Dáil Éireann debate -
Friday, 6 Mar 1953

Vol. 136 No. 16

Committee on Finance. - State Guarantees Bill, 1952—Money Resolution.

Minister for Finance (Mr. MacEntee)

I move:—

That, for the purpose of any Act of the present session to provide for guarantees by the Minister for Finance in respect of moneys borrowed by certain bodies, it is expedient to authorise:—

(1) the advance out of the Central Fund or the growing produce thereof of any moneys required to be paid by the Minister under a guarantee;

(2) the payment out of moneys provided by the Oireachtas of such sums as may be required for the repayment to the Central Fund of the whole or any part of any moneys advanced by the Minister under a guarantee and remaining outstanding after 12 months from the date of the advance; and

(3) the charge upon and payment out of the Central Fund or the growing produce thereof of the principal of and interest on any securities issued (together with the expenses incurred in connection therewith) for the purpose of borrowing to provide for advances out of the Central Fund.

Mr. Sweetman

This State Guarantees Bill is for the purpose of dealing with certain companies that were originally formed in what I might describe as emergency times. The fact that the form of guarantee is now being included in a permanent Bill on the Statute Book implies, perhaps, that the Government and the Minister consider that they will permanently deal with purchases from outside in respect of certain items by a system of bulk buying. I think it would be very desirable that we should have an expression of opinion from the Minister on this occasion and I think the Money Resolution is a suitable medium for that expression of opinion as to whether it is the Government's considered viewpoint that in future bulk buying will be the method in operation.

Mr. MacEntee

You are all right. Deputy Dillon has been resurrected.

Mr. Dillon

Pretty Fanny is always gay.

Mr. Sweetman

The Minister got mislaid around the passages on his journey here and we had to wait for him. There are six companies in the Schedule and three of them are what one might describe as bulk buying agents. I think it would be desirable that we should get an expression of opinion from the Minister as to whether it is the view of the Government that bulk buying will be themethod continued in the future or whether we will go back to free buying as existed heretofore.

Mr. Dillon

The amendment I put down to exclude the words "Tea Importers"——

An Leas-Cheann Comhairle

We have not reached that yet.

Mr. Dillon

Then I shall postpone my remarks until we reach the amendment. I would like to put this point on the Money Resolution. This Resolution is for the purpose of meeting the charges which may come in course of payment on foot of any guarantees given under the Bill. Quite apart from the larger issues of credit which were raised on the Second Stage, I want to put it to the Minister that the method employed here of financing these transactions by bank overdrafts seems to me to be singularly inappropriate. Take Grain Importers, Limited. As to a large part of the moneys there involved the procedure is that a cargo of grain is purchased, Shipping documents are forwarded here, the cargo puts to sea and on its arrival here it is distributed to millers who promptly recoup Grain Importers for it. That was the universal practice for the last century and a half in the City of London and to meet that practice there grew up a system of bills, ordinary trading bills. Now superimposed on the system of trading bills there developed the system of Treasury bills which became a very economic method for a Government of borrowing from the money market. Why does not the Minister employ the trade bill procedure fortified by a Government guarantee for the kind of transaction in which Grain Importers engage where purely temporary accommodation is required? It may be that a part of the accommodation required by Grain Importers takes the shape of protracted overdrafts but a large part of it should be and could be transacted by bills.

I think the average rate of the equivalent of a trade bill carrying a Government guarantee would be equivalent to a Treasury bill and is somethingin the order of 1¾ or 1? per cent., While the rate on the overdraft is, I think, at present in the order of 4 or 4½ per cent. Surely common sense requires that there should be that flexibility in the financing practices contemplated so as to secure for the Exchequer the advantage of the superior rate of interest that would be available if the bill procedure were adopted in lieu of the overdraft device.

Mr. MacEntee

Are we to have a Second Stage debate over again?

Mr. Dillon

Is not that directly relevant to the financing of this?

Mr. MacEntee

I would prefer to reserve any remarks I may have to make until I am satisfied that the Opposition has concluded its observations in this matter.

Mr. Dillon

Does not the procedure of the House lay down that certain facets of a problem are to be discussed on various stages of a Bill? I am trying to segregate very closely a matter strictly relevant to the Money Resolution and to nothing else: that is, how the money which it is designed to authorise the Minister to use should be used and nothing else. Surely the Minister will conform with our procedure in meeting these points when they are raised in an orderly way?

An Leas-Cheann Comhairle

If no other Deputy offers I will call on the Minister to conclude.

Mr. S. Collins

With all due respect, we are in Committee and the Minister cannot be called upon to conclude.

An Leas-Cheann Comhairle

If nobody else offers the Chair has no alternative but to call the Minister.

Mr. S. Collins

With all due respect, the Minister can offer and talk and if, as a result of what the Minister says, some member wishes to make further observations he may do so. There is no conclusion by the Minister in Committee on Finance. That matter was raised last night on the MoneyResolution in connection with the National Stud Bill, and as a result of it we had Deputies talking all over again.

An Leas-Cheann Comhairle

That point was not raised last night on the Money Resolution.

Mr. Dillon

On a point of order. Several attempts have been made in this House in recent years to advance the proposition that in Committee on Finance the Minister has acquired some right by precedent to be called upon to conclude. So far as I am aware no such right is known to our procedure under our Standing Orders, and I respectfully submit that neither a Minister nor a Deputy can be called upon to conclude while the House is in Committee on Finance.

An Leas-Cheann Comhairle

The Deputy will agree there must be some finality.

Mr. Dillon

A suitable amendment to Standing Orders should be submitted.

Mr. Sweetman

On a point of order. The finality arises on the Committee procedure when no Deputy wishes to speak and not otherwise.

An Leas-Cheann Comhairle

If no other Deputy wishes to speak I will call on the Minister to conclude. If the Minister does not want to speak I cannot make him.

Mr. Sweetman

Nobody is objecting to your calling on the Minister. We are objecting strongly to your phrase "to conclude". The Minister has no right to conclude. Of course, the Chair is perfectly in order in calling on the Minister.

Mr. MacEntee

I only rise to say that, in view of the manifest desire of the Opposition to obstruct business and waste public time, I do not propose to take up the time of the House. I will leave it to the Deputies opposite to continue.

Mr. S. Collins

That is a scurrilous observation.

Mr. Dillon

I ask the House to take note of this. We have dealt with Army pensions, with Financial Resolutions, with the Gaeltacht Housing Bill and with a variety of other legislation without a ripple appearing on the surface. with the Ministers in charge of these Bills anxious to meet representations and expressing appreciation of the representations submitted. The Minister for Finance comes into the House and in seven minutes the House threatens to dissolve into a beargarden, because he says he will not be bound by Standing Orders and if he is bound by Standing Orders he will not play, he will not act and he will not tell the House what they want to know. He says that anybody who speaks or asks a question on the Financial Resolution here before us is obstructing the business of the House.

We have done as much business in an hour and a half this morning as we would not do in a month with the Minister for Finance in the front bench of the Government. Is it not a scandalous state of affairs? Week after week the same thing has happened in this House. The Minister for Finance has pranced in here and in a quarter of an hour the place is in bedlam. The solemn agreement entered into at the request of the Government last week to sit certain hours is set aside because the Minister loses his temper.

An Leas-Cheann Comhairle

What has this to do with the Money Resolution?

Mr. Dillon

I am protesting against the fact that the Minister for Finance says if Standing Orders are enforced. he will not take part in the proceedings.

Mr. MacEntee

I protest most strongly at these misrepresentations in which Deputy Dillon is indulging. I am abiding by Standing Orders.

Mr. Dillon

The Minister has a right to raise a point of order. He has no right to interrupt my speech.

Mr. MacEntee

Deputy Dillon is the most disorderly Deputy in this House.

Mr. Sweetman

The Minister is the most disorderly Deputy in the House.

Mr. Dillon

There has not been a cross word spoken in this House for an hour and a half this morning but within ten minutes of the Minister's arrival we are in Bedlam. We cannot get the information we want. We are subjected to scurrilous abuse and the whole place is in pandemonium. When is this to come to an end? If it goes on it will become impossible to carry on the business of the House. As a result of this foolish man's conduct this morning in connection with this simple Bill——

Mr. Derrig

Is this in order?

An Leas-Cheann Comhairle

The Deputy is out of order. He is not speaking to the Money Resolution.

Mr. Dillon

We cannot carry on the business of the House so long as that man is there. I want to know why he does not adopt a certain procedure designed to protect the Exchequer. There is a sum of over £100,000,000 involved. I am making a simple proposal to him which would operate to save the Exchequer money. It involves no new principle. It involves no departure from established practice. His answer is that he will not say and he will not discuss it and he will not tell the House. He could say the proposal I make would not be effective for the purpose in mind.

Mr. MacEntee

It does not arise on the Bill.

Mr. Dillon

It arises on the Financial Resolution as to how the Minister will use the moneys he is authorised to use for the payment of interest if the State is called upon——

Mr. MacEntee

We have no responsibility for the management of these companies.

Mr. Dillon

We give the Minister power to guarantee.

Mr. MacEntee

On a point of order. The House has accepted on the Second Reading of this Bill the principle that we should give guarantees. The pointwhich Deputy Dillon is now endeavouring to raise could, perhaps, have been raised on the Second Stage. He did not raise it then and I suggest he is not entitled to raise it by a side-wind now.

Mr. Dillon

The principle decided on the Second Stage was that the Minister is authorised to guarantee certain moneys. When we come down to consider the actual moneys to be guaranteed I am making a proposal as to the way in which these moneys can be most economically guaranteed. We have authorised the Minister to use a sum of money; now we are suggesting to him on the net, narrow point that there are two ways in which he can use the money—one to the detriment of the Exchequer and the other to its advantage. What I am asking the Minister to do is, instead of undertaking to guarantee interest at the rate of 4½ per cent.——

Mr. MacEntee

I wish to raise a point of order if the Deputy will permit me. I would call your attention to the fact that there is nothing in this Bill empowering the Minister to establish or to run a company. We have no direct responsibility for the management and administration of the scheduled companies. The Deputy is now raising a point which is properly within the responsibility of the people who are directing and managing these companies. It is not the responsibility of the Minister. There is nothing in this Bill which empowers the Minister to direct companies as to how they will finance their transactions. The Deputy is now addressing himself to this net issue as to how these companies are to finance themselves.

Mr. Hickey

You are guaranteeing the overdrafts of these companies.

Mr. Dillon

Let me put this to the Minister. In regard to Irish Steel Holdings every director is an officer of the Minister's Department.

Mr. MacEntee

That is not the case.

Mr. Dillon

It does not matter. They are all civil servants from the Department of Finance.

Mr. MacEntee

That is not correct.

An Leas-Cheann Comhairle

That does not arise.

Mr. Dillon

The Minister says he has no power or discretion to advise these particular companies as to how they are to manage their finances. If you guarantee a man's debt, if you guarantee the interest on it, and there are two ways in which he can raise the money—one at 1¼ per cent. and one at 4½ per cent.—surely the guarantor has the right to say: "I guarantee your debt and your loan on the assumption that you will make my guarantee as light as you can."

Mr. MacEntee

Is that the basis upon which the Marshall Aid Loan was raised by the Deputies opposite? We understand the position now.

Mr. Dillon

You love to start a riot. You are running around like a chestnut on the hob. Can the Minister not calm down? The guarantor has the right to say to the borrower: "You can raise your loan at a cost of 4½ per cent. but here is a way in which you can raise your loan at 1¼ per cent. or 1½ per cent. In the last analysis, if you fail to meet you commitments I will carry the baby. I want you to borrow money on the basis that if you are forced by circumstances to fall back on my guarantee my liability will be no more than 1¼ per cent." Surely that is a matter intimately relevant to the Financial Resolution we are discussing? Surely it is nothing to get cross about or to lose your temper about? The Minister could examine the question and explain his views. He could say that the plan would not work and that it cannot be done. There would be the same reaction in regard to such an attitude as every other Minister got in this House this morning. Deputy Traynor, Minister for Defence, had a number of complicated matters to deal with. He took the opportunity while other Deputies were speaking of passing to his civil servants a note asking them to give an answer to the query.

An Leas-Cheann Comhairle

Thatdoes not arise on this Money Resolution.

Mr. Dillon

I am comparing the conduct of the Minister for Finance with that of other Ministers. The Minister for Defence, Deputy Traynor, got everything he wanted and the thanks of the House. Here we are floundering about trying to get an answer to a perfectly simple question. I move to report progress.

Progress reported; Committee to sit again.