As far as we are concerned on this side of the House we readily accept the necessity for this Bill and we will not impede its progress in the House. There are, however, a few matters on which I should like to comment. First, since this is the first opportunity I have had of saying this in public I would like to pay a very sincere and public tribute to the work of Dr. J. P. Beddy who was chairman of the Industrial Credit Company for quite a number of years and was associated with various activities of the Industrial Credit Company since their foundation. It is appropriate that a tribute should be paid to the work of Dr. Beddy for the Industrial Credit Company and the country in general. This work, while, perhaps not as widely recognised as that of other people, was no less appreciated by those who were aware of it.
The Industrial Credit Company were set up in 1933 by the first Fianna Fáil Government and their activities have been of very great importance in the industrialisation of this country. While I have not got up-to-date figures I have one percentage figure which illustrates the important part this company have played. Between 1933 and 1968 the Industrial Credit Company accounted for 54 per cent of all the capital raised by industrial companies in the State. In my view that is a fair indication of the important role the company have played in the industrialisation of this country.
It is true, of course, that since then there has been a very substantial increase in industrialisation accompanied by a very substantial increase in the involvement both by way of the amount of money and sophisticated know-how input by banks and other financial institutions. Despite that I believe that the Industrial Credit Company will continue to have an important role to play and that they did to a great extent pioneer the provision of capital for Irish industry at a time when the ordinary financial institutions were not all that keen to get involved. In recent years the Industrial Credit Company have increased the sophistication of their service to the community so that they are now fulfilling many of the functions of an investment bank and a merchant bank. This is as it should be.
The Industrial Credit Company have some subsidiary companies one of which is Mergers Limited. I note that on page 8 of the company's report and accounts for the year ending 31st October, 1973, the following statement occurs:
Mergers Limited had a busy year and its income went up by 50 per cent. In conjunction with some other financial institutions representations were made to the Department of Industry and Commerce concerning the legislation to be introduced by the Minister for the control of mergers.
It is only right that that should have been done because clearly Mergers Limited will be affected by any legislation introduced in that regard.
The whole area of that legislation is somewhat of a mystery. It will be recalled that the former Minister for Industry and Commerce, Deputy Lalor, had prepared legislation dealing with mergers and takeovers. It will also be recalled that the present Minister for Industry and Commerce, after he assumed office, said he was scrapping that Bill because it was not strong enough and that he was going to introduce stronger measures. It may also be recalled that the present Minister for Foreign Affairs, shortly before the last election, apparently gave semi-secret undertakings to certain groups to the effect that nothing untoward would be done in regard to legislation of this kind.
Whatever may have happened at that time, the fact is that we are now into July 1974 and we have not seen that legislation and only within the last week or so, in response to a supplementary question of mine, the Minister for Industry and Commerce became very upset apparently and sought the protection of the Chair when all I was asking was when he was going to produce the legislation. We do not seem to be able to get any information from the Minister for Industry and Commerce and since the legislation in question is not only of very great importance to the whole community but is of direct importance to Mergers Limited, a whollyowned subsidiary of the company for which we are being asked to agree to substantial increases, would the Minister for Finance, when he is replying, throw any light on this increasingly mysterious situation in regard to the legislation on takeovers and mergers which is badly needed, the previous Bill having been scrapped by the present Government as not being strong enough. We are now left with no legislation. Perhaps the Minister could enlighten us as to what is happening about that.
The Minister referred to the fact that it might be thought that the proposed addition of £45 million to the statutory limit on borrowing, with the corresponding increase in the statutory limit on guarantee power of the Minister, was excessive. I would agree with him that perhaps a few years ago such a figure might well have been thought excessive in a case like this. As the Minister is well aware, an effort is made in legislation of this kind which has to be brought in periodically in regard to the Industrial Credit Company and many other State companies to try to measure the amount of additional money to be provided in such a way as to reach a figure which will enable the body concerned to operate effectively but nevertheless will ensure that at reasonable intervals new legislation will be needed so that the operation of that body can come under periodic review in this House. On the basis of what the situation would have been a couple of years ago, say when I was Minister for Finance, this figure would certainly have been considered excessive and as stretching the interval for review by this House too far. However, I agree with the Minister in this case that it is not in fact stretching it too far. I say this for two reasons. One is that the activities of the Industrial Credit Company are expanded and, secondly, and it is tied in with the first, at the rate inflation is going now and with the prospects for the fairly immediate future, this figure of £45 million is not nearly as much as it may seem. Indeed the Minister may have to come back with further legislation on those lines at least as soon as would be equivalent to the last interval and maybe even in a shorter term. For that reason I have no objection to the amount proposed in this Bill.
In regard to the activities of the Industrial Credit Company, admirable as they are, I believe that there is built into these activities a form of subsidy to Irish industry. I say this not in any carping spirit because I believe that what is being done is correct and that it should be done. Nevertheless it should be recognised that there is involved in it a significant form of subsidy for Irish industry and this because the rate of dividend paid by the company on its share capital is 2½ per cent which, in ordinary commercial terms, would not normally enable it to retain that capital. Secondly, to the extent that the Government guarantee loans to the company—though the Minister has said this is relatively small I think the figure will increase—there is a form of subsidy which is not easy to measure but it is there. I say this because there are occasions when certain people with an interest, not by any means all of them but some of them who have an interest in industry, tend to think that they are operating wholly in a competitive field without any assistance from the Government of the day and rather tend to think only of interference by the Government of the day. There are many other areas where the same thing could be said but in this particular area there is a form of subsidy available in the activities of the Industrial Credit Company in so far as it assists Irish industry. I repeat that I would not change this, I am merely recording the fact that subsidy exists.
The Minister has adverted to the fact that the Industrial Credit Company has raised most of the capital it requires from non-Exchequer sources and has expressed the hope that that will continue. I would certainly concur in that hope. I know, from the activities of the Industrial Credit Company, that the concerns from which it raises money tend to be bodies like the World Bank and the loans tend to be of that kind. Nevertheless, I am posing the question, and perhaps the Minister will be able to tell me whether it is practical but one cannot help wondering when one sees the activities of the Agricultural Credit Corporation and the very effective advertising campaign which it embarked on some years ago to attract deposits, whether a similar kind of campaign is possible or would be worthwhile in regard to the Industrial Credit Company. I can see certain difficulties in this but perhaps the Minister could tell us whether he thinks they are insuperable or whether this ought to be initiated.
I was under the impression, which is somewhat shaken by the wording of what the Minister said in his speech, that the Industrial Credit Company had joined an association of development banks in the EEC. The Minister's wording leaves me in some doubt so perhaps he would tell us, when he is replying, whether, in fact, they have joined an association of development banks. I would believe that if this is so it would be a necessary preliminary step to an adequate implementation of a regional policy of the EEC, something that we have not yet seen, to our regret, but I am confident that we will see it. In so far as the Industrial Credit Company have taken or are taking a step of this kind it is, I believe, a step in the right direction. It should be borne in mind that the Industrial Credit Company by the statutory provisions under which they exist have no obligation whatsoever to have regard to regional policies in this country. They have no specific obligation to help the west more than the east under any statutory obligation but if they are about to join in such an association, as I have mentioned, I would regard this as a step on the road towards implementing regional policy for the European Economic Community in this country. Therefore, while they would not have the statutory obligation to engage in that it would indicate they were about to engage in such activities which, of course, they are not prohibited from doing by their statutory set-up.
The Minister in what he said answered a question I was about to ask. I intended to ask if any money had been received or any negotiations were in progress with the European Investment Bank. He said that the company had completed negotiations with the European Investment Bank for a loan of £2 million, the full details of which, he said will be announced in the near future. This is satisfactory but on the face of it it seems to me to be a very paltry figure to be the subject of a loan by the European Investment Bank with the EEC. I hope that it is merely a preliminary arrangement and that we can expect considerably more substantial loans from the European Investment Bank to the Industrial Credit Company in the future.
The European Investment Bank is, and should be, one of the very important sources of finance for us in the European Economic Community for the purpose of the development of our economy and, in particular, for the purpose of industrial development. I do not think there is any better instrument available to the State for industrial development, particularly development of native Irish industry, than the Industrial Credit Company. For that reason I am anxious to ensure that the maximum benefit is got from our membership of the European Investment Bank to further the activity of the Industrial Credit Company.
One other matter, to which I wish to refer, may not appear to be relevant but I believe it is. The Minister may recall on a previous occasion I asked some questions about the position concerning Fóir Teoranta. He will recall, when that company was set up originally, arrangements were made whereby the Industrial Credit Company supplied the staff and management for Fóir Teoranta but it was open to Fóir Teoranta to decide at a later date whether they wished to continue this arrangement or set up their own staff and management structure. When I enquired about this last the Minister told me that the Industrial Credit Company were continuing to supply this. I would like to know if that is still the position and if it is intended to continue it. If it is the position I would like to know if any progress has been made on a matter which I, as Minister for Finance, discussed with the board of Fóir Teoranta and in which I was considerably interested, that is the development of a nucleus of management expertise in Fóir Teoranta, provided as of now by the Industrial Credit Company.
I am particularly interested in this because experience shows in many cases where industries get into difficulty while, of course, the immediate problem is financial—there may be others—in many cases the root cause is lack of management expertise. Very often where the money is available to remedy some problems other problems cannot be remedied. Unless management expertise can be supplied it is throwing good money after bad for Fóir Teoranta to invest money in the proposition. I spoke on this before and I am aware of the various difficulties which I outlined then but will not outline now. I am very interested to know if the Industrial Credit Company are still providing the management structure for Fóir Teoranta and if any progress has been made in this regard.
There are various other aspects of the activities of the Industrial Credit Company which I believe are admirable and are well worthy of accommodation and perhaps of more detailed comment. However, I do not intend at this stage to go into any great detail on this. I want simply to say that, subject to the information I hope the Minister will be able to give me on the various points I raised, I unhesitatingly support the Second Reading of this Bill.
