Dáil Éireann debate -
Tuesday, 15 Apr 1958

Vol. 167 No. 1

Committee on Finance. - Industrial Credit (Amendment) Bill, 1958—Committee and Final Stages.

Sections 1 and 2 agreed to.

SECTION 3.

Dr. Ryan

I move amendment No. 1:—

In sub-section (3), line 36, to delete "£2,000,000" and substitute "£5,000,000".

When this Bill was being drafted, negotiations were going on with the banks, and it was expected at the time that the banks would put capital into the company, but, as a matter of fact, they afterwards agreed to put in a loan. The amount mentioned in the Bill is £2,000,000. £1,800,000 has been put in by the banks, so it does not leave very much margin for guaranteeing further than that sum. I am proposing, therefore, that the Minister for Finance should have the right to guarantee £5,000,000 instead of £2,000,000.

Mr. Sweetman

Could the Minister explain more clearly why the Bill as circulated had not got the £5,000,000 in it, because at the time the Minister circulated his Bill, he knew what the bank arrangement was?

Dr. Ryan

Yes, that is true, but I think the Bill was drafted around the time we came to the final conclusion with the banks. We did know at that time that the banks would put a certain amount of money into it, but they had not decided whether it would be by way of loan or by way of capital. The Bill was actually printed, I should say, before the final decision was made.

Amendment agreed to.

Question proposed: "That Section 3, as amended, stand part of the Bill."

Mr. Sweetman

I am not quite clear what the effect of sub-section (8) is.

Dr. Ryan

The previous sub-section says that the Minister will repay money to the Central Fund, even though he does not get it back from the company, but that, of course, does not mean that the company is let off the money; they are still liable, even though the Minister has already paid the amount to the Central Fund.

Mr. Sweetman

Does it mean that, because the House has voted the amount that is necessary to make good the guarantee, the action of the House is not in exoneration of the company?

Dr. Ryan

That is true, but, even before that, when the Minister has repaid it to the Central Fund—I do not know whether it could be held legally or not—it could be that the company could say: "We are exonerated because we do not have to pay it back to the Central Fund."

Mr. Sweetman

That, I can understand, but I cannot understand the last four lines of the sub-section where it provides for the times and the instalments and so forth. That does not seem to me to follow from the course the Minister has indicated, unless that is another way of saying that the Minister shall have complete freedom in negotiating settlements of the debts due.

Dr. Ryan

That is true, yes.

Mr. Sweetman

If it is another way of saying it, is it not a rather cumbersome way of doing so?

Dr. Ryan

That is quite true. It permits the Minister to take it back in instalments.

Mr. Sweetman

Surely the Minister has that power, anyway?

Dr. Ryan

I do not know.

Mr. Sweetman

Is the situation not this: if there is something due to the State and due in circumstances like these, the Minister has had to make good a guarantee, and the Minister had to pay it? It virtually only arises in cases where the company has gone "bust" or very nearly gone "bust". The debt is due to the Minister and the Minister has had to make good a guarantee. Surely the position is, under the existing law, that he is able to make any bargain he can to get back what he has had to pay for. It does not seem to me that this phraseology meets that point.

Dr. Ryan

As the Deputy knows, of course, when the Minister sets out the heads of a Bill, he sends it to the draftsman and the draftsman puts it into legal form. It is very difficult to know the mind of the draftsmen in some of these cases, but it is the same form as used in the State Guarantees Act.

Mr. Sweetman

The Minister has me there, because, as well as I recollect, I piloted that Act through the House. If it is the same sub-section, I was caught by it.

Question put and agreed to.

SECTION 4.

Question proposed: "That Section 4 stand part of the Bill."

Mr. Sweetman

So far as sub-section (2) of this section is concerned, I quite appreciate that without it the Minister might not be able, perhaps, to borrow in the ordinary way by Exchequer bills or any other method for the purpose of meeting the guarantee, but, so far as sub-section (3) is concerned, is that sub-section visualising a separate borrowing and separate charging for the purposes of this Act? I do not think that is what should be envisaged. If the Minister has to make good a guarantee out of the Central Fund, then the ordinary Central Fund arrangements for raiding the Central Fund should ipso facto follow. I do not think it is desirable that for the purposes of making good a guarantee under this Bill, there should be visualised the making of a specific borrowing for this purpose. I do not think that would be right at all.

Dr. Ryan

The wording here appears to be the usual form in relation to repaying money to the Central Fund. Of course, the securities are issued specially for the purpose and, therefore, this section deals with the repayment to the Central Fund.

Mr. Sweetman

It is I think a normal form for a Central Fund advance but I do not think a normal form for a normal Central Fund advance is properly applicable to this Bill. I do not think we should visualise the position in which, if the Minister had to meet a guarantee under this Bill, say for £1,000,000, he could go and make a separate arrangement with some lender to charge for this separate purpose. It should all be merged as part of the general Central Fund arrangements for the financial year in which it operates. What I have particularly in mind is that in relation to the general Central Fund advances and the methods of charging them, there are statutory provisions about the moneys that must be given, in relation to the tabling and so forth. That position does not operate here.

As far as I can understand, the effect of this section is that if the Minister has to pay £1,000,000 under guarantee and chooses to meet that guarantee, and having met it, if the banks are down £1,000,000 on the guarantee and the Minister agrees to meet it as an action under this sub-section by issuing 5 per cent. stock or 6 per cent. stock, or any stock he likes in lieu, and pays off the guarantee that way, he could do it under sub-section (3). It does not follow at all that he has to take the same steps as he normally has to take in relation to Central Fund payments and making them public.

Dr. Ryan

But the money must come through the Central Fund. Is that not right, even if it is in a big amount and we had to go out and seek a loan publicly for the purpose?

Mr. Sweetman

But I am not thinking of a loan: I am thinking of an issue of stock.

Dr. Ryan

It must come out in any case if it goes in.

Mr. Sweetman

Is there any provision by virtue of which any charge on the Central Fund must be published in the Iris Oifigiúil?

Dr. Ryan

No.

Mr. Sweetman

Is there nothing statutory, binding the Minister for Finance to give notice of charges he makes on the Central Fund?

Dr. Ryan

I do not know of it.

Mr. Sweetman

There should be.

Dr. Ryan

Perhaps there should, but it comes out some time.

Question put and agreed to.

SECTION 5.

Question proposed: "That Section 5 stand part of the Bill."

Mr. Sweetman

I suppose the Minister could not give these out of the Capital Fund? I do not think he would be empowered to do so under the Bill because I noticed in the returns that were furnished after the 31st March —they gave more information than usual which was welcome—that no information was given about the Capital Fund and I want to be sure that the Minister could not get this out of that fund and avoid making a return.

Dr. Ryan

I take it they would have to be published also. I think the Press did not publish all they got on this.

Mr. Sweetman

That might well be so, but unfortunately I did not see the Minister's hand-out. If I had, perhaps I would not have raised this.

Dr. Ryan

I think it will be covered.

Mr. Sweetman

In case the Press does not give the whole of it perhaps the Minister might take steps to see that I get a copy of the hand-out in future. Then I should not be criticising him unfairly.

Dr. Ryan

I think I can do that.

Question put and agreed to.

Section 6 agreed to.

Title agreed to.

Bill reported with amendment, received for final consideration and passed.

An Ceann Comhairle

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