Dáil Éireann debate -
Tuesday, 26 Jun 1956

Vol. 158 No. 7

Finance Bill, 1956—Report and Final Stages.

An Ceann Comhairle

Before entering on the Report Stage, on Wednesday last, in the course of the debate on the Committee Stage of the Finance Bill, Deputy Lemass asked me to give a ruling on the Report Stage as to whether a certain section should appear in the Bill and as to whether the inclusion of this section would raise any difficulty for me in certifying this Bill a Money Bill. Deputy Sheldon also referred to the inclusion of the section in the Bill, but did not raise the matter of certification. I am obliged to the two Deputies for the notice as it gave me time to consider the matter.

The certification of a Bill as a Money Bill is a function imposed on me by Article 22 of the Constitution and the question is subject to appeal in a constitutional way. The act of certification is one of a quasi-judicial nature. For that reason, members will clearly understand that I am not to be asked what my opinion on any Bill is likely to be, nor may I be asked the reasons for my opinion when it has been given.

As regard the inclusion of the particular section in the Bill, I think it well that members should know that, after introduction, but prior to printing and distribution. I have the text of every Bill examined, and one of the objects of the examination is to ensure that the contents of the Bill are covered by the Long Title presented to the House on introduction. The text of the Finance Bill was so examined, and I am satisfied that all the provisions of the clauses therein are covered by the Long Title of the Bill.

The duty of the Chair is performed in seeing that the Long Title of a Bill sets out its purposes in general terms. It is not the duty of the Chair to determine how the Long Title should be drawn, or at what length, or whether emphases should be given therein to particular clauses or to particular statutes proposed to be amended in the Bill. These latter matters are not within my province.

Amendment No. 1 ruled out of order.

Mr. Sheldon

I suppose there is no point in asking the Minister to recommit this amendment?

Minister for Finance (Mr. Sweetman)

We had a very full discussion on this matter the other day.

Amendment not moved.

Mr. Sweetman

I move amendment No. 2:—

In page 10, line 35, to delete "issued" and substitute "whether issued before or".

We had a fairly full discussion on this matter on the Committee Stage and I do not think it is necessary for me to go over many of the points which were raised at that time. As I indicated on the Committee Stage, the whole matter is a question of the balance of advantage and to provide the incentive where it is needed and where it will be strongest.

In considering the matter further, it did appear to me that I might be able to get a higher incentive for new issues in a better way by the amendment that I now bring before the House. It says that any issue, which qualifies for a remission under Section 7 of the Finance Act of 1932 in respect of 20 per cent. of the income-tax and surtax payable in respect of such dividend, will equally qualify for the death duty concession given by Section 21 of this Bill. I would point out that in respect of that concession it is necessary that the person, at his death, shall have been the owner of the securities, either from the date upon which the security was issued to the public or for a period of three years prior to his death, whichever is the shorter.

Amendment agreed to.

Mr. Sweetman

I move amendment No. 3:—

In page 10, line 38, before "of" to insert ", occurring on or after the day of the passing of this Act,".

Amendment agreed to.

Mr. Sweetman

I move amendment No. 4:—

In page 11, to delete lines 9, 10 and 11.

Amendment agreed to.

Mr. Sweetman

I move amendment No. 5:—

In page 12, line 4, to insert", provided that a ship shall be deemed to be new even if it has been used or is secondhand" after "secondhand".

I gave an undertaking on the Committee Stage that I would introduce this amendment which provides that secondhand ships will qualify for the initial allowance in the same way as new ships.

Amendment agreed to.

Amendment No. 6 not moved.

Mr. Sheldon

I move amendment No. 7:—

In page 16, Section 37, to add the following:—

(6) Section 35 of this Act shall be construed together with the Superannuation Acts.

I put down this amendment to give a further opportunity of saying something about the way in which a section such as Section 35 gets tucked away in a Bill of this sort. I had hoped to raise the matter earlier but it was just as well that I had two strings to my bow as the first amendment has been ruled out of order. There are two or three points to be considered about this and I may say that I do not agree with Deputy Lemass in what he said about a Money Bill.

I am not too happy to find something which amends a Superannuation Act tucked away in a Finance Bill, without any mention of it in the Long Title. When one examines the present proposal in Section 35, it is not easy to see what title it should come under. I think it really should be in a Bill by itself because it does not specifically deal with superannuation. It is an amendment of a Superannuation Act and it refers to superannuation more than to finance.

My chief reason for raising the matter again is to emphasise the undesirability of bringing into legislation which deals with one matter some small extraneous matter of another sort. If a large part of a Bill deals with one matter of such a specific nature, it is easy to follow that, but when you find a small section tucked away at the end of such a Bill, it looks suspiciously like what they call, in Great Britain, tacking.

Mr. Sweetman

What did the Deputy say there?

Mr. Sheldon

I used the word "tacking." It is an expression they use in Great Britain and it is highly undesirable. As well as being rather short and put away in the miscellaneous part of the Bill, there is no reference whatever to it when you come to the construction section. Section 37 very generally sets out how the various parts of the Bill are to be taken in regard to present legislation, but there is no reference at all to this section in the construction section of the Bill. I do not know what methods the lawyers use to find out the devious manner in which the Oireachtas may have changed the legislation, but if they use the construction section of a Bill for doing so, they would not find any reference to this section in it at all.

I do not know how far it is completely true to say that a Finance Bill gives statutory powers to the Budget proposals of the Minister. This section has nothing whatever to do with the Budget proposals and every other section of this Bill gives effect to the Financial Resolutions of the Budget. When one is discussing the Finance Bill, one is talking about the general financial set-up of the country and how the Minister for Finance is to give statutory powers to his Budget proposals. If you tuck away something about superannuation in the Finance Bill, you are going a bit wide of the ordinary run of such a Bill.

It is almost too late to do anything about it now and it would be difficult to do it, particularly as it is a desirable matter. If it was something that was undesirable, it might be easier to have something done about it. Because it is the sort of thing everyone agrees ought to be done, it is very easy to get into a slipshod way of doing it. That might lead to a slipshod way of doing things of importance not pleasing to everybody. I think it is important, because this is something that everyone believes should be done and it could go through very easily, that notice should be taken of it. If I have secured nothing else, I have secured that no Minister can get up in six months' time and say this sort of thing was done in the Finance Bill and no one said a word.

Mr. Sweetman

I think the House can be quite sure that a point like this would not get through in a slipshod fashion while we have Deputy Sheldon here. The Deputy would be quite certain to put very much on his defence any Minister who attempted to push anything of that nature through in a slipshod manner. I think the Deputy is not quite correct when he says that the Finance Bill only implements the Financial Resolutions. That, of course, is its main purpose, but in fact it is usual for Finance Bills to include other small changes in the finance code which are not perhaps of sufficient importance to be mentioned in the Budget statement itself and which may not require any Financial Resolutions on which the Bill would be founded.

I agree with him, however, that it is not usual to include things outside the realm of finance matters proper; but one of the difficulties about this provision is that it is an easement for the administration itself in superannuation per se. While it might be unusual to put it into a Finance Bill, I think it is probably the best vehicle for it and is better than introducing a separate Bill. I am advised by the draftsmen that the amendment Deputy Sheldon suggests is not necessary and that in fact it would be undesirable to include it because of the legal construction of the Bill. The Deputy will understand that I will have to be guided by that advice, particularly in this case, because the whole purpose of this section is to avoid legal costs. Otherwise, the widow who is receiving a gratuity on the death of her husband, a civil servant, might have to extract administration to her husband's estate.

It is for the purpose of avoiding such costs that the section is introduced. In the circumstances, I think it would be very wrong for me to offer any comment on the legal issue involved in this case.

Amendment, by leave, withdrawn.

Question proposed: "That the Bill, as amended, be received for final consideration."

Mr. Lemass

There is one point I wish to raise. On Committee, I moved an amendment for the purpose of securing for Irish insurance companies doing group annuity insurance business the same income-tax arrangements as British companies will enjoy under the British Finance Bill this year. The Minister told me that the position had been explained to the Irish companies to their satisfaction and that there was no urgency about making any change in the law here, because, under the British scheme, approval would not be given for arrangements in respect of persons employed in Ireland.

On the first point, I should like to say that, on inquiry, I have been told that the two Irish companies that made representation to the Minister in the matter have not received any communication from him since.

Mr. Sweetman

The officers of my Department did.

Mr. Lemass

I understand that an official of one of the companies saw an official of the Revenue Commissioners. I think they would welcome an opportunity of discussing the whole position with the Minister, particularly in view of the suggestion that some change in the law in that regard might be made in the future.

On the second point, I wonder is the Minister satisfied that a scheme negotiated with a British insurance company by a British company with headquarters in England cannot be extended to its Irish members? Firms like Liptons, the Home and Colonial and Woolworths would not be included in the British scheme in respect of their Irish members. I merely want to get some indication of the official interpretation of the position in that regard. If that is so, that persons employed in Ireland cannot be covered by insurance of this kind, I agree that the case for changing the law here is not in any way as urgent as I previously indicated.

Mr. Sweetman

As I understand the situation in relation to the first part of the question raised by Deputy Lemass, one company raised this question in the first instance and, as far as I can recollect, the second company merely came in and said they supported the recommendations of the first. One of the officers of the Revenue Commission discussed the matter with the representatives of the first company and, in that discussion, according to the information before me, it transpired that certain aspects of the situation had not been appreciated by the company. I understand that the position was that the official concerned was quite happy when those aspects were put before him and that in fact the effect of the British Bill would not be the effect he had previously believed it would be. However, if the company concerned wishes to have any further discussion, needless to say we are quite open to have those discussions, but I think they will find that that is the position.

In respect of the second point raised by the Deputy, I am not exactly clear what he has in his mind. The position appears to be that the British Bill operates in respect of schemes effected within their own jurisdiction. In so far as British insurance companies with headquarters in England are concerned, the position under the double taxation agreement would be that they would not be paying income-tax here, in any event. In respect of their Irish business, they pay British tax and get a refund of the Irish tax. I do not think the difficulty the Deputy visualised could arise on that account. If the company had not got its headquarters here, the double taxation agreement would operate. If it had its headquarters here, the group scheme concessions, to which reference was made by the Deputy, would not apply.

Mr. Lemass

There is a case for making the same amendment in our law as is now being made in the British law to exempt from income-tax the income from the portion of the funds which represents this life annuity business. That is a matter which can be considered at any time. There is no doubt that for the same reason we should encourage the development of that kind of business as in Britain. The urgency arose only if British companies, doing business in this country in competition with Irish companies, had that Irish income-tax relief. It would enable them to offer better terms than Irish companies and so scoop all the business.

That income-tax relief in Britain will not apply in respect of these group schemes for employment in Ireland. In that case, consideration of possible competition with Irish companies does not arise. It could arise in respect of one type of employment—employment in the service of a British company where the headquarters of that company in England has negotiated in England for a group annuity scheme of that kind.

Mr. Sweetman

I understand the situation is that a British insurance company with headquarters in Britain by operating here under the 1936 Act can take a group scheme such as the Deputy mentioned. If it does take a group scheme in respect of workers in an Irish company operating here, then I am advised it will not get in England the benefits of the concession under English taxation law.

Mr. Lemass

The Minister referred to workers in an Irish company. I was thinking of a group scheme covering workers employed in Ireland in the service of an English company. Would they have to pay income-tax in respect of that portion?

Mr. Sweetman

If it transpires that there is a case in that narrow sector, I will certainly look at it.

Question put and agreed to.

Agreed to take the Final Stage to-day.

Question—"That the Bill do now pass"—put and agreed to.

An Ceann Comhairle

This Bill is a Money Bill, within the meaning of Article 22 of the Constitution.