: I understood that this Bill was so urgent and so important that we would take all Stages today. On that assumption I have nothing further to add.
Industrial Credit (Amendment) Bill, 1983: Second Stage (Resumed) .
Question again proposed: "That the Bill be now read a Second Time."
: I welcome this very necessary Bill and would like to congratulate the ICC on their golden jubilee and all they have achieved in the last 50 years. Their progress has been very satisfactory and our people can look on them with a certain amount of pride. It was pleasing to see from their 1982 annual report that they financed over 2,000 projects and made available advances of over £140 million. They managed to show a profit which, before taxation, was £4.7 million.
I hope the Minister will be able to give me some information about one matter. There seems to be a considerable overlap between the working of the ICC, the rescue section of the IDA and Fóir Teoranta. What is the exact relationship between these three bodies? I realise that the ICC and Fóir Teoranta are different in many ways, but the rescue section of the IDA and Fóir Teoranta appear to be doing the same work. If so, there is a considerable overlap. Fóir Teoranta are a rescue agency; the IDA have a separate rescue section and the ICC advance funds to Irish firms. I would like to have some information about the day-to-day workings of these companies. The ICC are a commercial enterprise and I am happy about the way they work, especially as State finance is involved. The ICC could be said to be the first cousin to Fóir Teoranta.
The Fóir Teoranta annual report for 1981 showed that loan interest and other income for the year was £945,000 and there was an operating deficit of £319,000 as compared with a surplus of £35,000 the previous year. This is what intrigues me: after provisions, an amount of £1.86 million was written off and the net deficiency for the year was £2.18 million. That is a very considerable amount of money. I realise that Fóir Teoranta are a rescue agency, the people of last resort and on occasion the only people those in difficulties can come to.
Recently I was looking at a television programme, "Today Tonight". After watching it I had serious doubts about some of the workings of Fóir Teoranta. I am concerned because this body disburse taxpayers' money and there does not appear to be any way the taxpayer can find out how his money is being spent. A person makes an application to this company which is processed and then the money is disbursed. That programme showed instances of Fóir Teoranta paying money to companies which later went into liquidation or receivership and in some instances the money was directed to other companies.
: The Deputy is dealing with Fóir Teoranta in detail but this Bill deals exclusively with the ICC. It would be in order if he made a passing reference to Fóir Teoranta.
: They are in the same family.
: If it was a big family we could wander a lot.
: One is a wealthy relation and the other is not in the same league. As these agencies are so closely related I would like an explanation from the Minister.
I am quite happy about the normal business relationship of the ICC, but where vast sums of money are involved — and very large sums of money are being lost by Fóir Teoranta — there should be some public accountability and criteria established so that if money is invested it will be thoroughly investigated to ensure that it is being used for a specific purpose, the purpose of restoring the company rather than having it directed into other areas. I have reservations about it and I think the public interest would be better served in this instance by allowing Fóir Teoranta, as I understand was the case in the past, to publish the names of firms. There has been a change and a change I do not like and I think it should be rectified. That is something the public have been discussing.
: Will the Deputy now come to the Bill?
: The way the ICC were trying to assist firms and endeavouring to cover the exchange risk was something that was highly desirable. When I was Opposition spokesperson this was something I called for and I was pleased to see it being adopted by the ICC. Many of our firms need some kind of exchange risk guarantee.
The ICC have a very broad range of financial investments. I should say in passing that we should encourage people to invest in firms like the ICC and we should be magnanimous with people who are making an effort to save. We should provide encouragement for people to save. I am sad to have to say that we are not at present making sufficient efforts to encourage savings.
: Hear, hear. I do not know whether I should go across to the Deputy or vice versa.
: The ICC have had fantastic increases in their investments over the past number of years. Their deposits more than doubled in one year to £202 million. They are a State guaranteed company and it is highly desirable that Irish people should invest in firms like the ICC because the work they are doing is for the betterment of Irish industry.
: I should like to thank the two Deputies who have contributed to this debate. I agree with Deputy O'Kennedy in what he said about the headline set by the ICC for other State bodies. I want to acknowledge the contribution of the ICC to the economy over the past 50 years. They have provided more than £600 million for the country's industrial and commercial base. The ICC operated with particular emphasis on small businesses. Last year 91 per cent of approvals were for firms employing up to 100 persons and the average loan was £92,000. The ICC are also giving special attention to the provision of long-term loans, with a repayment period of five to 12 years, often at fixed rates of interest, and they are also active in supporting new business start-ups, particularly small businesses.
Fóir Teoranta have been mentioned by Deputy Enright. They are an independent State body with their own board. They have up to this availed of the management services of the ICC but they are now in the process of developing their own management structures. They cooperate very closely with the IDA on rescue cases. The ICC and Fóir Teoranta are different in that respect. The ICC provide finance on commercial terms and also funds for business start-ups. Fóir Teoranta take cases which are in difficulty. The decisions of the board of Fóir Teoranta must be based on the criteria laid down in the Fóir Teoranta Act, 1972. Companies being assisted must have reasonable prospects of returning to profitability. The IDA and Fóir Teoranta co-operate closely and have regular meetings. Overlap is minimised. Some IDA aids are available to companies in difficulty — for example, training grants. The television programme to which the Deputy referred is out of date. Meetings have since taken place between the chairman and chief executives of both agencies. The role of the State in these services will be looked at in the White Paper on Industrial Policy.
: Can the Minister tell us what co-ordination there is between the ICC, the IDA and Fóir Teoranta? Both Deputy Enright and I raised that question.
: If the Deputy will allow me, I am coming to that.
: I am waiting for it.
: Deputy O'Kennedy also referred to the European Investment Bank. On 31 October 1982 the ICC had received 1,400 loan applications involving £100 million and 1,300 cases have been approved by the European Investment Bank involving £96 million. The projects supported will create or safeguard 23,000 jobs.
Deputy O'Kennedy also raised the question of the effect of devaluation on various aspects of risk guarantees. It is very difficult at this point to evaluate what the effect might be but the Exchequer was providing exchange risk guarantees of £229 million of ICC's foreign borrowings at the end of their last financial year. The bulk of the borrowings were in hard currencies such as Deutschemarks and Dutch guilders which can be borrowed at low interest rates. It is crucial to the success of the exchange risk cover schemes, operated by the ICC for small and medium sized industrial and tourism enterprises, that the funds be borrowed in low interest rate hard currencies so that they can be on-lent to the enterprises at the lowest possible rates, as low as 9 or 10 per cent at present in some cases. These hard currencies are the currencies that have appreciated most against the Irish pound following the recent realignment. This underlines the large burden being borne by the Exchequer on exchange risk schemes, a burden that must be set against the undoubted benefits which industry and tourism secure from the operation of the schemes. The Government are keeping under constant review the relative costs and benefits of these schemes.
Regarding the question of relationship between ICC and Fóir raised by Deputy O'Kennedy, it may be interesting to note that it is proposed in this Bill to appoint two Government directors. This is the principal point on which the Deputy objects to the Bill but the move is designed to make for closer integration of ICC's activities with those of bodies such as the IDA and the Department of Industry and Energy. Deputy O'Kennedy suggested that it was open to the Minister to appoint directors in the normal way if he so wished.
: That is what the Minister said in his speech.
: That is fair comment, but it is important that we do not remove any of the people who have given so much down through the years. The ICC have done a very good job but it is reasonable to expect that there should be a direct input into the company from the State and that the Government directors would act as a co-ordinating force between the Government Departments and the ICC board. All speakers have paid tribute to the board. If the new directors were to be appointed in substitution for any of the existing members, this might have created the impression that the board were not doing their job, but that is not the case. It is our hope to have better co-ordination by way of direct intervention. I am talking of co-ordination between the bodies mentioned, Fóir Teoranta, the IDA and the ICC.
The existing board is not very large. It consists of only seven people, one of whom is the managing director. The outside directors have contributed a great deal. It would be unfortunate in any attempt at co-ordination if we were in any way to lessen the impact of those industrial-minded people, people who are prepared to give of their time in the service of this wonderful company, a company that is an example to others. Nine members is not an excessive number to have on a board of a State company when one considers the extent of the work of the company in question. It is important that there be direct State intervention.
The Bill is necessary. There is a case for having the various sections of Government represented. Accordingly, I recommend the Bill to the House.
Question put and agreed to.
Agreed to take remaining Stages today.