The purpose of this Bill is to confirm a number of Orders which were made by the Government under the Emergency Imposition of Duties Act imposing certain duties and varying certain existing duties. I am afraid I cannot suggest to Senators that the Bill explains itself, because it is all contained in the Schedule, where the Orders are set out, and it does not give very much information as to their purpose and meaning.
I should like to give certain detailed particulars regarding each of the six duties set out there. The first deals with corrugated paper and board and certain printing and writing papers. I should explain that the Emergency Imposition of Duties (No. 237) Order, 1949, was made by the Government on the 4th January, 1949, and imposed a duty of 45 per cent. full and 28? per cent. preferential on corrugated paper and corrugated board and modified the scope of the duties on certain writing and printing papers. The duties on the writing and printing papers which had been suspended from 1st July, 1943, were reimposed by an Order made by the Government on the same date.
The manufacture of corrugated paper and board commenced in June, 1947, and in December, 1948, additional machinery was installed specially to produce corrugated paper for the chocolate trade. I am glad to say that as a result of the imposition of the duty the rate of production has doubled and the firm in question is now able to meet the country's full requirements of corrugated paper and corrugated board. Employment in the industry has also increased and as a result of the increased production an appreciable reduction has been made in the prices.
There are four mills engaged in the manufacture of paper, but only one of these made writing and printing papers pre-war. A second mill commenced this manufacture recently. The production capacity of these mills had increased to a point which would more than satisfy the entire home demand for the types of paper produced by the Irish mills, but owing to the suspension of the duties the mills were not in a position to work to anything like their capacity.
Representations were made to me by the Paper Mills and the Printers' Association to have the duties restored. There was also the point that certain types of paper costing 3d. or less per lb. and another type costing 3¼d. or less per lb. were specifically excluded from the pre-war duties. The interests concerned submitted a joint recommendation that these exemption limits be raised to 8d. and 8¾d., respectively, to keep in line with the increased prices of paper generally. I accepted this recommendation and the amendments were effected by the Order now before the Seanad.
It is well known that the paper mills were in a very difficult position prior to the granting of this degree of protection. As a result of the duties one mill which had laid off about one-third of its employees resumed full production immediately and there has been a general increase in employment in the industry.
The next reference relates to woven artificial silk fabrics. The purpose of this duty on certain woven artificial silk fabrics was principally to protect Irish manufacturers of artificial silk linings. These manufacturers obtained their requirements of artificial silk yarns mainly from Britain and are being charged an export premium of about 33? per cent. above the British domestic price. Efforts were made by the interests here to reach agreement with the British Federation to eliminate this price differential but without avail.
This, I might say, is a rather difficult duty to administer and the definition which had to be adopted for administration purposes covers some plain fabrics other than linings. Provision was, therefore, made for the admission, free of duty, of fabrics not made here and for any requirements of the home market in excess of the capacity of the Irish manufacturers. A small committee of the trade was established to advise on the types of fabrics for which duty-free licences should be recommended.
I am glad to say that, in this case also, home production has shown a marked improvement since the imposition of these duties and the employment position has also improved very considerably.
The third reference relates to aluminium hollow-ware. This duty was imposed in 1937 to protect an Irish manufacturer of aluminium hollow-ware for domestic or household use. There are now two other firms engaged in this line.
The original duty did not apply to partly finished hollow-ware or to component parts. It was found, however, that advantage was being taken of this exemption and that aluminium utensils were being imported without handles, the only further process of manufacture required here being the riveting on of the handles. This practice caused the existing Irish manufacturer the loss of 40 per cent. of his market. There was an obvious case for amendment of the duty, and the required amendment of the tariff definition was made in the Order now before the House.
The next reference relates to men's and boys' woven outerclothing. This duty applies to men's and boys' overcoats, coats, suits, jackets, waistcoats and trousers.
Pre-war an ad valorem duty of 60 per cent. applied to these articles and there were, in addition, certain minimum rates of duty. From 1942 the reduced rates of duty—37½ per cent. full and 25 per cent. preferential—operated, but this was entirely suspended throughout 1947. In January, 1948, this suspension was revoked and, accordingly, the reduced rate of duty operated until the Government imposed the new duties at the rate of 75 per cent. full and 50 per cent. preferential as from 11th May, 1949. The minimum duties were restored on the same date. The effective rate in this case is the preferential rate of 50 per cent. as the bulk of imports are from Britain.
Before the war, under the existing rate of protection, Irish clothing factories supplied practically the entire home market. In 1938 there were 64 factories making men's and boys' ready-made clothing and employing almost 4,600 persons. Prior to the increase in the duties it was represented to me that there was considerable unemployment and short-time working in the industry. Imports, excluding the parcel post, had increased from £32,568 in 1938 to no less than £251,581 in 1948.
Prices of Irish-made clothing are, as far as the medium and dearer end of the trade is concerned, no higher than those of imported articles and in many cases below the latter. With regard to the cheaper end of the trade, evidence was produced showing that boys' suits were being sold here from Britain at prices not only below those at which they could be made here but below production costs, without profit, of similar articles made in Belfast.
As the increased duties have been in operation for only a short time, it is too early to assess their effect. We expect, however, that the clothing industry here should recover the position it held before the war. The large number of factories engaged in this production should preserve sufficient internal competition to safeguard prices and qualities.
Reference No. 5 relates to iron and steel chains and manufacturers thereof. This Order was made to enable an Irish manufacturer of electrically-welded steel chains to secure a reasonable share of the home market. The protection here is limited to the types and sizes of chains manufactured by the Irish firm which has a capacity adequate to the needs of the home market.
The prices of the Irish and British products are approximately equal though raw material costs to the Irish manufacturer were much higher, at any rate until very recently. The Irish firm's failure to secure a reasonable share of the home market was considered to be due not to any question of price and quality but to the longer established connections of Irish purchasers with English manufacturers and distributors. It is estimated that 60 per cent. of the chains of the sizes to which protection applies are used by farmers. The remainder would be distributed over hauling, timber, engineering, etc. There will be no increase in costs to these industries by reason of the use of Irish-made chains.
With regard to Reference No. 6— linen piece goods—this duty which was imposed from 28th June, 1949, is at the rate of 40 per cent. full, 20 per cent. preferential on piece goods containing more than 60 per cent. by weight of linen. There is a provision under which the Revenue Commissioners will admit, free of duty, certain types of fabric such as printed linens, curtaining, upholstery and bookbinding cloths, etc. A duty at the same rate previously applied but was suspended in March 1943. The former duty applied to clothes which were wholly linen. Fabrics made partly of linen and partly of some other fibre were liable to duty as "union piece goods". As this latter duty is suspended it was necessary to make the new duty apply to piece goods with more than 60 per cent. linen content. The preferential rate of 20 per cent. is that agreed for linen piece goods under the Anglo-Irish Trade Agreement of 1938.
Before the war Irish mills produced about 2,400,000 square yards of linen or linen-type fabrics, of which about half were exported. Last year about 750,000 square yards were exported. The possibility of expanding linen sales abroad depends on production at the lowest possible price and, accordingly, it is necessary for the mills to get maximum production so that costs can be kept at a minimum. The reservation of the home market for linen fabrics will give the mills scope for the extra production which will enable them to market their goods abroad competitively. This is doubly necessary now, as they cannot get licences for the sale of their goods in Britain, where, before the war, they sold substantial quantities.
In conclusion, I should indicate to the House that in accordance with Government policy the more important of the protective measures I have outlined will be subject to constant review to ensure that the purpose for which they were imposed will be achieved and that the consumers' interests will be adequately safeguarded. It was only after the fullest possible examination that these duties were imposed, and from the necessarily brief outline I have given I feel that the House will agree that the protective measures were necessary in the interests of Irish industry and employment.