Dáil Éireann debate -
Wednesday, 17 Nov 1971

Vol. 256 No. 12

Committee on Finance. - Fóir Teoranta Bill, 1970: Second Stage.

Minister for Finance (Mr. Colley)

I move: "That the Bill be now read a Second Time."

The Bill provides for the establishment of a State-sponsored company, Fóir Teoranta, to cater for reconstruction finance for potentially viable firms which are in danger of closing down because of their inability to raise capital from commercial sources. The decision to establish this company has already been announced in the Third Programme for Economic and Social Development.

Cases have come to light in recent years where firms were on the verge of closedown because of serious financial difficulties although there was good reason to believe that they could be viable in the long term. While the State has provided ad hoc financial assistance to tide a number of such firms over their immediate difficulties, I consider that there is need for an orderly, established procedure to deal with any such cases in the future. I propose that this work be undertaken by a new State-sponsored company, Fóir Teoranta, the principal functions of which are set out in section 4 of the Bill. Briefly, these functions are to provide finance for eligible concerns by such means as acquiring shares and debentures, issuing loans and bill finance and guaranteeing borrowing. It is envisaged that finance on concessionary terms as regards both interest and repayment will be necessary in many cases.

In order to be eligible for financial assistance a concern must comply with a number of conditions. It must be engaged in an industrial activity. Employment and capital invested in it must be significant. The proportion of the promoter's contribution to its total capital and the prospects of profitability on a permanent basis must be reasonable. It must be able to show that further finance cannot be procured commercially and that failure to obtain financial assistance would have serious repercussions nationally or locally. It is the intention to interpret industrial activity in the broadest possible terms to include all economic activities that can reasonably be described as being of an industrial nature.

The criteria for eligibility for financial assistance cannot be measured in quantitative terms and it will be left to the board of Fóir Teoranta to decide in each particular case whether or not a firm should be regarded as an eligible concern. For instance, one of the criteria is that the capital and the employment content of the firm in difficulties must be significant; the measure of significance is bound to vary according to the area in which the firm is located. We will rely on the good sense of the board to ensure that the criteria are applied fairly in all instances. I want to make it clear, however, that, while the company may be a lender of last resort, there is no intention of applying State funds in propping-up industrial concerns which have no reasonable prospect of viability in the long term.

In the past the State on occasion has had to deal at very short notice with appeals for help from firms which were in immediate financial difficulties. The decisions to give help in such instances had to be taken under the threat of imminent closure of the firms concerned, with the result that a comprehensive examination of their affairs was not possible in the short time allowed. These ad hoc arrangements are obviously unsatisfactory, and in order to avoid a recurrence of this situation it will be the policy of the new company to insist as far as possible that firms in financial difficulties which need State assistance should give sufficient notice to enable their affairs to be examined in detail before the position becomes so critical that a close-down is imminent.

As a condition of granting finance, Fóir Teoranta may, in suitable cases, require applicants to employ consultants and implement their recommendations including changes in their board of directors and management. This is desirable in order to guard against the danger that State support would be given to concerns which might not of their own accord make the necessary changes in their internal organisation to improve the prospects of future viability. There may be special cases where, in order to maintain the continuity of a business, Fóir Teoranta might have to arrange to find a new owner or to negotiate a merger or other form of association with another firm. These arrangements can be made administratively and it is not necessary to cater for them in the Bill.

The company will have a nominal share capital of £100 and will obtain its financial requirements by way of Exchequer advances. Section 12 of the Bill fixes a limit of £3 million on aggregate borrowing by Fóir Teoranta for purposes other than those in connection with functions transferred to it from Taiscí Stáit Teoranta and section 13 fixes a similar limit on advances from the Minister for Finance to the company. I propose on the Committee Stage of the Bill to move amendments to sections 12 and 13 raising the limit in each case to £7½ million but these new limits will apply to moneys required to meet Taiscí Stáit's outstanding commitments as well as to moneys required by Fóir Teoranta for its own purposes. Taiscí Stáit's outstanding commitments amount to approximately £1.3 million so that the ceiling on moneys which Fóir Teoranta may borrow for its own purposes will be just over £6 million. The limits were fixed at the low level of £3 million in the first place to ensure that the Oireachtas would have an opportunity to review the company's activities inside four or five years. The Bill is now before the Dáil for a year and the growing demand for reconstruction finance combined with the falling value of money make it desirable to fix considerably higher limits on the amounts which the company may borrow. It is intended that the company will pay interest on Exchequer advances to the extent that a return will be earned by it on its investments.

Provision is also made in the Bill for the guaranteeing by the Minister for Finance of borrowings by the company from non-Exchequer sources.

While it is difficult to estimate the amount of assistance likely to be required for reconstruction finance in the average case, it is envisaged that the firms most likely to have to avail of the company's help will be small or medium-sized and I consider that, as much of the finance is likely to be on concessionary terms, the company should not provide financial assistance to any individual concern in excess of £100,000 without the consent of the Ministers for Finance and Industry and Commerce. This will be arranged administratively with the company. The company will have discretion in deciding what form the assistance will take in each case and the extent of any interest and repayment concession. Normally freedom from interest or deferment of interest will not be allowed for a period exceeding five years.

Section 19 of the Bill provides for the dissolution of Taiscí Stáit Teoranta, the transfer to Fóir Teoranta of the property and liabilities of Taiscí Stáit and the preservation of its existing contracts. Taiscí Stáit Teoranta was set up in 1964 principally to acquire share in and to issue loans to State-assisted industrial concerns. In practice the main function of the company has been the provision of loans on preferential terms in part substitution for grants for large-scale industrial projects. In the absence of a more appropriate State source the company has also been used to assist certain firms which found themselves in financial difficulties and which I referred to earlier.

Since its establishment Taiscí Stáit has provided assistance to 25 industrial concerns by way of preferential loans or share investments. In a majority of instances this assistance was for new industrial projects or the expansion of existing projects. The demand for rescue finance was not significant in earlier years but the position in this regard has changed in the past two years when the main emphasis has been on rescue operations. Taiscí has already assisted or has undertaken to assist twelve industrial concerns in urgent need of finance which they could not raise from the normal commercial sources. Taking into account the commitments which will be transferred to Fóir Teoranta, Taiscí Stáit's contribution to Irish industry will amount to approximately £8.8 million and of this approximately £3.0 million represents rescue finance. So far the company has had to write off loans and interest to the extent of £40,000 but it now seems most likely that upwards of a further one million pounds is irrecoverable.

The Industrial Development Act, 1969, confers powers on the IDA to guarantee loans for and to participate in the equity of industrial concerns and to give interest subsidies in respect of loans. In the circumstances there is no longer a need for Taiscí Stáit to continue to provide facilities to large-scale industrialists, while its present functions in regard to rescue operations will be superseded by the new company. It is proposed, therefore, that the company be dissolved to avoid the possibility of a duplication of State facilities. As I have already indicated, Fóir Teoranta will honour existing Taiscí Stáit commitments and will take over its existing investments.

The Bill contains a number of standard provisions relating to the formation and operation of the company. There are the usual requirements in regard to the form of the company's accounts and their presentation to the Oireachtas—section 16—the furnishing of an annual report and other information to the Minister—section 17 —and the contingency of membership of either House of the Oireachtas by the directors of the company—section 18. In accordance with section 5 of the Bill, the articles of association will provide that the number of directors, including the chairman, shall not exceed seven and that they shall be appointed by the Minister for Finance with the consent of the Minister for Industry and Commerce. While the board of Taiscí Stáit has always been comprised solely of civil servants, it is envisaged that, in accordance with normal practice in regard to State-sponsored bodies, the directors of Fóir Teoranta will be chosen mainly from outside the Civil Service.

The Industrial Credit Company has acted as managers to Taiscí Stáit Teoranta and has conducted the day to day administration of its affairs. This arrangement has proved satisfactory as the ICC has long experience in industrial finance; it has first hand knowledge of the problems of industry and its staff have the necessary skills required in this field. The Board of Fóir Teoranta will decide whether the company should have its own staff or whether the ICC should be invited to act as managers of the company. Either arrangement can be made administratively and there are no provisions in this regard in the Bill. Whatever course is followed by the board of Fóir Teoranta, close liaison with the ICC and other State agencies will be maintained.

In a period of rapid transition in industry it is inevitable that some firms, however well managed or fundamentally viable, will be confronted with special difficulties and will be unable to get assistance from the normal commercial sources. It is necessary, therefore, to ensure that no firm will be forced out of business unnecessarily. This Bill provides an appropriate means for the rehabilitation of potentially viable firms and I consider it as a vital link in the chain of measures to assist industrial development. I, therefore, confidently recommend the Bill to the House.

Mr. Cooney

It is rather disappointing on hearing the Minister's speech to realise that what I might describe as the commercial philosophy behind this change is hazy. On reading the Taiscí Stáit Act, 1963, and the Industrial Credit Act, 1933 I can see very little difference, particularly between the proposed new Bill and the 1963 Act. I cannot see the need for a completely new piece of legislation. The powers taken in this new Bill are practically identical with those contained in the Taiscí Stáit Act, 1963. The essence of the power contained in these Statutes is to enable a State company to take up shares in private firms and that is also the function of the Industrial Credit Act, 1933. Consequently, I am puzzled to know what is the real commercial reason for this. If it is to be a fire brigade operation let it be said openly and plainly that this is what this Bill is to be.

In the past few years, as the Minister pointed out, the direction of Taiscí Stáit in involvement and investment has been in fire brigade operations rescuing firms on their last legs. The Minister has indicated this has not been very profitable, not through any fault of Taiscí Stáit, but because the firms concerned have left their approach for help too late in the day. I do not know if the situation will be cured in any way by the Bill because I do not see anything in it to make it obligatory on companies which may be in financial difficulties to come for consultation with Taiscí Stáit or the ICC at a sufficiently early time for assistance to be of use to them.

The Minister, possibly necessarily so, is somewhat vague on the criteria which will cause investment by this new company in an ailing private company or, indeed, in any industrial activity. Both the Bill and the Minister are regreattably vague as to the type of involvement that will be made by the new company. Up to now— having regard to the reverence in which we hold procedure in this country— involvement has been through the agency of the ICC. The ICC has a very commendable commercial record; it is an expanding and profitable financial venture but I would submit to the Minister that the ICC is the wrong body to advise the company it is proposed to set up by this Bill because in my experience the ICC applies orthodox and, consequently, conservative, commercial criteria. They are not going to recommend an investment unless a proposition is extremely sound. If it is in that condition, I suggest that the ICC themselves should invest in it. If this is to be a fire brigade operation, it should be such and its investment should not be determined by a conservative financial body like the ICC. If there is to be investment by this body in ailing firms, it should be something more than just a contribution to the capital needs. In addition to a nominee on the board, which would have to be a sine qua non of any investment, the opportunity should be taken, if not to take over the firm on behalf of the State, to go a considerable distance towards that. The opportunity presented by this investment should be used for advanced exercises in industrial relations, worker participation and various aspects of that nature which are missing from our industrial scence at the moment. The lack of those things in industry at the moment is one of the factors which contributes so greatly to the prices and incomes difficulty which has been a constant sore with the Minister and his Department for a number of years past and which has caused considerable difficulties in our economy.

I envisage a situation where a firm is coming to this new company for investment either because its proposition is unacceptable commercially or because it is in a difficult financial state. Such a firm should be prepared to accept an advance on whatever conditions it gets it even if it means that the original speculators or investors have to withdraw or part with their equity although at that stage the equity will probably have no real value. It is envisaged that the help will be given to small firms and if control has to be parted with, I do not think there will be any great objection because the control is going to go any way by way of liquidation.

The Bill should be used as an opportunity for a radical rethink of the philosophy of Government investment in private firms to make sure that the State in general and the workers in particular will be the first consideration and the owners of the equity very much down the scale. Up to now the operations by Taiscí Stáit so far as my limited knowledge of them goes—I am open to correction on this because my knowledge is limited— has not been as radical as that. They have been content to give money and, perhaps, go in as a holder of a debenture with a nominee on the board. In the preliminary investigations as to whether Taiscí Stáit would make an investment, an advance or a loan to an ailing company I found that the approach adopted in Dublin was too conservative and too bureaucratic—I do not use the words in a pejorative sense—and enough cognisance was not taken of the problems on the ground so to speak.

I have in mind a particular instance of a firm in my own town, Weirside Textiles, which got into financial difficulties for reasons well known to the Minister, Taiscí Stáit and the ICC. Those reasons would make one depressed as to the future of the firm. But, if the reality of that situation could have been got across to the people with the purse strings, and the advance which was originally offered and subsequently withdrawn left with this firm, the 80 workers involved in Athlone would be gainfully employed instead of walking the streets as they are now doing.

The kernel of that situation was that there were markets available and production could be organised to take advantage of those markets but because of earlier factors, principally a history of bad management and a certain lackadaisical approach to the problems after the first call for help was made, there was a loss of confidence on the part of Taiscí Stáit towards that firm and the offer of assistance was withdrawn. I think it was withdrawn too hastily. The reason it was withdrawn was due to a lack of real and intimate knowledge on the part of those making the investment with the situation on the ground. Whatever administrative structure is going to be given to this new Bill, as I say I imagine it is going to be mainly a fire brigade operation, there will have to be something of the nature of Whizz Kids—although I dislike that term— prepared to descend on the firm in question and examine it from A to Z.

Mr. Colley

For the record it would be more correct to say that in the case to which the Deputy was referring the offer was not withdrawn but rather rejected by the management.

Mr. Cooney

There were terms attached to the offer which made it impossible to accept it. In effect, it was withdrawn and there were propositions for lesser amounts which were not acceptable. Ultimately, when a lesser sum was requested, it was not forthcoming. A full report was available but there was no first-hand knowledge on on the part of the people making the decision of the situation on the ground. If this Bill is to be effective this first-hand knowledge must be obtained. With respect to the Industrial Credit Corporation, they are not the people to advise on investment for this new bank because their criteria are conservative and commercial. They are totally inadequate and inapplicable to the situations that will be met by this Bill.

I recall seeing a large investment by Taiscí Stáit in an industry in County Louth in which they took up one-third of the share capital. At the time it struck me as an extraordinary investment by Taiscí Stáit and it would be interesting to hear the commercial reasons that compelled them to make that large investment. I may be wrong on this point and I should be glad to be corrected if this is so, but for an investment of one-third of the equity— in which there was a very substantial sum—Taiscí Stáit do not have anyone on the board of that company. Perhaps it is intended they will at a later date, but if the State is to invest to that extent in a private concern it should have at least a nominee on the board and should impose conditions of the type to which I referred earlier, involving worker participation and more modern industrial relations in any such firm.

One change I see in the Bill as opposed to the Act of 1963 is in relation to the audit of the accounts. Section 5 of the Bill provides that the auditor will be nominated by the Minister. I hope the Minister will nominate the office of the auditor general because I consider he is the proper person to look after the accounts of State and semi-State bodies. I am not suggesting there would be malpractice on the part of ordinary commercial auditors, but when State money is involved, and as the auditor general is a protected personage under our Constitution, he is the person to look after State moneys.

I do not know how the Minister is going to constitute the new board. As he indicated, up to now the board has been comprised of civil servants—the secretaries of four Departments. Without any disrespect to the gentlemen on the present board, people of wider commercial experience would be required. I think the Minister should consider as members of this board people who are prepared to experiment in matters of industrial management, who are willing to get away from the traditional management philosophies we have had in this country and which we have had to import from differently structured societies because of the size of our country and the average size of firms. The concept of managing director in isolation from the floor is a matter that must be looked into and changed radically.

Something I should like to see done by the Minister is the submission to the House of the memorandum and articles of association. The Bill merely says that the company shall be formed and it gives a general line of the memorandum and articles of association. It is proper that details of these matters for a body such as this should be submitted to the House, particularly in view of the amount of money that will be involved and because the powers contained in the articles, the administration of the company and the detailed functions, will form the personality of this new company. The House should have an opportunity of seeing these and be in a position to comment on them so that the company will not be a duplication of the Industrial Credit Corporation, taking slightly more risks but in an equally conservative way.

The idea generally is welcome to us on this side of the House because we recognise that at the moment there are firms who may be in difficulty through no fault of their own but because of trading conditions over which they have no control, and it is only right that the State should come to the assistance of those firms. The most important point I should like to make to the Minister is that there should be some rule binding on firms to advise the board of the new company in good time when they see danger signals on the horizon. As the Minister pointed out, too often people come when it is too late and the State finds itself rushing in at the last moment making ad hoc advances to guarantee wages and commitments to keep the firm going until its position can be investigated. If on investigation it is found the firm cannot be kept going, those ad hoc advances are lost. As the Minister has said, the last two years have shown an increase in this tendency.

It is critical to the success of this Bill and the successful operation of this company that some system should be devised to cope with this problem, perhaps a system of inspection by the Minister's Department. I do not know what the procedure would be but perhaps there might be some form of compulsion on the firm's accountant to notify the Department that there are danger signals ahead. I do not think this would inhibit the operations of a firm or that it could be complained of as being an invasion of privacy. Frequently these firms have got State money, either by way of grants or loans, and it is only proper that the people should be entitled to see that the operations of the firms are carried on in a proper manner. I have no doubt that if some of the firms in which Taiscí Stáit have invested in the last two years had been inspected at an earlier date their future might have been secured.

I am glad that there is a limit on the amount that can be provided by way of assistance without the consent of the Ministers for Finance and Industry and Commerce, but I wonder whether the figure is a realistic one. When one reaches the six figure mark, one is dealing with large sums of money. But having regard to the costings of plant and machinery nowadays and the cost of management consultants—as the Government know to their cost—the ceiling might be lower and if the Minister intends appointing a board of the standard we expect him to appoint, they should be given discretion for a larger sum than that mentioned in the Minister's speech. Again, bearing in mind that the nature of this operation is fire brigade, there would inevitably be further delay if the consent of two heads of Departments has to be obtained for advances over a certain limit.

I would have some worry too that the board would have discretion as to the terms of repayment; but, having regard to the nature of their activities, I suppose they would have to have some discretion. The Minister should emphasise to this board that their discretion should always be exercised in favour of continuing employment for workers in a firm that is in danger. I do not know what are the statistics but I have no doubt that they will prove that the investment by Taiscí Stáit to keep jobs going has achieved this purpose at a much lower cost than that of setting up a job initially. In this particular firm in Athlone that I have mentioned it would have cost about £300 for each job, whereas it would cost the IDA a four-figure sum to provide a job at the moment. Having regard to that difference, this new body could lean over slightly backwards when considering the commercial viability of a firm in which it intends investing because, even if the investment proved unsuccessful, there is still the big difference between what it might have gained and the cost to the IDA of setting up a new job.

The success or failure of this company will depend on the commercial philosophy that they apply. They will have to be prepared to take risks, to encourage novel working arrangements within factories and they will have to investigate problems that reach them from time to time in a way that will be very different from the way in which they are being investigated now by the ICC and by Taiscí Stáit. At this stage, with free trade blowing a very cold wind and with Europe around the corner, it is essential that the various businesses in this country be made aware, for the sake of their morale, that a helpful and sympathetic State company are in the background— sympathetic and helpful without being sentimental or foolish. This can be got across and if firms are given this confidence they could be encouraged to go to the company in the early stages of their problems. If that general type of philosophy can be used by this company in their operations they should be successful.

Mr. Tully

Deputy Cooney has the quality which I used attribute to the former Deputy Dillon and that is that one could listen to him all day without agreeing with a word he was saying. However, I was very impressed by the critical analysis that has been made of this Bill by Deputy Cooney. I could agree with most of what he has said but he made a few points with which I would disagree violently. I welcome the Bill on behalf of the Labour Party but consider it a pity that, when the Government decided more than 12 months ago that a Bill of this nature was necessary, they did not go ahead with it then when things were not as bad as they are now.

The Government must know that the committees and bodies set up to assist industries have not been able to cope with the applications coming before them, and this has been particularly so during the past 12 months. While it is all right to talk about the number of firms that require fire brigade action—I do not suppose those men who were outside the gate yesterday would be very pleased with that particular description—the Minister must realise that the phrase often used by the late Mr. Seán Lemass, "Prosperity Around the Corner", is the one which most firms use as their slogan. Very few firms are prepared to admit they are doing badly and that there is very little hope of recovery; it is not until a firm has reached the stage where it is almost impossible to recover without a sizeable financial injection that they seek help. Therefore the situation in this country has been that most of the firms that seek assistance from State companies are firms that are on their last legs as it were.

My main objection to the existing arrangements is that it takes far too long to process claims. While we may have experts dealing with these matters, particularly in the case of Taiscí Stáit and the IDA, those bodies give the impression that they belong not only to different organisations but to different races of people. For instance it is not good enough to hear the ICC saying that the investigation carried out by the IDA has nothing to do with them and that they are not prepared to accept the findings of the IDA and then they start cross-questioning directors of a firm who have done everything possible to keep their firm going and their numerous workers employed. Deputy Cooney used the word "conservative" in respect of these State companies, but I would put the word "ultra" before that. The ultraconservative approach of some of the people in those companies has a dampening effect on firms seeking assistance but perhaps that is the intention.

It is all right to say that workers should be given consideration before the rights of the equity holders; but if one has spent all his life building up a firm and has invested all his money in that firm, it is not easy to say that his rights should be wiped away in the event of the firm going into liquidation. Those rights should be protected. Worker participation is a phrase that is very much overworked by some people, but if we are to have worker participation I do not think that the right place to start would be in a company on the verge of bankruptcy. We must start with the companies that are doing well and try to persuade them to give workers participation. Let those who talk so loudly about worker participation use their influence to encourage the really successful companies to participate with their workers in the running of their companies, and then, when that has been successful——

Mr. Colley

Hear, hear.

Mr. Tully

——let us talk about the necessity for bringing them into companies that are doing badly.

Mr. Colley

Even let them form companies of their own where they could try it out.

Mr. Tully

Providing that the State or somebody else puts up the money. The trouble about workers in this country, as in many other countries, is that they are not the people with the money.

Mr. Colley

That is not true.

Mr. Tully

Usually the workers are dependent on their week's wages.

Mr. Colley

They have organisations that have money.

Mr. Tully

If something goes wrong, they have not got their week's wages. If the Minister has any doubts about that, he should consult the almost 8,000 people who lost their jobs this year, due to the fact that the industries they worked in closed down, or did not need them, with the result that they did not get their week's pay the following week. They are finding it very difficult to exist. If we start talking about workers' participation or about starting companies with the assistance of workers, we must realise that there must be some way of finding the money which is required.

I should like the Minister to enlighten me on an attitude adopted by State bodies. I suggest that the new body being set up now should take a good hard look at this. Take a firm employing 100 people at £25 a week. That firm closes down because it requires an injection of £100,000 to keep it going. The 100 workers sign on at the labour exchange and they get an average of £10 a week. I do not have to be a financial genius to realise that in that 12 months almost the required amount of money has been paid out in benefits, money which could, possibly, have saved the company.

Mr. Cooney

That has happened twice in Athlone.

Mr. Tully

In addition, there is the loss of income to the State from income tax paid by the workers. There is the loss of the income from social welfare payments by the workers. There is also the 35 per cent and in many cases 55 per cent from another State organisation. This shows a net loss to the country, not to speak of the loss of purchasing power, or the social effects on the families and on the towns and villages in which they live. This attitude of the left hand not knowing what the right hand is doing must be changed. The Minister being an intelligent young man who has views on these matters might try to right them.

Mr. Colley

The Deputy is very flattering today—intelligent and young.

Mr. Cooney

Which will the Minister accept?

Mr. Tully

Like the Minister's statement on the Bill, intelligent and young are relative.

Mr. Colley

That is more like it.

Mr. Tully

In relation to some people who have gone before him he is intelligent and young. I am not talking about his immediate predecessor.

Mr. Colley

I appreciate that.

Mr. Tully

The Minister says this Bill is not for the purpose of dealing with small companies. In some peculiar way he then changes that around and says:

While it is difficult to estimate the amount of assistance likely to be required for reconstruction finance in the average case, it is envisaged that the firms most likely to have to avail of the company's help will be small- or medium-sized...

Earlier the Minister said:

In order to be eligible for financial assistance a concern must comply with a number of conditions. It must be engaged in an industrial activity. Employment and capital invested in it must be significant. The proportion of the promoters' contribution to its total capital and the prospects of profitability on a permanent basis must be reasonable.

This suggests to me that the Minister is talking about large concerns but, in the other quotation I gave, he referred to small- or medium-sized firms.

This must be spelled out fairly clearly because I can see a group of people, and particularly civil servants, saying to a firm with 25 to 30 workers that they are only little chaps, that they do not qualify and that the Minister said so. There would be very little use in somebody digging out what he said earlier or later, pointing out that the Minister said something contradictory and asking which was correct. Like the Minister's age, the size of the firm is relative. In a small country town or in a rural area, a firm employing 15 to 25 workers is not a small concern, whereas in Dublin city it would not be worth considering at all, I assume, because it was employing such a small number relative to the population. This must be spelled out so that those who are applying will know before they make application whether they are likely to comply with this requirement.

I am interested in a comment in the Minister's speech. He suggests that profitability is one of the matters that must be taken into consideration with regard to the making of a loan. I presume that means profitability to the board. Would the Minister not consider that the question of profit to the nation should take precedence? While a firm may not be immediately able to do more than repay advances, overall it may show a profit to the nation and to the area in which it exists.

With regard to the appointment of members to the board, as Deputy Cooney remarked, this is a matter of interest to many of us. If the Minister has anything to do with these appointments, he should get away from the idea that to be appointed to a board people must be good Fianna Fáil men. We had an instance of this recently, although it was pooh-poohed by certain people in this House and by a section of workers who felt, I am quite sure, it was the thing to do. The fact that somebody is accustomed to using a container for the purpose of taking effluent out of a septic tank does not of necessity make him an ideal choice as a director of a firm using a similar type vehicle for carrying around beer. There might be some connection, but this is the sort of thing that can be stretched a bit too far. I remember a member of the Fianna Fáil Party and of the Fine Gael Party commenting that all other things being equal the party man should be appointed.

Mr. Cooney

The Deputy should quote the member of the Fine Gael Party.

Mr. Tully

Deputy Oliver Flanagan. The other man is dead and everybody knows who he is so there is no point in quoting him. When someone is being appointed to a board the first thing to be considered is whether he will be a useful member of the board, before the question of party membership is considered. I do not belive in giving certain things to the party faithful simply because they are the party faithful. The Minister who is an honest man should realise that this is of vital importance at present. Some people may say it is not so important but I believe it is of vital importance. It reduces confidence in a firm if it is found that room is being made on the board for party men.

The Minister said:

I want to make it clear, however, that while the company may be a lender of last resort, there is no intention of applying State funds in propping-up industrial concerns which have no reasonable prospect of viability in the long term.

This is the whole kernel of the Bill. The people who make the decision on that problem are the people who will make or break this Bill and make or break industry. I was told of somebody who went out from a State concern to have a look at a firm which had applied for a loan and a grant. Having gone out there, this gentleman found that the application had been made for the wrong type of assistance. It was a small industry grant that had been applied for and it should have been for re-tooling. The person who was sent out, having had a look around, said to the harassed owner, "Of course, you know that you have not a snowball's chance in hell of getting anything out of this. Your firm and the smaller type firms are going to the wall and you are not likely to get anything." He did not tell him that he had applied for the wrong type of assistance. It took the Minister—to his credit—to point this out at a later stage. To a harassed factory owner or manager who is attempting to provide employment and to get a market for his product, this is not the type of encouragement he wants.

I would suggest that people who are sent out on such a mission should at least find out the facts before saying that it does not seem likely that assistance will be given. In fact, in the case I have referred to, substantial assistance was subsequently given and, I am glad to say, the firm are doing well. This sort of approach should not be allowed. The type of approach made to applicants for assistance is a very important matter.

Deputy Cooney was rather puzzled. He said the proposed organisation was very like the existing organisation and he wondered why it was necessary to introduce Fóir Teoranta. I believe that one of the reasons is that it was one way of having additional finance made available and a handy way; that if you did not introduce this Bill, which has been on the stocks for so long, another Bill would have had to be introduced at this stage to increase the amount of money made available. If that was a reason, it was a perfectly legitimate reason. In view of increasing costs, the amount of money could have been much higher than that suggested by the Minister. I am serious about this because I remember one occasion where a firm, who are now riding very high according to what we are told, came into this House at the end of July, less than a week before the Dáil went into summer recess—perhaps the Minister may remember the particular incident——

Mr. Colley

Not yet.

Mr. Tully

——and gave an ultimatum to the Minister for Industry and Commerce who had to come in here and say that unless they got £1.2 million within a week they were closing down with consequential loss of nearly 1,000 jobs, and the £1.2 million was made available to them. They had already got very substantial amounts of State assistance. It will make the amount of capital made available under this Bill look very sick, if items of that amount are required by one or two firms, as they very well can be.

Deputy Cooney was quite correct. While £100,000 is a great deal of money, it would be too bad if the fact that not more than that could be granted without approaching the Minister and having the matter cleared —and he might be as difficult to find as a Minister was recently—meant that a firm who would be looking for money of that kind and who would normally employ a big number of workers might have to close. It is very difficult to re-start a business that has fallen down. The Minister might have a look at that section of the Bill and see if there is not another way of dealing with it.

With regard to providing a crutch, or whatever the Minister likes to call it, for business that are doing badly, it might not be a bad idea, at this stage, long before the occasion arises, if information were given to firms that by doing certain things it might be possible for them to get assistance which would enable them to employ more people and thereby secure a bigger turnover, if they got a market. This would keep them from going down hill and would put them in a good way of making a profit. This matter could possibly be publicised. Again it depends a great deal on the newspapers.

The Minister and I had an argument the other day about the provision of factories. I know of cases where people with factories which they started with a small number of employees and have built to the stage that they have markets and have taken on additional employees, are not able to expand any further due to limitation of space. There should be some way in which such people could be encouraged to avail of State finances for the purpose of acquiring larger factories which in turn would help both the State and the workers who could be employed.

I am sorry to see a reference here to the effect that smaller concerns are not to be considered for this sort of assistance. I remember distinctly one firm which a few years ago were producing something which was not considered to be very important but which did employ nine men. These people were producing hurleys. They applied for assistance to the State because they wanted to enlarge the factory and thereby increase employment because there was a sizeable demand for the product. After several weeks they got a very detailed memorandum from the State organisation to which they had applied, the principal question on which was what was the prospect of exports of the commodity to the EEC countries.

Mr. Colley

I think the Deputy is going a long way back in time.

Mr. Tully

About that time the King of the Belgians had been in this country and had been shown by a certain high personage how to hit a hurley ball with a stick. This may have been in the minds of those dealing with the application who possibly felt that Belgium would take up hurling in a big way and it might be possible to sell a lot of hurleys there. That company have not been able to improve because the kind of assistance they required at that time was not made available. This is regrettable.

The Minister may consider a factory of 25 to 30 in Dublin as a small factory but such a factory is a big thing in a country area. If the Bill is allowed to go through in its present form, the gentlemen sitting behind the shiny tables, whom we take clients in to see to ask them if they will be prepared to give financial aid by way of loan or grant, may say that 25 workers in a factory in the country is not such a terribly important matter because they know of factories in the city that are employing perhaps 500 or 1,000 workers. The opportunity to say that sort of thing should be taken out of the Bill. The Minister might consider that the reference, and particularly his reference, to small industries would with very good effect be deleted so that this sort of situation cannot arise.

Let me refer now to the question of the formation of the board. If the board of a company are to have made available to them substantial sums of money, it is not alone not unreasonable but it is incumbent on the State to ensure that there is a director from the State on that board, not for the purpose of collecting a director's fee but for the purpose of ensuring that the people who lend a large amount of money know at least how that money is being expended. This may not be the time or place to say this, but we are all aware of companies which got substantial State assistance, which did not have a director appointed by the State and which got out pretty quickly with the money, leaving nobody at a loss except those employed and the State itself. The State is made up of the taxpayers. Everyone who buys anything pays tax. It may sound grand talking about the Government giving £1 million by way of grant but it should be remembered that it is the people who contributed to that £1 million and, because they did so contribute, they are entitled to value for their money.

I do not know how soon the Minister expects the new arrangement will come into operation. He can say that the sooner the Bill goes through the quicker it will go into operation. Is it intended to switch the staffs of the "old firm" to the new firm? Is it intended simply to change the name or, as Deputy Cooney said, to put in a few commas here and there? That would be the quickest way. Will it be an arrangement whereby a selection will be made to ensure that those who will administer this particular new company will administer it in a way designed to help those looking for assistance?

While most civil servants in the Civil Service itself and on State boards are most courteous, I have had the experience, and pretty recently, of questions being asked in a manner I would definitely consider insulting. Obviously, those asking the questions seemed to think that it was normal practice. Possibly it was but, if it was, then it should be changed. I do not think any civil servant is entitled to insult anybody and, if they do it even accidently, the fault is all the greater because they should know at least whether their questions are fair. Is it that they consider the applicant for assistance fair game to be asked smart alec questions, questions he may find it difficult to answer? Let me say immediately that those concerned were most helpful eventually, as things turned out, and possibly the questions were stock questions laid down by someone else. I often think it would do a great deal of good if someone would set up a bureau whose main function would be revising official forms. Some of the stupid questions asked, and this goes from old age pensions right up to State grants, just do not make sense in 1971. They may have been all right in the opening years of this century.

Mr. T.J. Fitzpatrick

(Cavan): They do not leave enough space for replies.

Mr. Tully

There are too many questions. If they took out some of the stupid questions there would be plenty of space for replying to the essential ones.

I wish the Minister well with this Bill. I hope he will take heed of what has been said and the points made with a view to helping the promotion of industry. All of us who are public representatives know the difficulties many industrialists are meeting at the moment. Unfortunately, when they meet trouble the first people to feel it are the workers, their wives and children. If the Minister can ensure a smoother passage for industry in the years ahead he will be doing a good job. This Bill was introduced in 1970 and we are now discussing the Second Stage in the winter of 1971.

Mr. T.J. Fitzpatrick

(Cavan): The introduction of this Bill at this time is opportune. The Bill was introduced, as Deputy Tully said, on 28th October, 1970. It is now being proceeded with. It is opportune. The object of the Bill is to provide for the establishment of a State-sponsored company to cater for reconstruction finance for potentially viable firms in danger of closing down because of inability to raise capital from commercial sources. I was shocked to learn that over the last couple of years the demand for rescue finance has become all important. The Minister said that over the last two years the emphasis has shifted to rescue operations and the spate of redundancies in the last two years would emphasise the Minister's statement that rescue operations are necessary.

I am prompted to speak on this measure because of a meeting I attended in the town of Cootehill last Monday night. I was invited there by the Cootehill Chamber of Commerce. The meeting was held in the huge assembly hall of the comprehensive school. The hall was filled to capacity. There were even people on the balcony. The meeting was called to deal with the position of the local industry, Cloth Manufacturers Limited. This industry was established some 20 years ago and I understand there was a considerable State investment in the industry. It is now part of the economy of Cootehill. I have not got the exact figures, but I believe there are about 100 people employed in the factory, a big percentage of those employees being men. The workers are at the moment on a three-day week and, according to reliable statements at the meeting, there is imminent danger of a complete close down. Speeches were made from the platform, well-prepared and eloquent speeches, but it was one or two speeches from the body of the hall which impressed me. There are grave fears in the town of Cootehill among the workers of that factory, some of them married men with six or seven children, that they may be completely out of employment in a short time. They pose the question: "What will they do or what will be done for them?" No meeting I attended in recent years impressed me so much on account of the pathetic but strenuous appeal from the floor about the possibility of the factory closing.

This factory seems to me to qualify completely for assistance under this Bill in respect of most of the tests set by section 4. It is stated that a concern shall be eligible for the purposes of the subsection if in the opinion of the company they are engaged in an industrial activity—Cloth Manufacturers, Cootehill are certainly engaged in an industrial activity—if the employment and capital employed in the factory are significant—the employment content of this factory is extremely significant as far as Cootehill is concerned; it has become part and parcel of the town's economy. If the factory collapses now, having been there for 20 years, and with a huge investment of State capital in the factory, the town will be frustrated and many family breadwinners will have to emigrate.

The section goes on to say "the proportion of promoters' contribution to its total capital is reasonable". As far as I know, when this factory was established a good deal of capital was put into it from County Cavan, a fair percentage was raised within the county. Therefore, the factory qualifies under that heading. It is also laid down that a firm should have "reasonable prospects of profitability on a permanent basis, whether as for the time being constituted or after adaptation". I am not prepared to comment on that because I am not an expert but if this undertaking has not reasonable prospects of profitability on a permanent basis as at present constituted it is the duty of some State body, whether the one we are setting up under this Bill or some existing State agency, to adapt them. Provision is made in this subsection for adaptation and now is the time to adapt before the firm collapse and people lose their jobs and must emigrate. If they cannot be made work as they are at present I think it is the duty of the Minister, because I believe that either directly or indirectly he is the major shareholder in this factory or if not he is the major creditor—to ensure——

Mr. Colley

I think that would be correct.

Mr. T.J. Fitzpatrick

(Cavan): He should ensure that they are adapted or reconstituted so as to give employment and ensure that the local contribution and the vast national contribution in the firm are not lost with consequent loss of employment.

The factory certainly meet the next qualification that in order to qualify, the continuance of the undertaking must be in doubt because of inability to obtain their financial requirements from commercial sources. There is a huge question mark hanging over the future of this concern. The final qualification in section 4 is that their failure to receive financial assistance would have serious repercussions either nationally or locally. Here and now I can say that the collapse of this undertaking would certainly have serious repercussions locally. I would fear the attitude of the workers in this factory in that event. One man at the meeting said: "I am a married man. I have six children and I can see my job in jeopardy. Where shall I go? What will be done for me?" There will be serious repercussions if something is not done.

I rose specifically to deal with this problem in my constituency. When I was here this morning dealing with another Bill and saw this Bill I thought that it was very opportune as far as Cootehill was concerned. The Minister must have certain rights and certain obligations in respect of this factory. He is probably not a shareholder but the State must virtually now own the factory. I appeal to the Minister to ensure that this factory does not close down and that the workers' jobs will be preserved, that the three-day week employment provided at present be converted to a five-day working week and that the economy of Cootehill shall not suffer.

There are peculiar circumstances here in that probably for the past 20 years the State has been injecting ratepayers' money into this factory and in that way it has encouraged the town of Cootehill to rely on this factory as part of its economy and has encouraged men and women to get married, settle there and rear families on the understanding that they had secure employment. I am giving the Minister credit for that, not blaming him, but the interest the State took in this factory led to those things. Therefore, there is a serious obligation on the Minister and his colleague, the Minister for Industry and Commerce, to take whatever steps are necessary to ensure that these people are not thrown on the scrap heap and do not lose their employment and are not forced to emigrate.

I welcome the Bill for its general provisions which enable a State-sponsored body to engage in rescue operations of this type but I particularly welcome it because it gives me an opportunity of drawing the Minister's attention and that of the Minister for Industry and Commerce and the Government in general to the plight of this undertaking and the plight of the town of Cootehill at present and of urging that something be done about it. I could make a further appeal because the meeting I have spoken about demanded that further industries should be established in Cootehill, but if I were to develop that line the Chair might be forced to draw my attention to the fact that I was getting outside the scope of this Bill. I shall, therefore, confine myself to appealing to the Minister to rescue the existing factory.

Section 5 of this Bill enables the Minister to appoint the chairman and directors, to prescribe the remuneration of the chairman and the directors and to approve of the auditor. I am not simple enough to believe that it is possible to get directors or a chairman or an auditor who do not profess any politics. There are no such people. I am appealing to the Minister not to let politics be the qualification. I do not care what a man's politics are if he is efficient, if he is fit for the job. If he has the qualifications to carry out the job that he is appointed to do he is entitled to have his politics, whether they are pro the Government of the day or anti the Government of the day. In the past there has been far too much of appointing people to boards of directors of this sort simply as compensation for political services rendered to the present Government.

Mr. Cooney

And then shifting them.

Mr. T.J. Fitzpatrick

(Cavan): That may have been dealt with finally today. I do not know. A lot of our trouble in the industrial sector over a great number of years has been caused by the nomination of people to State boards who have no qualifications other than political ones.

I am strongly urging on the Minister that when he is doing this the first and paramount qualification should be that the men appointed should be qualified to act as directors, qualified to discharge the duties that this Bill imposes upon them. Nobody wants to get personal, nobody wants to mention names, but it would not strain the research capabilities of anybody to go back over the years and pick out ministerial nominees on various State bodies who have no qualification, good, bad or indifferent, other than that they have served the party and served it well and think that they are entitled to be compensated. It would be far better to revert to an honours list or something and put them on pension rather than to inflict them on the economy and on the industrial sector.

The Minister said in his speech that the relevant Department is not concerned until the collapse of a concern is imminent. I am telling him now that Cloth Manufacturers, Cootehill, have been on a three-day week for a considerable time, that there are a great number of jobs at stake and that unless he does something, and does it quickly, it will collapse.

Minister for Finance (Mr. Colley)

There were some comments on the fact that this Bill was introduced in October of last year and is only being taken now. I want to make it clear that, as far as I am concerned, I have regarded this Bill as a matter of urgency and have been anxious to have it taken before now, but Deputies will be aware that the House was anxious to discuss other matters on different occasions since that time.

Mr. Tully

We are aware that there were other matters which needed to be discussed.

Mr. Colley

You cannot have it both ways. It is coming on as fast as I can bring it on, anyway.

Before Deputy Fitzpatrick leaves the House perhaps I might comment on the point he was making about Cootehill. I think he is quite right, as a Deputy for the constituency, to have made the case he did. I also think that, in all fairness, I ought to say that I received very eloquent representations on the same lines from Deputy Smith quite some time ago.

Mr. Tully

Nothing could be done about it.

Mr. Colley

I am aware of the situation there. In fact, only yesterday I was dealing with it. I cannot say at this stage what the outcome will be, but the Deputy can be quite assured that anything that can be done will be done. I cannot put it any further than that at the moment.

Mr. T.J. Fitzpatrick

(Cavan): I am grateful to the Minister.

Mr. Colley

Deputy Cooney was asking what was the difference between what was proposed here and what was the position with Taiscí Stáit. The primary function of Taiscí Stáit was, and is, to provide additional State finance for large-scale industrial projects. Its reconstruction finance operations are a purely secondary function as far as Taiscí Stáit are concerned. On the other hand, Fóir Teoranta, as proposed in this Bill, will be concerned solely with reconstruction finance and it is envisaged that it will set up orderly expert procedures for dealing with applications for assistance of the kind envisaged and outlined by me in introducing the Bill on this Stage.

There are some other differences. Taiscí Stáit are not free to operate in any individual case without a direction from the Minister for Finance. As Deputies will be aware, in the case of Fóir Teoranta this will not apply and the Minister for Finance only comes in in conjunction with the Minister for Industry and Commerce when the proposed assistance goes above £100,000. I shall deal with that ceiling later on.

There is one other matter to which I did not advert when introducing this Stage. Under the legislation of Taiscí Stáit it is precluded from giving assistance to a company which has not either received an industrial grant or is entitled to one, in other words had applied for one and has been approved for one. This is a technical difficulty but the activities of Taiscí Stáit, as originally conceived and as they operate in practice, are quite different to a very great extent from the activities envisaged for Fóir Teoranta. In addition, some of the operations of Taiscí Stáit have now, in fact, been conferred on the IDA under its fairly recent legislation.

Deputy Cooney also raised a question about investment by Taiscí Stáit in a certain firm in County Louth and he asked what were the commercial reasons for this investment and why Taiscí had no representatives on the board. The company in question have excellent prospects of profitable operation in the long term and they are a very large source of employment, as the Deputy knows. In the short term they were in urgent need of working capital on quite a large scale and this was not available to them from normal commercial sources. It was appropriate, therefore, that Taiscí Stáit should invest in the company. It is one of the kinds of cases envisaged in the Bill as it meets the various criteria involved. Taiscí Stáit have in fact two representatives on the board. I am not sure what the public position about that is, I do not know whether it has been announced or not. The fact is that Taiscí Stáit have two representatives on the board one of whom has been appointed chairman of the board.

Mr. Cooney

I am glad to hear that. I got the impression from the newspaper report that Taiscí Stáit had bought out one of the major shareholders.

Mr. Colley

No, that is the position. Both Deputy Cooney and Deputy Tully referred to the whole question of what might be called an early warning system when there is difficulty arising in a firm. This is a particularly difficult problem. It is one of the major matters with which the new board are going to have to concern themselves as soon as they are set up. It will be obvious to Deputies that there are a number of practical and even legal difficulties in making it compulsory for a firm to give notice in advance of difficulties arising. I expect the solution to be arrived at will probably be on the lines of making it as widely known as possible in the industry that in the event of a firm getting into difficulties and coming to Fóir Teoranta at the last moment it is more than likely they will not be assisted. If this can be got across to industrialists through publicity it will be of considerable help.

We must be realistic about it. It can happen that a firm will come at the last moment and failure to assist it for the technical reason that it had not got in touch beforehand could simply throw many workers out of employment and that is not a good enough reason for throwing them out of employment. I am surmising when I say this. I would hope when the board get down to this problem they will devise as satisfactory a method as can be devised to try to ensure that due advance notice will be given of difficulties arising for a firm. This is a very difficult problem for the Government. They have to deal with them in a rush, under pressure and without having an opportunity of assessing the situation properly. This has happened on a few occasions. It is a matter on which trade unions have made justifiable complaints, in my opinion, in the past. When a firm are closing down and their members are being made redundant they sometimes hear about it only a week or even a few days beforehand. I freely admit there are practical difficulties. Deputy Tully was being realistic when he said that it is normal for a firm who are in difficulties not to admit they are in difficulties because if they do that may close them down. This is one of the practical difficulties with which we are faced. Fóir Teoranta are set up and designed to assist a firm in that condition and it should be possible in the interests of the firm, with due precautions as regards confidentiality, to devise a system which will be more satisfactory than the one we have at the moment.

Deputy Tully, if I understood him aright, was somewhat critical of the limit of £100,000 on individual loans. In case there is any misunderstanding about it I should like to make it clear that there is not in fact a limit on individual loans. What is proposed is that a sum above £100,000 will require the consent of the Minister for Finance and the Minister for Industry and Commerce.

Mr. Tully

I suggest the Minister might be as hard to get as the Minister for Social Welfare was when the dole was cut off.

Mr. Colley

That may be a smart debating point by Deputy Tully but it is not realistic.

Mr. Tully

I agree not everybody disappears for a couple of days.

Mr. Colley

I do not think I have ever heard of a case in which due to the non-availability of a Minister a firm closed down.

Mr. Tully

I hope the Minister never will.

Mr. Colley

I do not think any such case will ever occur. What is involved here is simply a matter of judgment, how much should be left to the board and how much should be a matter for decision by Ministers, and therefore a responsibility generated from the House. The opinion I came to was that £100,000 represented about the right level, one could argue for more or less, I do not claim I have the right answer, and if there is a strong feeling in the House to change it I certainly do not have a closed mind about it. I might say the same thing with regard to the point made by Deputy Tully about the overall limits of capital. The Deputy will appreciate that what we are trying to do is to ensure that the amount of money laid down in the Bill is such that in the course of, say, four years or so, the matter will have to come before both Houses of the Oireachtas again to give public representatives an opportunity to discuss the operation of this company. The Deputy may well be right when he says the figure is too low and in certain circumstances we might have to come back in a year or two years but the Deputy will appreciate that the thinking behind it is to ensure that both Houses of the Oireachtas will get a reasonable opportunity in due course of reviewing the operations of the company. If there is any strong feeling in the House about changing those limits I would be prepared to have another look at it between now and Committee Stage.

Mr. Tully

The Minister is tying his own hands in view of the present circumstances.

Mr. Colley

Deputy Tully and Deputy Cooney mentioned the necessity of a director from the State being put on the boards receiving assistance from Fóir Teoranta. The general intention is that Fóir Teoranta will nominate directors to boards of firms where they provide substantial assistance but the decision in each individual case will have to be for the board of Fóir Teoranta. As I indicated in connection with the case raised by Deputy Cooney in County Louth, this is in fact the practice we are following in regard to Taiscí Stáit. Where investment is substantial we are appointing members to the boards of companies concerned. The number of the directors bears a relationship to the substantial nature of the investment made. The same practice will be followed by Fóir Teoranta although the decision in each individual case will have to be one for the board of Fóir Teoranta.

Deputy Tully made a point with regard to the question of small firms getting assistance. During the course of my introductory speech I tried to spell out that it is not a question of simply whether the firm are large or small but whether they are large or small in relation to the area in which they are operating. I specifically said, if I may quote myself:

For instance, one of the criteria is that the capital and the employment content of the firm in difficulties must be significant; the measure of significance is bound to vary according to the area in which the firm is located. We will rely on the good sense of the Board to ensure that the criteria are applied fairly in all instances.

I can certainly visualise—it may help Deputy Tully if I put it on the record— a situation in which a firm employing 30 or even 20 people could be quite significant in a particular area.

Mr. Tully

Very often ten in some places.

Mr. Colley

Well, possibly. On the other hand, we do not wish to create here a machinery which is simply going to attract every failed or failing industry in the country. That is not the objective. There are some industries that will go out of business regardless of what is done. That is a law of economics. It may be hard but it happens. Some firms go out of business while others continue to grow. We are not trying here to take on all the lame ducks that will exist in the country but I want to assure Deputy Tully that mere smallness will not be a reason for excluding people from assistance.

Mr. Tully

I accept that.

Mr. Colley

I should mention also that Fóir Teoranta as envisaged is really part of an internal early warning system which we tried to organise a few years ago in co-operation between the Departments of Finance and Industry and Commerce. It involves the IDA, the industrial reorganisation branch of the Department of Industry and Commerce and the Industrial Credit Company. The setting up of this body is a further leg in that system.

In regard to the comments made about the approach of the ICC, in all fairness to them I should say that the approach adopted by the ICC in what might be regarded as their normal sphere of activity is quite different from the approach they adopt in cases which at the moment we refer to as Taiscí Stáit cases in rescue operations where they act as managers for Taiscí Stáit. Their approach, of necessity, is different because they are dealing with different criteria. Nevertheless, whether there is to be a continuation of the employment of the ICC as the managers of Fóir Teoranta or whether Fóir Teoranta are to set up their own staff is a matter that will have to be decided by the board. I would envisage that in the beginning the board would have to operate through the ICC but it will be a matter for the board to decide whether that is the most appropriate way or whether they should have their own organisation to do this kind of work. ICC staff have a particular expertise in this field, an expertise that is not always easily obtainable, and this would be a consideration that the board would have to bear in mind.

Deputy Cooney made the point that opportunities should be taken when this kind of investment is taking place to experiment with new approaches to worker-participation and other matters that he had in mind. Apart from Fóir Teoranta at all, this was a matter I considered when certain investments were being made but the difficulty here is the one that was pointed out by Deputy Tully, that is, that the time when a firm are in difficulty is not the time to make radical departures. If a radical departure is to have any chance the firm must be operating successfully.

Mr. Tully

Floating.

Mr. Colley

To make radical departures at a time when a firm are in difficulty may be endangering both the future of the firm and the prospects of the experiment. This is the practical difficulty involved. I am in sympathy with the idea and I would expect that the board of Fóir Teoranta would consider this and, on an appropriate occasion, would try to do something about it but I cannot undertake in advance to tie them to doing anything like that.

I agree that members of the board of Fóir Teoranta should have wider commercial experience than is available at the moment in Taiscí Stáit where secretaries of Departments are concerned. One of the reasons for this board is to ensure that we will have this wider commercial experience. So far as I am concerned I can assure the House that every effort will be made to get the most suitable people for this kind of operation. It is not easy to get them but we will make every effort in that direction. Deputy Tully referred to a recent case where there were nominees by Taiscí Stáit and he referred to one of these nominees being a Fianna Fáil man.

Mr. Tully

I think all of them were Fianna Fáil men.

Mr. Colley

It is interesting that Deputy Tully should say that. My recollection is that there were four nominees or maybe five and that one of these is associated prominently with Fianna Fáil but of the others I could not say what are their politics.

Mr. L'Estrange

Of course the Minister knows.

Mr. Colley

Can Deputy L'Estrange tell me?

Mr. L'Estrange

I know that every man appointed is either a Tacateer or a large subscriber to Fianna Fáil.

Mr. Colley

The Deputy would probably die if he found that that were not true.

Mr. L'Estrange

I make it my business to find out the politics of these appointees.

Mr. Colley

It is a pity he did not find out in this particular case because, then, he could tell me. I made the appointments but I do not know the politics of the people concerned.

Dr. O'Donovan

We know the Minister is dull.

Mr. Colley

On the law of averages, and judging from the voting pattern in the country, at least half of the appointees would be Fianna Fáil men.

Mr. L'Estrange

Fianna Fáil have only 44 per cent of the votes of the country at the moment.

Mr. Colley

In the particular case referred to one of the men is very competent in his own right and the fact that he is a Fianna Fáil man would not rule him out so far as I am concerned.

(Interruptions.)

Mr. Colley

I do not want to be lectured on this by Fine Gael or Labour.

Mr. L'Estrange

Gerry Jones was all right so long as he subscribed to Fianna Fáil but when he backed Deputy Blaney, he was fired.

Mr. Colley

I want to remind Fine Gael and Labour that when they were in office they set up a State board and I suppose Fine Gael had the main strength because practically everyone connected with that board was a Fine Gael person.

Mr. Creed

That is untrue.

Mr. Colley

It is true. Nevertheless, they were good appointments and the fact that they were Fine Gael men was not a black mark against them.

Dr. O'Donovan

Is the Minister talking about the VHI?

Mr. Colley

Yes.

Dr. O'Donovan

They were not all Fine Gael men.

Mr. Colley

Have another look. Maybe Deputy L'Estrange can inform Deputy O'Donovan on this. I am saying they were good appointments. Do not talk to me about Fianna Fáil appointments. The few chances the Opposition got, they packed them in.

Mr. L'Estrange

Tell us about low standards in high places. Why was Gerry Jones sacked?

Mr. Colley

I can only say that the standard of this debate was higher before Deputy L'Estrange came in.

Mr. L'Estrange

The Taoiseach sent for Mr. Jones——

Mr. Andrews

Tell us about Deputies FitzGerald and Cosgrave.

An Ceann Comhairle

Order.

Mr. Colley

I have dealt with the main points raised in the debate. There were a few other points but these were irrelevant. Nevertheless, I gathered from the approach of the Deputies who spoke that they recognised that the Bill will do considerable good and will be a considerable help to Irish industries.

Question put and agreed to.

Committee Stage ordered for Tuesday, November 23, 1971.