In Committee on Finance. - Customs Duties (Horse-Drawn Vehicles) (Provisional Imposition) Order, 1932.

Thursday, 19 May 1932

Dáil Éireann Debate
Vol. 41 No. 15

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Minister for Industry and Commerce (Mr. Lemass): Information on Seán F. Lemass  Zoom on Seán F. Lemass  I move:

That the Customs Duties (Horse-drawn Vehicles) (Provisional Imposition) Order, 1932, which was made on the 5th day of May, 1932, by the Executive Council under Section 1 of the Customs Duties (Provisional Imposition) Act, 1931 (No. 38 of 1931), and a copy of which was laid on the table of Dáil Eireann on the 11th day of May, 1932, be approved.

It gives me very great pleasure to move this motion not merely because the Order referred to gave to this industry protection which was long overdue, but also because, despite a considerable amount of criticism, the protection afforded has already produced results in excess of my own anticipations. In consequence of the duties which we have imposed upon the imported bodies of motor cars, all car-manufacturing companies with a trade of any size in this country have made arrangements which will come into operation in the near future for assembling their bodies here. I hope in some cases that the assembling of the chassis will also be carried out here. We are proposing in the Financial Resolution on the Paper to modify the duty upon the chassis in the manner which I pointed out to the Dáil last week.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  Might I ask what Order is under consideration by the Dáil at present?

An Ceann Comhairle: Information on Frank Fahy  Zoom on Frank Fahy  The Order dealing with horse-drawn vehicles.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  I take it that we are discussing the three resolutions together.

[1982]Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  I thought there might be a distinction between the Horse-drawn Vehicles Order and the Motor Car Bodies Order.

An Ceann Comhairle: Information on Frank Fahy  Zoom on Frank Fahy  Does the Deputy wish to have the motions discussed separately?

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  I do not think that we will save time by discussing them all together.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  Then I move Order No. 2.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  On Order No. 2, I want to put a few questions. The part of the preamble to which I desire to draw attention is as follows:

Whereas it is enacted by Section 1 of the Customs Duties (Provisional Imposition) Act, 1931 (No. 38 of 1931),

I am skipping portion of the text.

that the immediate imposition of a customs duty on any particular description of goods is necessary to prevent an expected dumping of goods of that description ... which would occasion industrial injury.

The second “whereas” is as follows:

And whereas the Executive Council is satisfied on the report of the Minister for Industry and Commerce that the immediate imposition of a customs duty on the articles mentioned in the Schedule hereto is necessary to prevent an expected dumping of those articles arising out of financial or other events in other countries and occurring in circumstances which would occasion industrial injury.

I should like to have some information as to the data on which the Minister for Industry and Commerce was enabled to satisfy the Executive Council that dumping of these horse-drawn vehicles was to be expected.

An Ceann Comhairle: Information on Frank Fahy  Zoom on Frank Fahy  The Minister for Industry and Commerce.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  To conclude?

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  By no means.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  If the Deputy wants to make a speech, he can make it now.

[1983]Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  We cannot discuss the Order unless we have information as to the manner in which the Minister for Industry and Commerce satisfied the Executive Council that dumping of these horse-drawn vehicles was to be expected.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  I shall reply to any points raised when concluding.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  I understood that we were in Committee on Finance?

An Ceann Comhairle: Information on Frank Fahy  Zoom on Frank Fahy  We are.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  The procedure heretofore was that questions were put to the Minister and answered by him as they were put, and not in one “go” when concluding. The ordinary procedure is that questions are answered by the Minister in the manner I have indicated, and that his concluding speech is a summing-up of the whole position.

An Ceann Comhairle: Information on Frank Fahy  Zoom on Frank Fahy  The Chair cannot compel the Minister or any member of the House to speak on any question.

Mr. Blythe: Information on Ernest Blythe  Zoom on Ernest Blythe  This Resolution is submitted under special procedure. The Minister did not say anything in support of it. I think it would be reasonable that the Minister should say something in defence of the Resolution and not submit it barely to the House without argument of any kind. Applications were made to the former Government in connection with these horse-drawn vehicles, as in connection with other things. Suggestions were made that a tax should be imposed on horse-drawn vehicles. Amongst other reasons for declining to take action was the reason that we have here a Customs land frontier which must be crossed very frequently by horse-drawn vehicles. A certain number of roads were approved for use by motor vehicles. The majority of the roads are, however, unapproved roads and, in the past, vehicles not carrying dutiable articles could proceed along any of these unapproved roads. Consequently, the farming community were not disturbed in their ordinary work by the existence of the Customs [1984] frontier. No matter what concessions are given, I have no idea as to how this matter can work out. There is going to be a very considerable amount of trouble and annoyance caused the people who have to cross the Border frequently in the course of their avocations. That is a very definite argument against the imposition of a duty on these vehicles. It would be possible, on the other hand, to give concessions on such a wide scale that no difficulty might be raised. It would, however, be difficult to give these concessions without making it very easily possible for large numbers of the dutiable vehicles to be brought across the frontier without payment of duty. That would have a very bad effect in many directions if it were allowed to happen.

I think it is necessary that there should be regulations that will make it not easy to import vehicles without paying the duty. Trouble will be raised. Consequently, it seems to me some case is required to be made for the imposition of this duty. It is imposed separately. There is, perhaps, some idea of the number of people employed or who might be employed, and there is the question as to what effect, if any, it will have on costs. Is it equally aimed at every sort of vehicle, or is it only intended to be ultimately charged on one sort of vehicle when we get the Finance Bill? It has happened more than once that a resolution was drawn in wider terms than it was actually intended to cover, and that exceptions of a great many sorts were made in the subsequent Bill. I do submit to the House that the matter is not of such trivial importance that we ought have nothing more in defence of the resolution than the terms of it. Without wanting to pursue cross-examination of the Minister, some more information should be offered to the House.

Mr. Morrissey: Information on Daniel Morrissey  Zoom on Daniel Morrissey  This is one of the tariffs of which I am in favour, and one of the tariffs for which a good case can be made. I would appeal to the Minister that he ought to make a case for it, and a case can be made for it. The Minister himself has made a case [1985] in this House for this tariff on more than one occasion. If the Minister makes a case—and he can make a case for it—he will probably get the House to agree to it. It is not treating the House fairly merely to introduce a tariff without giving any reason as to why it is imposed or without stating what benefits will flow from it. I know that a good case can be made for this tariff, and the Minister, when in opposition, did make a good case for it. I would suggest that, in fairness to the House and to the tariff itself, the Minister should make a case for it.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  I would like to explain to Deputies Morrissey and Blythe that I have no objection to making a case for this tariff, but I object strongly to undergoing a process of cross-examination, such a process of cross-examination as we have had in relation to other resolutions in the past few days. It is unreasonable and unfair that I should be asked to submit to it. So far as the points raised, I propose to answer them and to give the reason which actuated the Executive Council in coming to a decision to make the order. In the case of horse-drawn vehicles a duty was imposed. An industry had existed here which was highly efficient and which had a reputation throughout the whole world and which at one time sent its products to all countries in the world. That industry in the past few years disappeared or was disappearing mainly because horse-drawn discarded vehicles were imported secondhand from England. These discarded vehicles were being imported in large quantities.

The reason why the duty was imposed by Provisional Order rather than by a Budget Resolution was that statements had appeared in newspapers to the effect that following a discussion between myself and the representatives of the Coach-Builders' Association it was the intention of the Government to impose this duty. These statements resulted in a considerable speeding up of imports of secondhand vehicles with the result that the market was being flooded to such an extent [1986] that even the imposition of the tariff would not have benefited the industry for a considerable time in consequence of the supplies available in the country. The coachbuilders went to the Tariff Commission with an application for a duty on horse-drawn vehicles as well as for a duty on motor and omnibus bodies. The Deputies who have read the report of the Tariff Commission are aware that even though the majority of the Tariff Commission recommended that a duty should not be imposed, there was no opposition whatsoever to the application. The ability of the industry here to supply the requirements of the country in this class of cars and carts at prices lower than that at which new cars and carts could be brought from abroad was amply demonstrated.

This duty is one which is going not merely to revive the industry but to revive the type of industry which we are most anxious to foster, that is, the handicraft industry which is operated in the rural areas; and although the demand for these horse-drawn vehicles is declining there is still a substantial market for them in this country. For a long time to come there can be considerable employment given to those engaged.

Deputy Blythe raised the point as to the difficulties that have been experienced on the Border or the land frontier consequent on these and other duties. Under Section 5 of the order the duty does not apply to articles which are re-imported into Saorstát Eireann after exportation therefrom previous to the date of the order. That is to say that the article had not been imported previous to its exportation or that the article had been first imported prior to the date of the order, or that the article had been first imported on or after the 16th day of May, 1932, and the duty chargeable on this order had been duly paid.

The Customs authorities are endeavouring to administer this and other duties along the Border in such a manner as to give the least possible inconvenience. But no matter what we will do we will always come up against the fact that the Border itself [1987] is a curse. The only way to remove the inconvenience is to remove the Border itself. We are quite willing to consider that at any time. It applies also to a large extent to certain Border towns which are undoubtedly badly hit by the duties we have imposed, where considerable hardship and dislocation would be caused by these duties. There is only one solution that we can conceive and that is that we include these towns in our territory. We are quite willing to enter into arrangements to that end. But so long as the Border remains and so long as it is the policy of the Government here to assist industry by tariffs these inconveniences will arise. But the Revenue Commissioners will do everything possible to make the inconveniences and difficulties rest as lightly as possible on the people concerned. But they will remain there and there is no means of getting over them.

I do not think there can be any considerable opposition to this Order —that is the Order relating to horse-drawn vehicles. In the past the matter was discussed in the Dáil here. Perhaps it is not fair to say it was. A resolution following the reports of the Tariff Commission was tabled and proposed but it was not discussed. Deputies who were members of the late Dáil will remember that the late Government said nothing about the tariff on these vehicles. We have been criticised for moving a Resolution without stating a case for it. The late Government rejected the tariff without stating a case for its rejection. Consequently the criticism which has been voiced in the last few minutes reacts upon those who uttered it, if they remember their own actions in the past. As I said before this duty should have been imposed long ago. When the Free State Government came into existence it established a Fiscal Committee to determine its fiscal policy. The members of that Committee were free trade in outlook and they produced a free trade report. But they made one exception. They did say that the duties upon coach work generally could be modified so as to [1988] give that industry protection. That action was not taken.

The coachbuilders went to the Tariff Commission with an application. The Tariff Commission took four years to consider it and by a majority report rejected the application. Now the industry is getting the protection it asked for. Considerable damage has been done. The industry has declined substantially within the last few years. Quite a number of skilled workers left this country for England, America and elsewhere but there are still some here. As the members of the Tariff Commission indicated in their Report, when they were engaged in the inspection of coach-building factories in England they constantly came into contact with Irish skilled workers who were formerly employed in the industry here but who were forced to emigrate in consequence of the decline of the industry. We hope that in the course of time large numbers of these workers will come back to their native country.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  The question I asked at the beginning still remains unanswered. I would like to know what was the evidence on which the Minister was able to satisfy the Executive Council that the immediate imposition of a duty on horse-drawn vehicles was necessary in order to prevent an expected dumping of these vehicles. I should have imagined that we would have got by way of reply a statement setting forth the imports of vehicles of the type to be taxed under this Order—imports for, say, six months prior to the imposition of the Order with a segregation of these imports so as to indicate the figures month by month in order to show whether or not there was an appreciable increase. Are there such figures available?

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  It is not necessary that there should be.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  There should surely be some figures to show that the imposition of the duty was necessary in order to prevent an expected dumping of these vehicles. That is a point that has not been met at all. The Minister's [1989] objection to answering questions in the House is quite contrary to the ordinary procedure of the Dáil when in Committee. Usually in Committee the procedure is such that one is not confined to the general type of speech customarily made on the Second or the Fifth Stages. The debate on the Committee Stage as a rule gets more intimate, and Deputies are allowed to cover a very wide field. At times the discussion assumes the more rapid form of cross-examination as the Minister called it. Until the procedure is changed I assume that we have the right to indulge in what has been described by the Minister as cross-examination.

The whole case made by the Minister in answer to certain questions takes the form of a reference to the Report of the Tariff Commission. It has been pointed out that the customs duty now being imposed is to be applied to wheeled vehicles which, in the opinion of the Revenue Commissioners, are designed and primarily intended to be drawn by an animal or two or more animals and for the carriage of persons or goods or both persons and goods. There is no question of secondhand vehicles there. What was the application originally made? It related entirely to second-hand articles—used articles. Paragraph 109 of the Tariff Commission Report, under the heading “Vehicles for animal traction,” after paying a tribute to the efficiency of the industry in the Free State, says:

The application for a tariff on horse-drawn vehicles was stated to have been made not because the applicants were unable to compete with foreign competitors in the construction of new vehicles but in order that the importations of old governess cars and traps, which have been discarded by their owners in Great Britain, might be stopped. The applicants stated that they are getting little or no work in the construction of new vehicles of this description and they asserted that it was imperative for the maintenance of efficiency in this section of the industry that the importations should be discontinued. They also stated [1990] that many of those who now purchase secondhand vehicles would invest in new ones if a duty was imposed.

The Commission reported:

We are of opinion that the applicants are unduly sanguine in anticipating that a tariff would stimulate to any appreciable extent the demand for new governess cars and traps in this country because it seems to us that in a large number of cases those who buy the old imported vehicles are only just induced to do so by the very low prices at which they are offered. These marginal purchasers will not be prepared to pay the higher prices required to secure new vehicles.

Then they continue—and I think this is very relevant to the present imposition:

The evidence which we obtained indicated that practically no new commercial horse-drawn vehicles are being imported and that, indeed, very few of them are being made either here or in England.

Continuing further the Report states:

The difficulties of the Saorstát coachbuilders are really due to the fact that the use of horse-drawn vehicles for commercial or private purposes has declined and is steadily declining. Such work as is still available for the home coachbuilders in this branch of their industry is confined to the construction of farm carts, bread and laundry vans and a small number of governess cars and traps. We do not consider that an appreciable increase in this work would result from the granting, in whole or in part, of concessions asked for in the application.

There is one more reference in paragraph 133:

The imposition of a tariff on horse-drawn vehicles would deprive many people, mostly of the small farmer class, of the opportunity of providing themselves with a form of private transport. As we have already mentioned, the imported secondhand traps and governess cars are being purchased in most cases [1991] by persons who can just afford to do so at the low prices at which the vehicles are offered and these persons would scarcely be in a position to pay the extra prices necessary to secure new traps and cars built in the Saorstát.

We get to this extraordinary position, that the original application was for a duty against imported secondhand vehicles, with special emphasis on imported secondhand traps and governess cars. That was refused on what seemed to me to be very good grounds. Now we have an imposition on all wheeled vehicles, whether new or old. We get that under the plea that the imposition was necessary in order to prevent expected dumping. We get no information as to where the dumping was apprehended—what country it was to come from.

We have the statement made in the Tariff Commission Report that no new commercial horse-drawn vehicles are being imported and that, indeed, very few of them are being made either here or in England. It is necessary to know where the dumping was expected to come from, and what articles would be dumped—secondhand or new. It is necessary to know whether they were horse-drawn vehicles, governess cars, pony traps and so on.

There is another small point to which I would like to make reference. In paragraph 5 of the Order we are told:

Any article liable to the duty imposed by this Order which is re-imported into Saorstát Eireann after exportation therefrom shall be exempt from the said duty if it is shown to the satisfaction of the Revenue Commissioners either (a) that the article had not been imported previous to its exportation, or (b) that the article had been first imported prior to the 6th day of May, 1932, or (c) that the article had been first imported on or after the 6th day of May, 1932, and the duty imposed by this Order had been duly paid thereon.

How can you re-import if you do not previously import?

[1992]Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  The evidence of dumping was submitted by me to the Executive Council and was accepted and an Order was made. The evidence of dumping related mainly to second-hand cars. As the Deputy stated, there is practically no importation of new cars of this description. I think it is obvious to anybody who is aware of the circumstances that the various statements which appeared in the Press at that time regarding the intentions of the Executive Council were bound to lead to a considerable increase in the imports of these articles. In consequence, we took action and stopped it. As to what the Deputy said, I think that is the only point left to be answered.

As far as the extract that was read from the Report of the Tariff Commission is concerned, I think there is a lot of nonsense in it. When they say that the market for these cars in this country is of no magnitude and is likely to disappear in the near future, I think they are completely wrong. There is a very considerable market for horse-drawn cars of one kind or another, and that market is likely, in the circumstances of this country, to persist here long after it has disappeared in other countries, and probably as long as many members of this Dáil are likely to be here. Consequently, those skilled workers who have been all their lives in this industry and who have been losing their employment in consequence of these importations in recent years will again be secured in employment as long as they are likely to require it. I am satisfied that considerable benefit will be conferred upon the towns in which these industries exist as a result of the imposition of this duty.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  I must again comment on what the Minister has said. It seems to me that he has entirely taken away any shadow of legality for this Order. I have to read the Preamble again. “Whereas it is enacted by Section 1”—of a particular Act—“that whenever the Executive Council is satisfied, on the report of the Minister for Industry and Commerce, that the immediate imposition [1993] of a customs duty on any particular description of goods is necessary to prevent an expected dumping of goods of that description”—that is the first part—“arising out of financial or other events in other countries and occurring in circumstances which would occasion industrial injury...” Leaving aside that dumping, if proved, would cause industrial injury here, there are two items that have got to be attended to, and legislation as legislation has got to be attended to. Let me now take the summing up as given in the second Preamble: “And whereas the Executive Council is satisfied, on the report of the Minister for Industry and Commerce, that the immediate imposition of a customs duty on the articles mentioned”—the articles mentioned are not second-hand; they are all articles, second-hand included—“is necessary to prevent an expected dumping of those articles arising out of financial or other events.”

What the Minister told us was that his report to the Executive Council had reference to second-hand articles, and that the dumping that is expected did not arise “out of financial or other events in other countries” but arose out of the indiscretion of the Executive Council in this country in letting their intentions about tariffs be known. I do not see how this can be brought under the Order at all. The imposition of a customs duty on the articles mentioned might justify—we will leave out the second part—an Order on second-hand goods of a particular type. The Minister told us that the Executive Council accepted his report, and that his report had relation to these second-hand articles.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  No.

Mr. McGilligan: Information on Patrick McGilligan  Zoom on Patrick McGilligan  I can be corrected, but I understood the Minister to say that. If that is what the Minister said, then I think the only customs duty warranted by that report would be a customs duty on second-hand goods in such categories as are called wheeled vehicles. But the other thing surely goes to the root of the whole matter, that dumping was not such as arose from financial or other [1994] events in other countries, but was because—it was said yesterday on the Budget debate—the Executive Council simply had made it well known that the imposition of tariff duties was going to proceed apace. Therefore, they are afraid of the consequences of their own indiscreet action or their own indiscretions prior to action. I think it may arise at a later stage, even if this Order is passed, that a matter such as this may be tested in the Courts, that is to say, whether the Order, framed as it is, is, on the evidence that the Minister himself has stated, a sound Order.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  If the Deputy thinks that the legality of the Order can be questioned let him question it. There are two points that I want to make clear. One is that it is the Executive Council not the Deputy that has got to be satisfied; secondly, that the evidence of dumping which was available or at least the evidence of the possibility of dumping which was available related to all classes of coach-building work. There was sufficient evidence available to satisfy the Executive Council that the Order should be made. This Resolution is now submitted to the Dáil and the Dáil is asked to approve of the Order.

Mr. Bennett: Information on George Cecil Bennett  Zoom on George Cecil Bennett  I would like to know if the Minister took any steps to satisfy himself as to what the effects of this tariff will be on the agricultural community. Is he aware that the largest user of the type of vehicle he proposes to tariff is the small farmer, and that he finds it not only difficult but almost impossible to provide himself at the present time with one of those light vehicles? I am afraid that he will find it impossible to provide himself with any such vehicle in the very near future, especially when the effects of this tariff begin to operate. I think the Minister ought to consider seriously the burden that this tariff will place on the largest and possibly the poorest section of the community. The Minister evidently intends to leave nothing to these unfortunate people except the method of conveyance [1995] usually referred to as “shank's mare.”

Mr. O'Neill: Information on Eamonn O'Neill  Zoom on Eamonn O'Neill  The Schedule sets out that the tariff will be 75 per cent. of the articles referred to. I am anxious to know from the Minister how the value is to be assessed in these cases. Will the invoiced price of the vehicle be taken as the value? In the case of second-hand vehicles there is sometimes a dispute as to whether the invoice is a correct statement of the price paid. Further, I would like to point out to the Minister that vehicles sometimes come into this country as gifts. A man in England may discard a certain type of vehicle and send it as a gift to a friend in the Free State. I am anxious to know if such a gift would be subject to the tariff, and how the value of the article would be assessed in that case?

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  The value of the article is assessed by the Revenue Commissioners in accordance with whatever method they consider most fair.

Mr. O'Neill: Information on Eamonn O'Neill  Zoom on Eamonn O'Neill  They would not accept the invoice as prima facie evidence of value.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  No. I take it that where they had no reason to suspect that an invoice was not genuine they would be prepared to accept it, but my information is that they do not accept invoices as prima facie evidence of the value of articles imported.

Mr. Blythe: Information on Ernest Blythe  Zoom on Ernest Blythe  I would like to ask the Minister if he would consider the question of ordinary farm carts. The particular industry that has been under discussion on this Resolution is coach-building. The construction of ordinary farm carts is scarcely coach-building and, as far as I know, they can be made here perfectly well, and I do not know that this tariff will have any great effect. It certainly will simplify procedure at the Border very much if ordinary unwheeled farm carts are entirely exempt from duty, so that no formalities of any sort would have to be complied with by those who have, for the purpose of getting to [1996] their own land, or to neighbouring towns, to cross and recross the Border.

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  I will undertake to examine that question before the introduction of the Bill.

Mr. Coburn: Information on James Coburn  Zoom on James Coburn  Do I understand that the Minister is going to consider the point raised by Deputy Blythe in regard to carts crossing the Border, because great confusion exists there?

Mr. Lemass: Information on Seán F. Lemass  Zoom on Seán F. Lemass  Yes.

Resolution put and agreed to.


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