In relation to the order referred to by the Minister, that is, S.I. No. 133 of 1970, I understand that this is the fifth reduction of protective duties that has been effected as a result of the Anglo-Irish Free Trade Area Agreement and that we are debating it in retrospection since it occurred in July of last year. However, at this stage I would again like to reiterate my anxiety that the Minister would make every effort to ensure that, where there is unemployment or where there is harship being caused to manufacturers or where there is disruption of trade because of these tariffs in any particular sector, their effects would be alleviated. I would like the Minister to give us his views on that and let us know what has been done in that regard.
Committee on Finance. - Imposition of Duties (Confirmation of Orders) Bill, 1971: Committee and Final Stages.
In relation to any action that can be taken under articles 15 or 19 of the Anglo-Irish Free Trade Area Agreement with a view to protecting employment, I can assure the Deputy and the House that such action is being taken currently. As I have indicated already, we had a review and there has been continuous discussion, both prior to the 1st July and since then, and our officials and officials from Britain are in constant communication in relation to this matter. I assure the Deputy that any action that it is possible for me to take will be taken.
I am glad of that undertaking and I appreciate that the Minister must be careful not to indicate specific industries or areas of difficulty because we must not point to our weaknesses in regard to particular companies. However, it would be my hope that there would be more than discussion and I would press that every avenue be explored in relation to the agreement so that any unemployment or disruption of trade would be obviated if possible. I accept that there is much redundancy and unemployment now which cannot be attributed to the Anglo-Irish Free Trade Agreement but for which there are other underlying reasons. However, there are certain items and instances which it would be unwise to discuss in detail here. I hope the Minister will make every effort to help in those cases.
In relation to Statutory Instrument No. 133 of 1970, the position in relation to knitted and crocheted fabrics, and in particular those fabrics which come from Northern Ireland, is one that is causing me considerable anxiety. Perhaps the Minister is in a position to indicate more specifically if there is anything he can do to help alleviate the present difficulties in respect of these fabrics. It may well be that this is an area in which amalgamation is necessary.
The imposition of duties raises the question of the Anglo-Irish Free Trade Area Agreement and, as the Minister has indicated, brings in the safety clauses. I should like to hear the Minister's views on the question of knitted and crocheted fabrics. I should like to hear his views also on the preference accorded to the importation of these fabrics from Northern Ireland and on the difficulties being caused here and whether anything is being done in the context of the agreement to help.
Technically, Statutory Instrument No. 133 is the withdrawal of the 10 per cent on the overall, but I do not understand exactly what the Deputy is asking about.
I am referring to the fact that there is a preference on knitted and crocheted fabrics imported from Northern Ireland, but I want to emphasise that I have no objection to such preference. I have been indicating also that there is serious difficulty in the entire textile trade. While I referred in a general way to the application of the Anglo-Irish Free Trade Area Agreement in respect of the reduction of tariffs, I should like to know in particular about the textile trade and especially about items that are imported from Northern Ireland. I want to know if the Minister has applied the safety clauses in this respect and, if so, whether we can expect results soon.
The situation in this regard is that up to now we have had the position whereby, arising from the Anglo-Irish Free Trade Area Agreement, there was an additional preference by way of a further reduction of 10 per cent of duty applied to articles from Northern Ireland. This has been maintained in the order we are discussing. In addition, any specific industry here that can be affected adversely by imports of articles manufactured in the North of Ireland is considered in exactly the same way as industries here that are affected by imports from the United Kingdom as a whole. It is natural that, even with the best will in the world and despite my anxiety, I should endeavour to aim at a sort of free trade situation between the Six Counties and ourselves. However, I have, of necessity, to take steps to prevent any duty free importation from the Six County area that would have the effect of creating any serious unemployment here.
The Minister did not take steps when it was imports from Britain.
Deputy Donegan is speaking specifically about endeavouring to work co-operatively on a commercial basis with the Six County industrialists. On the other hand, what I have been discussing is the necessity to do all I possibly can under the agreement to protect industry here to the greatest extent possible.
Was there any specific action taken by the Government?
There was. As a result of discussions with the British in April or May last, there was a standstill on the reduction in duties on certain articles.
A standstill on the part of the Irish Government?
A standstill on the reduction in duties on certain commodities.
What commodities?
The House knows them. They were announced to the House some time ago. The first was leather footwear. There was no reduction in duty on leather footwear this year.
Surely the Minister has always maintained that leather footwear was not affected in any way by the Free Trade Area Agreement? Is this not one of the points that was always made by him, that the Free Trade Area Agreement was not the cause of the trouble?
No, I have always maintained that it was not the only cause.
No, that is a qualification which the Minister did not use before now.
One of the cases I made here was that the volume of people employed in the footwear industry in the time under review, in 1970, was not less than the number of people employed in the footwear industry in 1965—that there had not been a falling off in total employment.
I must take the Minister up on that. It may have been possible for him to give figures to show that there was not a reduction in employment but there was at that time a grave danger of reduction and such danger has since become fact and serious redundancy has taken place. I should like to draw the Minister's attention to something. He finds it difficult to remember exactly what happened. What happened was that we did not have the 10 per cent reduction in tariffs but we had the removal of quota which was a very severe—we are all quoting from memory—factor affecting our footwear industry here. Of course, the problem is not leather footwear. The problem is cheap footwear from abroad, not only from Britain, but from the Continent where the prices are so low for the wholesale purchase of such footwear that they can bear any tariff. The only effective instrument there was was quota and that instrument was removed. It is true that footwear is a very sensitive area and one where discussions going on under article 1, subsection (5), and article 19 of the Anglo-Irish Free Trade Area Agreement should be concluded as soon as possible and something done. In my constituency I can see two to three footwear factories in serious difficulty.
My recollection is that the Minister has consistently opposed any suggestion that the footwear industry was affected in any way by the Free Trade Agreement on the grounds that there were exports and that there were other causes. For the first time tonight the Minister has said he agrees that it had an effect. He says he remembers that there were as many in employment in 1970 as there had been previously. I should like him to check on 1971 and see what the effect has been. This is the end of 1971 and he must know we are now reaching the dregs.
What Deputy Donegan has said is correct. There is an amount of cheap footwear coming in here. The Minister knows this because I went to the trouble of sending to his office a pair of ladies' shoes which were bought marked "Made in Ireland". They were assembled in Ireland. They had an Irish brand name on them. They were Italian shoes sent to this country in pieces. All the factory did was put them together and send them out under an Irish brand name. They were sold for £5. We had this checked to find out what the materials were worth. They were sent to Ireland at about 15s. The factory processed them and sold them at something under £2 and they were sold across the counter to an unfortunate workingman's wife for £5. They had plastic heels which wore away in a short time. When they were sent back from the Minister's office the firm that assembled them eventually did the big thing—they put on new plastic heels and said: "Hundreds of thousands of pairs of these shoes have been sold to date and there have been only a few complaints." It was not a case of those shoes being bad. It was the question of hundreds of thousands of them having been sold in this country and having been sent from Italy while we were supposed to be protecting Irish industry. That is the point.
I do not know whether everybody has had the same experience as I have had, but at present go out to the city or to any large town and you cannot buy Irish manufactured goods. You will be offered a half dozen foreign items, in many cases cheaper. One reason why they are cheaper is that the country from which they are coming is subsidising them just as we were wrapping pounds of butter in postal orders until this year in order to have a sale abroad. The result is that we are now in a situation where our Irish industries are going to the wall. The Minister says it is not altogether because of the Free Trade Agreement, that there are other causes. Of course there are; but when Britain found herself in trouble over her balance of payments she had no hesitation in slapping on a tariff. When we found ourselves in trouble what did we do? We could not insult Britain. After all Britain was our best customer and we had to be nice to them. The result is we are reaching a stage where, without officially suffering from European competition, the Irish industrialist is in serious trouble. The Minister has much more experience of it than anybody else and I am amazed at his attitude to these matters. He must know the precarious condition in which Irish industries are. It is all right for his colleague, the Minister for Finance, to say that when we go into the EEC we will have the customs border between here and Northern Ireland removed and everything will be grand. He did not say the British soldiers will still be there. Whether the customs border is removed or not the position is bad now, it will get worse unless something is done about it and the present administration are not doing anything to help. If the Minister wants any evidence of how bad it is, all he has to do is check with the Minister for Labour who could tell him that we are running up to 8,000 redundancies on permanent jobs in factories this year. The Minister might be able to explain what the Government are doing to help.
It amazes me how on occasions Deputies express surprise on being handed information which has been common knowledge in the House for three or four months.
Everyone knew except the Minister.
One of the things the Deputy does not seem to have known is that in or about 1st July there was an announcement in this House of the standstill on duty.
May I interrupt the Minister for one minute? Does the Minister say the extra reduction of 10 per cent with effect from 1st July was not being put into operation?
Yes, the extra 10 per cent on a number of items was not put into operation.
You pulled it down from 30 per cent at the bottom.
Yes, but the Deputy says it comes as a shock to him to find the Minister took some action in connection with footwear, because footwear —leather footwear—was included in the standstill in relation to reductions which took place on 1st July last. There were certain steel and iron products, leather footwear, hollow ware, joinery, electric domestic appliances and mobile homes. There were a number of items that were covered in the standstill, if you like, on the reduction in duties this year. This was an intermediate arrangement that was made in our discussions while a number of other items were being looked at.
Deputy Tully refers to the effect of the Anglo-Irish Free Trade Area Agreement and goes on to give an instance of the importation of something from Italy, which would have nothing at all to do with the Anglo-Irish Free Trade Area Agreement.
Of course, the Minister is well aware that I know that as well as he does.
Yes, but the point is that the Deputy did not quite give that impression to the House.
I am awfully sorry that the Minister does not understand the way I talk.
The Minister understands. The Anglo-Irish Free Trade Area Agreement, from the Deputy's point of view, was a fair chopping block.
I know that Italy is not in England.
Anything that can be thrown into the pot by way of "having a go" at the Anglo-Irish Free Trade Area Agreement, irrespective of the heading, is fair game. It is proper that I should draw attention to the fact that that particular reference to the importation of parts of footwear from Italy would have nothing to do with the Anglo-Irish Free Trade Area Agreement.
Would it have anything to do with the Imposition of Duties Bill?
Not with this particular order that we are talking about on the Schedule.
But it could have. There could have been another order there?
Yes, one can fully accept that. Deputy Donegan raised the question in relation to Order No. 133 and the reference to the duties on certain yarns and certain knitted and crocheted fabrics as to whether these were in accordance with recommendations of the Committee on the De-pyramiding of Tariff Protection. The committee recommended these specific reductions mentioned on yarns and fabrics in an effort to help the making-up trade from the point of view of making them more competitive. This was the reason why this was included in that order.
I accept that. I have no objection to the question of the mobile homes because, as the Minister said in his Second Reading speech, this is merely something that happened out of a mistake, perhaps, in drafting or some other thing. The conversion of rates of currency to the decimal coinage is not of great moment. It is something that is with us and that we have to accept. In relation to watches, the number of workers given was 50. I presume the Minister could tell us that there will not be any fewer watchmakers employed in the industry here than there were because of the inclusion of watches. I am aware of what the Minister said in his Second Reading speech about the Horological Institute and what the Swiss did for us. If he could just assure us that we will not have fewer watchmakers employed, I will not have much more to say on Committee Stage.
There are a few questions on this that I tried to ask last week. First, I was wondering if the Minister had yet got information about the discussions which were taking place between his Department and their counterpart in Northern Ireland. Unless I am very much wrong, it is my impression that these discussions were to start a year ago or in the early part of this year. I wondered if the Minister had looked into the problem since.
Secondly, I wondered had the Minister spelled out exactly the particular items from Northern Ireland which were being given special preference here and if any discussions had taken place about extending the list of goods or items which were getting preferential treatment here because, as I understand, our balance of trade with Northern Ireland is very much in our favour.
Thirdly, I asked about the importation of watches. I have a reply to some of my questions but I presume I will have to wait until tomorrow for a reply to the question about the Horological Institute and its purpose and financing. I am wondering about the effect on us of granting this special tariff reduction on the watches. It would appear that there is no special concession to the Swiss watch industry if we must apply it all round to other countries exporting to this country. I notice that the value in the last year was a little over £250,000 and I am wondering will this result in a reduction in the numbers employed in the watch-assembly industry in this country. Perhaps the Minister would like to answer some of the questions I posed last week in relation to these matters and I should like to give him an opportunity now to do that.
The Deputy did raise questions last week in relation to discussions between officials of my Department and the Ministry of Commerce in the Six Counties, to which I replied indicating to the Deputy that there have been discussions but not specific discussions in connection with the Anglo-Irish Free Trade Area Agreement or the operations of that agreement.
No, I did not imply that.
The discussions which took place ranged over a wide variety of subjects relating to the possible opportunities for co-operations between the North and the South. Certainly, in any wide-ranging discussions of this nature the tariff situation would arise but any discussions on tariffs would be only incidental to the overall discussions as to how my Department could co-operate with the Ministry of Commerce in the North in relation to trying to improve two-way trade. Also embraced in this would be the Department of Transport and Power in the general field of tourism and interchange.
Arising from the discussions which took place earlier, my Department are currently engaged in pursuing the various topics discussed with a view to seeing if further progress can be made but I think the House will appreciate that the present atmosphere is not one that is conducive to the continuation at present of wide-ranging discussions between the Minister of Commerce and my Department on general overall improvement.
I would try to prevail on the Minister to forget that, for God's sake, and to try to have the most wide-ranging discussions possible with his counterpart in the North.
That does not arise. This is a narrow, limited field. We are discussing certain Orders.
With respect a Cheann Comhairle, the Minister was indicating that the present climate does not help discussions on industry and two-way trade. I could not agree more with the Minister. He also indicated that this was not conducive to discussion on these matters. I would urge the Minister, as I have never urged anyone before in this House, to make every effort to have the most wide-ranging discussions possible on industrial goods of all descriptions.
That would seem to be a matter for another debate and not for this particular debate.
The matter should be raised now. The Minister raised it. I raised it last week. It is astonishing that the Minister of a Department should confess in this House absolute ignorance of the fact that his officials were engaged in discussions with their counterparts in Northern Ireland. The Minister comes in now and admits that what I said last week was true: his Department had been involved in discussions. This humiliating confession is made by a Minister who was simply not aware of what was happening in his Department. It surprises me that I should make known to the Minister that discussions had taken place between his Department and the Department of Commerce in Northern Ireland. It is disgraceful that the Minister should have known nothing about that.
I presume I am not entitled to ask the Deputy a question. The Deputy has alleged that I said last week I was not aware of the fact that there had been discussions between my officials and the officials of the Department of Commerce. Did the Deputy read the report of the debate here last Tuesday?
I heard the Minister. He knew nothing about it. He looked as if I had come out with something out of my own imagination. He knew nothing about it.
The Deputy is making an allegation——
I am not making an allegation; I am telling the truth.
——which is completely unfounded.
Do not come up with that one.
The Deputy wants to make a statement and he wants it to be believed—fair enough. I merely want to say that I did not say what the Deputy says I did.
Of course the Minister did and he knows he did. I would rather that the Minister would say straight out: "I admit I knew nothing about it."
Discussions on Northern Ireland and other matters that do not appear in this Bill are totally out of order and should not be discussed.
With respect, I would refer you to crocheted and knitted fabrics.
If Deputies confine their remarks to these particular items that is all right.
You will see there is a reference to special preferential tariffs with Northern Ireland. I asked about extending these and about the discussions which were promised a year ago and were taking place with the North and the Minister knew nothing about it. He is reading about it now.
This Bill relates to certain knitted or crocheted fabrics and does not open a whole range of discussion on trade with the North.
Last week I asked the Minister about the Horological Institute and he did not answer my question. I should like him to answer it now.
I am quite willing to give the Deputy the information. I tried on two different occasions to give the information but the Deputy kept interrupting.
The Minister was caught out. I am waiting for the answer.
Will the Deputy allow me to reply?
Of course, I will.
This is a democratic assembly and we do not have to ask the Deputy's permission to speak.
The Minister asked me would I allow him to reply and I said I would. Of course, I will allow him to reply.
Very nice of the Deputy.
One of the reasons for the reduction in duty relates to the contribution the Swiss watchmaking industry had made to this horological——
Institute.
——organisation or institute. Since 1964 the Swiss watch industry has contributed something in the region of £10,000 per year towards this institute under an agreement made with the Swiss Federation of Watch Manufacturers. The agreement was entered into finally with the Department of Education and, under the terms of the agreement, the specialist teaching equipment for the institute was supplied by the Swiss Federation at a cost of over £10,000; the federation has also paid the salaries of the technical teachers as well as the cost of the individual tool kits supplied to the students, plus certain other costs. Any remaining costs were met by the Dublin Vocational Education Committee. Last year I introduced an order, following an appeal from the Swiss, reducing the duty by 10 per cent. I was not aware of the actual complement of the transactions and that is the reason why I was not in a position to give the Deputy the information he sought.
In reply to Deputy Donegan, there are in the Irish watch assembly industry 50 workers employed. There is no question of this creating any reduction in employment. In fact the Irish industry was in complete agreement with this reduction. The industry was consulted before any steps were taken.
That satisfies me.
Will the Irish Institute be responsible for upholding the high standards of imported watches, will there be certain guarantees and will these guarantees be respected? Would that be one of the functions of the institute?
No. The institute is tied in with the vocational education committee. It is a training school.
It would not consider these things.
No. If a watch is bought for £1, or something like that, there could be no great guarantee of quality.
I do not think we would expect it, would we?
No.
This Bill is certified a Money Bill in accordance with Article 22 of the Constitution.
Notice taken that 20 Members were not present; House counted and 20 Members being present,