asked the Minister for Finance if any steps are now being considered by his Department to restrict the volume of Irish investment in Britain following the British budget restriction on British investments here.
Ceisteanna — Questions. Oral Answers. - Restrictions on Investment.
3.
Mr. O'Leary
The British restriction on investment in this country does not extend to personal investment in stocks and shares, short-term financing, reinvestment by insurance companies, or hire purchase capital. Current Irish investment in Britain comes almost entirely within the first two of these exempt categories and restrictions are not being proposed. The operation of the British restriction will be carefully watched, however, with a view to alleviating, as far as possible, any adverse effect it may have on the rate of economic development in Ireland.
The British restriction is expressed as an appeal for voluntary action. I and other members of the Government have frequently emphasised the need for increased savings and increased investment at home by Irish people, a need accentuated by this new development. I take this opportunity to appeal again for a greater volume of savings to be put to work productively in Ireland. This would make a valuable contribution towards solving the balance of payments problems of both countries by raising Ireland's output and, therefore, her capacity to pay for necessary imports from Britain and elsewhere. The variety of savings media available enables every saver to invest on attractive terms. There should be no need for anyone to seek investment outlets abroad.
Mr. O'Leary
Does the Minister see any possibility, arising out of the statement about consultations with the Central Bank, of giving them strong powers to stop the outflow of capital from this country?
The matter of consultations is raised in the next question. However, all consultations considered necessary to take whatever action might be deemed desirable will be entered into.
Is the Minister aware that one finance company in Dublin invites money for transfer to Britain at a very high rate of interest? It is located only a very short distance from here. It invites investment for transfer to England at a very high rate of interest and there is no disclosure. I inquired about it and they told me it would never be disclosed where the money was going and no tax would be payable either to the Irish or British Governments.
That has been the case for many decades in this country. When the matter was raised here on a previous occasion, I pointed out that, on balance, the rate of inflow of capital from Britain exceeds the rate of outflow of capital to Britain. The Deputy will understand the difficulty in imposing restrictions.
Would the Minister consider making an appeal to our people to invest at home, in view of the appeal the Chancellor of the Exchequer has made to British industry with regard to investment here?
I doubt if it would reverse the trend. On the other hand, the British public will see this as an appeal for voluntary action and an appeal to patriotic instincts. I should imagine that an appeal to Irish patriotic instincts should be equally powerful with regard to investment at home by Irish people.
Would the Minister take advantage of a special occasion in this House — for instance, if he should introduce a supplementary Budget — to make the same appeal to those who invest in Britain to do so here instead? There is far too much money going out of the country.
I have done that in my reply to Deputy O'Leary's question.
The Minister has done so but it will not get the same publicity as a special announcement on the matter would get. Maybe the Minister would consider that point?
I shall, certainly.
4.
Mr. O'Leary
asked the Minister for Finance when the present survey by his Department into the effect of the British budget restriction on investment in the Republic will be concluded; and whether British subsidiary firms here will be consulted.
The effect of the British restriction on investment in this country will be kept continuously in review so long as it lasts and British subsidiary firms here will, where necessary, be consulted.
Mr. O'Leary
Does the Department of Finance survey team have any special investigation in train at the moment on the immediate result of the restriction of British subsidiary investment in this country and the effect this may have on existing industries for the remaining portion of this year?
There is no special investigation, as such — as a special exercise — but my Department is alerted to the situation and is keeping it under review. It will take whatever action is necessary and will certainly engage in the consultations the Deputy suggests, when necessary.
Mr. O'Leary
There is large-scale unease in the country. This means that portion of the business investment in the Republic by British firms has now artificially been curtailed by another Government. Would our Government consider what action they will take in this instance?
We are considering what action will be necessary.
Mr. O'Leary
The Minister appreciates that some action will be necessary?
We are not absolutely certain yet but we shall take whatever action will be necessary.