About a month ago I mentioned in the House that the difficulties in the furniture industry in Navan were reaching a crisis. I was told that I was doing a disservice to the furniture industry by highlighting it. At that time five people were let go. When the Minister replied two of these had been taken back, so there was a net loss of three jobs. Since then 30 people have been laid off in the town of Navan itself. There are quite a number on short time employment. When one considers that Navan is the principal town involved in the furniture industry here in Ireland and employs a large number of people one notes that any recession in the furniture trade certainly affects the prosperity of Navan.
In the past month there has been a deterioration of from three to 30 people who have been laid off from this industry. This has serious consequences in the town. One of the reasons for the slump has been that there has also been a slump in England. It is legal to import furniture. I contend that there is dumping in one form or another, legal or otherwise. The manufacturers tell me that since Christmas the rate of importation into this country has increased greatly. The Minister's reply today was that there was no significant increase in furniture imports. The firms tell me that there has been a dramatic increase in the amount of furniture coming into the country since Christmas and particularly in the last few months.
One manufacturer who always gave a special offer at a sale three times a year to a firm in Dublin gave a quotation which was accepted. When they went to offer again they were told that they would have to have a look at the situation. In a fortnight's time a telephone call was received to say that an English firm had got the order instead of them this year and the furniture was at a lower price than that quoted here last year. When one takes into account the rapid increase in prices over the last 12 months it is disappointing to think that an English firm can ship furniture here and still sell at a lower price than the Irish firm quoted last year. I consider that dumping. This is having a detrimental effect on the furniture manufacturers.
There was an order for 15 suites of furniture to come into the city in the last two weeks. They came in but when the shopkeeper saw them he realised it was the wrong order. He rang the firm and was told that they did not want the furniture returned but that they could have 33? per cent reduction on the 15 suites. That may have been by design. They may have wanted to get them out. It may have been a pure accident but when a firm are prepared to give a reduction of 33? per cent I maintain that is dumping.
The furniture that is coming in from England is of a kind which is the bread and butter of the Navan manufacturers. When they cannot sell their products they must be very worried. Since I mentioned the subject here numerous deputations have approached the Minister for Finance, who has passed on their representations to the Minister for Industry and Commerce. I have copies of two letters which went to the Minister for Finance in order to try to get some concession for the manufacturers so that they could keep up production.
Another factor which is affecting them is probably the concern of the Minister for Industry and Commerce. It is that furniture carries VAT at 19 per cent. But in the case of new houses where the builder provides built-in furniture like cupboards, wardrobes and so on, VAT on that amounts to only 3.7 per cent. The rate is 7.5 per cent but, because it is 45 per cent of the cost only, it is brought down to 3.7 per cent. This is one of the ways in which it has hit them, as against the 19 per cent if they were selling direct to the trade or to the individual.
Another very sore point is the fact of duty not having to be collected at the point of entrance of the product from England and other countries. When the furniture comes in they have not to pay duty on it until the product is actually sold. Furniture manufacturers here feel that in respect of furniture coming in from England duty should be charged on the invoices at the point of entry. When Navan manufacturers send out furniture they have to put the rate of VAT on the invoices and, generally, it takes about 10½ weeks before they collect the money on the goods they have dispatched. Therefore the VAT on the product has to be paid before they receive payment for the product. This has to be done out of their own financial resources and, with bank lending tightening up, this is an added strain on them. This question of the collection of duty at the point of entry has been raised on a number of occasions before. I am told that, in the case of radio and electrical products coming into this country, the duty is collected at the point of entry. We feel that because it is done in one industry it should be done in the others also and that there should be no exemption in respect of furniture coming into this country. This is affecting the livelihood of our own furniture manufacturers and, to a large extent, the town of Navan because it is based mainly there.
There is another aspect which affects the industry as well. This is in regard to furniture which has been sold to the counties nearest the Border such as Louth, Cavan, Monaghan and Leitrim, but mainly Cavan, Monaghan and Louth, where a different situation obtains, in that furniture bought in the North of Ireland carries 10 per cent duty only whereas in the Republic it carries 19.5 per cent.
