Dáil Éireann debate -
Tuesday, 11 Jun 1963

Vol. 203 No. 6

Committee on Finance. - Taiscí Stáit Teoranta Bill, 1963— Money Resolution.

Minister for Finance (Dr. Ryan)

I move:—

That for the purpose of any Act of the present session to make provision in relation to Taiscí Stáit Teoranta it is expedient to authorise:—

(1) the advance out of the Central Fund or the growing produce thereof of all moneys from time to time required by the Minister for Finance to meet sums which may become payable by him—

(a) to provide the money payable by the subscribers to the memorandum of association of Taiscí Stáit Teoranta as consideration for the allotment and issue to them of shares in the share capital of the Company in pursuance of such Act,

(b) in respect of any shares of Taiscí Stáit Teoranta taken up by subscription by him under such Act,

(c) for the purpose of making advances to Taiscí Stáit Teoranta in accordance with such Act for the carrying out of the Company's objects, and

(d) under any guarantee given by him under such Act.

(2) the charge on and payment out of the Central Fund or the growing produce thereof of the principal of and interest on any securities issued by the Minister for Finance for the purpose of borrowing under such Act and the expenses incurred in connection with the issue of such securities;

(3) the repayment to the Central Fund out of moneys provided by the Oireachtas of moneys paid by the Minister for Finance under a guarantee given by him under such Act which have not been duly repaid to him; and

(4) the payment out of moneys provided by the Oireachtas of the expenses incurred in the administration of such Act.

Mr. Sweetman

I want to enter a protest that the information I requested in my question to-day was not made available for this discussion. I asked for the last accounts of one of the companies named in this Bill and its subsidiaries and the Minister chose to interpret that as meaning accounts to the 31st March, 1963. I did not ask for those because I knew there was no hope of getting them. I knew that I had on many occasions to ask the Minister for Industry and Commerce to ensure that that particular company would fulfil its statutory obligations and file its accounts and it did not do so at the proper time. The circumstance that the Minister for Finance neglected to provide the accounts relating to one of the companies named does not make the discussion of this Bill any easier. We may be able in some respects to clarify some matters but others may have to wait until the Report Stage.

I find the greatest difficulty in understanding what the Minister means in regard to this Bill. If it suited him to jibe in his reply on the Second Stage, he is welcome. It will not prevent me getting the information the House and the public are entitled to get, nor will the fact that the Minister misled the House in his opening or closing speech on the Second Stage assist the passage of the measure. I do not know which was the true position, whether his prepared speech at the beginning was the correct one or his reply at the end, but in many aspects of the matter, he was not as frank with the House as he should have been.

First, he said there was no need for an explanatory memorandum in regard to this Bill because the Minister for Industry and Commerce had forecast the entire contents of the Bill. I challenge the Minister to produce any speech or statement by the Minister for Industry and Commerce in which he mentioned a word about a Bill to cover Aviation Development Limited. I challenge the Minister to produce anywhere a statement by the Minister for Industry and Commerce that this Bill that was to be introduced was to cover a company to be called Aviation Development Limited or that such a company would be for the purpose of developing one aspect of the Potez aircraft factory. The fact is he did not. Obviously, before he made comments on that, the Minister did not take the trouble to read what his colleague said in this House on the occasion to which he referred.

In column 295, the Minister made it clear to the House he was proposing to utilise up to £2½ million for the purpose of paying off the Industrial Credit Company Limited amounts expended in relation to the Industrial Engineering Company and its subsidiaries. It was clear to anyone that he meant they were to pay up to £2½ million. We all know—and I showed it to some degree on the last occasion— there is not anything like £2½ million worth of assets there. Then the Minister proceeded to change his feet when he was challenged and, in column 317, say they were not going to pay the £2½ million, that they were going to pay only what the shares and loans were worth at present. I venture to say that the two statements by the Minister are recklessly inconsistent. I do not know which is the correct one. I hope the second is correct.

It is easy for people to comment on criticism of moneys expended in this way and say that the moneys provide employment. But what we want is not merely the temporary employment, which passes if capital moneys are spent foolishly, but the permanent employment that wise productive capital expenditure will give. The Minister cannot get that wise productive capital expenditure unless the projects involved can stand up to the light of day. If they can, if they are viable projects, economically, commercially and nationally, nobody should object to their being examined in public here. It is entirely wrong for public money of the size involved to be expended without proper evidence in support and without proper explanation to this House and to the country.

I might add that the Minister misled the House in other respects in his initial remarks. He said in column 292:

I should add that these will be confined to the relatively small number eligible for grants from an Foras Tionscal in excess of £250,000.

When he was challenged as to where that was in the Bill, he then proceeded to tell us something entirely different and to say that, while that might be the general position, there was nothing in the Bill, as I knew, and that in addition to that it was not even intended to confine the provisions exclusively, as he had undertaken in his opening statement. When we are dealing with sums of the size involved in this, it is, to say the least of it, unfortunate that the Minister should not be accurate.

This Bill was to deal apparently with the taking up of shares in a company to which a grant or guarantee of borrowing has been or is to be given under the Tourist Traffic Acts. I admit quite frankly that when I read the section I took that to mean resort development and so on. I did not appreciate it would cover hotels as well, although I wish to make it quite clear that the Minister in his introductory speech did make it clear that hotels were included as well as tourist development associations and so on. I must have failed to hear him at the time.

Before we provide the money for this Bill, I should like to know whether it is proposed that this new company will take over from the Industrial Credit Company the stake the Industrial Credit Company have put in the new hotel being erected near Santry. If so, what are the terms of that arrangement? Are the terms such that there is an adequate risk capital being placed by the entrepeneurs themselves and equally a chance of a satisfactory return for the State? If public moneys are paid out to an individual concern and the individual concern does not put a proportionate part of its own money to the public moneys paid out, we are likely to get ventures of a sort that will not be permanent.

We are entitled in this House, and should as Deputies satisfy ourselves, when Bills of this kind come before us, that the balance being kept between the private moneys being provided by the owners of the concern and the public moneys provided by this House is reasonably fair and proportionate, and that it is not a question of the matter being taken in a way that the entire risk is in one pocket and the entire profit, if things go well, in another.

Dr. Ryan

I do not think the Deputy need have made this onslaught. Perhaps he will calm down after a few minutes. The Deputy produced figures which I understood to be figures up to the 31st March, 1962. I am sorry if I was wrong in that. When I inquired in my own Department afterwards, having taken a note of that point, I was told there were no figures since then and, therefore, we could not give anything further than what was available in the Companies Office up to 31st March, 1962. As far as my notes go, the Deputy referred to the Companies Office and I concluded, therefore, he had got the latest figures from them.

Mr. Sweetman

I got the latest figures that were there when I went there some months ago at the time the Minister for Industry and Commerce made his speech. I have not been there since.

Dr. Ryan

I think they are there up to 31st March, 1962, now. Perhaps, we can get a little more enlightment on that later on. With regard to Dundalk, I said in my opening speech it was intended to take over the loan from the Industrial Credit Company and have it transferred to the new company. That is about all I said in my concluding speech. I said it should be taken over on a realistic valuation. There is nothing contradictory in those two statements.

Mr. Sweetman

Would the Minister look at column 295 and see what he said? He said:

A sum of £1½ million will be required for the investment in Aviation Development Limited and up to £2½ million in respect of the transfer from the Industrial Credit Company of their shares and debentures in Industrial Engineering Company Limited.

That could not mean anything except what it says. We all know the shares and the loans are in fact worth less than £500,000.

Dr. Ryan

The latest estimate I got was that £1½ million would be necessary. I am not sticking to that figure firmly but that is the impression I have been given. The evaluation of the assets of the Dundalk companies has been going on for some time. I may say nothing will be done until that evaluation is completed but when it is, Taiscí Stáit Teoranta will take over the assets there at a realistic valuation and I must come back to the Dáil to get money to pay the Industrial Credit Company whatever the difference may be.

Mr. Sweetman

Then there will be more than £3½ million and not as stated at column 295 from which I have quoted?

Dr. Ryan

Possibly. With regard to the £250,000, I said in my opening statement it was not intended to apply this Bill to any transaction where the subsidy would be less than £250,000. I referred to the speech of the Minister for Industry and Commerce when introducing the Bill in respect of State grants when he explained that up to the limit of £250,000, it would be possible to give a company going into the undeveloped areas two-thirds of the cost of the building and the equipment but that the other one-third would have to be supplied by the person undertaking the building of the factory —the owner, if you like.

In parts of the country outside the undeveloped areas, the normal subsidy would be to a limit of one-half, but in certain cases that could go up to two-thirds. It was considered there was ample provision there for dealing with any applications that might come along and that it would not be necessary for this company to intervene in any cases where the subsidy was less than £250,000. Where the figure was over £250,000, there would be loans which would bring the figure of subsidy and loan to a maximum of two-thirds of the entire cost. I explained that that loan would be given, half by the Industrial Credit Company on ordinary commercial terms and the other half by this new company on terms laid down. It might be bad to have put into this Bill a provision through which we could not deal with any cases in which less than £250,000 would be given in subsidy: it might be possible that where £250,000 would appear to be the appropriate subsidy, the applicant might be persuaded to take £200,000 by way of grant and £50,000 by way of equity capital and it would be impossible from a legal point of view to implement a decision of that kind.

It is for that reason that we would not like to see provided here that this would apply to any cases where the subsidy was less than £250,000. It was intended that it would apply to any cases where the amount is less, except in extraordinary circumstances. The Deputy asked me whether it was intended to take over the holding of the Industrial Credit Company in the Hilton hotels. If this Bill had been there when that transaction took place, this new company would have dealt with it. They would have taken the holding and I should say, though I have not discussed the matter with the Industrial Credit Company, if they express the desire that we should take over the holding I think we should consider it.

Question put and agreed to.

Resolution reported and agreed to.