Dáil Éireann debate -
Wednesday, 18 Nov 1964

Vol. 212 No. 7

National Loan, 1964. - Statement by Minister for Finance.

Minister for Finance (Dr. Ryan)

I want to inform the House that a new National Loan will open for subscription on Monday next, 23 November. The loan will be for £20 million but £4 million of the stock is being allotted to certain life assurance offices and an application for £4 million of the stock is being made on behalf of funds under my control. The balance of £12 million will be underwritten jointly by the banks and the Government.

The rate of interest will be 6 per cent per annum and the price £98½ per cent. The stock will be redeemed at par not later than 1990 and may be redeemed at any time from November, 1985. The yield to redemption on these terms is £6 3s. 0d.

The usual provision is made in the prospectus whereby only 10 per cent of the purchase price need be paid on application, the remainder being paid in three further instalments spread over the period to the middle of January. Those subscribers who wish to pay the full amount on application next week, or to complete their subscription on 16th December, will be entitled to discount equivalent to an interest rate of 6 per cent per annum on the advance payments.

The tax privileges attached to recent National Loans are again included. Interest will be paid without deduction of income tax at source, but, of course, holders will, if ordinarily resident in the State, be liable for whatever tax on the interest is appropriate to their respective incomes. Stock of the issue will be accepted at its nominal value as the equivalent of cash in satisfaction of death duties on properties of which it formed a part. The stock and the interest on it will be exempt from all Irish taxation, present and future, if owned by a person neither domiciled nor ordinarily resident in the State.

The issue is being made under the authority of the Appropriation Act, 1964, and other statutes. Both principal and interest will be a charge on the Central Fund. The attractive interest rate it carries, its status as a trustee security, the concession whereby it will be accepted in payment of death duties and substantial sinking fund allocations should ensure that the stock will always have a high market value. The Government stockbroker will be ready continually to buy and sell reasonable amounts of the stock, and this will help to maintain an active market in it.

The loan is required for the financing of State capital outlay on agriculture and industry, on housing, sanitary services and schools, on afforestation and fuel resources, on transport and on other development schemes in pursuance of the Programme for Economic Expansion.

The prospectus of the issue will be published in tomorrow morning's newspapers. Copies of the prospectus, with the application form for subscriptions attached, will also be available as from tomorrow from any bank, stockbroker or post office. The lists will close not later than Friday, 27th November.

I ask every Deputy in the House to give the issue his full support.

Mr. Sweetman

The issue of a National Loan is not a Party matter but a national matter. Accordingly, on behalf of the Fine Gael Party, I wish to make it clear we give the issue our full support. Any advance we can hope to make in our national living standards depends on a programme of capital investment, and that programme must be financed to a very large degree from the savings of our own people. The National Loan offers an opportunity to those people who have any amounts, large or small, to take part in this development.

It is very often accepted by people outside that the issue of a National Loan is something of concern only to the large investor. It cannot be too often stressed that the small investor is more than welcome in National Loans and that it is indeed the accumulation of small subscriptions that helps to make the issue of a National Loan a real success.

The Minister has stated that the proceeds of this Loan will be used for the purposes of productive investment. In this scientific and technological age, it requires very great investment indeed for a real advance. Accordingly, we on this side of the House can fully understand the necessity for productive capital investment, and indeed we have long advocated it. In addition, social investment— matters such as housing—requires great priority, particularly in the city of Dublin.

On that account we sincerely hope the issue will be a success. It should be a success, because the rate of interest and the terms offered are very favourable to investors. I think it is almost the highest rate that has ever been offered and I know of only one other occasion when a very slightly greater discount was given. In the circumstances, those who subscribe to the Loan will not only be doing something useful and worthwhile for the country but, in addition, will be getting a really substantial benefit for themselves by way of the interest and repayment terms.

Mr. Corish

On behalf of the Labour Party, I should like to express our approval of the issue of this Loan which we thoroughly recommend to the public. It should be attractive to investors because of the generosity of its terms. It is pleasing to note that £4 million of the stock is being taken up by certain large assurance companies. It is encouraging to see they are prepared to invest part of their incomes in an Irish Loan. I should like to ask one small question. Two or three years ago when a Loan was issued these companies took up £4.8 million. I think I am right in assuming from the Minister's speech that £4 million was the amount allotted to them and is not what they applied for?

It should be impressed on the people that this money is being raised for national development. If we are to further progress in industry, agriculture, the building of houses and schools and the development of forestry and fisheries, we must be prepared to continue to raise by way of loan the money necessary for these activities. Like all National Loans, this Loan will test the faith of the nation in the future development of the country. I have no doubt that on this occasion, as in the past, there will be a very generous response.

We are wholeheartedly behind the Loan. While we may differ on the methods of development, the priorities and the details of expenditure, that does not make any difference: we back any project, such as the raising of a National Loan, for the development of the country. We believe in the necessity of this investment and of saving for the provision of such investment. For those reasons, we fully support the Loan and recommend it to the public.