I was speaking on this section last night and I asked the Minister——
Insurance Bill, 1935—Recommittal (Resumed).
Debate resumed on Section 22.
Before Deputy Morrissey proceeds, I want to say that I have been giving consideration to the recommendations which have been made by Deputies opposite concerning the provisions of this section and I am prepared to consider an amendment by which the rights conferred by the section will be confined to policy-holders.
Section put and agreed to.
Question proposed: "That Section 23 stand part of the Bill."
Will the Minister say in connection with Section 23—Release of deposits and applications to the High Court of Justice—whether he will reconsider the matter in respect of the points raised by Deputy Costello here yesterday?
There is nothing in Section 23 associated with the points raised yesterday on Section 22—payment of judgment debts out of deposits.
Certain debts will be incurred in connection with the proceedings under this section in the High Court.
Possibly so, but that is the normal procedure.
Will the costs fall entirely upon the assets of the assurance company?
It is purely a formal business. The deposits are in the custody of the court and application must be made to the court for their release.
Section agreed to.
SECTION 24.
(1) Any two or more Saorstát Eireann companies which, on the 31st day of October, 1935, carried on in Saorstát Eireann life assurance business or industrial assurance business or both such businesses (in this Part of this Act referred to as promoting companies) may, whether they do or do not carry on any other class of assurance business, submit to the Minister at any time before the appointed day a scheme in writing for the amalgamation into one company (in this Part of this Act referred to as the amalgamated company) of such promoting companies so far as respects the life assurance business (if any) and the industrial assurance business (if any) carried on by each of them respectively, and the transfer to some other assurance company or companies (in this Part of this Act referred to as the transferee companies) of the several other (if any) classes of assurance business carried on by such promoting companies respectively.
(2) Every scheme submitted to the Minister under this section shall—
(a) contain particulars of the arrangements between the companies concerned for the amalgamation and the transfer (if any) to which such scheme relates,
(b) be accompanied by copies of the deeds, contracts, and other documents embodying the said arrangements,
(c) contain all such provisions as are necessary for carrying out the said amalgamation and the said transfer, if any,
(d) be accompanied by reports made and certified by actuaries on behalf of each of the promoting companies in relation to the businesses of such company to be amalgamated in pursuance of such scheme,
(e) be accompanied by a report made and certified by an independent actuary agreed upon by all the promoting companies in relation to the several businesses to be included in such amalgamation,
(f) contain, in relation to the amalgamated company to be formed in pursuance of such scheme, provisions conforming to the conditions set out in the First Schedule to this Act.
(3) The Minister may by order appoint a day to be the appointed day for the purposes of this section, and the expression "the appointed day" in this section means the day so appointed.
Amendments Nos. 66, 67 and 68 are out of order, as I have already indicated to the Deputy concerned.
Mr. Bourke
The reason I put down the amendments was that I wished to call the Minister's attention to these points.
The amendments having been ruled out of order, it is irregular for the Deputy to discuss them. However, the Deputy may put a brief question on the issues involved.
Mr. Bourke
I wanted to ask the Minister would he consider the setting up of some tribunal to inquire into these matters. A large number of people will be seriously affected as a result of the carrying of this scheme into operation. The Minister should give some indication that he will consider other people as well as the ordinary staffs of the insurance companies. The business of an ordinary insurance company gives rise to a great deal of employment and a great deal of work outside the ordinary work of the staff. These officials, engineers, architects, medical officers, solicitors, counsel, stockbrokers, and so on, will have their vested interests seriously interfered with, and they will suffer.
The matter will be one for the companies when drawing up their amalgamation schemes. These schemes will be prepared by the companies proposing to amalgamate, and they can write into the schemes whatever measures are proposed. The only point on which I differ from the Deputy is that I do not think we should place upon them a statutory obligation to compensate in all cases. But so far as these companies have obligations to various people, they are in a position to make adequate provision in the various schemes to cover those obligations.
Mr. Bourke
I consider that the Minister should not throw over all these things on the company. After all, it is not the companies that are responsible for this measure.
It seems to the Chair that amendments Nos. 69, 71, 74, 75 and 82 are inter-dependent. I am not clear as to whether amendment No. 70 is one of the series, but it appears to be.
Mr. Lynch
On behalf of Deputy Dillon I move amendment No. 69:—
In sub-section (1), line 58, after the word "respectively" to insert the words "or for the transfer of the life assurance business or the industrial assurance business or both such businesses from one assurance company to another".
The purpose of this amendment is to enable the companies which would prefer to shed their life and industrial business, rather than their general business, to do so. I can see no reason why the composite company should be confined to shed their general business, or why it should not be optional with the company to shed either. There are many of these companies who have built up very sound fire and general business. If they had their choice in the matter I understand that some of them, at least, would much prefer to part with the industrial and ordinary branch of life business than to part with their general business. I cannot understand the Minister's attitude on this matter, or as to why he should make it obligatory that they should shed their general business while retaining the life business. It appears to me that it would be immaterial from his point of view which part of the business they should retain, since he insists on the partition of the business, and since he insists that the companies will confine themselves to one kind of business. I cannot understand why it should make any difference to him whether it is life or general business to which the company is confined.
I have already intimated that I was prepared to consider any practicable plan that might be submitted by the interested companies for dealing with the problem created by the necessity to transfer their general business. The reason why it is not possible to adopt the Deputy's suggestion is because it is by no means certain that a composite company coming within the scope of the amalgamation provision and which is likely to continue in operation for its general business would be sufficiently strong to enable that business to be properly conducted. The obvious purpose of the Bill is to ensure that all classes of insurance business will be carried on by companies with sufficient resources to give security to those who do business with them, and it is necessary to provide that if, after the Bill comes into operation, a particular company remains in existence to do any class of business, that it is adequately capitalised and reasonably sound and capable of doing the business on a sound basis. That is, in effect, all we wish to ensure.
To enable one of the Saorstát composite offices to dispose of its life and carry on its general business might arouse considerable problems. I am prepared to consider what steps can be taken to facilitate them in that respect, provided whatever plan they bring forward is of such a nature that it will leave whatever offices are to carry on in the business sufficiently secured to justify their continued existence, with the approval of the Oireachtas given to that continued existence. It might be better to leave this matter over until the next stage, when it is not improbable that some amendment may be moved which will be designed to facilitate whatever plan the Saorstát composite offices may agree upon in that connection.
Mr. Lynch
In view of what the Minister has stated, I am quite prepared to leave the matter over, if there is any hope that he will meet the point raised in the amendment. I think the Minister's attitude is carrying the paternal Government business a little bit too far when he says that in his view it is better for the companies to confine themselves to life rather than to fire and general. Surely, the companies themselves are the best judges? They are not going to shed the type of business that is most profitable to them. If the companies have to come to the parting of the ways, if it is a matter of deciding between life or fire and general, then obviously they will choose the strongest leg on which they stand, the firmer of the two legs. Each company will obviously choose the type of business in connection with which it has the greatest hopes of prospering in the future. The Saorstát companies are no greater philanthropists in that respect than the foreign companies. They are all looking for profitable business and they are going to retain the type of business on which they hope to make most profit. That the Minister should take it on himself to decide for them what is going to be the most profitable line of business is, I think, carrying the paternal business too far. If the Minister is prepared to consider this matter between now and the Report Stage, I am quite satisfied.
The Minister's statement is very satisfactory up to a point. He seems to suggest that the composite offices will come forward with an agreed plan, to which he will be able to accede. I suggest that whether or not they are able to agree to that, facilities ought to be given for this type of transaction to be carried out, because otherwise it seems to me that the Government have not only made up their minds that they are going to get life separated from other classes of insurance business, but they are going to decide whether an insurance company is to carry life or general business. With regard to Deputy Lynch's expression about the paternal Government attitude, whether it is a paternal Government attitude or whether it is exercising an interference which I do not think they have a right to exercise, is a question which one might consider. Surely, the companies are now under sufficient supervision with the licences for the Minister to be able to determine whether he will accede to a certain transfer or not? Last night I spoke about the thimbles and the pea and I referred to which thimble the pea was under. Surely the Minister, with the information he has at his disposal, will be able to make up his mind whether the transaction is one that he ought to sanction. In the last resort, it seems to me that the Government appear to be desperately afraid of a position in which some insurance company will go to the wall. I am not at all sure that as regards a company that is unsound it would not be a much better proposition and a lot healthier for insurance business than to force it to amalgamate with some sound company. However, the Minister has promised to look into this matter, but I would ask him to go a little bit further. If the composite offices are not in a position to present him with an agreed plan, I would ask him to go into the matter carefully and see whether some facilities cannot be given for a transfer such as is envisaged under this amendment.
Will the Minister be a little more clear as regards what he is going to consider? He starts off by introducing a Bill with a view to improving the position of insurance in the country. While doing that, he is imposing on the companies certain disadvantages, certain restrictions that they have not suffered up to this. Let us assume that these are necessary. In any case, some of them that are solvent start off with that disadvantage for the future. It may be claimed that while the disadvantage is on the companies it is an advantage to the insured persons. It is highly problematical whether the insured persons have an interest distinct from the companies. In his scheme of proposals the Minister sets out how amalgamations and so on are to take place. In so far as this amendment is concerned, it seeks to separate, if the companies desire it, their industrial from their life business. Surely, there is no objection to considering that on its own legs, apart from any other consideration? If the Minister takes the line that, having put down a certain matter and having indicated to the insurance companies that it is on those lines he desires amalgamation, he is not giving them a free hand and they are as much interested as the insured persons. Obviously, if they are not solvent they can do nothing for the insured persons and their solvency depends on how the business is run. It depends on each section bringing in its profits and their interest must be as great as the Minister's interest in keeping the company solvent.
It is a matter for co-operation between the Minister and the company rather than the Minister setting a line and telling the insurance companies to toe it. The Minister will admit, I am sure, that the companies interest and his own cannot be separated in so far as the relative desire to keep the companies solvent is concerned. The only question of difference there can be is the approach to that particular problem. They have, at any rate, got this to their advantage, that they have had the experience of some years and have, by reason of the work they have done, gained valuable knowledge in regard to insurance. It is a very serious consideration for companies that are now solvent, perfectly solvent, whether they are in any way endangered by the Minister's proposals.
There is no doubt that it is desirable that there should be full co-operation between the companies and the Minister when changes such as are contemplated are being put into effect. The Minister's interest in the matter, however, is somewhat different to that of the companies. I will give the case of a company which appears from its accounts to be insolvent at the present time, so insolvent that there is little possibility of it ever getting to a state of solvency. The staff and the other people interested will undoubtedly ask for the chance to carry on in the hope that the company will become solvent at some future date, through better claims experience or otherwise. The Minister, as guardian of the public interest, has to consider whether that company can be allowed to enter into new liabilities to the public if there is grave danger that it will not be able to meet them. At any rate, that is the situation that arises. There are three Saorstát composite offices which are doing life and a general class of business. We are taking the view, and embodying it in another section of the Bill, that any Saorstát company doing either life or general class business should have certain minimum resources. We fixed that in respect of new companies at £100,000 paid-up capital. The Bill provides that the three composite offices must transfer their general business, and if it is found that there could be no action taken against those companies under Part IV of the Bill, there is nothing to prevent them carrying on in life business. If, however, they are insolvent there is power to wind them up. But as an alternative we contemplate the possibility of securing amalgamation for such of them as are in that position, and their inclusion in a new solvent company. We propose to support that by contributions from national resources, so that there will emerge a strong and secure Irish office able to attract business on its merits because of the security and value it offers.
In respect of fire and general classes of business, other considerations arise. We would like to see a number of strong Irish offices doing fire and general business. If we were left, however, with a number of offices, small and insecure, they would be a hindrance if allowed to continue by themselves rather than a help, to the development of the situation contemplated. As the Bill stands, any of these three composite offices required to dispose of their general business have the alternative that they can dispose of it to an existing company or form a new company which, as the Bill stands, must conform to the terms of the Bill. I am willing to consider an amendment to the Bill, permitting a new company to be formed, for the purpose of taking over the business of these composite offices, even though it does not have the minimum capital provided, if I am satisfied it is secure and able to provide for the business it will be doing. Intimation of that has been conveyed to these three offices and I understand they are discussing, amongst themselves, various plans which would be in conformity with their desires and my wishes in that respect. What I have agreed to is that if between this and the Report Stage a plan, which I am prepared to stand over and recommend to the Dáil, is, in fact, submitted, the necessary amendment will be made to facilitate its coming into operation.
The Minister has not referred to this particular amendment. We have here if you like three problems. There is first the present situation in which the Minister is more concerned with what he calls insolvent offices than solvent offices. But some consideration ought to be given to solvent offices. For example, one may be doing life and general business. They have first to part with their general business. Next they are asked to be allowed, if they so desire, to amalgamate either in respect of life and industrial or general. Amendment No. 69 prescribes for the transfer of the life assurance business, or the industrial assurance business, or both such businesses, from one company to another. The problem for the Minister is solvency and insolvency. But there are assets, whatever they are. The Minister is disentangling these assets, and some respect ought to be paid to justice. It may be that the new company the Minister proposes to set up will get more than its share of the assets. It may get more than its share because of the Minister's methods of dealing with the situation. Surely the elements of justice and right should be considered. If a company is disposing of its assets and desires to part with them why should it not be allowed to do so.
The amalgamation scheme would be one under Part III of the Bill. If two solvent companies desire to amalgamate their business and do a new business, there is nothing to prevent them doing it. Provided that they conform to the Bill they will get a licence, and, in particular circumstances, I am prepared to modify the Bill to enable such a company to get a licence, even though it does not conform in full to the capital sum laid down.
Mr. Lynch
The Minister is making no promise in respect of this amendment. This amendment means that a company carrying on a composite business should be free on either of its legs; it should be free to shed one of them. It should be free to shed its ordinary industrial business and retain its fire business. Now the Minister's attitude is that he will not consider that at all. But he will consider their shedding their life business and amalgamating with another of the composite companies so far as fire and general business is concerned. It is not giving the right to any company, carrying on its business as far as fire and general are concerned shedding its life business. Unless I am particularly dull this morning I am afraid the Minister has gone a long way towards confusing me. The Minister has dragged in insolvency where it does not arise. Section 12 deals with that, and to drag in insolvency here is only confusing. This amendment deals with companies irrespective of the question of solvency. No matter how solvent the company, the Minister is not prepared to consider it and to allow it to stand and carry on, on the particular leg on which it chooses to stand, even though the directors of that company and the shareholders of that company may be entirely satisfied that it would be far more profitable for them to continue their fire and general business rather than their life business. The undertaking which I understood the Minister to give when he undertook to consider this matter before the next stage was that he would consider that aspect, and that he would let composite offices free to carry on as fire and general offices or as life offices. Now he has changed from that, and, in enlarging on what he has promised, he says that he will not do that, but will allow them to shed their life and general business, and then insist on their amalgamating with another office which was going into fire and general business and which would comply with the regulations as to capital, paid up and nominal.
Putting the matter in non-technical language, I would say that if three composite companies came together and prepared a plan, as a result of which they emerged as two separate enterprises, one doing fire and general and the other life business, I would be prepared to facilitate it, although in respect of that life company, if there were any question of its coming under Part III, there might also be a question of associating with it certain other companies in the same amalgamation.
Would the Minister give any consideration to a scheme of amalgamation which would result in a new composite company being formed from two or three of these composite offices, if such a scheme were evolved?
I am afraid I could not undertake to consider that. The principle of division is one to which we are definitely committed.
Surely the Minister is not so obstinate an advocate of the principle of division that, in the interests of those three composite life offices, he would not even consider a scheme which might be sound, and which might satisfy the Minister that it was sound in inception, in principle, in capital, and all the rest? Surely the Minister could not rule out a scheme of that kind if it were possible of achievement, and I should like to know if he would even consider such a scheme. I do not know whether there is a possibility of such a scheme, but I rather imagine that a scheme of that kind would probably be more attractive to the three Irish composite offices than all the schemes so far mentioned. There would be less dislocation of their existing business.
I do not think I would be prepared to consider such a scheme.
Would the Minister at least go to the extent of saying that he will not at the moment turn down such a scheme if it is put up?
We discussed this principle at length on the question of the division of business. I think we are favourably situated in this country to carry into our law what is a good principle, because our own companies, the companies in respect of whom we have that paternal interest which Deputy Lynch talks about, are only beginning, and we can effect reorganisation of these companies with much less difficulty than would arise in any other country, and, on that account, I think we should not lose the chance which we have now of inserting this useful principle in our law. If we were to delay doing that, it might be much more difficult to effect the change at a later date.
On this amendment, the whole question of amalgamation arises in a very critical form. I do not know how far the Minister has discussed this question with individual companies, but I should like him to inform the House now as to what his view is on the situation that will arise, if, under the amalgamation schemes envisaged in Part III of the Bill, two companies come together and, as he would wish, shed their general business and amalgamate their life and industrial business, one of those companies being a solvent company with perhaps a modest surplus on its O.B. and industrial funds, and the other being a company with a large deficit. Under the amalgamation proposals, the Minister would there intervene and take ordinary shares equal to a sum sufficient to make the joint fund solvent. As I understand it, in the event of the Minister doing that, the Companies Act would prohibit that amalgamated insurance company paying any interest on the total capital of the company until such time as a reserve fund was built up equal to the amount of money which the Minister had subscribed for ordinary shares, which might result in the solvent company, which was paying a reasonable bonus on its life business to its policy-holders and a modest dividend to its shareholders, being put in the position of being unable to pay any dividend to its shareholders for 20 or 30 years.
If my reading of that situation is correct, it means that it will be impossible to induce or to attract any solvent insurance company to amalgamate with an insolvent company. At first glance Deputies might be inclined to say that that is not a very serious business, that it might perhaps be better to let the solvent companies amalgamate and the insolvent companies amalgamate amongst themselves, and that if the insolvent companies amalgamate amongst themselves they will be no worse off after amalgamation than they are now, but our object in this Bill is to provide that insolvent Irish companies will no longer exist. A company becomes insolvent in the industrial and ordinary branch life business from mismanagement. The spread is so wide in industrial business that it is virtually impossible for a company to become insolvent if it is properly managed, whereas in ordinary fire and general business an unforesecable disaster or series of disasters might shake the stability of the best managed company.
I do not know how many insolvent Irish insurance companies there are. I am not prepared to say positively that there are any, but let us assume there are two or three—and I am merely making that as a supposition, for I have no reason to believe there are—and let us assume that they were all amalgamated together. We will then have a joint board drawn from two or three companies, each one of which has worked itself into a position of insolvency, and we will have a joint board in respect of the amalgamation of the solvent companies which will include all the competent insurance men in the country who are engaged in Irish insurance. That is surely not a desirable position? If we are going to amalgamate at all, we want to take the wrecks, straighten them out and put them under good management which will command the confidence of the Department of Industry and Commerce and of the community as a whole. Perhaps the Minister at this Stage would inform us as to what is his advice as to what the dividend reaction of a purchase of ordinary shares by him for the purpose of rendering solvent and insolvent life fund would be, and, in the light of that information, we would be able to tackle this general question of amalgamation perhaps more intelligently than we can at present.
I do not know what provision of the Companies Act the Deputy is referring to at all.
If the Minister presses me, I should find it rather difficult to put my finger on it myself, but I have discussed this matter with an informed insurance man who told me that he had placed this whole question before the Minister's Department and explained very exhaustively to them what the problem was. It bulked very large in his eyes. I have no brief from him and it is a question of company law. The relevant provision so far as I can recollect may be summed up in the words: "You cannot pay dividends out of capital," and where a deficiency exists and was filled up by the creation of new capital, to pay dividends out of profits on the new basis would amount to paying dividends out of capital, unless and until one had built up a sum in reserve equal to the new money put in by the Minister for Industry and Commerce. If the Minister is, in a position to say that that difficulty does not arise at all, then it will clear the ground.
The Deputy has something in mind that is not in the Bill. I am not taking on myself, or on my Department, the responsibility of preparing an amalgamation scheme. I am prepared, under certain circumstances, to accept an amalgamation scheme and to support it financially. That is all Part III of the Bill provides. There is no further obligation upon the Minister in respect of an amalgamation scheme, if he approves of it, than that he will facilitate its being given legal effect to. He may enter into an underwriting arrangement in respect of any issue of shares that the amalgamated company may undertake, and so long as he holds shares in the company, he exercises a certain measure of control over it. There is a provision in the Companies Act which requires, so long as there is a debit on the profit and loss account, that no dividend may be paid. I presume that is the provision that the Deputy has in mind. I do not anticipate that it will be impossible to get an amalgamation plan which will be workable and which will enable the new company to carry on business on a basis satisfactory to all the parties concerned.
So far as amalgamation is concerned, I think there is no difficulty in contemplating a quite practicable plan. The one consideration that arises there is the extent to which we can extend the area of amalgamation. I have expressed the opinion here that it is better to have a limited number, and would be preferable to have one company engaged in industrial assurance rather than a number of companies. I think, in the long run, it will be better for everybody concerned. We are not, however, legislating for that, but we are making it known that, in so far as industrial companies are concerned, we are prepared to encourage and facilitate amalgamation proposals. I have no doubt that we will be able to get amalgamation proposals which will not be impracticable for any such reason as the Deputy suggested.
The point that occupies my mind is this. Under Section 31 the Minister undertakes to intervene in the amalgamation arrangements under certain circumstances. He undertakes to intervene only by the subscription of money for shares. My submission is that the subscription of money for shares brings us within the scope of the Companies Act and places upon us the obligation to build up reserves equal to the amount the Minister subscribes before a dividend can be paid. If instead of subscribing for shares, the Minister had power, under approved circumstances, to subscribe for debentures, my submission is that the company would then be left free to segregate their profits, first, for interest on the debentures; secondly, for distribution of dividends on the ordinary shares, and, thirdly, for a reserve over and above whatever sinking fund provision was in the debenture deed. Whereas if we issue ordinary shares the company must segregate their profits in the following order——
Debentures secured on what? On the deficiency?
Debentures secured on the assets of the company, whatever they may be.
The assets of an insolvent company.
No. Let us be clear. The amalgamation I am envisaging and want to bring about is an amalgamation between solvent and insolvent companies. Under the Minister's scheme, he is prepared to put in a sum for shares sufficient to make the insolvent partner in the amalgamation solvent and, on the basis of a dead-level of solvency for the hitherto insolvent partner to the amalgamation, to proceed with the amalgamation. I do not think the Minister has in mind that he should ask a solvent company to amalgamate with an insolvent company.
We have not power to do it. The company that is solvent cannot be compelled to do anything.
Of course not, but the Minister will not withhold his approval, if he likes to put it that way, in a case where a solvent company is prepared to put its solvent fund into the insolvent fund of an insolvent company and then apply to the Minister to subscribe money for the resulting deficiency. I take it that the scheme will provide that, if a company is deficient by 5/- in the £, the Minister will put up a sum sufficient to eliminate that deficiency and bring the company to the dead-level of 20/- in the £ on its contingent actuarial liabilities. When put in that position it will pass into the amalgamation and any surplus on the funds of the solvent partner to the amalgamation will remain a surplus in the joint fund. I want power vested in the Minister to put up that money on debentures so as to say to the shareholders of the solvent partner to the amalgamation: "This does not preclude you for the term of your lives from ever getting interest on your money; it simply means that you will go on getting interest, but you will have to take steps to redeem the debentures." My submission is that, if you do not take power to put up the money on debentures, you are going to fix the solvent company with notice that, having entered in to an amalgamation of that kind, they cannot pay dividends on the ordinary capital until they have redeemed, by way of the creation of a reserve fund, every penny of the money the Minister has put up. The Minister may say that means that what the State is going to undertake is very rickety. Perhaps it is. But it is not more rickety than ordinary share, so far as the security goes.
If the solvent company comes into the amalgamation it comes in voluntarily and prepares the amalgamation scheme itself.
I quite agree that the Minister can wash his hands of the whole thing and say, "Do not let the solvent companies come in; let them go and join up with one another and leave the insolvent companies to look after themselves." Then the major part of my difficulty lapses, because a group of insolvent companies coming together will be no worse after amalgamation than before. I do not want that because, in my submission, if you do that, you are going to have a group of insolvent companies run either by nominees of the Minister or by remnants of the boards which have already proved themselves incompetent to administer.
Is not that the situation if you advance money on debentures and leave it to the people who produced the insolvency?
The Minister can withhold approval from a scheme designed to amalgamate nothing but insolvent companies and say, "Unless I have evidence that the partners to this proposed scheme are men who have proved themselves in the insurance world and who have shown themselves competent to my Department to administer insurance funds, this scheme does not recommend itself to me." What I apprehend is that the Minister is going to encourage the solvent companies to come together and to allow the insolvent companies to come together and turn them into a kind of electricity supply board in the insurance business or State-run institution. He has no alternative. He will have to put up so much capital, if he puts the insolvent ones together, that he will have a majority on the board and, in fact, it will become a Government-run institution. Is that desirable? Does the Minister want to have a Government-run insurance company?
I do not think he could possibly desire to have a Government-run insurance company operating in this country indefinitely and a Government-run insurance company starting under undesirable auspices, inasmuch as it will be extremely rickety and require, sooner or later, a Government guarantee behind it. That would mean that, having gathered together all the rickety structures in the insurance world on the one hand, and allowed all the straightforward, honest companies to gather together on the other hand, the rickety concerns in the amalgamated firm are going to carry an absolute Government guarantee for every policy issued, because the board will be, in the majority, representatives of the Minister. You will then find ordinary businessmen operating industrial life assurance, on the one hand, trying to fight for business against another Irish company, which has all the sympathetic and romantic appeal of an Irish industry, having at the foot of every policy an implied guarantee that the entire policy is guaranteed by the Government. That is not fair.
I can conceive a situation arising where, for a transitional period, it may be necessary that such a situation should obtain until ways and means were found of disposing of these insolvent companies in the ordinary course of business. But to contemplate a permanent arrangement, where you will have this group of insolvent companies formed together under Government patronised amalgamation, competing for business with a group of solvent companies, who have nothing but their own good name to stand upon" seems to me to be wholly unjust and suggests that the reward for insolvency is that the Government takes you under its wing and maintains you for ever more, while the reward for solvency and Spartan methods of business is that you are left with the full blast of competition blowing about you and added to it, the prudence of a Government firm.
The perfectly logical course, then, if we are to be regardless of every other consideration, is to wipe out the insolvent companies. That is the logical course, but there are other considerations.
It is not. The Minister has to get the whole thing before his mind. We have to consider not only the interests of the businessmen in this business and the interests of the staff, but also the interests of the policy-holders. The whole purpose of the legislation and the whole reason for the attitude adopted during the last ten years towards Irish companies by the Government has been to protect policy-holders. As Deputy McGilligan said, seven or eight years ago some of these companies ought to have been wiped out, according to the strict letter of insurance probity. But it was not done, because a great many people had been encouraged to take out policies in these companies for patriotic reasons. The minute the Government made up their minds that they would not cut these companies off—I think they were right in making up their minds to that effect—they immediately assumed a moral contingent liability to see these companies through. It would not be the logical thing in existing circumstances to wipe these companies out. But the Government have undertaken a liability—I do not say this Government, but the Government of Saorstát Eireann, regarded as a corporation solely, have taken on a certain liability in respect to these companies. I want to get out of that liability to the best advantage of everybody. It seems to me that, if we want to maintain insurance as an institution in this country independent of the State, what we have to do is to try and get insolvent companies taken over by the solvent ones and run by bodies of men in whom the State has reason to have confidence as reasonably competent insurance administrators. That is what I have in mind.
The Minister seems to have in mind to leave the competent men to amalgamate amongst themselves and get into a couple of companies and do life and general insurance and the incompetent to amalgamate under Government patronage with a board, the majority of which he will nominate. That means that the last stage is going to be that the competent Irish insurance operators are going to be amalgamated together, facing the competition of the British companies and the foreign companies, and, pleading in view of that competition, that they are an Irish company, an Irish industry, and seeking patronage on that ground and on the ground of admitted solvency. When advancing that plea, which is about the only argument they have left, they find on their left another Irish company in a position to say, "Not only are we an Irish company, an Irish industry, but we can give a Government guarantee on every policy you take out which will bind not only this Government, but all succeeding Governments, because the Insurance Bill has, in principle, the support of every Party in Dáil Eireann.
It means that you are leaving the unfortunate men, who have maintained the good name of Irish insurance, in an absolutely impossible position, because they will be up against competition that no ordinary mercantile association could dream of carrying. Why should they be penalised under this scheme to that extent? These amalgamation schemes ought to be a signal of hope to good Irish insurance men. I put it to the House that, if they follow the lines indicated by the Minister, they are going to pass a sentence of death on the solvent companies and to perpetuate the insolvent companies under new boards to be nominated by the Minister.
I suggest that the first alternative has certain drawbacks. Under a system of giving loans on debenture, the Government would presumably have no representative on the directorate of the company. I think it is the rule that debenture holders are not entitled to any representative. I wonder would the public be satisfied that Government money should be invested under those conditions? It has been done in certain undertakings already, but I think there has always been a certain amount of discontent with regard to it. The principle, I think, has never been put before the Dáil and has never been accepted. Now, Deputy Dillon wants to have the principle established that the Government will advance money on the security of debentures, and that there will be no Government representative on the board of that company. It may be all right; there might be perfect security, but, on the other hand, there might not, and I hardly think that the people as a whole would be content to see public money invested under those conditions.
May I point to what I consider another error in his argument with regard to those new amalgamations? He postulates that the amalgamated company which will come about through the assembly of the insolvent companies, being under Government control and Government tutelage, will be a very formidable competitor with the amalgamation of the solvent companies not under the same Government control or Government supervision. I rather think that the companies independent of Government control will have the advantage in that respect. Obviously, a Government controlled company will have to be much more careful about the investment of its funds. It can take much fewer risks than the company which is not dependent upon Government money for its resources. I rather think that in that respect the independent Irish company —the company formed by the amalgamation of what Deputy Dillon said are solvent businesslike concerns—would have an immense advantage over the other amalgamated company, which he suggests will be formed as a result of the Minister's proposal. I rather think that the advantage in insurance matters would be altogether on the side of the company which can take certain risks, and which is not bound by Government rules or regulations with regard to the investment of its money. To that extent at all events I entirely disagree with the Deputy's argument.
Does the Deputy recommend risky investments in connection with the funds of an industrial insurance company?
The Deputy has not been listening to my argument. Now I have to go all over it again?
Preserve us from that.
I will read it carefully.
I said that the second company, the company that he states will be formed out of Government funds and will be governed by State nominated officials, will be in a much worse position with regard to its policy-holders than the company which is more independent, because the more independent company will be entitled to take greater risks. It will be able to cover a wider field of investment. Obviously, a company using State money will be very restricted in its investments; it will have to more or less go on trustee investments. To that extent I think the Deputy's argument is faulty.
There is one service that this amendment has performed. It seems to have brought to light the lines on which the Minister's mind was turning with regard to amalgamation. Apparently, we are faced with this problem and, in so far as that is so, we must agree with the Government that there was a problem to be faced. There are certain Irish companies which are perfectly solvent, and there are other Irish companies——
I do not wish to interrupt the Deputy, Sir, but I am anxious to know what are we discussing— whether we are discussing the amendment or whether we are discussing the section.
Amendments Nos. 69, 70, 71, 74, 75 and 82 are being discussed together.
I should like to know, Sir, whether it is the intention to discuss the section after these amendments have been disposed of, since it seems to me we are discussing it now?
It is very difficult, Sir, to discuss these amendments and the other amendments without seeming to discuss the section.
May it be taken as agreed that the section will be put, without debate, when the debate on the amendments has concluded?
Oh, certainly.
That clears the air.
I should like to point out, Sir, that there is an amendment there in my name, amendment No. 72, which is of a different trend, as it deals with compensation for the transfer.
Certainly, there is no intention of not putting other amendments. The decision on amendment No. 69 will govern several others. Amendment No. 72 is not in that category. As the discussion is ranging over the section, it is agreed that, when all the amendments have been disposed of, the section will be put without further discussion.
I understood we were discussing amendment No. 69?
That is right.
It was to that amendment that I was addressing my remarks, and I think it has served better than any other debate in the course of this Bill to bring out what the Government's intentions are. I was saying that there are solvent Irish companies against which nothing could be said, but that there are other companies which, while I would not attempt to describe them as insolvent, are at least under some suspicion as to their financial stability. Apparently, the Minister has made up his mind that that position is to be righted along certain lines and along no other lines. Evidently, the scheme that he has envisaged is that the life and industrial assurance sections of some of those companies are to be brought together and are to be amalgamated into one company, and he will provide additional capital. I hope the Minister will correct me if I have misunderstood the general trend of things. Now, to my mind, that is not going to be a solution of the problem. I do not know whether amalgamating insolvent companies with solvent companies would make them solvent. I hold that they would be insolvent. You would be bringing in directors who would be totally opposed to each other in their outlook. The directors of the solvent company would have been conservative —people who would have proceeded along small lines and built up their business carefully. The other directors would have been accustomed to taking risks, which sometimes came off and which sometimes had results that were anything but successful. I think that to lend a composite company such as that a whole lot of capital is only going to prolong the agony of getting that company on to right lines.
Deputy Dillon has suggested debentures, and I am not any more in favour of that idea. Deputy Moore appears to object to debentures, but he points out that under that scheme there could not be directors appointed, and in that way he seems to show that his mind, at any rate, was turning towards the amalgamation of the sound and unsound, and lending them fresh capital. I should like to protest, from the business point of view, against the Government putting fresh capital into a company in order to keep it going. It is quite a different matter for the Government to decide that certain industries ought to be promoted and that there is a chance of their establishment, and to put money into a concern which stands the only commercial chances of survival or making profits. I think that is quite legitimate, but to my mind, in this case, we are facing a problem, the fringe of which, I think, Deputy Dillon was really touching upon in his remarks. We are going to have a company which Deputy Dillon describes as an amalgamation of the insolvent companies plus Government capital. I presume they would get facilities in connection with their income-tax for the people who subscribe a little bit of the capital, and in that way they would be able to offer certain advantages and to continue, but I do not think that would be a proper solution of the matter. They would be increasing their liabilities. I cannot imagine that the Government is going to give them a gift. If they are going to give them additional capital, that is only going to increase the cash in the cash box. It is not going to increase their earning capacity or to increase the soundness of their valuation. What those people really would require would be a loan without any obligation to pay interest on it over a long series of years, because the real problem is that they have lost or have failed to build up assets, and that, as compared with other companies which have been carefully and conservatively managed, they are a minus quantity.
Now, in my opinion, it is not fair on the business community to ask that the Government funds be put into a concern to which the ordinary investing public would not agree to subscribe, and it is a considerable extension of the Government's previous idea that they were going to invest in Irish industries, or to engage in reconstructing Irish industries which are not in the position of financial stability that they ought to be in. As I said before, the Government has to face a problem, but, little as I like the alternative suggestion I am going to make, I like the present position less. If the Minister has made up his mind that for the good name of this country and its financial business certain companies should not be allowed to continue the way they are going, it would be better to reconstruct them with some sort of grant of money, and then things would be on a proper financial basis. The Government appears to think that things have to be mixed, and a sufficiently large aggregation of capital brought about, so that when there is some cash in the cash box, a company must be on sound financial lines. I suggest to the Minister that he is back again at the real root of the question, namely, that there will have to be Government interference with certain companies, and that he has made up his mind to that. Within the framework of this Bill, power is taken for other things. The Minister is only trying to avoid the issue. I suggest to the Minister that he cannot get a quart out of a pint pot, and that the problem now confronting us will have to be faced. It is going to mean that certain changes must be brought about, but to order solvent and insolvent companies to get into a certain position in accordance with State regulations will really only increase the difficulties in the future.
Arising out of Deputy Dockrell's remarks, surely it is a mistake to suggest that if a series of insolvent companies amalgamate and borrow on debentures from the Government their solvency will not be affected by the money they borrow, because solvency, so far as it concerns an insurance company is a dual thing, the solvency, vis-a-vis the policy-holders, and the solvency, vis-a-vis the shareholders. If money is borrowed on debentures and put into an insurance company which has suffered from a deficiency solvency is established, but admittedly you make the position of the company as bad as ever, vis-a-vis the shareholders. That would prevent any solvent commany attempting to amalgamate, because it postpones indefinitely the possibility of getting dividends until resources are built up to meet whatever money was borrowed and put into the policy fund. It is true to say that if you borrow money on debentures to put into a fund that restores solvency vis-a-vis the policy-holders.
What the Deputy says is true, but you are back again in the position I referred to last night, in which it is a question under which thimble the pea is. It is true to say that if a loan is got for a considerable sum of money, and if that is put into the fund, it would render it perfectly solvent, but it would leave the company in a much worse position.
The shareholders?
Yes, but I prefer to call it the company. What the Deputy said only served to show that these are really only half measures Surely he will not be satisfied to let the policy-holders out and to have the shareholders kept with nooses around their necks.
No.
That is not going to be of any good for Irish insurance business. We want Irish insurance companies to have solvent funds, because it will not be very long until the general public begin to descriminate between a company that is sound from top to bottom and one that is nearly sound.
This debate on amalgamation proposals has convinced me that so far from being a solution of the problem with which they are designed to deal, they will form no solution whatever, and that before they become law at all they are still born. I cannot see from the point of view of the solvent companies what attraction there is for them to amalgamate amongst themselves in respect to their life and industrial business. They have to do something about their general business. Leaving that aside, so far as their life and industrial business is concerned there is no reason why there should be any amalgamation scheme between solvent companies. As there is no attraction in the Bill for them to do that, companies solvent in respect of life and industrial business will carry on as heretofore, and make some endeavour to do something about their general business. If there is no attraction to amalgamate as regards solvent companies what earthly attraction is there to amalgamate with insolvent companies? They get nothing under this Bill. They get a lot of mischief and on top of that Government interference, because they will have a representative of the Minister for Finance and of the Minister for Industry and Commerce on the board. There will be constant Government interference, the sort of thing that Deputy Moore innocently referred to, when he said that an independent company could take certain risks that a Government-controlled company could not take. In other words, the rigidity of financial officialdom would be incorporated in the business. What attraction is there for any solvent company to join up with an insolvent company? I want to ask the Minister a question about the First Schedule. Assuming that the Irish companies which are solvent enter into an amalgamation scheme this section, paragraph (f), provides that the scheme shall contain provisions conforming to the conditions set out in the First Schedule. The First Schedules provides that:
"The memorandum and articles of association of every amalgamated company shall be subject to the approval of the Minister for Finance after consultation by him with the Minister."
If you have a number of solvent companies coming together and amalgamating, why should the Minister for Finance and the Minister for Industry and Commerce enter into that? Why should any Government or any Minister have power to say what is or what is not to be in the memorandum and articles of association? If the Minister was going to help such a company I could understand that the Minister for Finance and the Minister for Industry and Commerce might be entitled to have a finger in the pie, but if companies come in voluntarily —and the Minister insisted in this debate that these amalgamation schemes were purely on a volntary basis—why should Ministers have anything to say to the making of the articles of association? What concern is it of theirs? I should like the Minister to justify, in reference to voluntary amalgamations between solvent companies getting no Government assistance, why the Government should interfere with the articles of association?
Mr. Lynch
It is the old fraternal care—looking after the children.
I had an amendment down which put forward, more or less, alternative proposals to those of the Minister, but it was ruled out of order and I could not move it. I should like to hear from the Minister if he thinks there is anything in my proposals. I think myself these proposals of the Minister are unworkable. I do not think they will make insolvent companies solvent and they certainly will not maintain solvency. Infusing money into the capital of the company is not going to help the fund, and the fund is the most important part of the scheme. I think the first thing the Minister should do is to see that the funds are made solvent and then to amalgamate the companies on some system of repaying the companies over a period of years for the money that will be infused into the funds of the company. I think to go about it in the opposite way and to increase the capital of insolvent companies is only going to lead to disaster. You may probably stave off the disaster but, eventually, it will come to the same end. I think the Minister should consider some alternative proposal; if not the proposal I put forward, some proposal similar to it. I should like to hear the Minister say something on that.
If the Deputy is referring to the proposal contained in amendment No. 67, which was ruled out of order, I would not be prepared to consider that proposal or any similar proposal, which would not only make the State liable for the deficiencies in the life and industrial funds which have accrued under existing management of some company, but would allow such management to continue committing the State to new liability in respect of future deficiencies. Much of the discussion that has taken place on this section must have relation to some other Bill. I do not think it has much relation to the Bill before the House. I have no doubt that it is possible to devise a practical scheme of amalgamation which will enable Saorstát life companies to be brought together and welded into one unit, which will be adequately supported and strong enough to command business on its merits against any outside company competing against it. Certain devices not set out in the sections of the Bill may be necessary to get over particular difficulties, but that can be done. We are not taking any Departmental responsibility to formulate an amalgamation scheme in the first instance, but we have no doubt an amalgamation scheme can be devised which will be effective. If the companies concerned desire to have our advice on that matter, that advice will be only too gladly given. I think we shall be able to get amalgamation effective, far beyond the limits contemplated in Part III of the measure.
When the Minister says that advice is available from his Department on amalgamation, will he say now to the House—because after all the House should be first informed —whether it is the opinion of the Government that the desirable scheme of amalgamation would be one between the five Irish companies that have a composite business and the companies doing life and industrial?
The desirable amalgamation I have indicated is one which would include all companies doing industrial assurance.
If the companies approach the Minister, it will be a recommendation along those lines which will represent his views?
Yes.
So the Minister is not nursing a scheme to allow the solvent companies to amalgamate on the one hand and the insolvent companies to amalgamate under his tutelage on the other hand?
I am not so sanguine as to think that we will get an ideal arrangement as a result of the Bill, but the ideal arrangement would be to have one company doing industrial insurance business.
We are in a difficulty because the Minister seems to adopt one attitude towards the vested interests and another towards the House. He says here now he sees no insuperable difficulty in front of amalgamation, and that if the companies find themselves faced with insuperable difficulties and if they will come to him, they will get from him a suggestion which will enable them to over come all reasonably foreseeable obstacles. Surely that model scheme should be communicated to the House, when we are considering Part III of the Bill, so that we may know what Part III of the Bill is designed to achieve. I quite agree that the Minister feels constrained to leave a certain liberty available to vested interests, but cannot he tell us what the design is? As a matter of fact many of us are interested personally in insurance companies, and so far as we can, it is our desire to co-operate with the Department within reason. What better place to arrive at a knowledge of what is in the mind of the Government than here in Dáil Eireann where it can be communicated not only to the interested parties but to the public as well?
I have been somewhat criticised for suggesting debentures, but I think we ought to clear our minds on that matter. So far as I can understand, the situation is that we have two companies, one solvent and the other insolvent—let us call them A and B. B, an insolvent company, is worthless. It has a liability that no one will take over, but if B has put into its fund a sum sufficient to make that fund solvent, then B is worth the goodwill of its debit. The goodwill of B's debit may be of much greater value to one company than it would be to another, because if B company happens to be operating in Cork, Limerick and Waterford and there are two solvent companies, one of them operating in Cork, Limerick and Waterford and the other operating in Galway, Sligo and Athlone, the goodwill of the debit of B company will be of much greater value to the company which is operating in Cork, Limerick and Waterford, because it can make a much more material contribution to the reduction of the expense ratio of that company than to the expense ratio of the company operating in other towns. If by amalgamating A company, which is solvent, and B company, which is insolvent, you reduce the expense ratio, and you add to the profits accruing to the amalgamated company, as a result of the reduction of the expense ratio, sufficient to pay interest on the accumulated sinking fund for whatever moneys are lent on debenture, then it seems to me that the debenture proposal is a sound proposal because, with the remaining profits which are being made on the joint enterprise, dividends can be paid. But if you advance the money on ordinary capital and constrain the amalgamated company to build up a reserve with all its surplus profits equal to the amount subscribed for ordinary capital before it can ever pay a dividend, it is true that, in the long run, shareholders will get a dividend, but you may have to say to them, "You must postpone any hope of getting a dividend out of this investment until your grandchildren collect it." It is quite true that, in the long run, they will probably have a valuable investment but, in the meantime, all the profits are being ploughed back into this enterprise. In all human probability, that will not suit the majority of persons who have money invested in Irish insurance.
We must keep in mind the fact that we are not dealing with an ordinary business proposition when we are dealing with this insurance problem. It is the policy of the Government to protect the interest of the policy-holders. If that factor were not present, the proper thing to do would be to wind up the insolvent companies and distribute their assets to the best advantage. The Minister knows that, if he wound up the insolvent companies, he would have to pay out of the Exchequer a sum sufficient to pay back to the policy-holders 20/- in the £ on all they contributed by way of premiums to these companies. It is to avoid the necessity for doing that that these amalgamation proposals are brought forward. Is the Minister prepared to make no alternative contribution to the maintenance of these business by way of debentures at a low rate of interest or something of that kind? He knows as I said that the Government may have to pay 20/- in the £ on the policies issued by the insolvent companies. I believe that the proposals under Part III of this Bill, in so far as we have been able to extract them from the Government, are going to make the carrying on of business impossible and will end in what seems to me to be grossly unfair treatment of the solvent companies. The insolvent companies are going to become an independent corporation under Government protection. If that situation develops, it is only a matter of time until the companies that are solvent now and have kept themselves solvent by taking no more than modest salaries and modest profits out of their funds during the last ten or 15 years will be in the position of insolvent companies. The insolvent companies now will have been turned into a Government pet, which will be supported by Government money and kept floating at the expense of those who tried to run their business properly.
The Minister, to my mind, made an informative contribution to this debate when he said that he regarded as the ideal solution, from the industrial assurance companies' point of view, the amalgamation of the five companies.
Of all companies— foreign and Saorstát.
Of all companies carrying on industrial insurance. That is a contribution to the debate, and a nod is as good as a wink to a blind horse. Some people will probably get busy examining that portion of the problem. I invite the Minister to go a little bit further. He says "We are not compelling the insurance companies to amalgamate." I should like to join issue with the Minister on that point. While that is perfectly true, the insurance companies are faced with this position: a date will arrive by which they shall have to obtain a licence from the Minister, and the Minister is not going to give a licence under this Bill to them to carry on insurance business in their present form. How the Minister can argue in these circumstances that he is not compelling amalgamations or alterations, I do not know. I invite the Minister to pass from industrial assurance to the other forms of insurance and to tell us what he considers would be an ideal solution. He said that this discussion had ranged over subjects not contained in the Bill. If he refers to the arguments put forward by Deputies about the raising of capital, whether by ordinary shares or by debentures, I quite agree that it is not contained in this Bill but it is, or purports to be, an intelligent anticipation of what must face certain insurance companies when they settle down calmly to consider their position under this Bill.
I should like the Minister to go further and tell us what he considers desirable or ideal for the other insurance companies. It may be quite impossible, from their point of view, to carry out the Minister's suggestion, but it would shorten this discussion, because we would see on what lines the Minister's mind was running. I should also like him to deal with the question as to how giving additional capital to an amalgamation of companies that contain, as part of their composition, some very unsound units would improve the real position all round, whether policy-holders, shareholders or other people doing business with the insurance companies.
The Minister has not answered the point I put him about the First Schedule—as to why the Minister for Industry and Commerce and the Minister for Finance should have any power where Saorstát solvent composite offices are amalgamating in respect of their life business.
Under Part III of the Bill.
Yes, under Part III of the Bill. I should have thought in a case like this where they are not getting any Government assistance this should not apply. It should not apply if they are solvent people. In the case of a company that is insolvent or not so solvent where a Minister is subscribing in the way of shares it would be a different matter.
If two Saorstát companies decide to-day to carry on amalgamation they do not need legislation for the purpose.
When this Bill becomes law they will. Solvent Irish composite offices when forced by this Bill to separate their businesses are in the position that they cannot form any scheme of amalgamation within the law. They could form a nice little company but they could not carry on any business. I submit that when a company does not want anything from the Government in the shape of underwriting or in the shape of subscribing for shares, the Minister should have no power to interfere with their business in connection with the appointment of managing director, or with their memorandum and articles of association. I should like to have an explanation from the Minister on these points.
The provisions in the First Schedule apply only where financial assistance has been given.
The Minister has not seen this point. He will see in paragraph 4 of the Schedule that there is a very careful distinction drawn.
If the Deputy will turn to Section 29 he will see that it is not impossible for two Saorstát companies to amalgamate. Here is Section 29:—
Section 13 of the Act of 1909 shall not apply to any scheme submitted to the Minister under this Part of this Act but, if the Minister refuses to approve of a scheme under this Part of this Act, such non-application shall not effect or prejudice the right of any two or more Saorstát Eireann companies which carry on life assurance business or industrial assurance business or both such businesses (whether they do or do not carry on any other assurance business) to amalgamate or transfer any assurance business under the said Section 13.
But they cannot get a licence. They could form a little amalgamated company but they will not be entitled to get a licence.
Why not?
The provisions of the Bill say that the amalgamated company will be a new company. If it does not comply with this provision, then it cannot get a licence. Why should it be thrown back on Part III and then be subjected to interference by the Minister for Industry and Commerce and the Minister for Finance in reference to the appointment of managing director in cases where they are getting no financial assistance from the Government. Why should there be this interference by two Ministers where the Government is providing no assistance either directly or indirectly?
This is only an academic discussion.
Does not Section 30 prevent them from issuing any capital without the sanction of the Minister for Finance?
This relates to a voluntary amalgamation scheme submitted by the companies under Part III of the Bill.
Precisely, and being voluntary and there being no necessity to apply for assistance to the Government, why should they have to submit a scheme to the Minister, and why should they have to submit to the further interference by Ministers in reference to the memorandum and articles of association and the appointment of directors? What interest has the Government in any of these matters?
Is it not a fact that Section 30 applies to the companies mentioned by Deputy Costello, companies which are voluntarily amalgamating and asking for no assistance, that is to say, companies which are solvent, and could at present issue capital without reference to the Minister? If they amalgamate at all, they may not make any issue of capital without the previous consent of the Minis- ter for Finance after consultation with the Minister for Industry and Commerce.
If it is necessary to make it clear that Section 30 applies in these cases, I will accept an amendment on the matter, but I do not think it is necessary.
Surely it is obvious that the introduction of the Minister for Finance in Section 30 is based on the assumption that the Minister would be interested in the new amalgamated company as a shareholder. If not interested in it as a shareholder, why should he be sticking his official nose into the affairs of the company in which he is not interested, directly or indirectly? Will the Minister undertake to look into that matter?
Yes.
Unless the Minister is subscribing money to the amalgamation carried out under this Bill, he does not desire to exercise any restrictions on the ordinary activities of the company, such as the issue of share capital or the appointment of a managing director? Is that correct?
I have stated I will look into the question as to the application of the First Schedule of the Bill to a company which is not getting financial assistance.
And also to Section 30.
Amendment No. 69 put and negatived.
Amendments Nos. 70, 71, 74, 75 and 82 follow the same rule. Deputy Dillon might meantime consider whether amendment No. 94 is also covered.
Amendments Nos. 70 and 71 not moved.
I am not clear as to the purport of amendment No. 72. I read it as referring to the scheme in amendment No. 9, but possibly it refers to a different matter.
Mr. Lynch
I move amendment No. 72:
In sub-section (2) (a), line 4, after the word "and" to insert the words "provide for the payment of compensation for".
This is in reference to the transfer of the Irish business that compensation should be paid to the company. It has nothing whatever to do with the staffs. The sub-section would then read:
"every scheme submitted to the Minister under this section shall contain particulars of the arrangements between the companies concerned for the amalgamation and provide for the payment of compensation for the transfer (if any) to which such scheme relates."
The object of this amendment of course is to aim at removing the confiscatory aspect of the transfer of the general business by the existing composite offices. These existing composite offices have built up in a number of years quite a lucrative business in fire and general insurance. They have done so at considerable expense and at the expenditure of considerable energy and effort by the directors and staffs. All these companies have undoubtedly a valuable asset which is growing more valuable as the years go by. I am referring particularly now to composite companies which have conducted their composite business in an efficient and sound manner; there are such Irish companies as we know which have conducted their life and fire insurance business on sound lines and kept separate funds for the different branches of their insurance business. These companies have a valuable asset. What that value is at any particular time I am not able to judge but there must be some method of valuation. I think it would be a scandalous thing if the companies were forced to part with the one branch of their business that is valuable to another company and get no compensation for the energy and money they had expended in building up the business.
If you would transfer it to any other walk of life, any other type of business activity, if, for instance, the Minister were to bring in legislation to prevent an existing businessman from carrying on, say, the business of tobacconist side by side with that of a confectioner, and if he were told one fine morning: "You are to hand over your confectionery business to some other person," I would like to know what the man would have to say about it. I think that is an absolute analogy, especially where the companies are solvent, and we know there are such, where they have fire and general business, and it is a valuable asset, profitable business which is growing more profitable as the years go by. Everybody knows the formative years are the least profitable. All the Irish companies, without exception, started as friendly societies. After a number of years they found that the limits to which they were restricted, especially in the life business, justified them in forming companies so that they could do a bigger type of life business. Friendly societies are limited in ordinary branch insurance to a sum of £300. When these people formed companies they went into the general business almost immediately. During their first years a good deal of money was expended in trying to build up the fire and general business. It was hardly a paying business for the first four or five years. The premium income then began to be such that the business was becoming economic, and, when the premium income was better able to bear the overheads, the business became profitable.
It seems to me to be very hard luck on those companies who went through the difficult stages and have now an asset which for the future promises to be a very profitable asset to the shareholders—it seems to be extremely hard lines on them that they should be asked to part with it without any compensation. The Minister may tell me that the scheme will provide for that. I am afraid I cannot accept that. If this Bill goes through without any indication in it that there is to be such payment, I am afraid when the insurance companies reach the period when they will have to jettison their fire and general business, they will be allowed to whistle for compensation, for payment for that asset. I am afraid also that the staffs will have to whistle for compensation when it comes to the time that they find themselves redundant. If the Minister tells me that provision will be made in the amalgamation scheme for a valuation of the business that is being jettisoned or transferred to another Saorstát Company, equitable payment for that business, I can reasonably ask him why not make this provision? If it is his intention that there should be payment, there can be no objection to the insertion of this amendment.
I am completely unable to follow the Deputy's line of argument. He wants to insert certain words in paragraph (a). That paragraph refers to the scheme to be submitted to the Minister by the companies proposing to amalgamate. The section provides for the amalgamation and the transfer of certain assurance businesses. I do not see why it is necessary to insert the words suggested by the Deputy. Whatever scheme is submitted under paragraph (a) it will be a scheme that will be agreed to by all the parties submitting it.
Amendment No. 72 put and negatived.
Amendments Nos. 73 to 80, inclusive, not moved.
Section 24 agreed to.
SECTION 25.
(4) When a scheme has been submitted to the Minister under this part of this Act, the Minister may require the promoting companies to amend such scheme in any specified manner or particular, and if the promoting companies fail or refuse to amend such scheme accordingly, the Minister may (without prejudice to his absolute discretion to refuse to approve of such scheme) refuse to approve of such scheme.
(5) All expenses incurred by the Minister under this section shall to such extent as shall be determined by the Minister with the consent of the Minister for Finance be defrayed by the promoting companies in such proportions as the Minister shall, in each particular case, direct, and the amount of such expenses so apportioned to any such company may be recovered by the Minister from such company as a civil debt in any court of competent jurisdiction.
I move amendment No. 81:—
In sub-section (4), line 43, to delete the words: "to amend such scheme in any specified manner or particular" and substitute the words "to make any reasonable amendment in such scheme."
This section is one which invests the Minister with power to reject the amalgamation scheme that has been laid before him. Sub-section (4) provides that when a scheme has been submitted to the Minister, the Minister may require the promoting companies to amend such scheme in any specified manner or particular. To that I wish to make an amendment placing upon the Minister the obligation of being reasonable in his amendment in such scheme. This is a usual form in order to provide aggrieved parties with the right of going to the courts as against the Minister's decision. If the Minister rejects an amalgamation scheme he can put the amalgamated company under a series of disabilities and it may be necessary, under certain circumstances, to compel the Minister to accept the scheme which has been submitted to him where it conforms with all the statutory requirements. If the Minister has an absolute discretion and the aggrieved party goes to court, all the Minister need do is to go to court and say "I have rejected the scheme and there is an end of it." If the Minister is constrained not to reject the scheme except on reasonable grounds, the Minister is put on proof before the court that he has given the scheme reasonable consideration and he is required to satisfy the court that for substantial and valid reasons he is determined to reject it.
I am not prepared to accept the amendment. The Deputy may take it for granted that the Minister will exercise his functions in a reasonable manner, irrespective of who may occupy the post.
That is the stock reply. The whole difficulty arises when there is a bona fide conflict of opinion as to whether the Minister is acting reasonably or not. The truth of it, in regard to this bureaucratic provision, is that the Minister for Industry and Commerce cannot individually examine every matter in respect of which he has the right to make an order. What in fact happens is that a permanent official or civil servant, charged with the responsibility for that advice to the Minister's Department, will examine the scheme and will advise the Minister that there are certain grounds for rejecting it. Eventually it becomes a question of conflict between the Minister's advisers and the advisers of the amalgamated company. The conflict may arise on an actuarial problem. The Minister stipulates elsewhere that where án actuarial difference arises between his advisers and the company's advisers there will be an appeal to the High Court and thence to the Supreme Court. I want to provide that, in the event of a technical difference between the advisers of the Minister and the advisers of the amalgamated company, there will be reference to the courts for a decision on that. The Minister says he will exercise his discretion according to the advice tendered to him. That is not at all the way to act. He has not the time to consider a long actuarial argument from the advisers of the company and then weigh the whole matter up. He has not the capacity to weigh the matter up. I think it is necessary that the company should be able to get the decision of the courts on any difference that may arise between the opinion of their experts and that of the officials of the Department.
The Minister, I think, takes up the ground that he and his officials will act reasonably. What objection then can he have that an almost irrebuttable proposal should be brought before the courts?
The provision of the Bill is quite sensible.
From the Minister's point of view.
If the Minister decides the report is not reasonable he will not approve of it.
That is quite right from the point of view of an autocratic Minister. Does the Minister take no account of the position of the companies trying to save their business from the wreck that will occur from this Bill? Why should he not be lenient, instead of trying to force this autocratic provision? Coupled with the following provisions it is simply a scandal.
Judging by the attitude of Deputies opposite, they think that insurance law should be written by the companies.
What we want simply is that the Minister's decision should be liable to review by the higher courts. The Minister has an extraordinary objection to the courts.
Surely the Minister's position in this matter is absurd. The amalgamated companies may get the very best advice from the most distinguished actuaries and experts in Great Britain for the scheme on which they are entering. Having got that approval for their scheme they should be in a position to bring before the tribunal the very best intelligence Great Britain or America could give them in support of their scheme. The actuary on the staff of the Minister's Department may advise him that the scheme is imperfect. The Minister is then in the position to say the scheme is imperfect and he requires amendment made in it. The amendment is referred to, say, 20 of the very best actuarial experts to be found and they express the opinion unanimously that the recommendation of the Minister's Department is unsound and should not be incorporated in the scheme. It is reported back to the Minister that the amalgamated companies refuse to incorporate the proposal in their scheme and then the Minister simply says "I will not approve of the scheme at all."
Under Section 26 the Minister has absolute discretion.
That is what we are objecting to.
I have put down an amendment to deal with that. All we are asking here is that in the event of a conflict of that nature occurring, and that the obligation of the companies is to prove that the Minister is wrong, and has no reasonable ground for the conclusion he has come to, there should be a right of appeal.
Appeal to whom?
To the courts. All we are asking is the right to go to the courts and make the case that there is no reasonable ground upon which the Minister could come to this conclusion. In proof of that we would bring in the best opinion we could procure.
There is no provision in the Bill for a rejected scheme being taken to the courts at all.
That is what I want to get. If you put in the word "reasonable" and the Minister acts unreasonably, you have a common law right to bring the Minister before the courts and compel him to change his decision. Under the amendment we would be entitled to go to the court and say "The Minister has acted unreasonably." We would produce to the court all this expert evidence and we would produce any further evidence that they might require. We do not claim the right to put the Minister to prove that he is right. All we claim is that, acting as a reasonable man should act, he could not come to the conclusion that he has come to. The Minister says that that is something that he is not prepared to accept. As the section stands at present we have a common law right to go into the courts, but the Minister can quote statute law against us and say the Minister may require the company to amend such a scheme in any particular. The sum and substance of our amendment is that the Minister may require the amalgamated company to amend such a scheme in any reasonable manner or reasonable particular. That surely does not make the Minister's position impossible. If he says that no situation will ever arise in which his powers under the section will be used unreasonably, then there can be no conceivable objection to putting this into the Bill. If a situation does arise in which his actuary is in conflict with the best that the company can produce, there is reason to put this amendment into the Bill to guard against the particular bee the Minister may have in his bonnet on a particular morning.
Question—"That the words proposed to be left out stand part of the section"—put and declared carried.
Amendment No. 82 not moved.
Question proposed: "That Section 25 stand part of the Bill."
Before this is agreed to, I would like to ask the Minister what is the purpose of sub-section (1). When a scheme is submitted to the Minister he can submit such scheme to some persons named by him for report. Further on we find the Minister for Finance coming in to take a hand. All expenses in connection with this matter are to be paid by the promoting companies. What is the necessity for putting further expense on the promoting companies—the expenses of somebody who is to investigate and report to the Minister? Why cannot this be done Departmentally, or, if it is not intended to be done Departmentally, by whom is it intended to be done? The provisions of this part of the Bill dealing with amalgamation are going to put very heavy expenses on companies who are amalgamating into a new company, that is to say, if there is ever going to be an amalgamation under this part of the Bill, and I have already expressed the view that there will never be any amalgamations in respect of solvent companies. The Minister can have a present of amalgamations by insolvent companies. Here we have the expenses of somebody to investigate, to do the Minister's work for him. Surely he has expert officials enough in his Department who have been dealing with this matter to enable him to do it without this power of nomination, and consequent expense on the companies. because if there is anybody nominated by the Minister to do this job, he is going to be paid, and paid by the companies, and if the amalgamation scheme is approved, it has to go to the court with further expense.
I think it is quite right that the amalgamating companies should pay the expenses of the investigation of their scheme. I can see no objection in principle to that at all. Why should the taxpayer pay for the cost of examining a scheme submitted by these companies?
Because the Minister is interfering with businesses which the companies do not want him to interfere with.
Any company that wants to take the alternative of coming under Part IV has that alternative open to it.
To declare itself insolvent?
Exactly.
You have to ask solvent companies to declare themselves insolvent?
Solvent companies do not have to come under it except voluntarily, and, if they do, the expenses should be borne by that company and the companies associated with it in the proportions fixed. It may be necessary to refer an entire scheme or particular aspects of it to some outside expert for report.
Or experts.
Yes, an actuary or somebody of that character at some time.
Under Section 25 (1), you may have a whole series of persons nominated.
Quite possibly.
And that is intended?
It is unlikely, but it is possible.
And it is contemplated under sub-section (1) that expenses in that respect will have to be met by the companies. Does the Minister think that that sort of thing is going to help any voluntary amalgamation?
As I am anxious to help voluntary amalgamations, I will keep the expenses as low as possible.
Will the Minister for Finance allow you?
I want to make two concrete suggestions. The Minister is going to be advised in the matter of the perfection of the scheme by an outside adviser whom he will appoint under sub-section (1). It may well be that in the case of a large amalgamation the foremost actuarial experts and insurance experts will be consulted by the companies preparing the scheme, and, the scheme having been prepared, the Minister looks around for somebody to advise him. Naturally, he will not go to one of the persons partly responsible for the scheme; he will go to whatever is left in the field of actuarial expert advice and insurance expert advice, and he may then refuse to approve of the scheme on the recommendation of his adviser, it being certain that all the best advice is on the side of the scheme, with the left-overs of the experts advising the Minister.
We are not confined in the matter of the nationality of the adviser. I scarcely imagine that all the best advisers will have been secured by the company or they would have incurred expenses far in excess of anything we would impose.
Surely the patriotic Minister would not think of taking advice from a British insurance expert?
That is one position to which I invite the attention of the House. There is no use closing our eyes to the fact that if you are going to get advice on an insurance proposition, you cannot go very far outside this country or Great Britain, where insurance practice is identical, because the views of insurance experts drawn from countries where insurance practice may vary very widely compared with that normally followed here might not be of very much use to you. Under sub-section (5) the expenses incurred by this examination are to be paid by the promoting companies. Will the Minister set a limit to the money to be expended on expenses in this regard? The Department of Finance fix a limit in the matter of expenses to the State, and if the Department of Finance is fixed with notice that, for once in their lives, they can run riot and spend what they like, they may take a holiday at the expense of the promoting companies. Having grown weary of being scrupulous, cutting down people's fees and generally looking after public finance, their industry in doing which and their indefatigable zeal I must say I frequently admire, they may on this occasion run riot and give some fellow the kind of fees they would like to give but never had a chance. One can imagine them having one glorious night out.
I cannot, knowing them.
People suffering from suppressions or repressions or complexes or whatever they are, do sometimes go clean off the deep end.
Is the Deputy speaking from experience?
Not at all; I am speaking from observation. I, therefore, suggest, and seriously suggest, to the Minister that a figure should be put into sub-section (5) which would limit the expenses, say, to £100. Will the Minister consider that? Will the Minister consider fixing any limit to the expenses he may incur on behalf of companies whose scheme he is examining?
No.
So the Minister might casually spend the entire capital of the amalgamated company——
And then proceed to spend the deficiency as well.
——and then say "Further examination of this scheme is quite unnecessary. We have spent your entire capital and a cheque will oblige. The scheme may go into the wastepaper-basket and no further time need be spent on it. Next, please." Is that a reasonable proposal? The Minister has his heels in the ground and does not see his way. Surely, if we are giving the Minister the right to spend another person's money, we ought to put some limit on the extent to which he may spend it.
Considering that any deficiencies are going to be made good by a State contribution later on, the less we spend the less we will have to make good.
If we have two solvent companies having the misfortune to submit a scheme of amalgamation to the Minister, on the day they submit the scheme in accordance with this section, the Minister may call in an actuary and say "I want advice on this scheme. The capital of the company is £250,000. Your fee is £250,000. Here it is. Tear up the scheme and we will notify the company to close up its offices because we have spent their capital and you need not bother with the scheme." That is the situation created by sub-section (5).
That is what the Deputy calls going off the deep end.
It is admittedly a reductio ad absurdum, but I object to legislation that is capable of being so absurdly perverted, and I say that when a reductio ad absurdum can be legitimately made it demonstrates the necessity for fixing some limit to what the Minister may spend of a company's money. I imagine that if the Minister would look into the matter he would find a figure which would leave him an ample margin, say, £100, £200 or £250, so as to ensure that no undue extravagance will take place.
Question put and declared carried.
SECTION 26.
Whenever a scheme has been submitted to the Minister under this Part of this Act, the Minister may in his absolute discretion approve or refuse to approve of such scheme either before or after the same has been amended in accordance with a requisition made in that behalf by the Minister.
I move amendment No. 83:—
In lines 56/57 to delete the words "in his absolute discretion".
This amendment raises virtually the same point raised in amendment No. 81. These words, "in his absolute discretion," are designed for the purpose of aborting any High Court proceedings that may be brought, because, with the introduction of these words, the Minister's seal is sufficient to bring to an end any proceedings brought in the High Court with a view to having his decision reviewed, on the ground that it is contrary to natural justice or to anything else. He can produce the statute and say it is in his absolute discretion, and nothing more need be said about it. There are one or two pieces of legislation in which that phrase occurs, and it has been repeatedly subject to very adverse comment from the bench—in my opinion properly adverse comment. The courts are there to secure that individuals will get reasonable justice, and this is an attempt by statute to deny the protection of the courts to individuals who believe themselves to be suffering under oppression at the hands of a bureaucratic Minister.
I am not prepared to accept the amendment. It is definitely contemplated that the Minister should exercise a discretion in the matter with which this section deals in the rejection or approval of an amalgamation scheme submitted. The Minister is not responsible for the scheme. It is a scheme submitted to him by certain companies which have agreed upon it, and it is for the Minister to say whether he is prepared to approve of it or not. I do not think he should be limited in any way in the use of his discretion in that matter.
The Minister, as usual, has given no reason except to state that the section says what it does say, and, accordingly, he will not accept the amendment. Last night we had a discussion on another section in which the Minister was endeavouring to claim the Crown prerogative of preferential treatment. Here we have another Crown prerogative enshrined in a statute, that the King's Ministers here can do no wrong.
And the Deputies cannot do right.
We want the position that, whether it is the King's Ministers or the King's Opposition that are doing wrong, the courts will say which is right and which is wrong. That is the only position we want. The Minister wants absolute discretion. The Minister spoke of discretion. The section says absolute discretion. It is not merely absolute discretion in reference to the scheme, but, at every stage or moment in the discussion on the scheme, the Minister can close down the whole matter and say, "I will not have anything to do with this scheme good, bad, or indifferent." Although the Minister has made certain recommendations or certain objections or certain suggestions to the companies, which they are considering, while they are considering them and are perhaps agreeable to them the Minister can say, "I will have no further discussion with you." That is provided in the section. The section says that "the Minister may in his absolute discretion approve or refuse to approve of such scheme either before or after the same has been amended in accordance with a requisition made in that behalf by the Minister," so if the Minister objects to the scheme in any particular, tells the company the particulars in respect of which he objects to it, and the company agrees to meet the Minister's objection, notwithstanding the fact that they are in complete agreement with his objection, the Minister can come in and say, "In my absolute discretion you can all go home; I will not have anything to do with it."
What is the position with regard to reciprocity in this connection? Under the very next section of the Bill, when the scheme is graciously sanctioned by the Minister, the companies have to go to the further expense of bringing the matter into court and having the entire scheme sanctioned by the court. The Minister, having let go his absolute discretion, can come into the court and make still further objections in court. That is what the Minister and the company have to do. In connection with the discussions prior to the sanction, the policy-holders have no power whatever to interfere in those discussions. It may be that the very scheme which the company has put up to the Minister, and which he refuses in the exercise of his uncontrolled discretion, is a scheme which has had the complete approval of all the policyholders interested in the company, or in the various companies that are amalgamated. They are given no opportunity of expressing their approval or of having their wishes carried out. The only thing that the section provides is that the Minister can do no wrong, and that he must have absolute discretion to reject or approve the whole scheme at any stage or for any reason, although at a certain stage in the discussions both the Minister's Department and the companies were in complete agreement. This section, therefore, is entirely indefensible, and I have not yet heard any reason from the Minister why the Deputy's amendment should not be accepted.
If the Minister has approved of the scheme, and it is then taken to the High Court, the circumstances in which the Minister would withdraw approval and proceed to object in the court are inconceivable. The bringing of the scheme to the court is to enable the policyholders to voice any objections they may have.
That may be so, but still the Minister has power to come in and again object.
It may be the Minister who will bring the scheme to the court.
Let me put it to Deputy Moore——
Put it to the Minister, who is in charge of the Bill.
I put it to the House, Sir, of which I regard Deputy Moore as a respected member.
Go raibh mile maith agat.
A company puts up a scheme for amalgamation and amends that scheme to embody all the representations made by the Minister for Industry and Commerce; it puts in all the amendments he suggests, and then receives a notification on the following morning: "The Minister has changed his mind and disapproves of the scheme". Does Deputy Moore think that in those circumstances the company ought to have the right to go to the court and make the case that the Minister is acting unreasonably in refusing to approve the scheme which has, in fact, been amended in accordance with his suggestions? I will not further embarrass Deputy Moore by trespassing on his silence. Deputy Moore, apparently, does not care to answer that; I do not blame him.
He was told by the Minister not to make any further indiscreet speeches.
I think Deputy Costello is a very good judge of indiscretions.
Would the Deputy repeat that?
It is not relevant to the discussion.
Obviously, that is the express proviso which the Minister seeks to insert in the Bill—that the people are to be deprived of all right of reference to the court. It cannot be too constantly emphasised in this connection that this discretion is going to be exercised not by a representative of this House but in effect it is going to be exercised by a permanent official or a person appointed ad hoc to examine this scheme—a person who may be right or who may be wrong. That such a person should be vested by statute with the power of being the final judge, beyond whom there will be no appeal——
A judge upon a scheme submitted voluntarily for judgment by the companies concerned.
Submitted because they must submit it, if they are to take advantage of this Part of the Bill.
Why must they submit it?
They must submit it if they are to take advantage of this part of the Bill. It means that we are drifting into a position which is extremely dangerous. We are not only doing those companies a substantial injustice but we are establishing a detestable principle—a principle to defend which no attempt has been made by any Minister of the Government except the Minister for Industry and Commerce. There is in the minds of Deputies a kind of idea that, after all, as a general rule, you get substantial justice from a departmental decision. I do not deny in practice— though I am not prepared to waive the principle—that where you are dealing with a question of whether a person will thatch a roof or put slates on it you do get substantial justice from a departmental decision. Where you are discussing a question as to whether a lady living in Ballintemple is 78 years of age or 68 years of age, as a general rule you get substantial justice from a Departmental decision. But, in regard to complex matters of this kind, Department officials are no more qualified to formulate an unanswerable judgment than any other individual citizen of the State. The Minister will, I think, remember that not so very long ago a question arose in connection with insurance companies in Great Britain, and the official of the Board of Trade in Great Britain responsible for insurance matters very definitely ruled in regard to a series of insurance transactions in Great Britain that they were contrary to the law; he condemned them, and ordered the insurance companies to revise their practice in that regard. His decision was brought before the High Court, from the High Court to the Court of Appeal, and I think it went to the House of Lords. There, judgment was secured in favour of the insurance companies and against the Board of Trade. It was demonstrated beyond doubt or question that the law as it stood was correctly inter preted by the insurance companies and incorrectly interpreted by the experts of the Board of Trade.
What has that got to do with the section?
It means that the Minister will stipulate for certain requirements here——
He is not determining any question of law.
He is determining questions of far more complex character— questions of actuarial probability and insurance rectitude, which can be very much more complicated than any other question. His decision is subject to no review of any kind, good, bad or indifferent; and it is not his decision—it is the decision of a casually employed expert, supported by whatever experience he has in his Department at the present time. There is no opportunity to bring before any impartial tribunal all the rest of the expert opinion available. If the one individual expert whom he employs is on one side, and all known actuarial opinion in the world is on the other side, his expert is unanswerable and may not be answered. That is an absolutely intolerable position, and an absolutely indefensible proposal to bring before this House. May I invite Deputy Moore, when the time comes to signify his will on whether this section should remain part of the Bill, to join with us in protesting against the incorporation of such a proviso in the law?
The Minister has been insisting throughout this debate that the amalgamation proposals in the Bill are entirely voluntary, but at an earlier stage of the debate he stated— I think in answer to Deputy McGilligan—that the effect of this Bill and the proposals contained in this Bill would be to unloose forces which would compel amalgamation.
Hear! hear!
That being the case, how does he justify this absolute discretion? Does he mean, under his proposals in this Bill, to unloose those forces, in other words, to compel amalgamation indirectly when he has not had the courage to face up to compulsory amalgamations in this Bill, and then not merely to compel amalgamation but dictate to the companies the terms on which that amalgamation will take place? I was surprised to hear yesterday that the provisions in Section 12 dealing with the separation of the businesses of the companies were not the Minister's contribution to the solution of the insurance problems in this country. I then thought that the amalgamation proposals were the Minister's solutions for the difficulties that exist in regard to insurance here. I stated here earlier to-day that in my opinion those amalgamation proposals will not work. Whatever chance they had of working, irrespective of Section 26, I think there can be no doubt that it will be impossible to contemplate the working of those amalgamation proposals at all if Section 26 stands. Anybody who has had anything to do with the amalgamation of companies will know the complexities that are involved in such amalgamation proposals, the details that have to be considered and the long discussions that have to take place before anything in the nature of an agreement can be reached. There are problems of staff, problems of the future governing of the concern, any amount of personal considerations and personalities—all very difficult problems in themselves. But in connection with the amalgamation of insurance companies those problems become still more complex. They demand time, tact, and infinite wisdom on the part of the negotiating people who are trying to bring about amalgamation. When all that is done they are faced with a situation that the Minister may say, irrationally, and without stating any reason: "I will not have anything to do with your proposals"; then all the labour and tact which had to go into bringing about the scheme are gone for nothing. I think that any companies contemplating amalgamation under the proposals contained in this part of the Bill would simply be wasting their time if they were faced with the situation which arises under Section 26—that because of the whim of an official or the whim of an outsider brought in at their expense the whole of their work and the whole of their tact and diplomacy which have brought about the amalgamation scheme are rendered useless.
Question—"That the words proposed to be deleted stand"—put and declared carried.
I move amendment No. 84:
At the end of the section to add the words—
"provided that in any case of refusal he shall forthwith communicate the grounds of refusal to the promoting companies in a statement setting out such grounds under his hand."
This amendment now becomes even more urgent than it would have been had the Minister accepted my previous amendment. Deputy Costello has referred to the preliminaries and expenses which the drafting of any amalgamation scheme will involve. When the companies which propose to amalgamate reach the stage of coming to the Minister with their schemes they have already laid out substantial sums of money in smoothing out the difficulties which arose between the amalgamating parties. Having submitted the scheme, it may be sent back with objections, and they spend further time and money overcoming these objections and return their scheme to the Minister, who then tells them that, under Section 26, in his absolute discretion, he rejects the scheme. Now, this modest amendment asks that to that notification he should append a note: "and are rejected for the following reasons." Is it the intention of the Minister to accept that amendment?
No. I think, on general grounds, it is undesirable in a case of this kind that the Minister should be under statutory obligation to state the reasons for his decision.
Why?
It is for the companies themselves, if they want to avail of the advantages of this part of the Bill, to put up an acceptable scheme. If there are no advantages, they will not avail of them.
The Minister says that he sees no reason why the Minister should be put under the statutory obligation of giving reasons for what he is doing, and then, as the absurdity of that contention begins to dawn on the Minister's own mind, he is driven back to shaking his head at us.
I said that it was undesirable in a case of this kind that the Minister should be under statutory obligation to state the reasons for his decision.
And if companies want to put up a scheme, it is up to them to put up an acceptable scheme? How can they ascertain at any stage of the proceedings what is an acceptable scheme, since the Minister can reject it without telling them what element in the scheme is objectionable?
Under the Deputy's proposal, the Minister himself would have to prepare the scheme for them.
Under the Minister's proposal, as it stands at present in the Bill, the companies will bring forward a scheme; the Minister will appoint, at their expense, an assessor to advise him; he will then make objections to the scheme. That is what Deputy Moore calls writing the scheme for the companies, is it or is it not?
Quite.
Is that what Deputy Moore calls writing the scheme for the companies?
It could amount to that.
And that is what the Minister wants to do. He is to make objections. Those objections are to be met. It is not we who want the Minister to do that. It is he himself.
Then, what is the Deputy kicking up a fuss about?
Very well. Having done all that and, in the trenchant words of Deputy Moore, having himself written the scheme, the Minister can then say to the companies: "Although I wrote the scheme, I will not have it, and I will not tell you why." I say that, once the Minister himself has intervened and, in Deputy Moore's descriptive words, written the scheme himself, he should not have the right at all to reject it, and that, if he attempts to reject it, he should be haled before the High Court and made give his reasons there for rejecting it. The object of that amendment is to see that, when the Minister takes up the attitude that he will not accept his own scheme, he will be forced to give his reasons for its non-acceptance. The Minister having himself written the scheme, as Deputy Moore says, wants to be in the position of saying: "That is the scheme I want, not what you want, but I have now changed my mind and I will not have any scheme." In other words, it is a question of "jam yesterday, and jam to-morrow, but I will not have jam to-day," and the company comes back limply and says: "But it has cost is £5,000 and three months' hard work to bring our scheme into conformity with our requirements and your demands, and are we now to be informed that that money and time is to be thrown into the ash-can?" The Minister says: "Yes." The company then asks: "May we respectfully inquire why we are to throw £5,000 and three or six months' work into the ash-can?" and the Minister says: "No, you may not inquire; it is a most ill-mannered departure to make any such inquiry because, under Section 26, there is no obligation on me to give my reasons, and I will not give them, and so you can now proceed to throw your £5,000 and your six months' work into the ash-can, and if you do not like that you can lump it."
Does Deputy Moore consider that that is a reasonable attitude for any responsible Minister to take up, or is he going to allow himself to be led by the nose into endorsing a proposal which he himself must know is contrary to the most elementary principles of justice? The Minister does not make any defence of it himself. His only defence is to proceed to shake his gory locks at us and to say that it is the duty of these people to put up an acceptable amalgamation scheme. One's mind goes back to the happy days of the school-yard, when you said "Yah" and did something else and refused to play.
The Minister said that it is undesirable that a restriction of the kind suggested in this amendment should be placed under him—the restriction being that he should give the reasons for his refusal to approve of the scheme. Beyond stating that it was undesirable to place that restriction on the Minister, he has given the House no reasons. Can we have the reasons from the Minister why he thinks, at least, that it is undesirable that this restriction should be imposed on the Minister?
Because the obligation rests on the companies to put up an acceptable scheme.
The obligation of what?
Of devising the scheme.
How is that a logical deduction?
How are the companies to know what is moving in the Ministerial mind if the Minister announces that he himself will not reveal what is moving in the Ministerial mind? Is it suggested that they should employ a clairvoyant, that they should read the Minister's palm, or cast his horoscope, when they want to know his reasons for rejecting the scheme? The Minister says that he objects to this restriction because the obligation should devolve on the companies to put up a scheme. In other words, the obligation is on them to tell him why he objects. How can they tell him that? Words cease to have any meaning if they are to be employed in the way the Minister is employing them. In the name of Providence, how can it devolve on the promoting companies to tell themselves what they do not know?
Particularly as the Minister may employ a Norwegian or Japanese expert, according to what he said yesterday.
Question put and declared lost.
SECTION 26.
Question proposed: "That Section 26 stand part of the Bill."
This section contains all the junk which we have been discussing for the last ten minutes or more, and it is a source of astonishment to me that the Minister could possibly stand firm on a section of this kind without expressing his readiness to consider any of the points that have been raised in connection with the section. We are asking for no substantial concessions, except such as the barest commonsense demands, and I think the Minister ought to give some indication that he is prepared to consider the recommendations we made.
Question put and agreed to.
SECTION 27.
(2) Before making an application to the High Court under this section for the confirmation and sanction of a scheme, the promoting companies or the Minister (as the case may be) shall—
(c) unless the High Court otherwise directs, transmit in the manner provided by Section 136 (which provides for the transmission by post of notices to shareholders in a company) of the Companies Clauses Consolidation Act, 1845, to all life assurance policy-holders, industrial assurance policy-holders and bond investment policy-holders in each of the promoting companies the following documents and particulars, that is to say:—
(i) a statement of the nature of the proposed amalgamation and the proposed transfer, if any, and
(ii) a summary of the material facts contained in the agreements, deeds, or other arrangements which form the basis of such scheme, and
(iii) copies of every actuarial (including the independent actuarial) report and any other report furnished to the Minister with such scheme.
I move amendment No. 85:—
In sub-section (2) (c), line 19, to delete all words after the word "directs" down to and including the word "particulars", line 26, and substitute the words: "give public notice of the scheme by advertisement in Iris Oifigiúil and in two of the principal daily newspapers published in Saorstát Eireann, and every such advertisement shall contain the following particulars”.
Strange as it may appear, I am prepared to agree with the Deputy in this amendment——
There must be something wrong with it if the Minister agrees with it.
——and if the Deputy will leave it over to the next stage I may be able to produce a similar amendment.
Amendment No. 85, by leave, withdrawn.
The same applies to amendment No. 86.
Amendment No. 86, by leave, withdrawn.
On the understanding that the Minister will introduce similar amendments on the Report Stage?
Quite.
Amendment No. 87 not moved.
Question—"That Section 27 stand part of the Bill"—put and agreed to.
Question proposed: "That Section 28 stand part of the Bill."
Sections 27 and 28 hang together, the general effect being to give policy-holders an opportunity of intervening. What are the expenses likely to be in a suit of this character? The promoting company must first meet all the expenses of the Ministerial investigation, no matter how long that goes on, and without limit as to what these expenses may be. The company then has to go into court.
Not necessarily; that may be done by the Minister.
As I want to be clear on this point I must trouble the House in regard to it, because it is open to grave abuse. Sections 27 and 28 construct procedure designed to give policy-holders power, the object being to seek further particulars. Ordinarily that looks like an unobjectionable right, but it leaves companies, particularly companies reputed to be well off, open to blackmail. Supposing a conspiracy is sponsored by a shyster lawyer who gets a couple of hundred policy-holders to give him a brief to raise an objection to a scheme of amalgamation. What might happen is that he could go to an insurance company and say: "Now, gentlemen, there is six months' litigation, and you are going to fight every day of it. If you do not want to fight, it will cost you £2,000. What about it?" The company may say "No." He is delighted, goes to court, and the company stays in the High Court perhaps for 2½ years, while the battle is hanging fire, going eventually to the Supreme Court. Assume the position of an Irish company. If a lawyer could get, say 150 policy holders and tell them that he could raise 150 objections to a scheme, he could tell a company that it would cost £2,500 unless it was settled. What could the company do? Supposing that challenge is put up to a small company, it may not be able to fight, and a potential blackmailer might know that. Deputies may think that that is highly improbable, but I saw it happen in the City of Chicago, only that, instead of an insurance company, it happened to be the Chicago Corporation that was concerned. I saw a fictitious suit raised by a lawyer, in which a couple of thousand people were concerned. He told them that he would get something for them. He went to the Corporation and said that 50,000 dollars would settle the matter, provided it was left to him to make the distribution amongst the claimants. In fact the claimants got 500 dollars between them and he got the balance. If the Corporation was not prepared to put up the money——
Will the Deputy indicate to the Chair where court proceedings will arise on this section?
Supposing 150 policy-holders make separate objections to the scheme.
On Section 28?
Sections 27 and 28 hang together and I understood that I had leave to discuss both.
What is the Deputy suggesting?
I am not in a position to make a suggestion, but what I think is probably better is that the Minister in some way should move in a scheme of this kind. The matter will have to be considered carefully. You do not want to exclude genuine objections being raised in court, but in the same way you do not want to assume that the provisions will be used for blackmail. The analogy I mentioned is sufficient warning of the abuse that might arise unless there is provision to avoid that.
Is it the intention that every scheme approved by the Minister should be brought to the court? I direct attention to the fact that the word "may" appears in Section 27 and not "shall." Will the Minister look into the point?
I will look into it. Certainly it does not carry out the intention of the Minister.
What is the necessity in sub-section (2) of directing that a certified copy of the scheme is to be served on the Minister? What is the point of adding further expense? Surely the Minister will have every document dealing with this scheme and the fullest information, and be represented through solicitor and counsel in the court proceedings. What is the object behind the sub-section? It creates expense.
The expense is not considerable. It may be modified.
I want to know what is the object of creating in something to which there is not very great objection a criminal offence?
It is desirable that, a copy of the scheme and the court order should be furnished to the Minister as well as to the registrar.
But why make it a criminal offence?
There must be some obligation and some sanctions if that is not done.
The Minister could get for a few shillings a certified copy of the court order. It will not be a very big obligation on the amalgamated company to do that, but why create an offence? I have no very serious objection to it, and only want to know the point behind it. I take it that there is no point in principle.
The section says that it is to be lodged with the Department.
Why?
There is no principle involved.
There is, of course. Surely people should be allowed to dispose of their own business with the least possible interference.
This is an approved scheme in which the Minister is concerned.
It cannot be kept from the Minister. There is no question of any secrecy. The Minister could get a copy of the order for a few shillings. Yet we get all the paraphernalia and £50 of a fine.
There is a continuing offence for every day.
I want to put the obligation on these people to do this, and we must have some sanctions in case they do not. Does the Deputy consider the fine too high?
Would the Minister consider £5 of a fine?
I am prepared to consider anything. I have no very definite opinion as to what the figure should be.
It would probably meet my view if you knocked out the words which make it a continuing offence and increased the penalty at the discretion of the district justice. There is a continuing offence where there may possibly be a difficulty in getting an order from the court or something of that kind.
Documents must be lodged with the Registrar of Joint Stock Companies, and the mere collection of a fine, if they were not lodged, would be no alternative.
We do not agree to the extension of the criminal code without some reason. Does the Minister apprehend that there will be any great difficulty here?
The obligation must be on the company. It is not on the Minister.
Why not?
Because it is being put on the company.
Why should the obligation be put on the company? The matter will be sanctioned and the documents will be in a particular form, and Deputy Costello's argument on that is to get a certified copy. Why should not the obligation be the other way?
It is intended that a new company starting off should lodge these documents with the Registrar of Joint Stock Companies.
Once it does that, has not the Minister as ready an access to the Registrar as anybody else?
Having regard to the circumstance that the Minister is in association with the scheme in the period preceding the order of the court, I think it is desirable that the company should be required to lodge the document with the Minister also.
Desirable, yes, but you make it compulsory.
There is another point in connection with this section. It is a criminal offence under this sub-section to fail to deliver a certified copy of the scheme. The obligation under the sub-section is to deliver a certified copy of the scheme. Who is to certify it, or what is a certified copy of the scheme?
Certified by the court.
The court does not certify a copy of the scheme.
A certified copy of the scheme as confirmed by the court.
Certified by whom? This is a criminal offence and a certain amount of clarity should be insisted on.
Can anyone tell us by whom the copy is to be certified, in the event of there being a statutory obligation on me, involving me in a penalty of £50 and a fine of £1 for every day that I fail to furnish a certified copy? Surely the legislators of this country are entitled respectfully to ask of the Minister for Industry and Commerce that he would be gracious enough to say, when he asks for a certified copy, who he expects to issue the certificate, or does he wish everybody in the country affected by the section to incur a liability of £1 for every day the Minister takes to make up his mind on the question of who is to certify the copy of the scheme.
It cannot be certified by the court.
Certified by the company—a certified copy of the scheme as confirmed by the court.
You are dealing with a criminal offence, and you impose an obligation to lodge a certified copy of the scheme as confirmed by the court and also a certified copy of the order of the court. There is a distinction drawn, even in the section, between a certified copy of the scheme and the certified copy of the order of the court. It does not say by whom the scheme is to be certified.
The Minister would be well advised to say that he has not the faintest notion as to who is to certify the copy of this scheme, but that he will look into it between now and the Report Stage.
Can you not deal with more important matters in the Bill?
This is an important matter for anybody who has to lodge a certified copy of the scheme.
There is a fine of £50, with an additional fine of £1 for every day that the failure continues.
Surely the fact is that the Minister has not the vaguest notion as to who is to certify the copy of the scheme?
I do not care either, so long as there is a certified copy of the scheme lodged.
The Minister would be wise to say: "I have not the faintest notion as to who is to certify the copy but between now and the next stage of the Bill I shall make inquiries and let you know." When he sits like a mystic oracle of Delphi and refuses to give us any information, surely we cannot agree to a section which imposes a fine of £50 for failure to furnish a certified copy of the scheme?
The mystic oracles of Delphi gave answers occasionally.
I have been speaking all the week.
Our Minister remains silent and you can take what you like out of it. They were not always prophetic.
Section put and agreed to.
Question proposed: "That Section 29 stand part of the Bill."
Under this section there is a restriction in regard to the application of the Act of 1909 to certain schemes. Perhaps the Minister would explain it.
I explained that already when we were discussing the general question of amalgamation. We are not interfering with the right of a Saorstát company to amalgamate or to transfer to another under this section of the Act of 1909.
I have already explained they can amalgamate but they cannot carry on business. The section, therefore, is of no use.
Section put and agreed to.
SECTION 30.
No issue of the share capital of any amalgamated company shall be made at any time without the consent of the Minister for Finance, given after consultation with the Minister.
I move amendment No. 88:
In page 22, line 11, before the word "shall" to insert the words "and no reduction in the share capital of any amalgamated company."
This section provides that no issue of share capital of any amalgamated company shall be made without the consent of the Minister for Finance, given after consultation with the Minister for Industry and Commerce. I am rather interested to know whether it is possible for the amalgamated company to move to reduce the share capital without securing the consent of the Minister for Industry and Commerce. It seems to me to be desirable that a company with considerable liabilities should not be allowed to reduce its share capital without the approval of the Minister. The Minister is taking power to prevent a company from increasing its share capital, but it seems to me to be much more desirable to prevent it reducing its share capital having regard to its possible liabilities. I should like if he will say what reason he has for not taking power to prevent a company reducing its share capital without his consent.
The amendment is not necessary. The memorandum of the company, which must be approved of by the Minister for Finance, will set out the amount of the share capital, and the memorandum cannot be altered without his consent, so long as he holds any shares in the company.
Without the consent of the Minister for Finance?
Yes, so long as he holds any shares in the company.
Does not the First Schedule apply whether the Minister holds shares or not?
There may be some doubt about that, but it is not intended that these provisions should apply unless the Minister holds shares.
And the Minister will give the same consideration to Section 30 as he is giving to the First Schedule?
Quite.
Surely the answer given to Deputy Norton then is only relative?
Once he ceases to hold shares his responsibility for the shares of the company ceases.
Is Section 30 to be applicable only to an amalgamated company as long as the Minister holds shares in that company?
That is what I undertook to consider. The intention is that the Minister should have these powers over the affairs of the company only so long as he has shares in the company.
So long as he has a single share?
Yes. We are putting him in a more favourable position than an ordinary shareholder just as has been done in the case of certain other Acts. So long as he holds any share, he is given certain rights which an ordinary shareholder would not have.
The Minister says that the articles of association cannot be altered without his consent?
They cannot be altered without the consent of the Minister so long as he has shares.
And the memorandum will set out the amount of the share capital. It would seem that the memorandum is likely to contain a provision that the share capital of the company will be fixed at a certain amount. If that is embodied in the articles of association, would not the Minister's consent be required before any increase in the share capital can be made?
This is an issue of share capital to the public. It might not involve an increase of capital. The whole of the capital of the company might not be paid up.
Is it not possible for the company to decide at a later stage to increase the share capital?
We are providing in this section for the issue of shares to the public without the consent of the Minister.
Share capital cannot be reduced without the court coming in, ordinarily. I understand from the Minister that Section 30, in regard to the issue of capital, is only going to apply in relation to a company in which the Minister for Finance has shares and as long as he has shares.
Is the Minister proposing to limit his powers under Section 30 to companies in which the Minister for the time being is interested and no others?
No. As soon as the Minister ceases to hold shares, he has no longer any responsibility in respect of the conduct of the company's affairs.
Are his powers related to the possession of a certain amount of capital or to possession of a single share?
He will have those powers so long as he holds any shares.
Is amendment No. 88 withdrawn?
Yes.
Withdrawn in relation to the amendment that is to be brought into Section 30. As Section 30 stands, there is nothing which prevents the impact of the Minister for Finance on a company. He, apparently, comes into every amalgamated company, and I think the Minister intended to prevent his coming in save during the time he holds shares.
A qualification of the powers to this extent may be necessary: it may be necessary to prevent the issue of share capital by an amalgamated company if the Minister is about to take shares in it. As to the general position, this section should only apply to a company amalgamated under this part of the Bill, and these powers of control should only operate so long as the Minister has shares in the company.
Amalgamation under this part of the Bill does not mean amalgamation under the Act of 1909?
It is intended that it should not.
Amendment, by leave, withdrawn.
Question proposed: "That Section 30 stand part of the Bill."
I should like to refer to the First Schedule. As I had read the first part of the Schedule, I thought it referred to something about the making of deposits and not bothering about what happened to the deposits afterwards. I thought the Minister for Finance only came in on the first publication of the memorandum and articles. I gathered from the Minister's remarks that, in the case of any change, he has also to be referred to. Is there any precise phrase with regard to changes or is that provision supposed to be carried by formula (1) of the First Schedule?
It is supposed to be carried by (1).
The reference to the memorandum and articles mean these and any change?
Yes.
Is it intended that the Minister for Finance should control the memorandum and articles of association throughout the whole period he is a shareholder of the company?
He will have to consent to any change.
Surely this is dealt with in Section 37.
That is precise, while Section 30 is general.
The intention is that the Minister will make the principle which is enshrined in Section 37 cover the whole of these interference proposals?
Yes, the same as in the Agricultural Credit Act and other Acts under which the Minister has power to invest in shares.
Section 30 agreed to.
SECTION 31.
Amendments Nos. 89 and 90 not moved.
I move amendment No. 91:
At the end of the section to add a new sub-section as follows:—
(3) Immediately after the end of every year the Minister for Finance shall submit to both Houses of the Oireachtas a report setting out particulars of the transactions which have taken place under this section and the next succeeding six sections of this Act.
The section provides for certain underwriting and subscription of shares in amalgamated companies by the Minister for Finance. The Minister is empowered under this section and subsequent sections to utilise moneys from the Central Fund for the purpose of subscribing for shares in certain companies under this part of the Bill. He is also entitled to receive dividends and bonuses. Not only is he entitled to hold shares, but he is entitled to sell shares from time to time. Generally speaking, he enters into such a relationship as makes him practically a stockbroker for the amalgamated company. If there are a number of amalgamations and the Minister is going to sell shares from time to time and buy additional shares, quite a considerable number of transactions will take place. Since the moneys of the State will be utilised for these transactions, I think the House should have from the Minister each year a report setting out particulars of the transactions which have taken place, so that the House may know the extent to which the Minister is participating actively in the shareholding affairs of the amalgamated company. The amendment will not impose any onerous task on the Minister. All that is required is that he should report to the House the extent and the precise nature of his activities under Section 31.
I suggest that this amendment is not necessary. There is already an obligation on the Minister for Finance to furnish to the House accounts of all payments into and out of public funds. Under another section of this Bill the accounts of the amalgamated company must be laid before the House. When that is done the House will have adequate information under this section.
I do not think that the House will get adequate information from the accounts of the amalgamated company.
And the accounts which the Minister for Finance must publish annually.
I think the Minister ought to go further than publication of the finance accounts.
That would be giving precisely the same information.
My view is that the report the Minister would make would be more detailed and informative than a balance sheet.
In addition to the reports which the Minister for Finance must publish, the balance sheet and profit and loss account of the companies must be laid on the Table under Section 38.
I suggest that we will not get in the balance sheet of an amalgamated company the kind of information which we would get in a report by the Minister, nor will we get sufficient particulars in the returns by the Department of Finance.
The Deputy will get in these reports all the particulars he asks for in his amendment.
I ask for a report setting out particulars of the transactions which have taken place. I have in mind a report which would give information somewhat different from that to be obtained by the perusal of a balance sheet of an amalgamated company. There is no indication that we will get in that way from the Minister information which the House would require as to the extent of his association with the company and the type of transactions he has entered into.
Particulars of all transactions involving payments into or out of public funds must be published by the Minister for Finance.
Not under Section 38.
No, under the general statutes.
Have we not found that these reports are generally issued 18 months after the event.
Sometimes there are delays in connection with the report of the Revenue Commissioners.
That is generally two years old when published.
The ordinary Revenue Accounts are published fairly expeditiously.
Well over a year afterwards. I thought Deputy Norton was seeking to get a report precisely relating to these sections—not so much a balance sheet as accounts of what the Minister has done.
I want more information as to what the Minister has done than is usually disclosed by a balance sheet.
The Deputy asks in his amendment for "particulars of the transactions" which have taken place under this section and succeeding sections.
I thought what the Deputy wanted was information as to changes in the articles or memo, whether these had been made with the Minister's consent and so forth.
And particulars of the bonuses and dividends received.
When we put people into a favourable position, as we are intending to do in this case, the consideration the country demands for that favour is publicity. The Minister for Finance is being given a certain association with certain companies. That is supposed to be for the benefit of these companies. The House is asked to agree to that as a matter of parliamentary regulation. Why, then, should the House not get more information than is contained in ordinary accounts?
There will be the same publicity as there is in connection with similar transactions under the Sugar Act, the Industrial Alcohol Acts and the Agricultural Credit Acts.
Take the case of the electricity undertaking.
That is different. The Minister has no shares in that.
They got a loan and State credit. They were supposed to run the undertaking and make it pay, and they were given power to charge in a particular way. They are obliged to have their accounts audited by an auditor and accountant, and the Minister appoints that auditor and accountant, while the Electricity Supply Board pay him. The Minister makes a report. That is a way of drawing attention to what has happened, and it leaves the Minister open to criticism if he does not report year after year on any things that are peculiar.
I do not think that the Deputy is correct in saying that the Minister reports on the Electricity Supply Board operations.
No, but the Minister adds his comments and, if he did not add his comments, he would be subject to criticism. The Minister for Finance is placed in a peculiar position under this Bill. Why should he not report, earlier than the time for the ordinary presentation of the finance accounts, on his activities in this connection? There will not be a lot of work about it. I do not believe that the Minister will be a shareholder in any of these amalgamations for a very long time. He will, I suppose, divert things in a particular way and then clear out. It is a good thing to keep to that principle, that when you give people certain advantages, the consideration to the country and to this House is publicity.
I am not anxious to avoid publicity. We are providing for publicity so far as the accounts of the company are concerned.
These will not be ready until six months after the event, and will not be tabled for a further period.
I do not know that the Department of Finance would be any more expeditious in preparing its report.
I move to report progress.
Progress reported.
Committee to sit again on Tuesday.
The Dáil adjourned at 2 p.m. until Tuesday, June 9, at 3 p.m.