I move: "That the Bill be received for final consideration."
Local Loans Fund Bill, 1935—Report and Final Stages.
Question put and agreed to.
Question proposed: "That the Bill do now pass."
In the course of the Committee discussion on this Bill, with the principle of which the Opposition is in agreement, the following fact emerged: At column 2065, volume 55, No. 6 of the Official Debates the Minister is reported as having said: "I disagree that there is any necessity for anything mandatory, telling the Minister to do that, for this reason, that this possibly does not represent the final form of the Local Loans Fund. I should like to say that the Bill is a preliminary one." Out of that statement this question naturally arises— why did you introduce a preliminary Bill at this moment, in the middle of considerable pressure of public business if it was not for some ulterior motive? Why did you not wait until you had all the relevant data to introduce a permanent Bill? It is not a contentions measure. Of course, the explanation springs to the eye. The fact is that when the Minister came to the end of his financial year, and summoned the Irish Times and the Irish Press to explain his financial skill, both of them said: “Now we can do a great deal to boost you, but there are limits to what we can expect our readers to swallow.” The Irish Times was ready to claim a surplus of £500,000; the Irish Press said: “We cannot persuade our readers to believe in anything more than £1,000,000”; but both agreed that if they had to provide for the £4,000,000 which were appropriated to local loans in the Budget there could be no face put upon the surplus at all. A scheme was then devised whereby the Minister provided in the Supply Services Estimates of April, 1934, that local loans would not be used, that we would introduce this Bill, and postpone that item of expenditure to a later date. That conspiracy to deceive the public as to the true significance of the Budget is made more interesting when one realises that the Irish Times surplus of £500,000—the laurel wreath from Westmoreland Street which the Minister wears on his brow—was claimed in the full knowledge that not only was there no actual surplus but that, on the figures of the Minister's Budget as introduced here last May there would have been, on the Irish Times calculation, a small deficit, and on the Irish Press calculation a deficit of £400,000, for both those newspapers conveniently forgot to observe that, in addition to the Budget introduced in May, the Minister has introduced cumulatively during the year a very large Supplementary Budget.
For the Local Loans Fund?
Partially. Having done that, he baulked when he came to appropriating money to the Local Loans Fund. I remember very well in 1931 the Minister's predecessor in this House introduced a Supplementary Budget to meet a prospective deficit. The present Minister for Finance went into hysterics. He wept on the floor of the House at the picture of the appalling burden which was going to be laid on the backs of the taxpayers by this Supplementary Budget. The Irish Times had its doubts. They said the hour had come to sound a note of warning that extravagance was running mad in the country, and that something must be done to save the credit of the State. I forget whether the Irish Press was in existence at the time, but doubtless if it was it conducted hysterics of its own down on the quays. That was all because a Supplementary Budget was introduced, for the purpose of raising something over £500,000. When that course was decided upon, the Budget was introduced, the purpose was fully explained to the House, and the correct procedure followed. What does the present Minister for Finance do in much worse circumstances? There is no Supplementary Budget, but there is a pig levy, a coal duty and a sugar duty put on in the course of 12 months by underhand methods.
Those matters are not relevant to this Bill. It deals with local loans.
The point I sought to make was this: The Minister explained the introduction of the Local Loans Bill in an imperfect form by saying that this is a temporary measure. My submission to the House is that he introduced the Local Loans Bill in an imperfect form for dishonest financial purposes. On the Fifth Stage I am warning the House that in passing the Local Loans Bill at this juncture and in this form they are co-operating with the Minister in his dishonest purpose of covering up a very substantial deficit in the Budget. Not only is he relieving the supply services of £4,000,000 by this Bill, but he has already added to the tax revenue of the country by underhand methods the sum which was realised by the coal duty, by the pig levy, by the sugar duty, and by the tariffs which have accrued to him under the Emergency Imposition of Duties Orders which have been made since last May. The Minister, through those methods, has raised in taxation a sum considerably in excess of the sum which his predecessor raised by the Supplementary Budget of 1931. Comparing the two financial procedures——
An excellent speech for this day three weeks.
I thought the Minister would not like to hear it now. By the time he reaches his Budget his laurel wreath from Westmoreland Street will be a very ragged decoration, but still I want him to wear it, tattered as it may be. The Irish Times surplus— and the Minister is strutting about the country showing it to his supporters as his certificate of financial probity—is made up of the chicanery of this Bill, and of the Supplementary Budget, as big as or bigger than that of the Ministers's predecessor in 1931. The House should realise that when it consents to the passage of this emergency measure. They should realise that although we accept the principle of this Bill we cannot approve of using it as a piece of chicanery in order to cover up, in conspiracy with the Irish Times and the Irish Press, the Minister's financial turpitude.
On the Committee Stage of this Bill, Sir, I was putting certain questions to the Minister for Finance, and your direction was that they would be better raised on the Final Stage. I regret that I was not present at the Second Stage, but on the Committee Stage I felt that the Minister for Finance was hedging a bit. I am sure he will now disillusion me on that point. I see the necessity for this Bill. I also compliment the Minister on being wise enough to see that a central authority should hold control of borrowing by local authorities—that is, borrowing in the open market. I am aware of a lot of schemes which were discussed by local authorities for raising money both separately and collectively. I presume they came before the Minister for Finance, and he has put this Bill on the stocks in preference to any of those suggestions. I think he was wise.
There are a few points upon which I am not clear. In this Bill the Minister will ascertain the aggregate value of outstanding loans. I am particularly interested in the manner in which he proposes to manipulate the local loans outstanding that were granted prior to 1922. It is on that I thought the Minister was hedging on the Committee Stage. As I interpret this measure, this is the way he proposes to handle those loans. This fund will get revenue in the shape of annual or half-yearly payments on foot of those loans that will be paid into the new Local Loans Fund from and after the appointed day, and any money to the credit of local loans in the hands of the Department of Finance will be transferred to the Local Loans Fund on the appointed day and any loans sanctioned but not placed will be placed after the appointed day by the Local Loans Fund. From the Central Fund, as the Minister thinks fit any time subsequent to the appointed day, he can transfer sums to this Local Loans Fund but the Local Loans Fund will be liable for the service of the money so transferred and the redemption of that capital money to the Central Fund. The Minister will issue a certificate when he ascertains the amount of the present aggregate value of the local loans outstanding.
Let us come to that section of the local loans outstanding which represents the money that was advanced by the British Government to borrowers, local authorities and private individuals. That will be included in the Minister's certificates. On the appointed day, or on the day he issues the certificates, the Minister will indicate that the amount of money representing the present value of the annuities from the loans made by the British has been transferred from the Central Fund to the Local Loans Fund. In another section he says that the Local Loans Fund must pay back to the central authority any money the central authority gives to the Fund. In other words, the capital value of the money outstanding representing the loans advanced by the British is going to be deemed by this Bill to be money lent to this Local Loans Fund by the present Government. I would like Deputies to observe how the whole plot works. On the strength of that income, including the income from the British loans outstanding, on the strength of the revenue to the Local Loans Fund from the moneys lent by the British, moneys which have not been lent to local authorities or private individuals by any central government in this country, the Minister proposes to borrow for the credit of this Local Loans Fund.
Another section says that that money which is deemed to have been transferred to the Local Loans Fund from our Central Fund must be recouped; in other words, the Minister under this Bill is going to ascertain the present value of the money due to the British on foot of the loans made by the British. When this is an Act he is going to use this Local Loans Fund to borrow that amount of money represented by what is outstanding on foot of the British debt and transfer that into the Central Fund. In effect, as regards the revenue that is coming to the Government at the present time on foot of moneys lent by the British, he is going to pawn that and from the pawnbroker he is going to get the capital value as a windfall for the Exchequer. That is my interpretation of the various sections.
In Sections 2 and 3 the Minister fixes the appointed day and establishes the fund. Under Section 5 he can borrow and Section 6 sets out that the Minister can ascertain the aggregate value of various sums on the appointed day. Sub-section (5) of Section 6 sets out:
The amount stated in the certificate made and issued by the Minister under the foregoing sub-sections of this section which is for the time being the latest such certificate shall be deemed to be an advance made under this Act to the fund by the Minister on the appointed day out of the Central Fund or the growing produce thereof for the purpose of making issues from the fund in respect of local loans.
In sub-section (7) of Section 5 it is laid down:—
All moneys advanced to the fund out of the Central Fund or the growing produce thereof in pursuance of the next preceding sub-section of this section shall be repaid to the Central Fund out of the fund, and if and so far as such moneys are not so repaid they shall be repaid out of moneys provided by the Oireachtas.
If this Local Loans Fund is not able to pay the pawnbroker's price, then the taxpayer will have to pay it. I am surprised at Deputy Dillon if he accepts that juggling with moneys outstanding. I would like to know what are the conditions which will convince the Minister that an outstanding loan is deemed to be irrecoverable. How does it arise?
Section 12 says: "Notwithstanding anything contained in any other Act, the rate of interest on and the method and period of repayment of every local loan made after the passing of this Act shall be such as the Minister shall direct either generally or in any particular case." I wonder the Minister did not say that before.
That is a Committee point.
I did not quite catch what the Minister said.
I was addressing myself to the Chair.
I do not think that two Deputies should be addressing the Chair at the same time. I was endeavouring to address the Chair.
I thought the Deputy was soliloquising.
Sub-section (2) says "the rate of interest fixed by the Minister under the next preceding sub-section of this section shall in every case be sufficient, in the opinion of the Minister, to enable the loans or loan to which such rate applies to be made without loss to the fund." I would like to know from the Minister what relation the rate of interest bears to the rate of interest at which the money can be borrowed in the market, and to the local loans made by the British which amounted to £5,000,000 or £6,000,000. I do not know which it was, but let us say £5,000,000 was the amount of it. The Minister lays it down that that sum of money must not be lent at a loss. But surely it costs the Minister nothing. What is he going to lose on lending it? What rate of interest is he charging upon that? I should be very glad, and it would be very interesting, to have that information from the Minister. Is he going to charge more than the original charge which the British made when they lent it?
Sub-section (1) of Section 14 says: "No part of the principal of or the interest on any local loan shall be written off the assets of the fund, save in pursuance of an expressed direction in that behalf contained in an Act of the Oireachtas passed after this Act." On that matter, Deputy Dillon asked, a moment ago, why not include that in this particular Act so that we would have the whole lot together. The Minister proposes what, I think, is an innovation in the matter of public lending by the Government, namely a penal interest. I would like the Minister either to explain whether that assumption is wrong or frankly to admit that he is about to capitalise the annuities from the loans granted by the British. I would like him to say whether that is so or not. Further, I would like to hear from him if at the present time—he will be betraying no secrets—any money that he has already cashed is available to transfer to this fund. The Minister must be aware of the urgent difficulties that are besetting local authorities, without exception, in trying to get sufficient money to carry out their annual programme. One of the largest local authorities in this country is very much perturbed at the present moment as to the dispensing of money, in useful services, because of the need for ready cash. Responsible officers in local authorities would have their minds put at ease if the Minister made a gesture to show that there was money available and sufficient, and the amount of that money and the rate of interest at which it would be loaned. A serious position is confronting all local authorities and if this position is going to be alleviated, if collective borrowing on the rates of the local authorities is going to relieve them in the existing conditions which are almost insoluble, it would be very welcome news to the local authorities.
Many local authorities are waiting to see if the Minister would make any comment or give any indication that money will be immediately available, or will be available in the immediate future, in order to enable the local authorities to get their requirements through, whether they will be housing schemes directly carried out by the local authorities such as the building of cottages in rural parts, and the administration of the Small Dwellings Act in various other places. These are matters pressing very severely on the local authorities now. I would be glad if the Minister would explain how he has successfully pawned these annuities which were hitherto paid to the British, and if he would explain the extent to which he has successfully pawned them, and if he would give us an idea of the money we may expect to be available in the near future for public utility purposes.
If Deputy Belton did not so often talk, for the sake of talking, he might, occasionally, make an intelligent speech upon a matter like this. It is quite obvious that the Deputy has not studied this Bill at all. So far as the local authorities are concerned this Bill proposes to make no change in the existing state of affairs. Those of them that are not able to borrow on more favourable terms elsewhere, and desire to carry out works approved by the Minister for Local Government can, if they care to, go to the Local Loans Fund and secure advances upon the terms that at present prevail. There is nothing in the Bill that touches that at all; but Deputy Belton for the sake of talking for an extra ten minutes kept rambling round and round that point. Of course, it was not by any means the least sensible or public-spirited part of his speech, nonsensical and all as it was. The most positively damaging, from the point of view of this country, was the earlier portion of the speech where he referred to the pre-1922 loans. The Deputy knows as well as I do that those loans are in dispute. He knows that the question of those loans is in dispute between this country and another country; that we claim, as Deputy Belton once claimed——
And still claims.
—— that they are the property of this State and that they are properly payable into the Exchequer of this people. That was Deputy Belton's one-time position, but now he gets up here in the House to-day and talks as if we were engaged in rigging the Stock Market and trying to put something over on honest people here and elsewhere. He said— I have his exact words here—"we are going to manipulate these moneys which were advanced by the British." The Deputy, certainly, has become absorbed in the Commonwealth. These moneys were advanced by the joint Exchequer of the United Kingdom of Great Britain and Ireland, and these moneys were moneys collected and raised from the Irish people in taxation and advanced by the common Exchequer for the purposes of local development in this State. They are our moneys because they were taken from us in the first instance. But Deputy Belton speaks of them as moneys advanced by the British and says that we are going to manipulate them. Then he went on to say, "Let us see then how the plot works." Notice the choice diction with which Deputy Belton clothes his sometimes confused thought. The Minister, he alleged is going to borrow on the strength of that. How much is he going to borrow on the strength of that? Deputy Belton did not even read the Bill.
He did.
Deputy Belton did not see Section 4 of the Bill which limits the borrowing power of the Minister to £5,000,000. In all his laborious work on the Committee Stage of this Bill, Deputy Belton did not think it worth while to ask the Minister for Finance what was the aggregate value of the assets we were going to transfer to the fund. If he had done so, he would then see how nonsensical is the statement he has just made. The assets which are going to be transferred to this fund are, on the lowest computation, a good deal more than twice £5,000,000, and, apart altogether from the pre-1922 loans, the security which this fund can offer to the people is very much more than the £5,000,000 which it may borrow. Deputy Belton, however, wanted it to appear that this Government is so dishonest in its financial policy that it is trying to borrow on the security of something that does not belong to it.
On a point of correction, Sir.
I am not giving way to the Deputy.
On a point of explanation, Sir, I did not say or imply any such thing. I only raised that point in order to have it cleared up by the Minister.
I am not going to give way to the Deputy, Sir. May I ask, is Deputy Belton speaking or am I?
Deputy Belton is being permitted to make a personal explanation.
I suggest, Sir, with all respect, that Deputy Belton is not entitled...
Order, order!
The Chair having allowed Deputy Belton to make a brief personal explanation, the Deputy was entitled to do so.
Of course, we know that the Chair has to be tolerant to Deputy Belton.
The Chair makes no distinction whatever between Deputy Belton and any other Deputy. The Chair has allowed Deputy Belton to intervene for a brief explanation of what he meant.
I should like to see the Standing Order which gives the Ceann Comhairle that power.
The Chair is not obliged to quote Standing Orders and should not be asked to do so.
Very well, I have nothing more to say.
I submit, Sir, with all respect, that the conduct of the Minister is grossly disorderly.
Question—"That the Bill do now pass"—put and agreed to.