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Dáil Éireann debate -
Tuesday, 11 Nov 1969

Vol. 242 No. 4

Committee on Finance. - Trustee (Authorised Investments) Order, 1969: Motion of Approval.

I move:

That Dáil Éireann approves the following Order in draft:

Trustee (Authorised Investments) Order, 1969.

a copy of which Order in draft has been laid before the House.

The purpose of the order before the House for approval is to add the shares of Allied Irish Banks Limited to the list of trustee authorised investments. That Bank has requested that trustee status be accorded to its shares.

The investments in which trustees may invest trust funds, unless expressly forbidden by the instrument creating the trust, are set out in the Trustee (Authorised Investments) Act, 1958. The Minister for Finance may very the list of investments by order subject to the approval of the Oireachtas. The primary qualification for trustee investments is that they should be secure, and subject to this, that they should give a reasonable income to the beneficiary. I am satisfied that the shares of Allied Irish Banks meet these criteria and that they are a suitable security to be added to the list of authorised investments.

Allied Irish Banks Limited was incorporated as a public company in 1966. It is the holding company of the Munster and Leinster Bank Limited, the Provincial Bank of Ireland Limited, the Royal Bank of Ireland Limited and their subsidiaries. The authorised share capital is 12 million shares of £1 each, of which 7,700,000 shares have been issued and are fully paid-up. The shares are quoted on the Belfast and London Stock Exchanges as well as on the Dublin and Cork Exchanges. Total assets of the company on 31st December, 1968, amounted to £386 million. Balances on current, deposit and other accounts amounted to £364 million, an increase of 20 per cent on 1967. Total dividend for last year was 17 per cent.

The stocks and shares of the two major banking groups in this country— that is the Bank of Ireland and Allied Irish Banks' groups—are the only Irish bank stocks and shares available for purchase by the public. The capital stock of the Bank of Ireland has been a trustee security since 1889 and a loan stock issued by that bank in 1966 was given trustee status by means of an order similar to that now proposed. In the normal way I would be reluctant to very further the list of authorised investments pending the completion of a general review of the existing legislation. The position in relation to the shares of Allied Irish Banks is, however, anomalous. There are no good grounds for differentiating between the two main banking groups and I am satisfied that the request of Allied Irish Banks to have trustee status given to its shares is reasonable and should be acceded to.

The Minister for Finance is obliged under the Act to consult with the following persons in regard to the terms of any order he proposes to make varying the list of authorised investments—a judge of the High Court nominated by the Chief Justice, the Governor of the Central Bank, the Public Trustee, the Chairman of the Irish Banks' Standing Committee, the President of the Incorporated Law Society of Ireland, the Presidents of the Dublin and Cork Stock Exchanges. I have consulted each of these persons and they have no objections to the proposed order.

We have no objection to the proposed order but I think it is a pity that this order is coming into force before the amalgamation is complete, as was provided in Part III of the Central Bank Bill, which was introduced before the dissolution. I was also disappointed to hear from the Minister earlier today that it is not proposed to take the Bill at an early stage or even to re-introduce and re-circulate it.

I did not say that. I will certainly bring it in as quickly as possible.

The Minister and I may differ as to what is an early stage.

It is not intended not to take it before Christmas. If we can possibly do it we will.

Squeeze it out. I do not believe the Minister was squeezed out. I believe the Minister did not wish to put the Bill in. I understood that that amalgamation part was to become operative originally before the 31st December of this year. Of course, the amalgamation is a necessary part of the strengthening of the institutions, one of which we are now discussing. Subject to that, we certainly have no objection to the Bill. The position is anomalous but it is a pity that the other changes could not have been brought in before. Indeed, they might have been brought in if the Minister for Local Government had not wasted the time of this House for so long in 1968.

There is, of course, no objection at all to this order but the Minister provided me with a piece of ammunition in the course of his brief. He need not necessarily have done so but since he did I cannot avoid taking advantage of the occasion. He said:

Total assets of the company on 31st December, 1968, amounted to £386 million. Balances on current, deposit and other accounts amounted to £364 million, an increase of 20 per cent on 1967.

That increase of 20 per cent is, of course, a direct reflection of the failure of the Minister to carry out his work. A 20 per cent increase in current deposit and other accounts in a period of 12 months is a direct reflection of the inflation which occurred in the year 1968.

We have the Central Statistics Office telling us the cost of living only went up by 5 per cent. This is the kind of nonsense in Government figures which makes a person like myself really wonder whether he is ga-ga or the Government are ga-ga. You can have your choice but you cannot have both. It is obvious, having made the point, that every loan creates a deposit and the vast increase in the advances of the banks was what created this huge increase in current and other deposit accounts. As I say, it proves the Minister failed to do his work.

Question put and agreed to.