Skip to main content
Normal View

Dáil Éireann debate -
Tuesday, 11 Jun 1963

Vol. 203 No. 6

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

Sections 1 and 2 agreed to.
SECTION 3.

I move amendment No. 1:

1. To delete subsection (1) and substitute the following subsections: "(1) The functions of the Company shall be:

(a) to acquire, hold, sell, assign and otherwise deal with shares and debentures issued by—

(i) any state-assisted industrial company.

(ii) any company to which a grant or guarantee of borrowing has been or is to be given under the Tourist Traffic Acts, 1939 to 1961, in respect of the development of holiday accommodation,

(iii) Aviation Development Limited,

(iv) Industrial Engineering Company Limited,

(b) to issue loans to state-assisted industrial companies,

(c) to guarantee the due repayment with interest of borrowings by state-assisted industrial companies.

(2) (a) The Company shall exercise the functions specified in the foregoing subsection as and when directed by the Minister (and not otherwise) and in accordance with the terms of the direction. (b) Before giving a direction under the foregoing paragraph, the Minister shall consult with the appropriate Minister."

I have studied this clause further and if Deputies will look at the first three lines of the section they will see the phrase "with the appropriate Minister and with the agreement of the company concerned". I have been advised since the Second Reading that these words were likely to give trouble because if Taiscí Stáit held shares in a company which they could dispose of at favourable terms they could do so as the clause stands without the consent of the company concerned. As far as I understand it, the public company has no right to express any opinion at all. That is one point. A second point is that the company might say: "We do not like it; leave things as they are." In that case also Taiscí Stáit should have power to dispose of shares if they had thought well of it. Apart from that, the section is fairly lucid, but I think it reads better as amended than in its original state. Actually, there is very little change in it—the amendment is practically a drafting one.

I read the original wording, where it says "company concerned", as meaning Taiscí Stáit. The Minister now says it was intended to mean, for example, Aviation Development Limited. It is clearly better that the section, in these circumstances, should be clarified as it has been in the Ministerial amendment. I am, however, a little worried as to whether the functions of the company are as rigidly binding as in the original case. I have made the case again and again in this House that if the Government of the day and the Dáil feel it is desirable and necessary to do a certain job in the national interest, and provide funds, they ought to do it but they should do it openly and above board, saying they are doing it for national reasons and not pretend that they were doing it as an economically viable proposition when everybody knew it was not.

To that extent I was glad when the Minister for Industry and Commerce forecast last February that there would be a Bill of this sort. What I want to be quite clear about is that when & job of that nature is to be done it will be done by and on the responsibility of the Government. It appears to me quite clear there was such Governmental responsibility in the original subsection (1) of this section. I think there still is in subsection (2) but I want to be crystal clear that the Minister agrees the company can only exercise any of its functions if the Minister gives them a directive to do so and that accordingly, whether the Minister has or has not given them a directive, this will be a matter on which the Minister will be entitled to be questioned in this House.

It says "not otherwise". It is very clear in subsection (2).

The Minister agrees I take it that if it is subject to a directive it is a matter in which the Minister will be amenable in the House. However, I shall come back to the matter again when discussing the amendments. It would be quite wrong to give a company which had been assisted the power of veto of the direction of the Minister and the Taiscí Stáit Teoranta to sell. I understand from the Minister that that is the purpose of his amendment.

I raised a certain matter on Committee Stage and the Minister was kind enough to make reference to it in his reply. This section, which is, in fact, the kernel of the Bill, provides that the company, Taiscí Stáit Teoranta, can do certain things in respect of industry and in respect of specific industries. I appreciate what the Minister is trying to do in respect of the particular companies and in respect of other unnamed companies and businesses such as the hotel business and things like that and I applaud him for it. As a matter of fact, on occasions throughout the past few years I have indicated on behalf of my Party that we believe some State agency should have an interest in industrial and other undertakings that have been assisted to a great extent by the State. The Minister has greater appreciation of the difficulties in the matter of State assistance and protection of industries than possibly most members of the House would have.

I am reluctant to talk in the strain in which I now propose to talk in respect of the type of industry that I mentioned before. I do not know what the definition of "State assistance" is, whether it is confined entirely to assistance by way of grant or loan or whether it includes assistance by way of protection. I should like to know whether or not industry that has been afforded protection comes under the heading of State assisted industry.

I have no political axe to grind in asking that the Minister would consider the extension of this section in order to ensure by Government intervention, Government direction, Government investment, that industries which it would appear to most people have a chance of survival, would not be allowed to die for want of such State intervention. There are industries that have not got substantial assistance by way of grant or loan and the plain fact is that they seem to be deteriorating and employment in them is becoming slacker and slacker.

This is a new departure as far as the Minister is concerned. It is a new departure in policy as far as the Government are concerned, a departure which I personally applaud and which the members of my Party also applaud.

I would seriously and sincerely ask the Minister, if it cannot be done under the section as it is, to ensure, by amendment, that the type of industry to which I refer and, might I say, the specific industry to which I refer, will not be allowed to die. I do not want to mention names here. The Minister knows exactly what I am talking about. It is not my intention to put him into a difficulty or to embarrass him in any way. I know his interest is as great as mine. I want to impress upon him—it may be superfluous to do so—the seriousness of the position as far as certain industries are concerned. If something is not done in the immediate future, it is my opinion, in which I am not alone, that there will be a good deal of unemployment which will affect the economy of the centres where these industries are situated. If it can be dealt with under the Bill that is all right. If "State assistance" means assistance by way of tariff or quota protection the industries to which I refer could be included within the terms of the Bill. I doubt that "State assistance" does mean that in the context of this section but if it requires an amendment on Report Stage and if the Minister thinks it is possible to do something by way of amendment of the Bill, many people who will be affected will be very pleased indeed.

I was one of those people who applauded the Government for the action they took in Dundalk when they were confronted with the situation of having 900 people unemployed. I was not at all impressed by the protestations of the Minister for Industry and Commerce to the effect that this was a private company. It may have been a private company in theory; it may have been a private company according to the book, but it was a Government-sponsored company. It was a company, or should I say a group of companies, established by the Government to alleviate or to prevent mass unemployment in Dundalk. It is not the first time I have said this: Where the Government see that there may be unemployment in various centres, it is their bounden duty to try to ensure that that will not happen, even if it means the establishment by the Government of an industry or a factory

I realise the Government's difficulties, especially their political difficulties, with regard to the placing of industries but where there is an industry and where there is hope for that industry and it is generally acknowledged that it can be a thriving industry, it is the bounden duty of the Government to ensure its survival.

I would, therefore, appeal to the Minister, if it is not possible to do it under the Bill as it stands, to introduce an amendment whereby the Government could intervene for the worthwhile purpose of saving an industry and guaranteeing employment.

If Deputy Corish looks at Section 3, he will see that, first of all, of course, it deals with State assisted industries. A State assisted industry means an industry that has got a grant from An Foras Tionscal. Then the section deals with three specific cases which are being taken over and which have already been dealt with— Aviation Development Limited, Industrial Engineering Company Limited and three hotels. As far as the ordinary trading company is concerned, such a company always, of course, has the Industrial Credit Company to go to for a loan to carry on. Apart from that, there is the readaptation grant which is available now to any company that wants to readapt its equipment or its make-up, in order to meet increasing competition. As far as existing companies are concerned, therefore, the old-standing companies, they are amply supplied both by way of grant for re-equipment or anything like that and by way of loan in order to carry on.

Of course, I am quite well aware of the company that Deputy Corish has in mind and we are both, of course, very sympathetic, naturally, in seeing what can be done. I think we would both agree also that the Industrial Credit Company would long ago have given loans if conditions were favourable in regard to management and so on. We still hope that we may be able to get over that difficulty, but it is not a matter for this Bill. Apart from the three companies mentioned, the Bill will deal in future with entirely new companies which are getting grants from An Foras Tionscal.

I believe the Minister understands my difficulty as well as I think I understand his, but let me put this to him. Granted there is the Industrial Credit Company, and granted there may be some other agencies which are empowered and willing to come to the aid of industry. That is good, in general practice. Many industries have availed of assistance from the Industrial Credit Company, and the like. When we were discussing the Common Market, we discussed the ability and willingness of industries to readapt and re-equip themselves to change their methods, and provide for better marketing, salesmanship, and that sort of thing. We must also be concerned about the neglect of industries by individuals.

I do not consider that is interfering with private enterprise. If I have a factory, and if I have allowed it to deteriorate, I may have no intention of availing—I may refuse to avail—of the assistance of the State. I acknowledge, and I have always acknowledged, that so far as the establishment of industries is concerned the State has not been ungenerous. The various pieces of legislation that have been introduced in recent years have not been ungenerous to those who want to improve their industries, or to those who want to establish industries.

If we were to go into the Common Market in three, four, five or six years, I believe there would be people who would say : "I am not going to bother about this business. It is too much trouble. I will not look for assistance from the Industrial Credit Company. I will not ask the Department of Industry and Commerce or the Minister for Finance to help me." That might be all right if the owner only were concerned, but 100, 200, 300, 400 or 500 people are concerned, and I think someone has to do something. I do not believe that is unwarranted interference in private enterprise.

I believe it is the duty of a Government or the State to take over such places. The owner is important. The idea of ownership and private property is sacrosanct, but the dependence of 300, 400, 500, 600 or 700 men for their livelihood on an industry is much more important. If something cannot be done in this Bill I do not know what will happen. I want to assure the Minister that it is no pleasure for me to introduce this matter into this debate. It is not done for the purpose of embarrassing him or any of his Cabinet colleagues. I am concerned about a particular situation. I believe something should be done about it, and I believe something must be done in a very short time.

I am afraid we are committed to private enterprise. We have to be very careful. I can quite well understand the Deputy's impatience with the case he has in mind. I know he is not by any means advocating expropriation but we have to be very careful because we are trying to induce people to come in here and start industries. I am afraid a bad story might be made about any interference of that kind. I appeal to the Deputy to leave it to those concerned, including myself, to see if we can approach that problem in another way.

Amendment agreed to.

Perhaps we could take amendments Nos. 2 and 3 together.

I would be quite agreeable to discuss my amendments on the section if the Minister would rather have it that way.

No. I should like to hear the Deputy's case.

I move amendment No. 2:

In subsection (2), page 2, line 38, after "Tionscal" to add "and which has at any time been named by the Minister by order which the Minister is hereby empowered to make."

While I may disagree with some things Deputy Corish has just said on the first amendment, there are certain other things with which I would entirely agree. In my view it is quite essential that we succeed in getting it accepted by our own people that the facilities available for the development of industry are available for Irish people just as they are for foreigners, on exactly the same terms. I want to make it quite clear that in saying that I am not suggesting that they are not. We know what the position is, but we must get it accepted by our own people. It is important that that should be done as well as ensuring that we do what we possibly can to induce further industries to come and settle here.

Deputy Corish mentioned Dundalk. The Government had a job to do in Dundalk, but my objection at the time was that they did not go about it the right way. My objection was that the Minister for Industry and Commerce told us it was a private enterprise transaction, which it never was. My objection was that the Government forced—and I used the word "forced" deliberately — the Industrial Credit Company to cover up, under the guise that it was a commercially viable proposition, what never was a commercially viable proposition.

It was a State rescue operation and should have been tackled by the Government under that heading, openly and avowedly. There should not have been any shilly-shallying by the Minister for Industry and Commerce or by the Minister for Finance, in trying to maintain that it was an ordinary commercial loan which could be granted on a commercial basis. It was a State rescue operation and should have been treated as such. If it had been treated as such, and open as such to the wind of criticism, I think more permanent employment would have resulted from the expenditure involved.

I want to be quite clear that if there is any necessity to have a State rescue operation in the future, or if there is a State initiation operation, it should be treated openly and above board. Therefore, the concerns should be named as the Aviation Development Limited and the Industrial Engineering Company Limited are named in the Bill. We could then discuss whether they are sound propositions, and whether portion of the pool of national capital should be put into those concerns. Personally, I would not restrict at all the concerns that could be assisted to concerns which have got a grant from Foras Tionscal or under the Industrial Grants Act but I would insist that they be named in an order by the Minister which would be put on the Table of the House. In that way, it would be all clear and above-board.

It is absolutely essential, if we are to avoid the type of suspicion that is going around, that we have some type of open commitment by the Government that they feel as a matter of Government policy that doing something in relation to that company is desirable. If the Government of the day are prepared to ensure that a company is assisted then they should be prepared to come out openly and say so by means of an order such as I suggest and, in addition to that, the company concerned should feel that it has nothing to hide and that the task is one that everybody would agree is a proper operation. However, to try to suggest, as has been suggested up to this, that the Industrial Credit Company has in certain instances given loans on a purely commercial basis, when we all know it is entirely untrue that they were given on a commercial basis, is wrong and degrading for this House. It creates suspicion and prevents Irish people in industry feeling they are getting a fair deal.

Let me take an example. I know of one case where, on the information I am able to get in the Companies Office, the people concerned have put in £87,000 and £4,600,000 of State money has been or is to be invested in that concern. It seems to me quite improper, quite wrong, that that lack of balance would be made. It means that the private enterprise people concerned have put less than 2½ per cent of the capital into the concern. I know they are foreigners and I am saying nothing about that. They have had a managing director down there who was as straight as a die, in my opinion, and who has done a first-class job. They have a managing director there, a foreigner, whom I have not had the pleasure of meeting but who I am sure is absolutely straightforward and knows his job. There is also a solicitor who is a director. I am not making any criticism personally of him because I know he would not be a party to anything that is wrong. My criticism is that a situation should be established in which £87,000 is put up by one person and £4,600,000 is put up by the State. If the concern loses, the State lose their money. If it wins and turns out all right, the person concerned takes all the benefit. Admittedly, it is in the national interest if it succeeds because there will be valuable employment for the men concerned in that area but there is a lack of balance in the private enterprise investment and the State investment that should never have been allowed.

However, as I say, I am not arguing whether it was right or wrong to make such an investment. I am arguing that the Government that directed—and I use the word "directed" deliberately —the Industrial Credit Company to make such an investment should have had the courage to say they were doing it as a matter of Government policy and done it in the proper way and not pretend and hide behind the skirts of the Industrial Credit Company, saying the money was being put up by the Industrial Credit Company because everybody knows the directors of that concern are commercial men of the utmost probity who would not make a loan in the ordinary case unless they were absolutely satisfied they were doing it on a commercial viability basis.

I guarantee that the Minister could not produce a resolution or an expression of opinion, if you like, from that company denying they were directed by the Government to do that. If the Government want that done, if it is necessary to have that done in the national interest, they should come here and say so openly, put the matters on the Table. If it is done in that way the people's money will be invested in a more long-term, secure way both from the point of view of the return and permanent employment, and we shall not have the suspicion that undoubtedly exists throughout the country that if you are an Irishman you will not get as good terms as if you are a foreigner. I do not believe that is true but I want that suspicion killed. One of the ways of killing it is to ensure that any company that is to get facilities under this Bill by direction of the Government will get them by being named in an order. Ninety-nine times out of a 100 the order will go through without anybody saying anything about it because we on this side of the House will make our own inquiries and will more than likely be satisfied. There may be the odd one per cent of cases in which we may feel further investigation is needed here and that can be done by tabling a motion as I have provided here.

If there were a provision that the company would be named by means of an order being tabled, I would not in any way restrict the operation of this section as the Minister himself has restricted it by the definition of a State-assisted industrial company. It is infinitely more important for this House to know what is going on than to define the company concerned that is going to be assisted in the manner in which the Minister has defined it. I would far prefer to be able to name the concerns in the Bill. I accept the Minister's statement that he cannot see for the future what exactly the concerns are likely to be. Therefore, the method of naming it by administrative order is the appropriate one.

I cannot object very strongly to anything said by the Deputy but I should like to take this Bill, as it were, in two parts. We have named certain companies like Dundalk, Potez, hotels and so on.

You have not named hotels either. It has been left vague, any hotel company.

Yes, but there is a clearly defined procedure laid down for the future that where a grant exceeds £250,000, that is one-third of the cost, there are various safeguards. That is as far as we can go, or we can go to £1,000 per worker. However, over and above that, we have been trying to negotiate for some time with some of these big companies that instead of a grant, they would take equity capital. That has not been agreed to in many cases. They do not like the idea of the Government coming into business with them.

Then we came to the second alternative of making a loan. That has been agreed to in some of the bigger cases, like Potez. This Bill is implementing certain decisions arrived at that the loan in that case would be divided equally between the ordinary commercial loan of the Industrial Credit Company and the loan of Taiscí Stáit on the terms which have been mentioned, that is, it would be free of interest probably for seven years and then would be repayable at the ordinary commercial rate of interest plus half for every one per cent dividend paid by the company over seven and a half per cent, but the company has power at any time to pay off the loan. That is the pattern that is in mind for future bigger propositions that come along. I am told by the Department of Industry and Commerce that there are certain propositions being discussed but I do not know anything more about them at the moment.

As the Deputy is aware, these are being discussed by the Industrial Authority who have to be in a position to discuss all the terms at the same time, that is, they get so much grant, so much by way of loan, and so much off by way of equity capital. I think it would be impossible to publish any of the facts until a deal was concluded. As Deputies know, some of these deals do not come off; they just tail off and nothing more is heard about them. Where the deal is concluded, I do not think we could make the matter public until everything has been agreed. Therefore, I would have to argue strongly against the amendment proposed by Deputy Sweetman because we could not very well come to the Dáil and get permission to give this loan when negotiations are on, and when negotiations were completed, it might be a slow procedure. If the Dáil happens to be in recess, it would lie upon the Table and nobody could say for certain whether the answer of the Dáil would be yes or no until it had been discussed.

I would certainly be as agreeable as I possibly could to give all the information that could be given afterwards. In the first place, of course, this company will publish a full account of their proceedings at the end of each year and will mention the amounts given in each particular case. They will be entitled to get balance sheets from these various companies. They may be entitled to more but I am not sure. I think I could guarantee that the balance sheets of these various companies in which they have a major holding, if not a minor holding, would also be made available to the Oireachtas. That is as far as we could go. Deputies will realise that in these negotiations we cannot make anything public until they are concluded. Whether they are concluded by way of agreement or by way of disagreement, nothing can be done until the negotiations are finished.

I appreciate that it is necessary during the course of these negotiations to make the position clear but we are all accustomed to negotiations of that sort being carried out and the Minister informing the parties concerned or the Authority: "I am prepared to go to the Dáil with such and such a proposition" and the interests concerned should always accept that when it could be done. There would be no difficulty whatever in the Industrial Development Authority being able to say: "We are negotiating with you and these are the terms we are going to put up, but the Minister must make an order but he will make the order because this is such that the Dáil will not object."

I will give the Minister an example of another case which I consider should not have been dealt with so that he will appreciate that I am not just talking out of the air. A certain company was formed in 1949 with an issued share capital of £45,215. On 22nd July, 1949, the Industrial Credit Company made £140,000 available to it. On 18th November, 1954, the Industrial Credit Company made a further £26,000 available to it. I am deliberately taking this company because apparently some of the payments were made in my name and because I want to make it clear that while I can be as political as I want on occasion I am not arguing this on a political basis. I am deliberately taking one company out of several companies about which I know something. On 11th July, 1955, a further £20,000 was made available to it. On 30th October 1958, £126,000 was made available and on 21st September, 1960, a sum of £93,941 was made available. The position therefore in 1959 was that the issued capital of the concern by the private entrepeneurs was £45,196 while the Industrial Credit Company loans were £318,565. The firm's assets were far from satisfactory and I am afraid I have the gravest reason to fear that a great deal of that money which was put up by the Industrial Credit Company was not secure and was lost.

That seems to me to be a typical case of what I might call an imbalance between the private entrepeneurs putting up £45,000 and the State putting up £318,000. Part of that money that was put up by the State was put up by them, as far as I can judge from the Companies Office, by their taking over a loan that formerly had been made to the company by some of the joint stock banks. I might add that in addition to that, I found, when I went to investigate in the Companies Office, that the particular company were two years late in their returns to the Companies Office. The Minister should seriously consider issuing a directive, or getting his colleague, the Minister for Industry and Commerce, to issue a directive, that in any case where State moneys have been made available, the utmost strictness should be observed to make certain that the companies fulfil their proper statutory obligation of making statutory returns. As I say, in the case in question, there were two years' arrears of returns at the time I was endeavouring to probe and find out what had occurred.

The Minister has said that he is going to make the information available after the deal is made. That, of course, to a large extent is closing the stable door after the horse has gone. However, there is another point which should be attended to and frankly it was only while the Minister was speaking that it occurred to me or I would have put it down by way of amendment. It is desirable that there should be in the definition both in relation to the Tourist Traffic Company, and in relation to State assisted industrial companies, that they must be public companies so that it will be possible for anybody to investigate, if they want to, the position of the company concerned at the Companies Office.

One of the worst situations is where it is impossible for anyone to see what has transpired because the company is a private company and gives the certificate that there has been no issue to the public. There should be a prohibition against assistance in any case except where it is a public company—a public company limited by shares or a public company limited by guarantee or a public unlimited company, but one never has that. If the Minister would give me an undertaking that he will consider such an amendment between now and Report Stage it would go some distance to meet my difficulty. It would strengthen the Minister's hand to have publicity in some shape or form.

Take, for example, the situation if notice had to be given that a deal was about to be signed under this Bill, when enacted—even if it were only a notice in Iris Oifigiúil. The fact that that had to be done would immeasurably strengthen the hands of the official bargainers—if I may call them that—in relation to the terms. The fact that they would be in a position to say: “We have to give notice publicly that this will be done and therefore it would be impossible for the Minister to stand over the suggestions you are making” would help rather than hinder the striking of a satisfactory bargain.

I appreciate, at once, in relation to industrial development, that inevitably there is a fair amount of bargaining on both sides. I think it is all wrong that there should be a situation in which people can say: "Heads I win; tails you lose," when they are negotiating with the representatives of the taxpayer. Where it is only £87,000 ordinary share capital put up by a private entrepreneur, and £4,600,000 is being made available by the State, the imbalance is outrageous. It is not the sort of case that should be dealt with except with the glare of publicity so that it can be decided coolly, calmly and deliberately whether it is right to do that for the sake of the employment content. I can see circumstances in which it would be right but it is quite improper that that should be done under the guise and the pretence that any such arrangement can be a commercial proposition. It is not— and nobody helps himself or the country or the industry by suggesting it is.

The Deputy made some suggestions which I shall certainly consider. I want to deal, first of all, with the point that State companies should be compelled to carry out their statutory obligations. The Deputy thinks a State-assisted company or a Tourist Traffic Company which comes under this Bill should be a public company. I do not know the implications of that. I might find, on examination, that some companies we are dealing with are private companies, are quite reputable companies, and so on, and it might be difficult to make that stipulation. I suggest that where Taiscí Stáit make a loan they could insist on getting a balance sheet and that could be made available to the House or to the Library. Whether it is a public or a private company, that might be an alternative. We shall have a look at that.

On the question of giving notice, I made the case already that in these negotiations—which are very prolonged and very bitterly contested on both sides—those negotiating the agreement are sometimes very glad when they get an agreement and they have succeeded, as it were, in bringing a firm here which would be expected to give good employment. I am sure they would protest very strongly against doing anything that might upset the whole agreement at the very end.

The Deputy made a suggestion about publishing the matter before signing. That might be possible. I cannot see any objection to publication of the signing of such an agreement. Whether it was made the day before and signed the day after, I do not know, but I can see no objection that it might be published that such an agreement was made. Therefore, I would undertake to consider the various suggestions made by the Deputy. I think we might be able to be very definite, as it were, on what could be done on the next stage.

Amendment, by leave, withdrawn.
Amendment No. 3 not moved.
Section 3 agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill."

May I take it from the Minister that the position for the future will be that no pressure will be brought by the Government on the Industrial Credit Company to deal, themselves, directly with a proposition that they do not consider to be a commercial proposition? If the Industrial Credit Company do not consider a proposition to be a commercial proposition, then the position is that the Minister will take responsibility if it is to be done. May I take it that it will not be done by the Industrial Credit Company under pressure rather than under this? I think that is essential. Without such a categorical assurance, public confidence in the Industrial Credit Company would not be retained. Everybody knows that the Industrial Credit Company had been pushed to the point of making facilities available not on a commercial basis. It would go a long way to re-establish the reputation of the Industrial Credit Company as the company for which it was established if the Minister gave such a categorical assurance.

I regard the Industrial Credit Company's loan arrangements as only a very small part of the facilities which it should offer. I want to see the Industrial Credit Company going back to what it was originally when it was initiated as an issuing house. At present there is a very widespread desire for social securities, and a market in which there is great anxiety for good class Irish industrial securities. That is the occasion on which the Industrial Credit Company should push the people whom it has assisted by loans out into the market, if at all possible. We want a wider market in Irish industrial securities and the assistance given by Section 7 of the Finance Act, 1932 and by the death duty provision in the 1956 Finance Act to Irish industrial securities should be availed of in the present climate for buyers for the purpose of getting that wider market. I do not think the Industrial Credit Company can play its full part as an issuing house unless it has the reputation also of dealing only with commercial transactions.

It is because of that I want the position clarified beyond question now. I am not discussing all their functions as managers under Section 4, in regard to Ministerial direction. That is a perfectly different situation. The commercial aspect does not necessarily arise in that but in regard to their ordinary operations the time has come when they should be treated and allowed to treat themselves entirely as a commercial concern. By so doing, they will be able to do far more as an issuing house and inspire far greater confidence in the public and in that way give the public a wider portfolio of Irish industrial securities.

I am afraid there is great difficulty in regard to the Industrial Credit Company becoming an issuing house. They are quite willing to do it but there has been no issue by them so far as I know at all in recent years. I have not seen an issue of that kind. But I am sure they would be willing to do the job if it arose.

As regards giving this assurance, I think the Dundalk Company is the only one that really matters. The Deputy mentioned another company. He did not mention the name and I shall not mention it either. The Industrial Credit Company were not asked to go into that company. The £87,000 was capital but substantial loans were made by the foreigners——

Is that not another good reason why it should be a public company because nothing appears in the companies register?

It is probably a private company.

I can assure the Minister it is. I have it here. At 2nd August, 1962, let me add, the loans by the other concern were not mentioned as far as I can make out.

Since the last debate in which it was stated they were seeking some grants, I made inquiries and I find that is true. What they will get is another matter.

The Deputy's information is sometimes better than the Minister's.

At any rate, the company was helped substantially by way of loans. We shall leave it at that at the moment. The only company that would fit in at all with the Deputy's argument is the Dundalk Company. I think it true that the Industrial Credit Company would not have gone in there as a commercial proposition. They were quite willing to go in if it were Government policy to help the concern. They had an understanding, although I do not think it was in writing, that they should go in temporarily and that they would be taken out of the mess as soon as possible. That was what the arrangement amounted to and we are now doing that in this Bill.

In the future, as far as I can see, all new companies setting up here in a big way will have access to this Taiscí Stáit under the conditions laid down but I could not say, should another case like this arise, what will be done. I certainly hope that the Industrial Credit Company would be left to carry on its commercial business and not asked to do anything else. However, if such a case should arise, they have the staff and so on to deal with it and, as a temporary expedient, it is a convenient body to ask to step in for the time being. I hope such a case will not arise and I hope they will not be asked to intervene in anything like that again.

I think the Minister is misinterpreting the situation when he uses, as one of his arguments, the fact that they have the staff. It is precisely because they have the staff that they are being asked to be managers under Section 4 of this Bill. That is a very good thing. But I can assure the Minister if he asks the Industrial Credit Company to read the statement he has just made and if he asks them if he is in a position to repeat it on the Report Stage, he will be told categorically that he is not, that it is not true that Dundalk is the only case in which they were asked by the Government to deal with matters on a noncommercial basis.

It is the only case I know of.

I am not suggesting the Minister is deliberately telling lies to the House but if he does make the inquiry, the directors of the Industrial Credit Company, whom I know to be honourable men, will not underwrite the Minister's statement when they know it. If the Minister makes the inquiry between now and the Report Stage, he will find my information is right and that the information he has given, quite bona fide, to the House, is not correct. I think the existing practice should end, now that we have got a proper vehicle in the shape of this Bill.

Question put and agreed to.
Sections 5 to 7, inclusive, agreed to.
SECTION 8.
Question proposed: "That Section 8 stand part of the Bill."

Will the moneys that have been paid for the shares under Section 8 have to be met out of the Central Fund or by way of Supply Estimate?

The Central Fund.

Question put and agreed to.
Sections 9 to 11, inclusive, agreed to.
SECTION 12.
Question proposed: "That Section 12 stand part of the Bill."

Is the point of this section purely to cover qualificational shares?

Yes. We have, say, three or four directors who will hold a share each.

That used to be the old-fashioned way of doing it. The modern way is to provide that there need be no qualification for a director.

There might be three or four officers making up the seven. If one of those retired, they might say: "Give it to somebody else".

Question put and agreed to.
Sections 13 and 14 agreed to.
SECTION 15
Question proposed: "That Section 15 stand part of the Bill."

In relation to this section, would the Minister consider, instead of laying the guarantee on the Table of the House every year, to lay it on the Table immediately he has made the guarantee, having regard to what he has said himself?

That could be done, provided there is no power to rescind or revoke. The bargain would be made by that time.

It is the same point I was on before, that notice should be given at the earliest possible opportunity.

I shall consider that.

Question put and agreed to.
Section 16 agreed to.
SECTION 17.
Question proposed: "That Section 17 stand part of the Bill."

Who will be the auditor—the Comptroller and Auditor General?

I cannot recollect at the moment who is auditor for the Industrial Credit Company.

I have the accounts here. I can tell the Minister.

We are leaving it open anyway.

There are three separate firms of auditors—one for the parent company, the Industrial Credit Company; one for Shipping Finance Corporation Ltd., and one for Irish Film Finance Corporation Ltd., two wholly-owned subsidiaries. What I was interested in is this. This is a case where the business is to be done by direct direction of the Minister. Therefore, in such a case, where it is Ministerial direction, there might be a case for the Comptroller and Auditor General, whereas there would not be in the case of a purely commercial company.

That is right.

Question put and agreed to.
Section 18 agreed to.
SECTION 19.
Question proposed: "That Section 19 stand part of the Bill."

Is this what has come now to be the standard form?

Personally, I never liked it, but it is put into all of them— perhaps there is something to be said for it—that members of the Dáil and Seanad should not be put on these companies. There was a very dangerous proposition one time that they actually be disqualified from Dáil membership, if elected.

I would not have that at all.

If they resign from the company now, it is all right.

This method makes it clear that it is membership of the Dáil and Seanad that is paramount. If they are elected to this House, they give up their directorship.

It was in one of our Acts that they resign from the Dáil.

I know. That is all wrong.

Question put and agreed to.
SECTION 20.
Question proposed: "That Section 20 stand part of the Bill."

I notice that the wording of the section is such that the superannuation scheme cannot cover the directors. That is undesirable. You might have a whole-time managing director.

Would he be an officer?

I think there has been a decision that, where a person is a director, the fact that he is a director supersedes his other official capacity.

Could you interpret this section to mean that they could do that without consulting me?

It depends on the terms of the memorandum and articles of association.

Question put and agreed to.
Sections 21 and 22 agreed to.
Title agreed to.
Bill reported with amendment.

This day week.

When will the Minister be able to make the last published accounts of the Dundalk companies available in the Library?

We might be able to get them tomorrow or Thursday.

Next week, then, by all means.

Report Stage ordered for Tuesday, 18th June, 1963.
Top
Share