to supply the whole of that market. At present they are employing about 140 people, but that employment will, it is expected, increase to around 200 at an early date. The prices at which these goods are being sold here are competitive with prices in Great Britain. It must be recognised, however, that in respect of these goods, continental prices are lower than British prices. In so far as I have expressed the view that it is a fair test of the efficiency of any Irish industry that it should produce goods at the same price as those goods are sold in Great Britain, this factory answers the test.
A price understanding has been entered into which calls for a review of prices whenever the price of the raw material—that is wire rod—changes. At the present time the steel market is very confused and there is even evidence to suggest that on occasions the manufactured steel products, such as bright steel wire, can be purchased at a lower price than the price of the steel rod from which the wire is made.We have the position of this concern under consideration in so far as the application of our price understanding is involved. For the bulk of the products concerned — galvanised wire, barbed wire and wire netting—the evidence available to me is that their prices are lower than the British prices. Of course their prices depend entirely, or almost entirely, upon the price of wire rod and they will, therefore, fluctuate with that price.
Order No. 309 relates to single cotton yarns. These yarns were subject to quota on importation here. Previously this single cotton yarn had been included in the liberalised list supplied to O.E.E.C. and when the matter came for consideration by the Council of O.E.E.C. they decided we were justified in suspending the liberalisation in respect of single cotton yarns up to July of this year. Under our O.E.E.C. obligation, it became necessary to revoke the quota Order in July and to substitute for it a customs duty. The duty in force is 50 per cent. full and 33? per cent. ad valorem.There are four firms now engaged in the production of single cotton yarn and they are employing, we understand, upon that operation, approximately 560 people. Our estimate of the requirements of the home market is about 6,000,000 lb. weight. The production of the existing firms for the six months period to the end of September was about 2,000,000 lb. weight. There capacity is about 4,750,000 lb. weight. There is, therefore, room for further extension in that industry and I understand that some of the existing firms are proposing to enlarge their capacity.
At present the prices of their yarns per lb. are slightly higher than British prices. I expect that situation will be rectified when full production has been attained. There is no reason that I know of why cotton yarn produced in an efficient spinning plant here should be any dearer than cotton yarn produced in England.
Order No. 310 was made to amend the existing duty upon leather handbags by extending the scope of the duty to cover those articles when made from artificial plastic materials andalso to bring within its scope certain trunks, suitcases, travel bags and similar articles.
The old duty was a flat rate of 40 per cent. but under the trade agreement with Britain, when any change is made in an existing duty a preferential rate has to be established and, therefore, the duty will in future operate at the rate of 60 per cent. full and 40 per cent. preferential.
Some 520 persons are, I understand, at present employed in the manufacture of all types of leather and imitation leather goods and the information available to me establishes that the prices at which these handbags are sold here are fully competitive with prices in England and apparently there is no need for anxiety on that score.
Order 311 relates to spectacle frames. Spectacle frames and parts of spectacle frames were liable to import duty previously if made of any material other than metal. The effect of the amendment is to bring metal frames within the scope of the duty. This is not a very big industry. There are three firms engaged in it. They employ on this work about 33 people. So far as prices are concerned there is an almost endless range of spectacle frames and it would be impracticable to make absolute comparison in detail between Irish prices and the prices of imported frames but, so far as we have been able to ascertain, prices here are as low as and in some cases lower than prices prevailing in Great Britain. It may be asked, therefore, why an import duty is required. I think the answer is that there is a certain amount of prejudice in favour of well-established British products and, as the frame is such a small part in the ultimate cost of a pair of spectacles, that an advantage in price does not secure business for the Irish firms.
The next Order, 312, which relates to sheet and plate glass, raises some issues of a different kind. May I say that the Order applies to plate glass only, because the Revenue Commissioners cannot undertake to distinguish between sheet glass and plate glass in the administration of the duty but, in fact, all requirements ofplate glass are allowed in duty free? The existing duty, which was not an ad valoremduty, but a fixed amount per cwt. on sheet glass, was fixed following a review of the position under the terms of the Anglo-Irish Agreement made in 1938 by the Prices Commission of that day which was then established as the reviewing body recognised under that agreement. The duty was fixed on the recommendation of that commission following the review. Duty at the rate of £1 full and 13/4 preferential per cwt. was established. With the alteration in values, subsequent to the war, these fixed rates of duties became less protective in their effect and, although the trade agreement made with Britain in 1938 did not, on its face, provide for a review following a review of a duty, nevertheless, the British authorities, when the matter was taken up with them, agreed that there should be another review of this duty. That review was carried out by the Industrial Development Authority, which is now the reviewing authority under the agreement, and the higher rates of duty which are now operative, 33/- full and 22/- preferential per cwt., are those which were recommended by the Industrial Development Authority following that review during which representations of the British manufacturers were received.
It was, however, recognised by the Industrial Development Authority that the effect of the higher rate of duty will be a higher price here and that the need for a higher rate of duty was the fact that under the situation existing previously the manufacture of sheet glass here was involving the manufacturers in a loss and that only if a higher price could be secured—and that could not be made effective unless the duty was increased—could they continue in operation. The manufacturers here, in fact, have been getting only about two-thirds of the home market notwithstanding the duty in force and it is hoped that if, as a result of the increase in duty they get the full home market, a reduction in their costs and, consequently, in their prices may be achieved.
The review in this case raised some interesting points. The trade agreement made with Britain in 1938 and still in force provides, in Article 8, that, on review, duties should be fixed at a level which provides British manufacturers with full opportunity of reasonable competition. In their report to me the Industrial Development Authority pointed out, however, that in Britain, so far as this industry is concerned, "reasonable competition" had meant the elimination of all competition, that there was only one producer who survived competition in Great Britain and who now has, apparently, a monopoly position in that country. They argued that in so far as competition might be assumed to be likely to have the same effect here that they could not accept as reasonable a type of competition which had produced that result in Great Britain, and particularly having regard to another provision of the trade agreement which requires that the Irish producer must be afforded adequate protection having regard to the relative costs of efficient and economical production and taking into account the requirements of a newly established industry. The review of the position carried out by the Industrial Development Authority established that having regard to all the circumstances production here was as efficient as it could be and as economical as it was possible for the firm concerned to make it. That firm has, however, certain higher costs which producers in Britain do not have to bear. These higher costs arise primarily under the head of raw materials, but also under the headings of wages, power, light, fuel and water. The relatively small size of the plant here as compared with the corresponding plant in Great Britain was also taken into account, although it was not suggested even by representatives of the British firm that the plant here was any smaller than plants normally operated in other countries or less economical because of its size than similar plants elsewhere.
The Industrial Development Authority said that if there was a price of sheet glass brought about bythe free interplay of the forces of supply and demand, then they would regard that price as being an economic price, but in the circumstances prevailing in Britain they could not take the British price as being representative, and they reported that they had ascertained that in other countries where conditions were more similar to those existing here the price was higher than in Britain. The effect, therefore, of the higher duty was to permit manufacturers here to raise their price from 100/- to 120/- per case. That is a situation which it was recognised would result from the alteration of the duty. It represents an addition of £1 to the cost of construction of the average house. On the other hand, the report made it quite clear that unless that higher price could be secured the manufacture of sheet glass in this country could not be carried on, and as that manufacture is linked in with other glass industries here it is important to preserve it apart altogether from the employment aspect.
Order No. 313 altered the rate of duty applying to articles made of asbestos and used for building purposes. The effect of the Order was to substitute an ad valoremfor a flat rate of duty. These goods are made, as the House is probably aware, in a factory in Athy, County Kildare, where there are 340 people at present employed. There was every evidence that before the duty, which had been suspended, came back into operation the prices of their products were fully competitive with continental prices; and there has been no change in their prices since, and information available to us is that they are still able to produce and sell here at prices as low as those prevailing anywhere else in Europe.
Order No. 314 may require some more elaborate explanation. That is the Order which increases the customs duty upon delf and china tableware. That Order received some publicity in the Press after it was made, and it may be no harm to explain a little more fully why it was considered to be necessary. The effective duties upon imported delf tableware in the pastwere the fixed duties of 6d. full, 4d. preferential per article so far as tableware was concerned, and 1/3 full and 10d. preferential so far as teapots and coffee pots were concerned. These fixed duties were brought into operation before the war and, again, with the alteration in the value of money their protective effect had declined considerably since the war as the general level of prices of tableware has increased by something over 200 per cent. during that period. Apart from the desire to maintain protection at much the same rate as it operated previously there was evidence that despite the fact that all our information was that delf tableware produced here was competitive in price and at least as good in quality as British tableware exported to this country, nevertheless there was a continuing import of tableware of fairly substantial dimensions, mainly tableware for hotels. The hotel trade had not been captured by the Irish producers, and it was hoped that by an alteration of the rate of duty that situation would be changed. Some disemployment had emerged in the industry which was not rectified until the increased duty came into operation.
Apart from the position in relation to the manufacturers of delf tableware, a new concern for the manufacture of chinaware has been established in Galway. That concern is now only going into production. The factory, I understand, is building, and in the meantime operatives are being trained upon imported unglazed and undecorated ware. It will not be until next year that the full process of manufacture will be carried on there, but having regard to the imperishable nature of the commodities involved it was thought desirable to bring the duty into operation as soon as it became known that such a factory was going to be established because otherwise the market could easily be saturated with imports, which would prejudice the prospects of success of the new undertaking for a long time.
The Hardware and Allied Trades Association, the organisation representing retail traders handling thesegoods, came to my Department to make representations regarding this duty and after full consideration of their representations I decided to grant a certain easement. Deputy Cosgrave asked me a question regarding this matter some time ago and I told him that it was under consideration. As a result of that consideration it has been decided to allow duty-free imports for a period up to the end of March next, and subject to review then, on the basis of one complete set for each complete set ordered from Irish manufacturers. In the case of delf tableware that import licence will operate in respect of sets between 39/4 and 71/5 per set. In other words, it is the higher grade of delf tableware that may be imported, and licences for other articles caught by the duty will be issued on the same basis, a one-for-one basis, but again confined to articles within the higher grades of quality. The main manufacturers of delf tableware here have up to the present concentrated upon the cheaper qualities, which represent the bulk of their output, and it is only in the last few months or so that they have extended their operations into the higher qualities of delf tableware. So far as the Galway factory is concerned——
