fall in line with cuts in Customs duties.

The warning was made in the House of Assembly on Monday night when MPs passed an Act lowering duties on a range of shop goods as well as boats.

Finance Minister Grant Gibbons said: "One of the important things about Customs duties and their impact is that in order to be effective, those duties have to be passed along in the price of the goods.

"One thing the Ministry of Finance will be looking at is whether these reductions will be passed along.'' Dr. Gibbons was speaking on the Customs Tariff Amendment Act 1997 which he pledged to introduce in the Budget to reduce duty on a range of products.

"These duty changes form part of a range of strategies undertaken by Government to help in certain areas such as the tourism product.

"They also help to improve the competitiveness of certain areas of manufacturing, in particular the printing and painting industries,'' said Dr.

Gibbons.

The changes in Customs duties include cuts in duties for materials used in the paint manufacturing and printng industries as well as a broad range of reductions in duty on goods likely to appeal to visitors, such as clothing, china and glassware. Duty on boats has also been slashed.

Shadow Finance Minister Eugene Cox said anything that helped the retail industry should be welcomed, but Bermuda's retail sector was driven by local demand more than tourism.

"It seems Government is more concerned about reducing duties on tourist related items whereas we know that the bulk of retail demand is by locals.

Perhaps the Minister should seek to do more for locals,'' said Mr. Cox.

However he added: "We are not going to vote against the measures at this time because we want to see some relief given to Bermudians.'' Shadow Tourism Minister David Allen said Government's move only reflected what the PLP had been calling for, for years.

He added: "I see no reason why in the future we should not be looking at making Bermuda duty free in some areas, like electronics.

"We need to look at more items and the total elimination of duty. This is a step in the right direction, but it is too little too late.'' Dr. Gibbons finished the debate by saying the reductions in duty were worked out in conjunction with the Chamber of Commerce which wanted to see benefits spread to as many retailers as possible.

He agreed that the local market was the mainstay of the retail trade, but said many of the cuts would also benefit Bermudians.

Customs duty cuts The changes in Customs duties include: Down to five percent for resins and chemicals used in painting and down to zero from ten percent for paper for the printing industry. Down from 22.25 percent to 15 percent for printing machinery.

Down from 22.25 percent to 6.5 percent for leather goods such as handbags and down to 2.5 percent for goods made of natural fibres like linen, cotton and wool.

Down from ten percent to 6.5 percent for glassware and crystal. Down from 8.5 percent to 6.5 percent for precious and semi-precious stone. Down to 8.5 percent for paintings and sculptures.

Down from 55 percent to 33.5 percent for ships and boats and down from 55 percent to 10 percent for tourist and diving boats.

Down for environmentally friendly gas and oil for the Bermuda Hospitals Board for heating at hospitals.