Dáil Éireann debate -
Thursday, 25 Nov 1976

Vol. 294 No. 6

Friendly Societies (Amendment) Bill, 1976: Report and Final Stages.

SECTION 3.

Mr. O'Malley

I move amendment No. 1:

In page 2, between lines 20 and 21, to insert the following:

"3. —Section 35 (1) (i) of the Credit Union Act, 1966 is hereby amended by the deletion of the words "Part I" and the substitution therefore of the words "Parts I and II".

This amendment is on the lines of what I think was agreed between the Parliamentary Secretary and myself on the last day. He spoke of making the amendment in the Seanad rather than here. It might be better to make it here. Could I ask him if he intends to accept it?

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. Bruton)

Not in the form the Deputy suggests.

Mr. O'Malley

There is a problem now. If I sit down I cannot stand up again.

An Ceann Comhairle

I will give the Deputy some latitude.

Mr. Bruton

My consideration of this matter has been that it would not be appropriate to accept the amendment in the form in which it has been introduced by the Deputy. The Act in question is a Credit Union Act. Any changes made in the limits under the Credit Union Act have to go before the Credit Union Advisory Committee. Extending the powers in the way the Deputy has in mind to alter the limits for the friendly societies within the context of the Credit Union Act would mean that friendly societies who are quite distinct and different from credit unions would have to have the alteration of their limits processed through the Credit Union Advisory Committee. This would be inappropriate and it would be mixing up pieces of legislation and dealing with friendly societies in credit union legislation which would be undesirable, as it would be undesirable to deal with the problems of credit unions in legislation not particularly designed to meet their needs.

This is the Friendly Societies (Amendment) Bill. Within the context of this Bill rather than by reference to the Credit Union Act, it is open to us to make the changes the Deputy and I agree should be made. I have suggested that these changes should be made in an amendment in the Seanad through this Bill, using the context of this Bill alone as a means of taking the power for that purpose and not making the change within the Bill but by reference to another statute designed for a different purpose which has a different means of control. It is true that the original Government authority for the drafting of this Bill did not extend to the matters on which the Deputy and I agree. These are the main objections to the course of action suggested by the Deputy. I am sure he will be able to accept my bona fides in the matter and the anxiety I share with him that something should be done about the problem he mentioned.

Mr. O'Malley

Although the Parliamentary Secretary agrees it is necessary, he is refusing to do it now on grounds which are a bit difficult to follow. He says there would have to be consultations with the Credit Union Advisory Committee on raising the limits of the shareholdings or deposit holdings and insurance policies in credit unions. There is nothing to stop that consultation. The effect of the amendment is to bring Part II of the Schedule of the Credit Union Act, 1966 into line with Part I. Part II deals only with friendly societies law and the Friendly Societies Act and nothing else. I did not bring the Act into the House with me because I understood the Parliamentary Secretary was accepting this amendment. I am sure he has it there. He has three people to hand it to him. If he looks at Part II of the Credit Union Act, 1966, he will see it deals with nothing but the Friendly Societies Act. Am I right?

Mr. Bruton

I will tell the Deputy when I am replying.

Mr. O'Malley

The Parliamentary Secretary will not be replying. His time has expired.

Mr. Bruton

It has not.

Mr. O'Malley

I am afraid it has. The Parliamentary Secretary had better learn the rules.

An Ceann Comhairle

This is the Report Stage of the Bill. The Deputy moved his amendment. I told him I would give him some latitude. Strictly speaking, he is now replying.

Mr. O'Malley

I am afraid I am.

An Ceann Comhairle

The Chair will allow some latitude.

Mr. O'Malley

As I said, Part II of the Credit Union Act, 1966 deals only with the Friendly Societies Act, and gives the power to the Minister for Industry and Commerce to make regulations changing the limits there for the amount of deposits and other similar matters. If it is intended as a result of the change proposed here to change those limits, then the Minister can have consultation with the credit union advisory committee. That is the time he would have the consultation. It is not necessary for him to have them now because the limits are not being changed to any specific figure. At the same time the Parliamentary Secretary seems to give the impression that he will bring in an amendment in the Seanad on these lines in some different form. Will he give me now an undertaking on the record of this House that he will do that, and I will withdraw the amendment?

An Ceann Comhairle

A brief comment, please.

Mr. Bruton

The wording of section 35 (1) is that:

The Minister, after consultation with the Credit Union Advisory Committee, may make regulationsel

As the Deputy rightly says, Part II of the Schedule deals solely with friendly societies and section 35 (1) deals only with Part I. Therefore it was drafted with a view to credit unions, and the requirement about consultation with the credit union advisory committee was put into section 35 (1) because it was dealing with credit unions only, and I do not consider that that particular form of achieving the object would be the most appropriate. I am prepared to consider very favourably the introduction of an amendment in the Seanad specifically to deal with the problem the Deputy has in mind. I have some difficulty in that I have to consult with my colleagues. I imagine it will only be a matter of form but I at the moment cannot give the specific undertaking the Deputy seeks. However, I see no difficulty in achieving in the Seanad the object I have already set in train. Naturally enough the Seanad amendment would be coming back here and, if the Deputy is dissatisfied with the form in which it is then made, he can raise the matter again.

Mr. O'Malley

The Chair will appreciate the difficulty of trying to deal with a Parliamentary Secretary. If the Minister for Industry and Commerce, whose duty it is to attend this House, would attend it and would attend to his business here we would not have this difficulty. I appreciate the problem the Parliamentary Secretary has. He says he has no authority——

Mr. Bruton

With the utmost respect, that is all baloney. The situation is that a Minister has to get the authority of the Government, just the same as a Parliamentary Secretary, to change the fundamental character of any legislation. I am in no less a position to deal with this matter than the Minister would be, but the Minister, as I, would have to get Government authority in a matter such as this, and it makes no difference whatever that I am here rather than the Minister.

Mr. O'Malley

The Government must be sitting until midnight every night if it is necessary to get their specific official authority to add the words "and II" in line 21 of page 2 of the Friendly Societies (Amendment) Bill, 1976.

Mr. Bruton

The Deputy is being naïve. He knows very well——

Mr. O'Malley

The Deputy is only pointing out the consequences——

An Ceann Comhairle

Order. The Chair has allowed some deviation in the rules governing Report Stage in order to facilitate Members. The discussion must now come to finality. From now on I will only hear questions from either side.

Mr. O'Malley

I have not concluded my reply.

An Ceann Comhairle

I thought the Deputy might have done so earlier, but I allowed some liberty in that regard. He may not make another speech.

Mr. O'Malley

It is very unsatisfactory that a trivial, minor amendment of this kind, which I thought was agreed in this House ten days ago, should now be rejected on the grounds that the authority of the Government has to be got to accept it. Surely even a Parliamentary Secretary has authority to agree to something as minor as this.

Mr. Bruton

Within the context of the Bill. This is widening the context of the Bill.

Mr. O'Malley

The Parliamentary Secretary may be making an error there. If this amendment were widening the context of the Bill the Chair would rule it out; the Chair has not, and I think what the Parliamentary Secretary has said is a reflection on the Chair. This specifically deals with friendly society law. The Parliamentary Secretary is being unreasonable, and it is the most childish thing of all to run behind a story that he has to go back and get the authority of the Government just to add the words "and II" to "I". It is impossible to do business in the House if the attitude is such that the authority of the Government has to be got for every change of every comma. I am prepared to withdraw the amendment if the Parliamentary Secretary gives me an undertaking he will introduce it in the Seanad. He is not apparently prepared to give me that undertaking either.

This is very unsatisfactory. The difficulty I am trying to deal with— and the Parliamentary Secretary should know this—is the difficulty that nearly every credit union in this country is in because these two figures are not added to section 35 of the Credit Union Act, 1966. The Parliamentary Secretary agreed here with me the last day that this difficulty is here. I have had many representations from credit unions about it and they are in serious difficulties. The Parliamentary Secretary said he was aware of that and that everything would be done to change it. Now he is refusing to change it.

Mr. Bruton

I am not refusing.

Mr. O'Malley

Will he undertake to change it in the Seanad?

Mr. Bruton

I almost certainly will change it in the Seanad.

Mr. O'Malley

Why only "almost certainly"?

Mr. Bruton

I have to go through the procedure——

Mr. O'Malley

It is a farce trying to legislate in these circumstances.

Mr. Bruton

It is not. The Deputy knows that if the change is made in the Seanad, it will come into effect just as quickly——

Mr. O'Malley

I know it will, if it will be made in the Seanad. How do I know it will be made in the Seanad? If we let it go from here without it being made, we have no further control over it. It is farcical that you cannot talk across the floor of the House to someone who has some authority to do something.

An Ceann Comhairle

We must come to finality. The Chair has facilitated Members in trying to resolve this problem.

Mr. O'Malley

This is a minor matter and the Parliamentary Secretary has no authority to do anything. I agree we have to come to finality.

Amendment put.

The Dáil divided: Tá, 45; Níl, 58.

Tá

• Barrett, Sylvester.
• Brady, Philip A.
• Brennan, Joseph.
• Breslin, Cormac.
• Briscoe, Ben.
• Browne, Seán.
• Brugha, Ruairí.
• Callanan, John.
• Calleary, Seán.
• Carter, Frank.
• Colley, George.
• Collins, Gerard.
• Connolly, Gerard.
• Crowley, Flor.
• Daly, Brendan.
• de Valera, Vivion.
• Dowling, Joe.
• Farrell, Joseph.
• Faulkner, Pádraig.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin Central).
• French, Seán.
• Gallagher, Denis.
• Geoghegan-Quinn, Máire.
• Gibbons, Hugh.
• Haughey, Charles.
• Hussey, Thomas.
• Kenneally, William.
• Kitt, Michael P.
• Lalor, Patrick J.
• Leonard, James.
• Lynch, Celia.
• Lynch, Jack.
• MacSharry, Ray.
• Meaney, Tom.
• Molloy, Robert.
• Moore, Seán.
• Murphy, Ciarán.
• Noonan, Michael.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Malley, Desmond.
• Tunney, Jim.
• Wilson, John P.
• Wyse, Pearse.

Níl

• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Belton, Paddy.
• Bruton, John.
• Burke, Dick.
• Burke, Liam.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Coogan, Fintan.
• Cooney, Patrick M.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Halligan, Brendan.
• Hegarty, Patrick.
• Hogan O'Higgins, Brigid.
• Jones, Denis F.
• Keating, Justin.
• Kelly, John.
• Kenny, Enda.
• Kyne, Thomas A.
• L'Estrange, Gerald.
• Lynch, Gerard.
• McLaughlin, Joseph.
• McMahon, Larry.
• Malone, Patrick.
• Creed, Donal.
• Crotty, Kieran.
• Cruise-O'Brien, Conor.
• Desmond, Eileen.
• Dockrell, Henry P.
• Dockrell, Maurice.
• Donnellan, John.
• Dunne, Thomas.
• Esmonde, John G.
• Finn, Martin.
• FitzGerald, Garret.
• Fitzpatrick, Tom (Cavan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Governey, Desmond.
• Griffin, Brendan.
• 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.
• Taylor, Frank.
• Timmins, Godfrey.
• Toal, Brendan.
• White, James.

Tellers: Tá, Deputies Lalor and Browne; Níl, Deputies Kelly and Pattison.

Amendment declared lost.

An Ceann Comhairle

Before the Parliamentary Secretary moves the next amendment, No. 1a, I suggest that it be discussed with amendment No. 2 since it seems to meet the latter.

Mr. Bruton

I move amendment No. 1a :

In page 3, subsection (2), line 38, after "the registrar" to insert "and a statement of the reasons shall be laid before each House of the Oireachtas".

The only reason for the introduction of this amendment relates to wording. The intention is to achieve exactly the same objective as the amendment tabled by the Deputy. The wording of his amendment is that the reasons shall be laid on the table of each House of the Oireachtas while the Government amendment is to the effect that a statement of the reasons shall be laid before each House of the Oireachtas.

Mr. O'Malley

Agreed with enthusiasm.

Amendment agreed to.

Amendment No. 2 not moved.

Mr. O'Malley

I move amendment No. 3:

In page 3, lines 42 and 43, to delete all words after "a person" and to substitute therefor:

"who is a qualified accountant with at least ten years' experience in practice after qualification".

On the last occasion the Parliamentary Secretary indicated that it was almost certain that the registrar would be a qualified practising accountant from outside the public service. On Committee Stage he said that he agreed with that proposal but I wish to ensure that this will be the case. I ask him to accept the amendment on the basis of its being in line with what he said during the Committee Stage debate.

The Bill proposes to abolish the qualification of the registrar being a barrister of ten years' standing. I agree with that. It is obvious that the sort of job envisaged for this person, who also will be registrar of building societies, some of which have enormous turnovers in the region of £70 million to £80 million per year, will warrant his being an accountant of standing and experience and I have provided accordingly in the amendment.

Mr. Bruton

The position here is that in the 1896 Act the qualification was laid down as being that of a barrister of ten years' standing. With the passage of time it was found that this stipulation was unduly rigid and restricted choice to an undue extent. Considering that it has taken us all this time to get around to the job of making a change in the qualification as specified originally, it would be unwise to make the specific requirement that the registrar be an accountant of ten years' standing. A provision that was quite appropriate for 1896 has been found to be inappropriate in terms of 1976 and it may well be that in 15, 20 or 40 years' time, professions may have evolved to such an extent that somebody who is understood to be an accountant may not necessarily be the most appropriate person for the position of registrar or it may be that the type of work the registrar is performing will have evolved to such an extent that somebody with qualifications in addition to those of an accountant may be appropriate for the job.

While an accountancy qualification is the most appropriate one for the position of registrar, a substantial amount of legal expertise is required, too. Consequently, it may be necessary that we will need somebody with both legal and accountancy expertise. If a man had acquired both in the course of his career he might not have the full ten years' experience of accountancy. Rather, he might have some years' legal experience and some more years of accountancy experience. Perhaps it would be more appropriate to appoint a person of such mixed qualifications to fulfil the diverse responsibilities of the registrar. Therefore, it would not be appropriate to tie the Minister unduly as to the qualification in the way proposed by the Deputy.

The Deputy can rest assured that the person appointed will be the right one in terms of meeting the needs of the day. It is anticipated that he will be a man, not necessarily with ten years' experience of accountancy, but with adequate professional accountancy experience.

Mr. O'Malley

From outside the public service?

Mr. Bruton

We went into that on Committee Stage.

Mr. O'Malley

I did not specify any particular type of accountant. For example, it was suggested that one might insert the words "chartered accountant" but I left it as wide as possible and acted on the lines indicated by the Parliamentary Secretary on Committee Stage. One of my aims in tabling this amendment is to endeavour to ensure that the registrar is independent of the Minister. An amendment I had tabled to this effect on Committee Stage was defeated. I could not table again the same amendment which was in specific terms but to some extent I have tried to achieve the same purpose in the one before us.

One of the ways of trying to ensure that the registrar will be somebody from outside who is not subject to the control of the Minister would be to set out some qualifications such as I have done which would make it unlikely that the person appointed would be a civil servant transferred to the job from the Department of Industry and Commerce or from any other Department. I was hoping that the Parliamentary Secretary would accept this amendment which is very much on the lines of what he said on the last occasion on which we were discussing this Bill. It is worth repeating for the sake of the record that what he said then was that no public servant from the Department of Industry and Commerce would be appointed to this position, that it was very unlikely that a public servant from any other Department would be appointed to it and that there was a high degree of likelihood that a practising accountant from outside the public service would be appointed. That being the situation and the Parliamentary Secretary having expressed those views, I feel the measure should be tied down——

Mr. Bruton

The Deputy should check the record as to precisely what I said.

Mr. O'Malley

If the Parliamentary Secretary is telling me that I am wrong will he tell me where I am wrong.

Mr. Bruton

I can quote what I said at column 231, Volume 294 of the Official Report. I said:

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 backgroundel

Mr. O'Malley

The Parliamentary Secretary went on at some length to talk about the fact that it would not be somebody out of the Department of Industry and Commerce.

Mr. Bruton

What I said stands.

Mr. O'Malley

I wonder if it is what the Parliamentary Secretary said in the House that stands or what appears in the Official Report.

Mr. Bruton

I did not alter the Official Report.

Mr. O'Malley

I have the clearest recollection of being assured that it would not be somebody out of the Department of Industry and Commerce. That was said in this House. There is no question about it.

Mr. Bruton

I said at column 233, Volume 294 of the Official Report:

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 did not mention specifically as far as I can recollect that it would not be somebody from the Department of Industry and Commerce. I did not mention that Department specifically.

Mr. O'Malley

I think that the amendment should still be accepted. It is essential that a job of this kind which will have to be done in a very different way from the way it was done in the past should be done by somebody who has experience of business and of independent financial activity outside the public service. The duties which devolve on the registrar, particularly in his capacity as registrar of building societies and to a lesser extent in his capacity as registrar of industrial and provident societies are duties of enormous importance where on his own initiative, he would have to take many important steps in relation to these very large and significant bodies. I think he should have the freedom to take those steps which nonmembership of the public service would give him and he should not be beholden to the Minister of the day or any Minister at any time in carrying out those functions.

He should be free to carry them out in the public interest and in the interest, in the case of building societies, of depositors and borrowers and, in the case of industrial and provident societies, of the shareholders in those enormous co-ops, their suppliers, customers and creditors. The job envisaged for this official for the future is very different from the purely mechanical recording function which he has only had to exercise up to now. As I mentioned in the debate yesterday on the motion to establish a committee to deal with semi-State bodies, there is a growing tendency in recent months to try to subsume those hitherto independent bodies under the wings of various appropriate Departments, a tendency I deplore.

It is particularly evident in the Department of Industry and Commerce where the recent appointments to the chairmanship of the board of the IDA and the chairmanship of the board of CTT have indicated a major change of policy which, in my view, is undesirable. I think there is a reflection of it here to some extent in an unwillingness to give a guarantee that an officer of the Minister will not be appointed to a job which patently calls for independence of the Minister. No matter what the calibre of the man concerned is, if he is an officer of the Minister he cannot exercise and be seen to exercise the kind of independence one would feel is essential in a position such as this.

Mr. Bruton

I do not think that necessarily making him by law an accountant confers any significant extra degree of independence on him.

Question: "That the words proposed to be deleted stand" put and declared carried.