: Can the Minister give a breakdown in relation to the profile of borrowings, especially foreign borrowings, of the ICC? First, can he say how much the current borrowing represents in Deutschemarks, and following from that what is the exchange risk cover cost anticipated this year? We have the figure for last year. It is in the chairman's address. I am sure the Minister for Finance has some idea as to what the cost, consequent on devaluation, is likely to be this year. I hope that in calculating the figure the Minister will take into account the fact that the Deutschemark came into realignment at the bottom of the band so that obviously there is scope before it reaches the ceiling of the band for an appreciation of 4½ per cent. The answer does not seem to be available readily, but I would have thought that the question would have been easily anticipated and that the Minister's advisors would have had the information on record.
Industrial Credit (Amendment) Bill, 1983: Committee and Final Stages .
: The estimated cost this year is £1.6 million.
: That was the figure for last year, too.
: It is very difficult to assess yet the change as the result of devaluation, but accumulated exchange losses to date are of the order of £20 million to £30 million. That would not accrue until the loans had to be repaid.
: In giving the estimated cost for this year the Minister simply referred to the cost of the exchange risk cover for last year, but what is the estimated cost for this year? The Minister went on to mention a figure of £20 million, but I do not know where that comes into it.
: That is the estimated difference which the currency fluctuations will make.
: Are we being told that the increase in cost to the Exchequer this year as a result of the currency fluctuations expected from realignment will be of the order of £20 million?
: Until such time as the impact of the fluctuations is known it will be difficult to give an estimate, and there is also the fact that we would not really know until their payments fell due.
: I agree. The Minister for Finance seemed to have no difficulty in telling us that the cost of the devaluation this year would be £17 million. I have questioned that since, and that is why I cannot understand the Minister of State saying now that the estimated cost in respect of the ICC will be of the order of £20 million. I should be appalled to think that it would be anything like that, but if it is it underlines further the case we have been making since the decision to devalue was made. Will the Minister clarify that matter?
: It is estimated that the total foreign exchange losses since these loans were negotiated is roughly £30 million.
: I am not sure if we will be able to clarify this properly, but I must pursue the matter on the basis of what the Minister has said. He has told the House that the figure is of the order of £30 million on the exchange losses and that really underlines the impact last week's decision will have on companies such as the ICC, and the Exchequer, in general this year. We are likely to have an appreciation of the DM in the EMS and that will mean a major impact on the repayment obligations this year and in subsequent years. Somewhere along the line the Minister for Finance, and his Minister of State, are not singing the same tune. Nobody is going to be reassured by what we have heard today and, even if it conveys news, it will be considered to be of the utmost gravity. We are concerned because of that but we have underlined that this recent decision which was apparently directed towards achieving a readjustment with sterling failed to take into account the consequences of the disparities with other currencies within the EMS, particularly the DM in which we have significant borrowings for this and other companies.
: The estimated cost of realised exchange losses this year is £1.6 million. The total foreign exchange losses since the loans were negotiated is roughly between £20 million and £30 million.
: That was not the question I asked. Surely it is not beyond the bounds of the ICC, or the Minister's advisers, to give some indication of the estimated losses this year.
: Several of these loans were negotiated five years ago and the exchange fluctuations on these borrowings over that period added up to a value of £30 million. I did not try to estimate the extra cost attributable to the recent currency alignment whose impact has not yet settled.
: The Minister for Finance did not have any problem in making a statement to the House and I would like if we could have the same accouning procedure from both. Having regard to the spread of our foreign borrowings, particularly in DM I am anxious to know the estimated increase in our loan repayment obligations this year as a consequence of the recent realignment of our currency within the EMS.
: I am informed that the estimated extra cost will be between £5 million and £8 million but I am anxious to point out that that will not arise until the loan is being repaid.
: At last we are getting some information that the Minister for Finance could not give. I appreciate that the Minister of State has put a range of £5 million to £8 million on it and told us that it will not arise until the loans are being repaid. The Minister for Finance told us recently that the total figure was £17 million. I do not think anybody could have accepted that figure.
The chairman, in the course of his statement in the annual report of the company, stated:
Continued support from the State by way of exchange risk cover will of course by necessary to ensure future availability to industry of these valuable facilities. We are satisfied that the provision of exchange risk cover [as Minister for Finance I had the privilege of initiating that] in respect of loans under these facilities, which are interest bearing and repayable, is a very cost-effective method of supporting industrial development.
It is clear that the consequences of the decision to realign within the EMS which does not affect sterling, although it appears to be the main preoccupation, is going to have damaging consequences for companies such as the ICC and others in respect of which exchange risk cover has been provided. It will also have damaging effects for the customers of the ICC. I am appalled, though not greatly surprised, to hear the extent of the cost. I might add that by the end of 1983 the Minister will have to revise that figure up because trends so far indicate that the DM and the dollar — we borrowed in that currency also — are strengthening vis-á-vis EMS currencies. We will find that the decision which seemed to be so neat and tidy to adjust our relationship with sterling will have severe consequences through out the economy. We have just heard one of the most significant examples of the consequences of it.
: There is so much I would like to say on these sections but I am anxious that we come to the final point.
: I must take issue with the vague reasons the Minister gave for the representation from the State, the civil service, on the board. In reply to my query he mentioned co-ordination between the IDA, Foir Teoranta and the ICC, but he must know that if that is what he is concerned about there are easier and more effective ways of achieving it than to have representatives from the Department of Finance or some other Department on the board of the ICC. One easy way is to have dual representation on the boards of the IDA, the ICC, Foir Teoranta and others by people of proven ability. That would ensure co-ordination.
The final responsibility lies with the Government. We set the general terms of reference for the operations of these bodies. The concept has always been that within those terms of reference they should be autonomous and independent in the discharge of their functions. This decision is in the wrong direction.
In view of what the Minister has said, can we now anticipate that when legislation dealing with any other semi-State bodies comes before the House there will be similar proposals for extra representatives on the boards or is this meant to apply only to the ICC, if by chance this House foolishly agrees to section 5?
: This section deals with one semi-State company, the ICC.
: It is an important point. Is the Minister saying that this is purely for the ICC and that there is no intention of applying a similar provision to any other body?
: Government representation on boards is not confined to the ICC. There are several cases of it. The purpose of increasing the size of the board is to enable the State, as the owner of the company, to be directly represented on the board. Because of the small size of the board and the fact that one of the directors is the managing director, it is considered preferable to accommodate the direct State representation by an additional director rather than by reducing the number of external directors. It is important that the external directors should be retained and it is also important that there should be direct State representation on the board.
: It is a new position for the Labour Party.
: The State is already represented on the boards of the IDA and other bodies. This is not something new and sinister. The Deputy knows that.
: Increasing the provision to take account of State membership is new.
: We prefer to do it in that way rather than by cutting down on the number of outside directors.
Tá
- Allen, Bernard.
- Barnes, Monica.
- Barrett, Seán.
- Barry, Peter.
- Begley, Michael.
- Bermingham, Joe.
- Birmingham, George Martin.
- Bruton, Richard.
- Burke, Liam.
- Crowley, Frank.
- D'Arcy, Michael.
- Deasy, Martin Austin.
- De Rossa, Proinsias.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John.
- Dowling, Dick.
- Doyle, Avril.
- Doyle, Joe.
- Durkan, Bernard J.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Oliver J.
- Glenn, Alice.
- Harte, Patrick D.
- Hegarty, Paddy.
- Hussey, Gemma.
- Kavanagh, Liam.
- Keating, Michael.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- McCartin, Joe.
- McGahon, Brendan.
- McGinley, Dinny.
- Carey, Donal.
- Cluskey, Frank.
- Conlon, John F.
- Connaughton, Paul.
- Coogan, Fintan.
- Cooney, Patrick Mark.
- Cosgrave, Liam T.
- Cosgrave, Michael Joe.
- Creed, Donal.
- Crotty, Kieran.
- Mac Giolla, Tomás.
- McLoughlin, Frank.
- Manning, Maurice.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Moynihan, Michael.
- Naughten, Liam.
- Nealon, Ted.
- O'Brien, Fergus.
- O'Brien, Willie.
- O'Donnell, Tom.
- O'Leary, Michael.
- O'Sullivan, Toddy.
- O'Toole, Paddy.
- Owen, Nora.
- Pattison, Séamus.
- Prendergast, Frank.
- Quinn, Ruairí.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick Joseph.
- Skelly, Liam.
- Spring, Dick.
- Taylor-Quinn, Madeline.
- Timmins, Godfrey.
- Treacy, Seán.
- Yates, Ivan.
Níl
- Ahern, Bertie.
- Ahern, Michael.
- Andrews, Niall.
- Aylward, Liam.
- Brady, Gerard.
- Brady Vincent.
- Brennan, Mattie.
- Brennan, Paudge.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Calleary, Seán.
- Colley, George.
- Conaghan, Hugh.
- Cowen, Bernard.
- Daly, Brendan.
- Doherty, Seán.
- Fahey, Francis.
- Fitzgerald, Gene.
- Fitzgerald, Liam Joseph.
- Fitzsimons, Jim.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat Cope.
- Harney, Mary.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Kirk, Séamus.
- Kitt, Michael.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- Lyons, Denis.
- McCarthy, Seán.
- McEllistrim, Tom.
- MacSharry, Ray.
- Molloy, Robert.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J.
- (Limerick West)
- O'Dea, William.
- O'Hanlon, Rory.
- O'Keeffe, Edmond.
- O'Kennedy, Michael.
- O'Leary, John.
- Ormonde, Donal.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Walsh, Seán.
- Wilson, John P.
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- Wyse, Pearse.