Dáil Éireann debate -
Wednesday, 15 Feb 1967

Vol. 226 No. 8

Private Members' Business. - State Boards and Companies.

Mr. Sweetman

I move:

That a Select Committee consisting of 17 members of whom five shall be a quorum, be appointed, with power to send for persons, papers and records: (a) to examine the capital expenditure of State Boards and Companies, and to consider the future capital programme and plans of such Boards and Companies; (b) to consider whether any changes are needed in the organisation of such bodies; (c) to consider whether there is proper and adequate liaison between such bodies and Government Departments, and private interests affected by their activity, and between the bodies themselves in matters of common interest; (d) whether the private citizen or other body obtains reasonable service from such semi-State bodies and in case of dissatisfaction has a reasonable means of securing redress from any such body; and (e) to make such report or reports embodying the recommendations of the members of such Select Committee as it thinks proper.

The position in relation to State-sponsored bodies is one that has been causing some anxiety not merely to members of this House but to people outside the House, in the past few years. It is perhaps fair to say that the position of the State-sponsored bodies here, and their operation, is one that has grown up quite haphazardly over the years. The first State-sponsored bodies were set up in 1927 when the Dairy Disposal Company was formed for the purpose of disposing of creameries in certain parts of the country. It is still happily flourishing with those creameries not disposed of at all. The Electricity Supply Board was formed in or about the same time and was restricted then to public utilities, in the strict sense of the word. As the years wore on, the use of State-sponsored bodies — and I use the term "body" to cover both boards set up specifically under statutes and companies set up under the Companies Acts, or under statutes — became a matter for ad hoc considerations whenever a problem arose which it was desired to remove from Civil Service control. In passing, I may say that when removing it from Civil Service control in one sense, it had at the same time, the effect of removing it from the control of this House and from effective public control of any sort.

Some of these ad hoc bodies were set up in the early 1930s and then during the years of the Emergency, there was a variety of bodies set up purely to deal with emergency considerations of that time. Many of those emergency bodies, have, of course, since ceased to operate and are not now in existence and therefore are not a matter for consideration at present. Following the ending of the Emergency and the ultimate wiping out of some of the bodies set up for emergency purposes, other bodies were set up again on an entirely ad hoc basis rather than according to any plan. They were set up partly because there did not seem to be any particular reason why it could be hoped that private enterprise would fill a void in the economy and partly because the type of undertaking was such that it was felt at the time that some form of public enterprise was more appropriate.

Down through the years there has been a suggestion that if something was done incompetently, the mere fact of transferring it to a new State-sponsored body meant that the work was going to be done in a competent fashion. That was proved to be far from the case. It does seem extraordinary that in this day and age there should exist a large sector of production in respect of which the public, through the taxpayer, is called upon to pay the piper and in that sector there is no effective control at all by those who should be exercising the attributes, if one likes to use that word, of a watchdog over it.

The first analysis of State-sponsored bodies which I have been able to find was one made by Dr. John O'Donovan in the Statistical and Social Inquiry Society of Ireland on 12th May, 1950. He divided State-sponsored bodies into seven different sectors, agricultural companies, financial institutions, industrial undertakings, public utilities, transport organisations, emergency companies and other bodies. As I said already, the emergency bodies have gone and therefore it is fair enough to take the State-sponsored bodies of the present under the six categories he has mentioned, with the addition, perhaps, of what one might call social welfare organisations, whether Arramara Teoranta — which although nominally a manufacturing company, is in fact a social welfare organisation for providing employment in Connemara—or companies for health purposes or the welfare of one sector or another of the weaker sections of the community.

After that analysis made by Dr. O'Donovan, a very striking statement was made by Mr. Mortished, speaking to that paper, in which he was most emphatic in his condemnation of the fact that there was not adequate control of these public bodies, and particularly that there was not adequate publicity given to the method in which the control which there might be would be operative. Of course, I should add that Mr. Mortished had, perhaps, a jaundiced view, of this House in that he was not very partial to politicians for reasons which it is not very difficult to see. In his statement on that occasion, he was rather hard on the politicians. However, he did make it clear that in his view at the time, there was a very strong case for a permanent general supervisory body in relation to these State-sponsored bodies acting in much the same way and in the same spirit as the Committee of Public Accounts Acts.

One comes to another paper also read at the Statistical and Social Society on 29th May, 1965, when Mr. Bristow made a most factual analysis, not merely of the terms of employment of State enterprises but also of the proportion of production in the State for which they were responsible. I noticed particularly that he came to the same conclusion as Senator Garret FitzGerald came to in his paper on State enterprise, that their payroll accounts for about ten per cent of total wages and salaries. We are, therefore, to-night dealing with no small or insignificant sector of the economy when we are dealing with a sector which accounts for about ten per cent of total wages and salaries.

Apart from that, State-sponsored bodies are of their very nature particularly capital intensive and, therefore, the amount of the gross fixed capital formation in any year by the State-sponsored bodies is very much greater than the ten per cent of their payroll and I think the general estimate is that it would account for about one-quarter of our fixed capital formation.

It is, of course, true to say that these State-sponsored bodies do have some supervision on them by Ministers and by the Departments under the various Ministers responsible for them, but they all work, regardless of what they are, in a jealously protected atmosphere of secrecy which does no one any good and certainly does not do any good to the people who work in them, much less to their public image. The atmosphere of secrecy to which I refer is emphasised even in many of the replies which I have got today where the Ministers concerned have refused to answer questions in relation to the salary of the five chief executive officers in each institution. Some of the Ministers concerned, in fact, have so little contact with these State-sponsored bodies for which they are responsible that they were not able to answer the questions, although, I am glad to say, the Minister for Finance, who would be responsible for more bodies than any other Minister was able to provide the information at once, in so far as he wished to provide it. He, however, also took refuge again in the secrecy about payments that are made to executive officers.

It is entirely wrong that in the case of boards such as Córas Tráchtála or Bord Fáilte, the status, if you like to use the word, and the remuneration of the employees in those boards should be published here in this House and that the Minister responsible would refuse to publish in the same way the same factual information about companies and other boards that have been formed. It is that atmosphere of secrecy that has done a great deal to spoil the image of work that has been worthwhile.

The Committee of Public Accounts also from time to time has adverted to this matter and, as far as I can find, the last reference to it is that in the report that was made on 17th November last when the Committee stated, in paragraph 3:

The Committee notes that its suggestion that an amendment of Standing Orders of Dáil Éireann should be made to enable it to review the accounts of State-sponsored bodies which receive subventions from voted moneys is being received in the light of the comments of the Departments concerned.

I am afraid I differ slightly from the Committee of Public Accounts in that respect in that I do not think it is necessarily the Committee of Public Accounts that is the best means of exercising the control in question, although I do without question subscribe to the view that a committee of some sort is required. However, it is because we are open to conviction as to the best method of control that our motion was phrased in the way it is. The motion is, as I say, for the purpose of ensuring that there would be a Committee of this House set up to ensure that a suitable form of control by the Oireachtas of these various State-sponsored bodies and boards would be considered.

In fact, the proportion of the active population employed in this sector of the economy is not merely substantial of itself but substantial by comparison with other countries. We provide more employment for our people through State-sponsored bodies than do Belgium and Denmark and very little under the figure for France, Sweden or Austria. Admittedly, we have a smaller number employed here, in proportion, than they have in Britain, but even in Britain they have had two Select Committees to discuss this very problem and to make recommendations in relation to the problem of control, whereas we have not had one at all.

In 1957, which is the last date I can get, the State-sponsored bodies absorbed, in Finland, Belgium, Denmark, The Netherlands, Norway and Sweden, approximately between 22 and 25 per cent of gross fixed investment. The only countries in the EEC report where the amount was larger than here were Austria, France, Italy and the United Kingdom. The best estimate that one can come to is that there are about 50,000 persons employed in Ireland in this sector of the community. The amount that they have to take out of the national pool in relation to fixed capital formation is, as I say, somewhere in the region of 25 per cent.

Let me say at once that I accept that in many of these State-sponsored bodies there are many dedicated public servants but these bodies have tended in recent years to provide a class of people who resent any type of constructive criticism of their endeavours. Another way of putting it would be that some of them have got very much too big for their boots. A concrete example of that was the disgraceful performance by the Manager of Córas Iompair Éireann in relation to this House just before Christmas. There is, unfortunately, a certain feeling growing up amongst them of "scratch me and I will scratch you", and the personnel engaged in some of the companies are not in the same forthright class as those on the boards to which I have referred earlier and whose work is discussed and bound to be discussed more fully in this House.

The type of audit carried out by the auditors of a commercial concern is entirely different from the type of audit carried out by the Comptroller and Auditor General in relation to voted moneys. The commercial audit is devoted entirely to ensuring that there is not fraud, that a proper financial picture is shown, and so does not in any way consider the legality, if I may use the word, or the appropriateness, of the expenditures that are concerned. The Comptroller and Auditor General, on the other hand, does not concern himself with the commercial side of an audit, but he does concern himself very much and very properly with the underlying authority for the expenditure and with the appropriateness of that expenditure.

It seems to me that in relation to these State-sponsored bodies, one wants to get something that is halfway between the two. The directors of the State-sponsored bodies are appointed by the Minister or the Government of the day. The commercial auditors are appointed in exactly the same way and it would not be reasonable or proper to expect that the auditors in those circumstances would be reporting in a critical way of the directors who have appointed them, because though, in theory, the auditors of a company are appointed by the shareholders in fact, as the Minister only too well knows, it is the directors who make the appointment. We have again and again, not merely in relation to auditors but today in relation to executive staff, had it clearly laid down that it is not the Minister's concern; it is the directors who make the appointment at issue.

There has been evidence before the British House of Commons in their Select Committees that it was not reasonable to expect commercial auditors who are working with the directorate of the nationalised industries there to produce the same kind of reporting on appropriateness as would be done by the Comptroller and Auditor-General. However, when one turns to the problem that is here—and everybody must accept that there is a problem—and turns to what is being done in other countries, it is a most significant fact that we are very much behind in the steps we have taken, or rather, the steps we have failed to take.

I suppose the oldest State enterprises in the world are those in France where the Manufacture Royale of Louis were responsible for the expansion of the Sévers porcelain factory and the Gobelin Tapestry, but in France they have faced up to this situation with the Court de Compte and they have therefore a position in which while there may be commercial auditors for the State industries, as there are here, there is also in relation to those a court of accounts in which it is the responsibility of that court to ensure that the State-sponsored bodies do not go beyond the powers that have been given to them.

It always struck me as one of the most extraordinary things that I came across when I was Minister for Finance, that during the time of my predecessor, a company that had been set up by this House had, apparently with Ministerial approval, set up a subsidiary company of its own without coming back to the Dáil for the authority to do so. It seemed to me grossly wrong that, when a Minister in any Government had come to the House and asked the House for authority to set up a particular company, be it CIE, be it the Irish Life Assurance Company or any other company, that company would then on its own and without coming back to the Dáil or to the Oireachtas, proceed to hive off certain of the responsibilities that had been put on it without proper Oireachtas authority.

I agree that probably at the time when Irish Estates were set up by the Irish Life Assurance Company or when the hotel companies were set up by CIE, the Minister of the day was asked for and gave his approval. However, whether he gave his approval or not, it seems to me a gross derogation of the powers of this House that the duties that have been given to a board in that manner should be delegated and hived off to a subsidiary company in the manner in which that was done in those two cases.

These State-sponsored bodies, while they may be able to judge within the narrow concepts of their own business what is best in that business, cannot possibly have the same wide conception of the public interest as would be necessary for, shall we say, a Government Department. Yet it takes the very rough handling of threatening to dismiss the directorate of one of those bodies before they can be brought back from a line that was entirely wrong, entirely outside their normal scope, to a line the Government of the day thought desirable.

I am quite certain that if the Minister for Finance were faced with the same problem as I was faced with of ensuring that the Horse Show, the Spring Show, would have adequate room to expand, he would have taken the same view as I took, that it did not matter what property development was going to take place in that area, the first essential from the point of view of our tourist trade ought to provide that the Horse Show, the Spring Show, would be able to expand and would be able to go on being the immense attractions they have proved to be.

Mr. Haughey

As a member of Dublin Corporation at the time, I supported that decision.

Mr. Sweetman

I only mention it to show that it was entirely wrong for the body in question to hive off its responsibilities to a subsidiary company which was not in the same contact with my predecessor as the main company would be, and therefore that the situation had arisen out of something not visualised by this House when the parent company was set up. I have no doubt whatever if the method of audit there had been not the commercial audit in the ordinary way, but the audit of the Comptroller and Auditor General, or somebody of a similar nature, that difficulty would never have arisen.

I do not know whether the Minister has examined the only book published on this matter: "The Accountability and Audit of Governments" by E. L. Normanton, published by the Manchester University Press. I understand I have an advantage over the Minister in this respect because I understand this is the only copy anywhere in any library in the country. The Minister has it in his Department?

Mr. Haughey

Yes.

Mr. Sweetman

Then I will expect him to corroborate that there is in every country other than in Ireland some means of ensuring that State-sponsored bodies of this sort are made amenable to public control. In France, where they have the oldest public industries of this sort in the world, they have got the Court of Accounts. In America they have a very clear method of providing control over Government corporations. These corporations are audited by a body which is bound to produce its report, not merely to the Executive in the person of the President, but also to the Bureau of Budget, the General Accounting Office, to the appropriate Committee of Congress and to Congress itself. Its working in relation to Government corporations in America over the years has clearly been proved to be an outstanding success. In recent times America has not had the proliferation of new Government corporations springing up as it did in the 30s before the last World War. Nevertheless, the number that are there, and the enormous extent of the subvention given by the Treasury to them, has made it absolutely essential to have this power of control given to the General Accounting Office, as it is called, and reports back by that body to Congress and to the relevant Committee of Congress.

The position in Germany is that they have a similar audit by a public auditor, who is something halfway between our Comptroller and Auditor General and a commercial auditor. He reports back to a court of audit rather like the French court in that respect. Every country has done something in relation to this problem except us. The British had two Select Committees on it. While they considered a wealth of evidence, I do not think they came to conclusions that are entirely valid for us here. But the very fact that even today answers are given to purely factual, statistical questions that they are matters for the corporations themselves and not matters for the Minister concerned is evidence that these bodies have gone out of control and that the sooner control is exercised, not merely by the Executive represented by the Minister but by this House, which has to provide the money and the wherewithal for them, the greater will be their efficiency and standing in the public eye.

Mr. M.E. Dockrell

I second the motion. I think the House will agree from Deputy Sweetman's statement that this is a very difficult and complex subject and one that we cannot hope to cover completely in Dáil Éireann. This difficulty and complexity is, in itself, a sign that Dáil Éireann is not the body to deal adequately with these State-sponsored concerns. That is what really lies behind this motion.

Deputy Sweetman rightly paid tribute to the very many dedicated people in State-sponsored bodies who carry out to the best of their abilities, which in many cases are very great, the functions for which these bodies were set up. These bodies range from the Milk Board to a transport company, taking in en route social welfare schemes and services. There are a host of other types of bodies which I have not time to enumerate here.

We in Dáil Éireann are trying to exercise some control over all these bodies. I will take back that sentence and say we are pretending to exercise some control, but we are not exercising any effective control over them at all. The Minister refuses to answer questions which come within the ambit of day-to-day administration. We might put it another way by saying he is not allowed by the rules of the House. I am not blaming the Minister for that. Any Minister of any Party in power would find he would have to do that.

I would like to take just one small and what may appear to be a trivial example of this—the CIE bus queues which we all know. I have seen them stretched for a couple of hundred yards, people standing in the rain. It is not a trivial matter for them. We cannot raise that in the House. After all, the whole purpose of a transport company, its reason for existence, the reason why this House takes an interest in it and pours money into it, is so that people will be transported from their homes or their businesses to wherever they may want to go, so that what appears to be a trivial day-to-day question is really an extremely fundamental one, not only politically, but from the point of view of the real reason for the existence of the particular body and also because we are not able to exercise that degree of control which all of us would like to see exercised without swamping this House with day-to-day matters.

How can we achieve our purpose? We can do it by setting up a Committee which will deal with that and go into the capital expenditure side of it. I hope the Minister will not say that the Public Accounts Committee is one that is set up by this House and can deal with this matter because, in my opinion and I think also in the opinion of Deputy Sweetman, the PAC is not a Committee which can deal with that. From my memory of that very excellent body and its work, its primary function is to see that Government Departments spend the money as Dáil Éireann told them to spend it and they must not spend more and should not spend less in many cases. I do not think that the PAC can help Dáil Éireann in this matter.

Other countries have apparently found that they have to set up new bodies to deal with what is a function of the 20th century in parliamentary life. If we try to do it here, we shall swamp the House with a mass of complex matters with which we are not able to deal and it is quite inadvisable that we should try.

There are so many facets of this question of State-sponsored bodies that I should like to take them one by one. I cannot hope to get through them all. I have mentioned the question of Dáil Éireann and its function in connection with them. We may be told if the Minister is against this: "You may bring it up in the Vote." The Vote does not come often enough to deal with matters that need to be dealt with, day-to-day matters which in many cases are the reason for the existtence of the body. We can only deal with them in a loose fashion.

We then have the question of the bodies themselves. They have an innate tendency, like all bodies set up by a parliament and allowed more or less to function on their own under a sort of loose control, to become imperium in imperio, a state within a state. They think they are not answerable to anybody. That is an inevitable development, not necessarily of all these bodies, but they all certainly have a tendency to work in that direction. They would not become more liberal, more closely in touch with the people or even necessarily with democratic procedure.

One could say that is an inevitable development, almost a new Parkinson's law. A further matter concerning these bodies is the inevitable power they develop because we cannot cope, and have not the time to cope, with all the matters with which they are concerned. We, in fact, are relinquishing our own powers and if we relinquish them in matters like that, these powers will be taken from us. If we do not exercise them, we lose them either by precedent or by deliberate intent on the part of these bodies.

In the 18th and 19th centuries, the legislative bodies of the world had a very great struggle in various countries with the royal prerogative and the parliamentary history of those periods is very largely an effort by parliaments to exercise control and establish power over the power of the monarchs and later, in the 19th century, to develop the skills that were necessary to see that the vast civil service which parliament had to create carried out the ever-increasing work of parliament and to ensure that those powers were not lost. The history of those centuries is a splendid one from the point of view of the establishment of parliamentary power.

Fortunately, we in the 20th century do not have any questions like that but we have the difficulty of dealing with bodies which we ourselves set up and we shall be failing to exercise the vigilance which a parliamentary body should exercise if we do not take steps to see that these bodies are watched over, helped on occasions and on other occasions reminded of their real function. That is why we in this Party have felt this is a question which should be aired widely and thought about.

We believe a Select Committee of 17 members should be appointed to go into this question and report back to the House on how best to exercise the control which we know is not being exercised over these bodies. That does not always mean — or mean at all—that those bodies are not carrying out their functions in a proper manner, but it sometimes does happen that they are not carrying them out in the way in which this House wished them to and still wishes them to carry them out. For those and other reasons, I have great pleasure in seconding this motion.

Mr. James Tully

For many years, we in the Labour benches have been asking for some type of Committee to be set up for the purpose of having some control—not overall control— over the activities of semi-State bodies. We believe that many of them, indeed most of them, are doing an excellent job and, as previous speakers mentioned, that many of the key men in these bodies are dedicated men who are doing a good job and believe that they are doing it in the right way. We feel it is bound to happen that scattered throughout the very many people employed in the semi-State bodies will be the odd one who believes that given unbridled control, he can do anything he likes, whether or not it is in the public interest.

Possibly the State feels that because the Government Minister in charge of the Department which is responsible for the particular semi-State body has the right to examine the audited accounts, that is sufficient control over the body. We do not agree with that at all. We believe that since these bodies can rightly be described as creatures of Parliament, set up by Parliament, financed in most cases by Parliament, it is ridiculous that they should have now reached the stage where they do not feel answerable to anyone. As Deputy Sweetman said, it has become nearly a matter of form that a routine audit takes place, looking for fraud and things like that in the accounts, and if they are not present, there is no further interest in the affairs of the company. The Minister naturally, being a very busy man, and his officials perhaps having more than enough to do, usually they just take a cursory glance and see that everything is above board in the board's report, not the accounts of the semi-State body, and the result is that everything in the garden is rosy so far as they are concerned.

Again and again in this House, questions have been addressed to Ministers who are responsible for the Departments under whose aegis there are semi-State bodies. When they are questioned, if the question is of such a nature that an easy reply can be given without embarrassing anyone, that reply is given. If it is an embarrassing question to the Minister, to the Government, or indeed to a semi-State body, the Minister will say he has no function in the matter. The Minister for Transport and Power is a typical example. We have had this from him so often that it has nearly become his signature tune: "The Minister has no function in the matter".

We believe that the Minister and Parliament should have a function in the matter. We believe we not only have a right to investigate the question of profit and loss and not merely the question of the ordinary activities, but also that the questionable decisions taken by those boards from time to time should be subject to investigation by representatives of this House. As Deputy Sweetman said in his opening statement, every civilised country in the world where semi-State bodies exist has some system of responsibility by the Parliament. We seem to be out on our own in this matter. We have our own peculiar system. Why, I do not know. Maybe it is because it is the easy way out. We have decided just to carry on, get the audited report, let the Minister have a look at it, and everything is grand.

The Minister may ask what I mean by "questionable decisions", in view of the fact that I said earlier that most of these bodies are run by dedicated men. I would refer particularly to the decision taken by the ESB, of their own accord, to completely close down electric power in this country. The ESB may have considered that they had good reasons for doing this, but when we asked to have the matter fully investigated, we were told this would not be done. That is a typical example of where administration by a semi-State body should be examined and the rights or wrongs of it finally proved. As it is, there are two sides, and both are sticking to their own story. It appears as if the general public will never know who was right or who was wrong on that black Monday.

We have quite a number of other instances. For instance, there is the closing of the railways by CIE. Surely there should have been some way in which this House could have investigated decisions to close railways: whether or not the decision taken was the right one; whether or not the system which was offered as an alternative after the closing of the railways was the right decision? Syrely all those things should be subject to some scrutiny by a committee of this House. There is also the amount of money that is being expended. There was a story that CIE were going to save so many millions of pounds by doing certain things. Many people feel that these millions were not saved and that in fact it is costing much more to do the job than it did originally. Surely it should have been possible to put the evidence before some committee which would be able to investigate it and pass judgment on it?

As I said earlier, most of these bodies are doing a pretty good job. How are the top executives paid? What are their conditions of employment? Since the Taoiseach, Ministers, Members of this House and the other House, and the Civil Service must have their salary-souls bared in front of the general public, why should it not be possible to have the same information supplied about those who are attached to the semi-State bodies. Maybe they are not being paid nearly as much as they are entitled to. Maybe the evidence would prove that they are paid a lot more than many of us would think they should be paid. Those are matters which should be subject to scrutiny.

We have the situation where certain conditions of employment are being negotiated. We have had over the years a number of transport strikes. We have been told that the reason these transport strikes took place was that, according to the Minister, the unions representing the workers were unreasonable. On the other hand, the workers are prepared to say that it was because of the unreasonable approach by CIE: on one occasion, on two occasions, on three occasions, a very junior member of the staff was sent to negotiate on wages and conditions of employment, instead of a top man who could take a decision, and it was this that caused the dispute. Now we can never have these things investigated because, according to the Minister, he has no function and there is, therefore, no one in this House who can have a complaint of that kind investigated. It is because of that this motion has been tabled by the Fine Gael Party: they want the right to set up a committee to investigate. They have done a public service in putting down this motion. I hoped that, when the proposer and seconder had finished speaking, the Minister would get up and put his point of view. Apparently, he has decided he will wait a little longer.

Mr. Haughey

I wanted to hear what the Deputy had to say.

Mr. James Tully

Maybe the Minister has no point of view; I do not know.

Mr. Sweetman

He quite obviously had not read the book anyway.

Mr. James Tully

I hope it will not be that the Minister has no function in the matter. Perhaps I have got the wrong Minister. It appears a simple thing for this House to set up a Committee to investigate the matters to which I have referred, a Committee to find out if the very substantial sums being expended on some semi-State bodies are being spent in the right way, a Committee to find out if there are in fact—this is something which is not directly referred to in the motion—many other semi-State bodies which could be set up and could do a darn good job, after full investigation and examination by a Committee of this House.

I agree with Deputy Sweetman that the setting up of a company within a company, which was done on a couple of occasions here without the authority of this Dáil, was illegal. However, the companies concerned got the Minister's sanction, and got away with it. One of them seems to have done quite well. With regard to the other, both the Minister and the Government would, I suppose, be much happier if everybody would forget all about it, but it is not likely to be forgotten too quickly.

These are the kinds of thing which should be the subject of consideration by a Committee such as that suggested in the motion. There is no use in the Minister getting up, as I presume he will and saying that what we suggest is that the day-to-day operations of these companies should be interfered with by this House, that we should not attempt such interference, and that such interference would, in fact, only cause a great deal more confusion than has already been caused. As far as we are concerned in the Labour Party— Fine Gael have made themselves pretty clear—our point of view is simply that this Committee should be set up to do exactly what I have said it should do. If the Minister has given this matter the consideration he should have given it— it has been long enough on the Order Paper—I feel he will have very little hesitation in agreeing that this Committee should be set up.

Mr. Sweetman

The Minister? Mute? I should not like to say mute of malice, but there is no other explanation.

An Ceann Comhairle

Deputy Donegan.

Mr. Haughey

I want to hear fully the views of the House.

Mr. James Tully

Does that include Fianna Fáil, or have they any views?

Mr. Haughey

I do not know why I should be blamed for wanting to hear what everyone else has to say.

Mr. Sweetman

The Minister hopes Deputy Donegan will last till half-past seven. He has not made up his brief. He will be able to read Normanton between this and next week.

Mr. Haughey

I want to hear the discussion.

Mr. Donegan

I am sorry the Minister for Transport and Power is not here because he is the person who most irritates members of this House by his insistence that he will not provide information about State-sponsored companies, information which both sides properly feel should be available to them. His answer is invariably "No"; he refuses to give the information, and that is that. Because of that attitude has come the need for the Committee now proposed. Any company operating in the commercial sphere needs direction and this direction must have a certain discipline imposed upon it, either the discipline of looking after its own money, if it is money invested by the directors, or being responsible for the money invested by the shareholders who have appointed certain persons to act as directors. That is the whip across the back of the director of the ordinary company and in 99 cases out of 100, he freely accepts his responsibility.

In the case of a State-sponsored company, there is a different situation, due in particular to the attitude of certain Ministers, such as the Minister for Transport and Power. A situation has developed in which the Government want every State-sponsored company to succeed, while, at the same time, giving the public no information of any kind as to the intricate operations of the company. Naturally enough, that breeds suspicion and, equally naturally, breeds the demand by the Opposition for more information. There is, too, the other point that, when the executives of any company realise that the directors, irrespective of profit or loss, are determined that the company shall succeed, then their attitude as executives is conditioned by that situation. They have a different attitude altogether from the executive in the ordinary company who is responsible to the directors and who must always bear in mind that his actions and decisions decide either profit or loss.

Let me give an instance of what I mean. If you are a clerk in an office in CIE and if you reach a certain point at which you have seven other clerks under your control, then your salary, your pension rights, your whole mode of living, are spectacularly changed. Whether or not the operation was a profit-making one would not enter into your thoughts. Let me give another example. Socially I met an official of the ESB and I put a hypothetical question to him: "Is it right or is it wrong that the ESB should sell appliances against the ordinary trader down the street, who is paying rent, rates and taxes, while you are not bound to make a profit; you are merely bound by the instructions of the Minister?" Very honestly that man answered: "The position is that there are now 800 people involved directly or indirectly in the sale of appliances and every one of those wants to have his future looked after, wants to see expansion, wants to have his ambition realised. You cannot sack him and, secondly, you cannot depress that ambition."

The fact is that in that way one builds for oneself a colossus—I am not saying whether it is right or wrong— which wants to expand, irrespective of the result, irrespective of whether the result spells more loss or more profit. In the particular instance I am giving, it would probably be more profit because the ESB can switch off the current if the instalments are not paid. Because of their wonderful collection system, the operation is a complete insurance against loss, but the operation is not a profit operation. I give it as an example to show that executives in a company are not necessarily bound in the proper way by the directors; directors normally have their responsibility either to themselves from the point of view of profit or to their shareholders since they are put there by the majority of the shareholders to look after their interests.

What is the corollary here? I want to suggest that if we here, by the collection of national loans, or the guarantee of loans to the ESB, or the passing of money to CIE, invest the people's money and underwrite the payment of that money through the collection of taxation, then the responsibility rests on the Members of this House and on them alone to see that these companies are properly carried on. There is another responsibility as well. If we make capital investments in State-sponsored bodies, then we must see that the people who subsidise them through us are not being adversely dealt with by the State-sponsored bodies and that they do not interfere in the people's private affairs.

Once this thing starts, you have started the growth of a colossus which you cannot stop because you have involved all the people in that State-sponsored body in activities which may or may not be right. The Members of this House have the responsibility to the ordinary voter and taxpayer who elected them to see that the people's money is properly dealt with and they have the responsibility to the ordinary citizen to see that he is not interfered with by the actions of a State-sponsored body. There have been instances where Members of this House have objected to practices of State-sponsored companies. For instance, there is the practice of not charging up interest on capital and also the practice of producing an operating surplus. This means that the taxpayers are paying for a movement of capital into that State-sponsored body and that there is no repayment from the State company itself.

That might be justifiable if the company concerned were providing a social service. If it could be proved, for instance, that CIE provides a social service in seeing that part of the country is not cut off from the rest of the country in regard to transport, that would be an instance where the proposed Committee could decide that CIE was providing a proper social service. There are other instances in which this provision of social services is questionable.

I have here some figures from the accounts of a State-sponsored company and again there is an omission of the amount of interest. Because the terms of the loan and the terms of repayment have not been decided, they blandly put into the accounts that no figure has been provided for interest payments. The difference in the accounts of this company if the calculation of interest on capital were made at seven per cent, which is a reasonable figure, would be £420,000. I would prefer not to go into the absolute details because this is a young company, and we all wish it success, but it is an instance where a State-sponsored company has decided not to include a figure for interest in its accounts and this fact completely distorts the information given to the public. It is only when one sits down and spends a lot of time in doing homework that one sees these difficulties and anomalies. I am sure that if a Select Committee sat down and discussed this matter, they would make a recommendation to include a figure for interest which is what every commercial company faced with such a situation would do.

If any such manna from heaven happened in the case of an ordinary commercial company, the accountants of that company would insist on including a figure for interest or on putting a footnote to the accounts giving the position as it was and indicating a probable interest rate. These are matters in connection with State-sponsored bodies to which there has been objection since I have been in this House, that is, since 1954. These objections have never been answered. Minister after Minister has said that this is a function of the State-sponsored company and no more about it.

Perhaps when the money involved in our State-sponsored bodies was much less, there might have been some justification for not going too deeply into the matter. Now all these companies, the ESB, Aer Lingus and the Sugar Company should grow. Bord na Móna should grow if they build the briquette factories that we suggest. It is in that situation that we suggest that an examination into the operation of these bodies on behalf of the people should be made by the parliamentarians of this House.

I agree that when that is done the Cabinet table is the place where decisions must be made in relation to capital investment and to the provision of further capital, if necessary. The situation is that while that power must rest with the Cabinet, there is need for the minute and detailed examination suggested by this motion. Deputy Sweetman ended his speech by saying that the standing of these companies would be considerably improved, if it were possibled to have this examination. I could not agree more with Deputy Sweetman. The attitude of many people is that these are State-sponsored bodies and that they can do what they like. This attitude may or may not be correct but it would be far better if a Committee of the House could examine the situation and see how private interests are affected by the activities of these companies, to examine, if the practice has been to produce an operating surplus, in order to find the real position and see what is the interest due to the plain people of Ireland.

Such a Committee might say, if any of these companies was producing a real surplus, that some of the money should be repaid to the people and the Government could decide, if there was a request for further money for expansion, whether that money would be properly employed to provide employment for our people and to produce goods for export. I want to advert to the fact that in many instances proper figures for depreciation are not being charged. This is a well-known fact. It means that these people, apparently, when sending a set of accounts to the Government are not bound by the stricture by which the ordinary chartered accountant is bound. He knows that when his name goes at the bottom of the accounts and the accounts go to the Revenue Commissioners for examination, he must stand over the figure he certifies.

The practice has largely been not to charge proper depreciation. There has been a loose view about this, to the effect that it is all in the one cake, that if they declare a higher profit and have to pay income tax, it goes back into the kitty and it could not matter less. This means that the executives of this State-sponsored company can retain profits for future use within the company, a decision which should be a decision of the Cabinet, of this House and of the people—whether or not the money they invested and which has now earned a profit should come back to them in the shape of repayment, or as an interest factor, or should in fact be left with the company.

I support this motion in every way I can and I believe, as Deputy Sweetman and Deputy Dockrell have said, that if this is done, we will have a much better situation in relation to State-sponsored companies and far more respect for them. Within that framework, it will be far easier for them to expand with the goodwill of this House which, at the moment I am sorry to say, some of them have not.

Mr. Larkin

As Deputy Tully mentioned earlier, we are supporting the general terms of the motion, but at the same time it would be wrong to create the impression that we support some of the views expressed by Deputy Donegan, particularly in relation to the question of the private sector. First of all, we have to examine either in this House, or possibly in Committee, if the motion is passed, why State-sponsored bodies were established and why they continue. Do we not know that a number of them, including CIE, were established because private enterprise failed miserably to do the job for the community, and even with all the encouragement given to private enterprise for years, it still fails to do the job?

It appears from Deputy Donegan that we might approach this question from the point of view that in relation to essential services—and a number of these State enterprises do represent essential services, whether we like it or not—if private enterprise does not make possible the growth of the community, then and then only should the State step in to take over an enterprise that is unprofitable. If this is the view of State enterprise, there is no problem whatever. Let private enterprise then continue as it has been for many years, getting whatever fat is going and leaving the essential services for the community, including services like the ESB, CIE, and the air services. If they cannot make a profit, leave the State to carry the purse and leave the taxpayer to bear the cost. While we are supporting the motion, it may be that we are diametrically opposed to part of the contribution made by Deputy Donegan. However, we have long held the view that there should be a greater degree of accountability to this House, and through this House to the community, by State-sponsored bodies.

Year after year Deputies from the Labour benches and from the Fine Gael benches and, on occasion, from the Fianna Fáil benches, have complained not just about details of administration but about major decisions of State-sponsored bodies which it was not possible for the House to examine or discuss on the basis of their representative capacity. Much has been said about the attitude of the ESB in the past year. We have not yet got any satisfactory information in this House about the attitude of the Board on that occasion. The same applies to the attitude of the Board of CIE not in relation to dealing with individual workers but in relation to their approach to major industrial relations. When challenged about such things, the Minister concerned has been able to say that he has no function in the matter.

The same applies to the attitude of a Board, established by the Minister, in relation to every major application for wage or salary increases which goes through an automatic process of failure to negotiate, followed by conciliation and arbitration, and "No" at the end. The same applies to the position of thousands of citizens who are affected by decisions to withdraw services. We have, too, the position of RTE where some months ago the position was reversed. A body which was supposed to control its own policy and make its own decisions was interfered with. This is a difficulty which can only be overcome by an investigation and a decision that there must be some form of accountability to the community's elected representatives. Nobody in this House who has any sense of responsibility wants to impede State-sponsored bodies if they are doing a good job of work for the community.

Debate adjourned.