asked the Minister for Finance if he will arrange for a standstill on the proposed increases by the Irish banks on local authorities pending the holding of a public inquiry.
67.
Ceisteanna—Questions. Oral Answers. - Bank Interest Rate Increases.
66.
asked the Minister for Finance if he is aware of the widespread public indignation, particularly amongst members of local authorities, at the increased charges now being applied by banks to local authorities; and if he will take immediate steps to prevent the application of these charges which will add to administrative costs and contribute to the inflationary spiral; if he will be prepared to (a) nationalise the banks in order to utilise the nation's capital resources more equitably in the public interest or (b) enable local authorities to engage in joint action so as to create their own credit institutions.
I propose with your permission, a Cheann Comhairle, to take Questions Nos. 66 and 67 together.
I take it Deputies are referring to the revised scheme of charges for current accounts which was introduced by the Associated Banks with effect from 1st April, 1972. I am aware that the local authorities have, with the support of the Minister for Local Government, expressed to the Irish Banks' Standing Committee their concern and opposition to the application of the revised scheme to their accounts. I understand that the banks are considering the matter, which is also being examined by the Central Bank.
As negotiations are in progress, it would not be appropriate for me to comment further at this stage.
Would the Minister be prepared to sound a note of warning to the banks in view of the very reasonable stand taken by the Minister for Local Government in relation to the local authorities? Would he not consider it advisable to make it very clear that they will not be allowed, permitted or tolerated to extract a quarter of a million pounds from the ratepayers of this country in relation to these new charges and if legislation is necessary to deal with this matter, perhaps, the Minister would consider that?
The position is as I have stated in the reply and I do not think it appropriate to say anything further on it.
Can the Minister say whether he or the Minister for Local Government had been informed beforehand about these charges?
The general scheme that came into operation on the 1st April, not just in relation to local authorities, was, I think, speaking from recollection, conveyed to me by the Central Bank before it was announced.
Did the Minister agree with the imposition of these? Did he raise any objection to them?
It was not my function, I think, to say "yes" or "no" to it but no objection was raised to it by me. I cannot say with certainty whether any objection was raised by the Central Bank but I think some negotiation probably went on before the final form of it was agreed.
(Cavan): What does the Minister think of it?
May we take it from the Minister's reply that the interest charges are not being applied? Is the Minister indicating that a stay has been put——
I did not say that.
Would the Minister not consider having a stay put on the interest charges involved——
I think that is another matter.
——in view of the effect this will have on the cost of the public services, rates and rents and will generally contribute to inflation?
I think that is another matter which, as I have indicated, will have to await the outcome of the present consideration.
Would the Minister not agree that the banks in this instance have acted in a very monopolistic and dictatorial manner which is completely unjustified in that local authorities must be regarded as gilt-edged securities and, in the circumstances, does the Minister not consider that he should apply some restraint?
I have already indicated that I am not prepared to say anything further on the matter at this stage.
Would the Minister not agree that in view of the fact that the Minister for Local Government has indicated this, presumably on behalf of the Government—I presume they are collectively responsible —that would suggest that the present system of control of this banking cartel by the Central Bank is inadequate and that the Opposition's proposal that the Fair Trade Commission should be given a jurisdiction here should now be implemented?
No.
Would the Minister like to justify his answer in logic?
Will the Minister give an assurance to the House that he will not stand in the way of local authorities creating their own financial institution to deal effectively with this matter?
I could not at this stage give any undertaking about something that has not been precisely formulated. Obviously, if a particular, detailed proposal were made that would be a situation in which I could say: "This is my attitude" or "That is my attitude." At present I could not say any such thing because there are no detailed proposals of which I am aware.
Will the Minister do his duty in controlling this cartel?
The Deputy may rest assured that the Minister will do his duty.