This is the section which allows the Minister to make regulations to increase the restrictions on loans by societies to members and on the acceptance of deposits. Would the Parliamentary Secretary consider widening it somewhat to include the two amendments which I have down and one of which, No. 3, I understand, is out of order and not confine it to the very limited class of societies which are covered by section 46 of the 1896 Acts because in fact there are only about a dozen of these societies which are in a very small way of business? My principal interest is to have it extended to credit unions.
Friendly Societies (Amendment) Bill, 1976: Committee Stage.
Section 1 agreed to.
SECTION 2.
Question proposed: That section 2 stand part of the Bill.
The Deputy will appreciate that credit unions are already regulated by special legislation. I think we should perhaps wait for section 3 to discuss the amendments which the Deputy has put down.
Would the Parliamentary Secretary tell us what amount the Minister has in mind in making the regulations that would be permitted by this section?
The situation here is one which will have to be the subject of negotiations between the Minister and the societies in question. I do not think I could anticipate the limits at this stage or the particular controls that may be imposed. Orders in relation to this matter will be coming before the House for sanction when they are being introduced.
Is it intended to make draft orders under this section fairly soon?
It depends on how you interpret "fairly soon". When we get the legislation we shall proceed to the stage of drafting the orders that the legislation enables us to draft. But it will not be simply a drafting job. It will involve consultations with the societies as to both the limits that would be appropriate and the controls which might be introduced as this section authorises the Minister to do, by order.
Question put and agreed to.
SECTION 3.
I move amendment No. 1:
In page 2, before section 3, to insert a new section as follows:
"3. —Part II of the Schedule to the Credit Union Act, 1966, is hereby amended by the substitution of "£2,000" for "£1,000" wherever the latter figure appears in the said Part."
The amendment proposes to amend the second part of the Schedule to the Credit Union Act, 1966. The second part of that Schedule consists of references to and amendments of the Friendly Societies Act, 1896. A credit union appears to me to be basically an industrial and provident society but it has many of the attributes of a friendly society also, including the limitations which are placed under the Friendly Societies Acts generally on the amount of insurance that a member can be covered for by the society and the amount of deposits or shares which he can hold.
In talking about credit unions in effect I am talking about friendly societies as amended by the Credit Union Act, 1966 because as well as having some of the attributes of industrial and provident societies, credit unions have many of the restrictions and regulations governing friendly societies generally. Credit unions are by far the most important of this type of society in existence at present. The Parliamentary Secretary told us previously that there are only 177 friendly societies in the country of which only something like 15 are engaged in actually taking deposits or lending to members or insuring members. Therefore, what counts are credit unions.
A limitation is imposed in Part II of the Schedule of the 1966 Act on the amount of deposit or shares and on the amount of insurance that a credit union member may hold. The figure chosen in 1966 by way of amendment of the Friendly Societies Act, 1896, was £1,000 which was probably a reasonable figure at the time but it is now inadequate. That limit should now be increased.
A further difficulty has arisen for a number of credit unions about which I should like to have the Parliamentary Secretary's guidance. It is that while the limitation is expressed in the Credit Union Act to be £1,000 in respect of a member, it is now a frequent occurrence that a member has £1,000 in shares or deposits with the credit union and has also an insurance policy for £1,000 with the credit union in the manner in which he is entitled to have it under the Friendly Societies Act, 1896, and section 25—I think it is—of the Credit Union Act, 1966.
A difficulty has arisen in interpretation as to whether a member is entitled to have both or whether the limitation of £1,000 covers the entire interest of the members in the credit union or friendly society concerned. Perhaps before I go on to the rest of what I have to say the Parliamentary Secretary would be good enough to intervene at this stage to tell me whether in the view of the Department a member is entitled to both or only to a maximum coverage, as it were, between deposits and policy of £1,000. It would be easier to develop the remainder of the argument then.
Part of the reason I am reluctant to accept the amendment in the form in which it is drafted is that there is some doubt about the very point mentioned by the Deputy. To the best of our knowledge the limit applies to both but——
To both accumulatively?
Yes, but this is a matter which is still in doubt. If the Deputy wishes I could outline my general attitude to his amendment at this stage. It is that I agree with the purpose he has in mind in introducing this amendment but feel it would be more appropriate to deal with this problem by taking a power to make alterations in these limits by regulation in the same way as we are seeking to deal with other matters under this legislation by regulation. The reason I feel that that would be more appropriate is that it is a more flexible instrument and one can react more quickly to depreciation in the value of money by regulation, whereas if, as is not inconceivable, the new limits which would be put into effect by Deputy O'Malley's amendment were to become irrelevant within the terms of the amendment he has proposed, it would be necessary to bring in new legislation, with all that that implies, to amend those limits. If we merely took power to deal with the problem, which he has rightly identified, by regulation I think we could cope with it more flexibly and effectively on an on-going basis. I would propose therefore to introduce an amendment to this effect on Committee Stage in the Seanad which of course, being an amendment introduced at that juncture, would be discussed again in the Dáil if it is accepted by the Seanad.
That is not unsatisfactory except that we have a Report Stage in the Dáil.
I do not mind——
It would be better to see it there.
In principle one used always object in this House to giving regulation power to make regulations of this kind, but when we are talking about monetary limits in things like this I am afraid that, since the advent of the present administration some years ago, it is unwise, because of the rate of inflation they have brought in their train, to limit oneself to even an optimistic forecast of what the value of money might be in a couple of years' time. Therefore, I go with the Parliamentary Secretary and I thank him for his method of meeting the point I am making. I go with him in relation to effecting this amendment by way of power to make regulation rather than by the fixed figure which I have here in my amendment. I would simply make the suggestion that it would be preferable if the amendment was made here on the Report Stage, which could be done tomorrow or even after a short interval, as I understand we have no business until Private Member's Time.
There are a few difficulties in drafting this power and I would prefer to have enough time to have the amendment drafted properly by the parliamentary draftsman, as the Deputy will appreciate. It is for that reason that I have suggested that possibly it would be better to introduce it on Committee Stage in the Seanad. That would allow greater time to anticipate any difficulties there may be in meeting the point which the Deputy made in his original amendment. If we were to wait for the Report Stage it might mean delaying the Report Stage here in the House for an undue length of time. As I said, if it is accepted in the Seanad it will come back here anyway for discussion.
I would point out to the Parliamentary Secretary that under section 35 of the Credit Union Act, 1966, the limitations in the Industrial and Provident Society Acts which are amended by the first part of the Schedule to the 1966 Act are covered in section 35 (1) (i) and the alterations in the financial and monetary limits can be made there by regulation of the Minister. The amendment we are talking about simply necessitates the adding of the words "Part 2" to the words "Part 1" there and we would appear to be able to get over the problem.
The other point I want to make that is associated with this and that was part of the reason for my putting down the amendment, which the Parliamentary Secretary has been good enough to meet in this way, was the fact that difficulty is being encountered at the moment by credit unions in regard to whether or not the insurance policies they carry on the lives of their members or which the members carry on their own lives through the credit unions can be cumulative to the deposits and shares which they have in the credit union. The Parliamentary Secretary has said that he is advised there is some doubt about this. Unfortunately there is, and I would have hoped that we might possibly have been able to clear this up. I am aware of two cases where the credit union have been advised that because of doubts that exist they may be taking a risk in paying the money concerned to the people who are entitled to it.
It is undesirable that that doubt should be there and it is undesirable that the credit unions should find they are inhibited from making payments which they wish to make but about which they are in some doubt about their powers to make. In particular the problem seems to arise where there is a power of nomination exercised under the Friendly Societies Act, 1896, and where the nomination appears to cover only either the insurance policy, as is usual, or the shares. If a nomination covers one only, the credit unions are in some difficulty as to whom the non-nominated asset should be paid. I wonder, before we leave the topic, if the Parliamentary Secretary could elucidate all that difficulty.
The problem, whereby we are discussing this matter on this Bill at all, arises from the fact that a regulation in relation to friendly societies was made in essentially very different legislation, under Part 2 of the Schedule of the credit union legislation. This Bill does not deal with credit unions at all and it is merely an accident of legal history that the matter we are dealing with in relation to friendly societies in the amendment which was suggested by the Deputy happens to have been in a credit union Act. Therefore, in opening up a general discussion on a problem in relation to credit unions, he is extending the discussion well beyond the scope of the Bill.
Not beyond the scope of the amendment.
Not really in the sense that the amendment is dealing with friendly societies although amending a Schedule to a Credit Union Act but the Schedule dealt solely with friendly societies not credit unions. It was just tagged on to the Credit Union Act, 1966.
The best course of action would be if I could write to the Deputy in the near future giving him the best advice we can find on this matter. I have not the means of giving a definite answer to any greater extent than I have already given on this problem. Therefore, I think it would be best to wait and I will communicate with the Deputy.
Thank you very much.
Is the amendment withdrawn?
It is withdrawn on the basis that I would like to see the alternative amendment put in. I suggest the way it should be done is by adding the words "and 2" after the words "Part 1", making it "Parts 1 and 2 of the Schedule" in the last line of paragraph (i), subsection (1), section 35 of the Credit Union Act, 1966. On the basis that that could be accepted on Report Stage, I will withdraw amendment No. 1.
I will consider the form of amendment indicated by the Deputy. There may be advantages in making the amendments specifically under this Bill rather than by an amendment on the other Bill.
Amendment, by leave, withdrawn.
Amendment No. 2 not moved.
Question proposed: "That section 3 stand part of the Bill."
Does this apply to all friendly societies or only to societies making loans and accepting deposits?
All friendly societies are covered by this because this power relates to the regulation of the accounts of societies. Obviously, all societies would need to have proper accounts whether they are making loans or not.
Is it the same sort of general regulation that relates to credit unions?
Yes.
Question put and agreed to.
SECTION 4.
I move amendment No. 3:
In page 3, line 21, subsection (4), to delete "of the ordinary members" and to substitute "members of the society who are not officers of the society".
This is really a drafting amendment to make clearer what exactly is in mind in relation to the people who may carry out this function. On reflection, it was felt that the simple description of "ordinary member of the society" could conceivably be construed as including ordinary members who were also officers. It was felt undesirable that people should be supervising and passing judgment on their own work if they are officers. It was also felt that this body should consist solely of people who are not officers of the society and members at the same time. Therefore, this clarified amendment is now being made.
Amendment agreed to.
Question proposed: "That section 4, as amended, stand part of the Bill."
Is the provision relating to supervisory committees the same as in the Credit Union Act, 1966?
Yes.
I am glad it is but we have had three sections dealing with credit unions——
These are not——
They are dealing with them in the sense that they are applying to other friendly societies the precise regulations of credit unions and it might have been possible to work in the two together in a fuller way to enable the necessary amendments to the credit union legislation to be made too.
This is not a Credit Union Bill but a Bill which applies to other friendly societies in some cases provisions which apply to credit unions. It was felt in the case of this section that specially authorised loan societies are societies which are so similar in their functions to credit unions that the same safeguards the House in their wisdom decided in 1966 should apply to credit unions should also apply to specially authorised loan societies which have a different historic source to credit unions.
Question put and agreed to.
SECTION 5.
I move amendment No. 4:
In page 3, to delete subsection (2), and to substitute therefor:
"(2) The registrar of friendly societies may be removed from office by the Minister. Such removal shall not take effect except on the passage of a motion by each House of the Oireachtas with a two-thirds majority of those voting in each House."
I set out the purpose of this amendment in some detail on Second Stage in Volume 293, No. 4, of the Official Report for Wednesday, 27th October last. The Parliamentary Secretary replied to it at the end of that debate. He did not accept the principle of the case I was making. While I do not want to go into the full argument made the last day, it is essential that an amendment of this kind should be put down and, if at all possible, accepted.
The Registrar of Friendly Societies is not just the registrar of the 170 societies which are actually friendly societies themselves. He is also the registrar of all building societies in this State, which are immensely important, wealthy and powerful institutions, with a tremendous degree of influence on social and economic affairs. He is also the registrar of industrial and provident societies. Some of the largest undertakings in this country are industrial and provident societies, such as the Amalgamated Co-Ops where the turnover in the case of some of the big agricultural co-ops in County Cork and elsewhere approaches £100 million a year each. He is also registrar of credit unions of which there are a great many and which perform a very important function. He is also registrar in relation to certain functions of trade unions. While his importance in relation to friendly societies is very limited and it is not of significance who he is or what his powers or functions are, his functions in relation to building societies are immensely important. During the course of the debate on the Bill dealing with building societies in the Seanad, and in this House, our spokesmen tabled amendments on the lines of the one I have tabled to try and ensure that the registrar of building societies, who will have extremely important functions to perform under the building societies legislation, is somebody who is genuinely independent.
The section does not say that he is independent. Section 5 states:
(1) The registrar of friendly societies shall be paid such remuneration as the Minister, with the consent of the Minister for the Public Service, determines.
(2) The registrar of friendly societies may be removed from office by the Minister. The reasons for the removal shall be conveyed to the registrar.
I have no objections to the rest of the section. The nub of the problem as far as the registrar is concerned is contained in subsection (2) of that section, that he may be removed from office by the Minister and he must be told privately the reasons for his removal. Therefore, he is entirely a creature of the Minister in the sense that the Minister can appoint him and dismiss him at five minutes' notice. In effect, he is a civil servant of the Minister, subject to the directions of the Minister. The Parliamentary Secretary may tell me that legally he has some independence of the Minister in the exercise of his function but in the original Act, where the Minister is referred to as the "Treasury" it is clear in section 1 that the registrar is very much subservient to the functions of the Treasury which have now been taken over by the Minister for Industry and Commerce.
That may well have been appropriate in 1896, when building societies were small and were nothing like as important as they are now. Industrial provident societies were small and the functions of the registrar were small and, as the Parliamentary Secretary said the last day, they were simply mechanical recordings, recording the information in relation to the societies. He had no real supervisory functions and had very limited inquisitorial functions. We would envisage that his functions in relation to building societies, for example, would be very different and that he would have a direct control over building societies and the way they conduct their financial affairs.
A person with that sort of function vis-à-vis enormously important financial institutions here should, in our view, not alone be independent of the Minister but be clearly seen to be that. Nobody can be independent of a Minister if a Minister can tell that person at two minutes' notice that he is fired. It is not real to suggest that a person in that situation who is subject to that ultimate sanction at any time is independent of the Minister. The reason a judge, and a lot of other officials who perform work involving the exercise of independent discretion, cannot be fired except for stated misbehaviour and usually after a resolution of both Houses of the Oireachtas has been passed, is to ensure that they remain independent. In approaching building societies and their affairs the registrar should be in a position to take a view that would not necessarily coincide with the personal or political view of the Minister of the day. He should be able to stand back from the societies, look at them objectively, and deal with them as he felt the national interests, the interests of the public, the depositors and borrowers demanded rather than the conflicting way the Minister for Industry and Commerce of the day might think appropriate.
My amendment suggests that the registrar might be removed from office by the Minister as is provided for in the section but that such removal shall not take effect except on the passage of a motion of each House of the Oireachtas with a two-thirds majority of those voting in each House. That is to ensure that, if he is removed against his will, there is good reason for removing him. It gives him the kind of independence that, for example, the Comptroller and Auditor General has. I am not suggesting that the register of friendly societies will become as important in the State as the Comptroller and Auditor General, whose powers are defined in the Constitution; but, nevertheless, he will be very important.
Nobody can say today that building societies are not important. What building societies do has an enormous influence on the economic and social life of the country. Recently they raised their interest rates to borrowers by 2 per cent and this had a profound effect on an enormous number of people. They raised the rate of interest they pay to depositors by 1½ per cent when one might have expected that perhaps the two figures would have gone up by the same amount. These are the questions a truly independent registrar of friendly societies, being in charge of building societies could inquire into. He could meet the Irish Building Societies Association when they are faced with a situation similar to what they faced in the last couple of weeks when they had to make a decision about interest rates to depositors and borrowers and to discuss the implications of what they are going to do with them. That could be done in the interests of borrowers and lenders and be independent of the views of the Minister for Industry and Commerce of the day.
How can any man with important functions of that kind to fulfil be independent of a Minister of the day when he may be removed from office by the Minister? The fact that it has been always that way and that under the terms of section 1 of the 1896 Act he held his office during the pleasure of the Treasury is no argument that it should now be the same, that he should hold his office during the pleasure of the Minister for Industry and Commerce. He should not. These bodies, with the strange exception of friendly societies, over which he exercises control to some extent as registrar, have all become immeasurably more important than they were in the 1890s, particularly the industrial and provident societies, trade unions and building societies. In addition, there is a whole new area where he has control. The credit unions are only ten years old but they have already made a very significant impact on social and economic life here.
The kind of recording registrar who was significant in 1896 is, in my submission, no longer appropriate to the duties now thrust upon him because of the passage of time and the growth in size of the various bodies to which he acts as registrar. A man holding an office as important as that should, in our view, be independent of the executive of the day. I am not trying to allege that the present Minister, or any Minister, might try to influence him improperly, but he should not be in a position of a civil servant. I understand the office has been held by an assistant secretary of the Department. But this was very much a part-time office and the actual recording duties connected with it could have been delegated to junior officers in the Department and carried out quite competently by them.
One can envisage this office, particularly in relation to building societies, as being considerably more important than simply recording information. The degree of control to be exercised should be in the context of the enormous turnover of such societies, something in the region of £100 million a year. Such control should be in the public interest and in the interest of members and creditors of such societies, some of whom are very substantial.
I support the amendment which is a very important one. I am mainly concerned because of the association the registrar would have with building societies in respect of whom there is a Bill before us which has had its Second Reading and which, I understand, we will be considering in Committee tomorrow. We would hope that if the Minister for Local Government accepts some of our amendments to that Bill the registrar would have an even more important role to play.
As Deputy O'Malley said, the registrar is now dealing with bodies such as building societies, which are enormous financial institutions, and in relation to the Building Societies Bill we are concerned with the powers being given to Ministers. We should like these powers to be transferred to the registrar, and our argument will be, when that Bill comes before us in Committee, that it is important the registrar should not only be independent but that his independence should be seen. The inflow of money to building societies depends very much on confidence and we all know that any fears on the part of the public can easily result in an outflow of money from such societies. Some of these fears might be related to what a Minister in certain circumstances might do. Deputy O'Malley's amendment is not concerned with the present Minister for Industry and Commerce, but, of course, we do not know who might be Minister for Industry and Commerce at any future time and what such a man would do in certain circumstances.
For that reason we consider that the registrar should be outside the political arena and should not be subject in any way to political pressures—as Deputy O'Malley has said, that he should have and be seen to have independence. The role of the registrar in the future will be much more important than in the past, and I appeal to the Parliamentary Secretary not just to listen to the arguments put forward by us and rebut them from the point of view of past performances of registrars but to compare the future role of registrar with that of the past, particularly in relation to building societies.
Our concern is that, although allowing that the Minister should have the right to remove the registrar from office, such removal should not occur except by motion to be passed by both Houses of the Oireachtas. Therefore, I appeal to the Parliamentary Secretary to take a careful look at the amendment and to relate it to present day situations rather than to those obtaining when the original Bill was passed.
The position as proposed by the Deputies opposite is that for some reason not only a majority but an overwhelming majority of Deputies in the House could be frustrated by a minority of Deputies—47, one-third plus one. That would mean that not only the wish of the Minister, but of a majority of the House, to remove a registrar would be frustrated. Giving such a power to a minority of Deputies would be unwise for the very reasons advanced by Deputy O'Malley when he spoke of the importance of these societies and the need to have an efficient, competent man dealing with the functions conferred on the Registrar of Friendly Societies. If the amendment were accepted we could have a situation where there would not be a registrar functioning or if there was that he would be functioning in the eye of violent controversy.
It is conceivable that it might be necessary to remove the registrar very quickly for some of the reasons advanced by the Deputies opposite. For instance, he might become affected by some mental illness or by alcoholism and consequently not be able to perform very important functions in relation to large amounts of money. It might become necessary to remove him quickly without having a full-dress debate in the House as to the reasons for his removal, without having his medical history explained not to a majority of Deputies but to one-third of the Members of the House.
Acceptance of the amendment would work very strongly against the objectives the Deputies have in mind. Their objectives would be served by the Minister who is accountable to this House at Question Time and during debate but who would have the power to remove the registrar at short notice in the sort of circumstances I have in mind. I agree that it is very important that the Minister would not exercise this power or threaten to use it in any capricious or political manner. It is difficult to safeguard completely against such eventuality apart from the ultimate control which lies in the fact that the Minister must answer to this House and ultimately to the electorate. I would be prepared to consider some form of amendment whereby if the Minister decided to remove a registrar, he could do so immediately but would have to make a statement to the House or to lay some statement before the House subsequently, giving reasons for his action. The time factor is one of the big problems of the Opposition's amendment. In addition to the normal check on the exercise of power by Ministers, that check will be sufficient to ensure both the efficiency of the exercise of the powers of the office and to safeguard against political activity on the part of the Minister in regard to the registrar.
At present the registrar is required to furnish to this House an annual report of his activities and if any Deputy considers that the registrar is being influenced unduly by a Minister, such Deputy can take steps to seek a discussion on the registrar's annual report in addition to questioning the Minister about the matter here.
Deputy O'Malley used a term which I would repudiate because it is a term which cannot be helpful. He said that in effect the registrar would be a creature of the Minister. Manifestly this is not the case. The powers of the registrar are statutory. Consequently, he is responsible to this House in relation to the exercise of the powers conferred on him by this House. In no event are these powers susceptible to intervention by the Minister. We can be satisfied that the best interests of the societies referred to by the Deputies opposite will be served by retaining the section basically as it is but possibly with some amendments along the lines I have indicated, that is, to provide that the Minister must account for any moves he makes in relation to the removal of the registrar.
I am not satisfied that the Parliamentary Secretary has met the point we raised. An ordinary civil servant has much greater tenure of office than has the Registrar of Friendly Societies under subsection (2) of this section. The Minister cannot approach a civil servant and tell him he is being removed from his job because the civil servant has enormous statutory protection under the various Acts relating to the civil service. It is very difficult to dismiss a civil servant even when there is good reason for so doing. His dismissal would require a decision of the Government under seal. Therefore, why should the Registrar of Friendly Societies not be in a similar position in relation to his job which is more important than the jobs of the majority of civil servants?
I sympathise fully with the point the Deputy is making in so far as it is intended to prevent this Minister or any successive Minister from exercising a political role in dismissing a registrar. I am prepared to consider ways and means whereby this power can be restrained by providing that the Minister resort to a certain procedure which would be quick enough to deal with the problem. On reflection I do not think the Deputy would consider his amendment to be correct because it goes much too far and would be a handicap rather than a benefit.
Much of the difficulty may be resolved one way or the other by the Parliamentary Secretary telling us whether it is intended to appoint an established civil servant to this office or whether it is intended to open the position to public competition.
I cannot say whether the registrar will be a public servant but it is our general intention that he be a man of independent status and background. I should like to go further than that but it would be better that I remain silent rather than to anticipate something of which I am not certain.
Without asking the name of the individual who may be in mind for this office, is it envisaged that he is an established civil servant in the Department of Industry and Commerce?
It is not the intention to appoint someone from the Department of Industry and Commerce but I cannot go so far as to rule out the possibility of appointing somebody who at some time in his career served in the public service.
Does the Parliamentary Secretary mean either somebody who may have served or who is serving in the Department?
Yes.
If he is a public servant and is appointed to this job I presume it will be by way of secondment and he will not lose his various benefits as a civil servant. If, for example, the Minister wants to get rid of him for good reason, or otherwise, he can always be retained in the civil service. He can be banished to some far distant place without losing his emoluments and other things civil servants have. For example, he could be made adviser to the Kerry sheep dipping committee or some other post of equal responsibility in a distant part of Ireland.
If he is not a public servant in that situation and he is just a member of the public who is recruited for this very important job and he falls foul of the Minister, he is out on the street. He has no income. He has no pension. He has no lump sum. He has nothing. Because he falls foul of the Minister he is out on his ear. He cannot be appointed to some sinecure in the public service in some place or other to protect his pension rights, his years of service, and so on. He is out on the street. While there might possibly be some justification for some of what the Parliamentary Secretary is saying if a public servant is appointed, I can only assume from this that it will not be a public servant and it need not always be a public servant.
It does not mean we want a public servant.
I agree with what Deputy Faulkner has said. I think I speak for him too when I say I do not think it should be a public servant.
The Deputy does not want a public servant?
No. It might well be preferable in a job of this kind to have someone who was never in the civil service and who thinks differently.
Perhaps I can help the Deputy by giving him a practical indication of our intentions which are to appoint somebody with professional accountancy experience. It is pretty clear that the sort of work involved here is not the barrister of ten years' standing sort of work, that being the qualification hitherto. As the Deputy probably knows, there are not that many professional accountants in the public service. While one could not rule out the possibility that one of them might be appointed and, being appointed, he would retain his rights as would any public servant who is seconded to another post, it is likely that it will not be a public servant. I still believe in the validity of the argument I made that the check which exists on the Minister in the exercise of these powers as a result of the necessity for him to answer questions on the matter here in the House far supercedes the negligible advantages which might arise from the proposed amendment.
I was glad to hear the Parliamentary Secretary say it is proposed that the registrar will be independent. We visualised a person who would be independent and who would have a professional staff to advise him. This relates in particular to the building societies. We felt that because of changes of staff in the civil service who dealt with building societies in the past, the expertise which they gathered or accumulated during their time dealing with building societies was lost once they went into another area and somebody else had to start again.
While we are pleased with what the Parliamentary Secretary has told us, that makes it all the more important that he should have a safeguard and the Minister should not be able to remove him from office without any reference to the Oireachtas. I want to emphasise that, apart from what Deputy O'Malley said, that is, that a person could be removed from office and would not have a salary, a pension or any other emolument, it is of vital importance that the public should see—I am sure this relates to all the friendly societies but basically I am concerned with the building societies—that this individual was not in a position where he could be unduly influenced by the Minister.
As I said earlier, money flows in and out of the building societies. It is important that people investing money should have confidence that the societies are governed by somebody who will be basically concerned with the interests of the societies, their members and borrowers and their objectives, rather than with some political objectives. There have been considerable fluctuations in the intake of money into building societies over the years. In itself this has done a certain amount of damage to confidence in the societies, and it has done damage to the building and construction industry. Therefore, I would again suggest to the Parliamentary Secretary that he should take another very thorough look at this amendment. If he is not satisfied to accept it in its present form, he could introduce an amendment which would be as close as possible in its effect to our amendment.
I am afraid I cannot accept the amendment as put forward. I have already said I am prepared to consider the possibility of some safeguard on a post hoc basis against arbitrary action by the Minister in dismissing the registrar.
We have now established the position that it is extremely likely that the appointment of the Registrar of Friendly Societies will be that of a man who is not in the public service, who is a practising accountant with a good deal of experience and knowledge. I am totally in favour of that, so much so that I should actually like to see it written into the Bill. I am in total agreement with this proposal. I most certainly hope it will be adhered to because it is the ideal type of appointment.
If the Parliamentary Secretary were a practising chartered accountant in Dublin, Cork or Limerick with a substantial practice and therefore, one would assume a substantial income, and if he were a man with the high level of competence one would wish for to fill this post, would he apply for the job on the terms of section 5 (2) which means he could be kicked out on the street at a minute's notice, without compensation of any kind, simply because he fell foul in some way, perhaps political, or perhaps personal, or perhaps in some irrelevant way, of the Minister for Industry and Commerce or his shortly to be appointed Fianna Fáil successor?
The Deputy is now entering the realms of fantasy.
I am afraid the unfortunate chartered accountant, or whatever kind of accountant he might be, who might consider applying for the job would think twice about it. The Parliamentary Secretary does not realise that by refusing to accept this amendment to give some security of tenure to the people who might apply for this job, he is ensuring that the best type of people will not apply. No one who has a good income at the moment could afford to take the risk of going into a job which he can be thrown out of at five minutes' notice, provided he is given some kind of formal reason in respect of which there is no appeal. That is an impossible position. We have established that the man will not be a public servant.
No.
It has a high degree of likelihood, a fact with which I am in total agreement. If he were a public servant he could be put into a sinecure or some other job for which he might be more suited, but he would not be in the position of the outsider, a nonpublic servant who would have no right to compensation of any kind on being thrown out.
I do not think that is good enough. I am not harping on this to protect the man who gets the job, because I do not know who will get it. I am harping on it to ensure that we get the right man for it. We will not get a first-class man for a post like this under these terms. A first-class man who would be suitable for such a position must by definition be earning a lot of money today. He is probably a partner in a firm of chartered accountants with his whole future secure. He is not going to put his whole financial future and that of his wife and children in jeopardy to take on a job the terms of which are set out here in subsection (2), that he can be fired at five minutes' notice.
Therefore, I would ask the Parliamentary Secretary to reconsider this matter and not put himself and all of us in the position of being forced to take someone less than the best available for this very important job because of the terms under which he will serve and, in particular, the total absence of security and tenure for him.
The Deputy is looking at this matter from the point of view solely of the registrar and his problems. We must look at it from the point of view of security of the people who are involved with all the societies which are subject to supervision by the registrar. In a situation where a registrar is completely incompetent for one reason or another, he can cling on to office because he knows, if the Deputy's amendment were accepted, he could not be removed unless two-thirds—not a majority— but two-thirds of the House were prepared to agree to his removal. If that were the only means whereby he could be removed and if all the sordid details had to be thrashed out in this House, under a motion for his removal which would have to be sufficiently strongly argued to persuade two-thirds of the House to accept, it is quite clear he would be retained in office much longer than he would normally be and much longer after he had become incompetent than would be desirable in the interests of the public, the people involved with the societies, the friendly societies, the building societies, the credit unions, the trade unions and so forth who are so significantly affected by the operations of the registrar. I believe the acceptance of the amendment put forward by the Opposition would be a very dangerous move and I would not be inclined to accept it at all.
There is no doubt that Ministers will exercise the greatest discretion in this matter. They will not interfere in an improper way—and that applies to Ministers of the parties in this House who might hold office at any time— with the registrar in the exercise of his functions. We have only to look at the experience in the past in relation to similar offices, for instance, the Registrar of Companies or the Examiner of Restrictive Practices. There has been no interference by any Minister with those people although, in theory, their position is the same as will be the position of the Registrar of Friendly Societies under this legislation.
I do not expect it would carry much weight with any Deputies in this House if I put forward this argument, but nonetheless it has a practical validity and relevance, that is, that the similar officer in Britain, the chief registrar, is removable by the Treasury in the same way as it is proposed that this officer could be removed under this legislation. There is no problem there any more than there is a problem here, and I do not think we should get involved in what is essentially an academic point being made by the Deputies opposite on this matter.
I have said, and I repeat, that I am prepared to consider any amendment which would make the Minister account more fully than he may have to do under the present legislation for any decision he makes to dismiss the registrar subsequent to the dismissal. However, it is essential in the interests of the people involved that, if it arises —and this is unlikely—that the registrar, because he is incompetent, has to be removed quickly from office, the Minister will have the power as a duly elected representative of the people to remove him quickly and account for it afterwards. That is preferable to having him hanging on in office, not doing his job, while the Minister waits—and it may be a long wait—to get two-thirds of this House to agree with the decision which, perhaps for reasons the Minister would not be inclined to disclose publicly, would be absolutely necessary.
The Parliamentary Secretary said we were concerning ourselves too much with the registrar. As Deputy O'Malley pointed out, we are not concerned with the registrar as a person; we are concerned with the position and those who fill that position later on, because of their vulnerability. The Parliamentary Secretary then went on to say that what we ought to be concerned about were the interests of the people for whom the registrar would be responsible, like those who would be involved in the friendly societies and so on. That is exactly what we are concerned about. If a post is advertised and if the conditions are as laid down here, that the Minister can remove the registrar at will, then, quite obviously, the applications you will get for that post will come from people who are at a relatively low scale in salary and will be willing to take the chance for the increase they will get but, as we know from experience, really worth-while people, people who are possibly at the top of their profession will not apply. I have seen this happen not just in relation to this post of registrar but in relation to management in industry. I have seen cases where an industry was not doing as well as it might but which had potential, when it advertised for a manager it got a very large number of applications from people in the lower income bracket who, if they were put in charge of the industry would not be long finishing it off. It was just fortunate that there were one or two applicants of quality who applied and one of them got the position and made an excellent job of the industry.
The same thing applies here. If the Parliamentary Secretary is not willing to make a worth-while, basic change in that section, then I am afraid those who will apply for this position will not be of the quality we want. There is no doubt that we want a first-class person to be appointed as registrar. Deputy O'Malley pointed out the problems and difficulties in relation to it and, as I said previously, if the Parliamentary Secretary was willing to introduce an amendment which would relate to the idea we have here and which would satisfy us, we would not continue to press this specific amendment. We would accept an amendment which would ensure that the Minister could not dismiss the registrar without referring the matter to somebody else. We want to ensure that a top-class man is appointed to the position of registrar.
The Parliamentary Secretary has been making the case that if this man were to be dismissed in the way we suggest it would entail a long involved procedure with a full and rather lurid debate in this House. That is not so. Assuming it is a reasonable dismissal all it entails is privately to inform the Leader of the Opposition of the reasons for the dismissal. An unopposed motion would then be moved and it would take a short time to do it.
Assuming the Opposition is reasonable.
One is entitled to assume that of the present Opposition. When the Parliamentary Secretary is around a bit longer he might realise that there is a big difference between this Opposition and some of its predecessors. In connection with the Parliamentary Secretary's comment that no Minister of this or of any other Government would dismiss a person out of hand, it is no harm to remind him of the treatment that was meted out by the present holder of the office of Minister for Defence to Lieutenant-General Seán Mac Eóin, a former Chief-of-Staff of our forces and of the United Nations Forces. He was informed of his dismissal as Chairman of the Army Pensions Board by telephone. It is no harm to remind the Parliamentary Secretary of members of public boards who were informed that they were fired only when they arrived for the next meeting of their boards and were stopped by a porter from entering the rooms where the meetings were to take place. The Parliamentary Secretary should remember these things when he talks about arbitrary dismissal.
The Deputy was arguing earlier that he did not envisage that the Minister would act in this manner.
I did not envisage that the present Minister for Industry and Commerce would act in this fashion. We have been informed that there is to be a reshuffle. If, as a result of that reshuffle, the office of the Minister for Industry and Commerce were filled by the present occupant of the office of Minister for Defence, could the registrar have any hope that he would last longer than a day or two? In view of the fact that a public servant is not to be appointed to this position it is clear that the appointee should have the kind of protection we are seeking for him. We are not seeking it for his own personal protection. We are seeking it for the office in order that the applicants will be of the highest calibre and of the highest standing in the practice of their profession of accountancy. It is in the public interest that this amendment should be accepted. I would ask the Parliamentary Secretary to reconsider his attitude.
The Minister is accountable to the House for any decision he takes in this matter and that should be sufficient.
Is the amendment withdrawn?
No.
Question put: "That the words proposed to be deleted stand."
The Committee divided: Tá, 61; Níl, 55.
Tá
- Barry, Richard.
- Begley, Michael.
- Belton, Luke.
- Belton, Paddy.
- Bermingham, Joseph.
- Bruton, John.
- Coogan, Fintan.
- Cooney, Patrick M.
- Corish, Brendan.
- Cosgrave, Liam.
- Costello, Declan.
- Crotty, Kieran.
- Cruise-O'Brien, Conor.
- Desmond, Barry.
- Desmond, Eileen.
- Dockrell, Henry P.
- Dockrell, Maurice.
- Donnellan, John.
- Dunne, Thomas.
- Enright, Thomas.
- Esmonde, John G.
- Finn, Martin.
- FitzGerald, Garret.
- Fitzpatrick, Tom (Cavan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Governey, Desmond.
- Griffin, Brendan.
- Halligan, Brendan.
- Harte, Patrick D.
- Hegarty, Patrick.
- Burke, Dick.
- Burke, Liam.
- Byrne, Hugh.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Hogan O'Higgins, Brigid.
- Jones, Denis F.
- Kelly, John.
- Kenny, Enda.
- Kyne, Thomas A.
- L'Estrange, Gerald.
- Lynch, Gerard.
- McLaughlin, Joseph.
- McMahon, Larry.
- Murphy, Michael P.
- O'Brien, Fergus.
- O'Donnell, Tom.
- O'Sullivan, John L.
- Pattison, Seamus.
- Reynolds, Patrick J.
- Ryan, John J.
- Ryan, Richie.
- Spring, Dan.
- Staunton, Myles.
- Taylor, Frank.
- Timmins, Godfrey.
- Toal, Brendan.
- Tully, James.
- White, James.
Níl
- Allen, Lorcan.
- Andrews, David.
- Barrett, Sylvester.
- Brady, Philip A.
- Brennan, Joseph.
- Breslin, Cormac.
- Brosnan, Seán.
- Browne, Seán.
- Brugha, Ruairí.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Carter, Frank.
- Colley, George.
- Collins, Gerard.
- Connolly, Gerard.
- Crinion, Brendan.
- Cronin, Jerry.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Vivion.
- Dowling, Joe.
- Fahey, Jackie.
- Farrell, Joseph.
- Faulkner, Pádraig.
- Fitzgerald, Gene.
- Fitzpatrick, Tom (Dublin Central).
- French, Seán.
- Gibbons, Hugh.
- Gogan, Richard P.
- Healy, Augustine A.
- Hussey, Thomas.
- Kenneally, William.
- Kitt, Michael P.
- Lalor, Patrick J.
- Leonard, James.
- Loughnane, William.
- Lynch, Celia.
- Lynch, Jack.
- McEllistrim, Thomas.
- MacSharry, Ray.
- Meaney, Tom.
- Molloy, Robert.
- Moore, Seán.
- Murphy, Ciarán.
- Noonan, Michael.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Patrick.
- Smith, Patrick.
- Timmons, Eugene.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Tellers: Tá, Deputies Kelly and B. Desmond; Níl, Deputies Lalor and Browne.
Question declared carried.
SECTION 5.
Question proposed: "That section 5 stand part of the Bill."
The Parliamentary Secretary spoke of an amendment in less precise terms than I. The Parliamentary Secretary spoke in terms of adding words to the effect that the reasons referred to in the second section of subsection 2 should be laid before each House of the Oireachtas. Is it the Parliamentary Secretary's intention to put down such an amendment on Report Stage?
Assuming that a definite decision is taken to introduce an amendment such as this, I am indicating my general intention in the matter. I have not made a final decision but assuming that I decide to introduce an amendment it could be introduced either on Report Stage or on Committee Stage in the Seanad. It might be better to introduce it in the Seanad in that it will bring the Bill forward faster. We could have the Report Stage in the House now and I could come back then with the terms of whatever amendments were decided upon.
Another amendment to the section which seems to me to be desirable is to write into it the fact that the registrar whom it is proposed to appoint will not be a civil servant but will be an accountant of some standing in his profession. This would clarify the situation considerably and it would be a help. If the Parliamentary Secretary does not want to do so himself, I propose to put down an amendment in those terms on Report Stage.
Question put and agreed to.
Section 6 agreed to
SECTION 7.
I move amendment No. 5.
In page 4, line 18, to delete "branch" and to substitute "branch,".
This could be described as a syntactic amendment. It seeks to insert a comma between the word "branch" and the word "officer" in line 18. As this part of section 84 stands, an offence is created by a "branch officer" under subparagraph (a). Clearly it should relate to a branch or to an officer and hence the insertion of the comma. The prints of the Principal Act in use in the Registry of Friendly Societies are also erroneous in that they omit this comma but in the text of section 84 contained in the publication of that eminent authority on society law, Frank Baden Butler, barrister-at-law, the comma is appropriately included. For these reasons it was felt wise to insert the comma here and hence the amendment.
Amendment agreed to.
Section 7, as amended, agreed to.
Sections 8 and 9 agreed to.
Title agreed to.
Bill reported with amendments.
Report Stage ordered for Tuesday, 23rd November, 1976.
Business suspended at 5.55 p.m. and resumed at 7 p.m.