I wish to raise a point under section 2 (3) which states: "The amount of grants made by the Minister under this Act shall not exceed in the aggregate £7,500,000". I raise this matter in connection with a point I will be making later concerning the inclusion of the word "loss" under section 6 (2). If in the instance of a natural disaster a grant aided ship is lost and we do not allow specifically for roll over of the grant, in other words for the ship owner to get a ship which would suitably qualify for grant aid rather than repay the grant to the Minister and then apply again for another grant, and if the £7.5 million has been earmarked at that stage, the ship owner will not be eligible for a specific second grant for the replacement of that ship. It is only in that context that I raise the point of the £7.5 million and to draw to the Minister's attention that it further underlines the reason for my being persistent on the later section in relation to the inclusion of the word "loss". I will develop the point further later.
Shipping Investment Grants Bill, 1987: Committee Stage.
With a limit of £7.5 million, if a boat is lost and a grant is repayable to the Minister then that money or that percentage of the grant which would be recoupable may not after five years have to be repaid. The scheme would be operated on a pro rata basis. If that money was made available it would bring us back within the limitation of £7.5 million.
Would preference then effectively be given to the ship owner who had lost the ship? Under the terms before us, we have no reason to believe that if the Minister wished to recoup that portion of the grant deemed repayable, depending on the age of the ship at the time of the natural disaster and there are other applications on hand for a grant which cannot be processed because the £7.5 million has been reached, the shipowner who suffers a natural disaster and has to repay the grant or portion of the grant will have first preference on that portion of the grant for replacing the ship. If the Minister could give me that assurance it would help but really it further underlines the unnecessary circulation of money. It would seem far simpler to allow a roll-over of the money within a specific length of time rather than having to get it back and giving preference to that owner provided his replacement ship complies with all the other conditions of grant.
I accept Deputy Doyle's concern that the loss of a ship should be treated differently from transfer or other disposal should repayment of a grant in whole or in part be required for non-compliance with the conditions laid down. I have, as a result of her query on Second Stage, been in touch with the parliamentary draftsman and he has assured me that the Minister's discretionary powers in relation to repayment are sufficiently broad. Given that the company will have already established a good track record, there should be no necessity for a detailed appraisal of the applicant and, subject to the funds being available, if there were funds to be repaid at least those funds would be available.
And preference would be given to the man who lost the ship for its replacement?
Grant-aid would be payable subject to all other conditions relating to the ship itself being complied with. That company's application would have priority provided it had a good track record. The Minister's powers are very broad. I would like to think that myself or anybody else holding the office would take a reasonable and humane view in this situation.
I only raised that at this point in relation to the figure because we will have a further debate on the issue of the item lost later on.
Hopefully we will not experience this in our time but if the situation does arise I think anyone in the Minister's position would take a reasonable and humane view.
As the Minister knows, assurances given in this House do not have the status of statute law. What it says in the Act when it is finally passed is what counts. It is the only basis on which business can plan. The Minister might be very well intentioned but the constraints on the Exchequer, the views of the Department of Finance at the time, may be that there are no funds available to replace that grant and that it must be repaid. The point raised by Deputy Doyle as shadow Minister for the Marine is a very valid one. The Minister should give more consideration to it. We may not have time today if we hope to pass all Stages of this Bill today, but perhaps between now and the Bill going to the Seanad we might give some consideration to a possible amendment to clarify the position. One thing business needs is to be confident in its planning, to be sure of its position. Therefore, Deputy Doyle's point should be considered by the Minister before this Bill goes to the Seanad.
It may also be possible for some form of insurance to be taken out by grantees to cover such losses, the insurance to cover the repayment of the grant and also the value of the ship.
I am sure the Deputy will accept that a good track record is vitally important. One could have a situation where a boat is lost by a company with a bad track record, and if what the Deputy suggests were written into the legislation it could tie our hands completely. The points made by Deputy Mitchell will certainly be borne in mind in drawing up the administrative details of the scheme. I also accept his point regarding insurance. This is a vitally important point. He is right in saying that it should be a condition of the scheme that the grantee should record the interest of the Minister in insurance cover for the vessel so that in the event of loss the repayment to the Minister would be covered. That would be part of the administrative details of the scheme.
The insurance moneys would have to be sufficient to repay the Minister and also provide the grantee with sufficient funds to replace the ship, so it is a double insurance. I do not know if it is possible but it ought to be considered.
We will certainly look at that. The point made by Deputies Doyle and Mitchell will be borne in mind when we are drawing up the administrative details of the scheme. The point on insurance is valid.
The point I was going to make has been made by Deputy Mitchell. It was in connection with the insurance. If the conditions of the grantee getting a grant were that the grant should be insured in addition to the value of the ship, it would get over the problem of possible loss. There must be some way, even though it is not definitive in the Bill. I accept the Minister's goodwill. From the point of view of a business, if they knew specifically the criteria they could plan accordingly but if they do not know that, they have to plan for the worst scenario and that may not be conducive to further investment. Therefore, if we could look at that in terms of the conditions, it would be extremely helpful and might tie it down in some way.
The insurance question will be included when we are drawing up the administrative details of the scheme because not alone is it important to the Minister, it is vitally important to the company or individual owner of a boat.
I hope the Minister is grasping the point that it is not just the value of the ship but also the value of the grant. If an owner has to repay the grant and buy a ship——
The owner would not have the full price of a second ship without the grant.
Assuming he is buying the same type of ship, there should be no problem. While I could not give a categoric assurance, with a good track record that individual or company would have priority.
Ministers change and circumstances change, and nobody is going to go into a court of law and say, "Pat the Cope Gallagher said in the Dáil on 4 November 1987..." That has no force in law and things change. Business cannot plan on that basis and, therefore, has to plan on a worst case basis. The question of insurance may be out of it, if the Minister cannot completely adopt Deputy Doyle's amendment.
The legal advice is that it is not possible to adopt that amendment completely. I have gone as far as it is possible to go to allay the fears that are there, to ensure that whatever Minister is in office would be reasonable and humane in that respect. Providing there is a good track record and that the company can comply with the conditions relating to the vessel, the appraisal of the applicant would be short circuited because all that would have been done before. A good track record will help to prioritise. It does not necessarily mean that these people will come in at the bottom of the league.
Will the Minister look into the insurance angle?
I shall.
I should like to draw the attention of the Minister of State to something which he said this morning and which I suspect was an oblique reference to me. He said "Some Deputies expressed the view that ships of up to 12 years old should be eligible under this scheme, or failing that, that the age limit be raised for the purpose of giving access to the Business Expansion Scheme to projects involving the purchase of ships of that age." I should like to put the record straight. I did not say or suggest anything of that nature but the Minister could be forgiven for misunderstanding perhaps what I had said and interpreting that from it. I said specifically on the last occasion:
I have absolutely no problems with the seven year limit on secondhand vessels for the purpose of this Bill.
I went on to say that I do believe that a seven year age limit for the purpose of the Business Expansion Scheme is not in the interests of the industry. The Minister for the Marine was present on the last occasion and I was drawing his attention to the fact that the linking of the Business Expansion Scheme to the seven year clause in this section before us today is causing problems for the Business Expansion Scheme. As far as I am aware, it will not cause problems for this Bill. Would the Minister undertake to bring this specific difficulty to the attention of his colleague, the Minister for Finance, with a view, perhaps to an amendment in the 1988 Finance Bill which is, I understand, the proper way to deal with this problem? We are trying to encourage investment with an average age of our marine fleet here of 30 years. I am being generous. We have vessels of more than 50 years old as well as new vessels; it averages out at around 30 years. There is an enormous case for rejuvenation without insisting that under the Business Expansion Scheme seven years is the upper limit. As I pointed out on the last occasion on Second Stage, there is an enormous number of extremely good eight, nine and ten year old vessels available to our ship owners, and indeed our fishermen, but that is not relevant here. These vessels are young by Irish standards and would rejuvenate our fleets but that will not necessarily comply here. I am not requesting any change in the seven year limit for this, but it is unnecessarily restrictive under the Business Expansion Scheme, given the excellent value to be had on the Continent. I would ask the Minister of State to bring it to the attention of the Minister for Finance, with a possible view to perhaps breaking the linkage. All other conditions could stand but not necessarily the seven years limit.
What was suggested by Deputy Doyle was not intended. I was quite aware that Deputy Doyle concurred completely with the seven year clause, as did Deputy Mitchell who in his proposed legislation suggested five years and has welcomed the seven year limit. We are all clear on that. The Deputies can be absolutely certain that I shall bring to the attention of my colleague, the Minister for Finance, the question of the 12 year limit which would not qualify for grant aid but might qualify under the Business Expansion Scheme for consideration in the preparation of the 1988 Finance Bill.
This section raises another point which is a cause of concern. One very important aspect which has been raised by all the Deputies, including both Ministers, is that of employment in connection with the giving of these grants. Unfortunately, nowhere in the Bill is there any specific reference to the criteria of the type of employment, or of the quantity of employment needed if such a grant is to be given. That is extremely worrying. I know that it will not be put into the Bill now but could the Minister, in the terms that he will be drawing up whereby these grants will be given, look at the area of laying down some criterion for employment for Irish people? We have the quality of seamen available in this country and the object of the Bill is to get as many people back in employment. I should like to see that specific reference put down somewhere.
As I said, an important element in the entire package is that of employment. In drawing up the regulations we would take that into consideration. To give an example, we would not be looking at an application involving a vessel which would give employment to very few as against one that would give employment to many more. The question will certainly be taken into consideration.
The marine surveyors office have manning levels laid down.
It will take care of itself. It is a very valid point. It is part of the entire thinking of this Bill to encourage further employment.
I do not want to be repetitive. There was an amendment circulated in my name which the Chair has not ruled out of order, but I suspect that he is about to do so. I would have liked if the Minister could have taken it on board because it incorporates what we were discussing earlier under section 2. It would simplify the circular transfer of moneys that may result——
I thought that the Deputy had already received intimations of exclusion.
It has been circulated and I have a copy in my possession, so I am speaking to the amendment that I have in front of me and which has not been ruled out by you.
Circulation does not presuppose its acceptance. It has been ruled out.
I suspected as much. I want to come back to the substance of what that amendment was all about. I appreciate the reason for which it was ruled out and do not argue with that ruling. Perhaps the sentiment of my amendment could be incorporated if the Minister would agree to drop the word "loss" in section 6 (2). It would then read:
Without prejudice to the generality of subsection (1) of this section, conditions imposed by the Minister pursuant to that subsection may require that, in such circumstances (including the transfer or other disposal of the ship), and within such time, as the Minister may specify, the entire of the grant, or such part thereof as may be specified, shall be repaid to the Minister.
That would not pre-empt or naturally result in losses of revenue to the State, which I understand was the basis on which my amendment was ruled out. If that cannot be accepted, given the assurances by the Minister of State that such conditions can be included, as he has been advised by the parliamentary draftsman, to satisfy those sentiments, surely those conditions in themselves would be out of order if we cannot drop the word "loss"? I am a little worried about the logistics of this. There is one area about which the Minister is aware that we have doubts.
In relation to the amendment circulated by Deputy Doyle, the test of the amendment would exempt the replacement ship from the restrictions or conditions under which the original ship was grant aided. It could, in fact, follow that if we did this one could purchase a ship and qualify for this grant without any conditions attaching to the actual replacement ship. That is the fear that is there.
Yes.
If there was a roll-over, one could provide a ship that would not be up to the necessary standards. I fully appreciate the point the Deputy is making but I believe that discretionary power will and should be used.
I accept that the detailed wording of my amendment might allow for that interpretation, but it was not ruled out for that reason alone. I fully accept the Minister's interpretation. If the second line were to be in order it would want to read "the replacement of the lost ship with another suitably qualified ship." That is academic now because we are not taking this amendment on board. We are really trying to simplify the procedure in the event of a natural diasater where a grant aided ship is lost overnight, that once the insurance is paid the Minister will not insist on clawing back the grant and that when the ship owner wants to replace the lost ship with another suitably qualified ship he would have to go through the entire process of reapplying for the grant and perhaps finding that the £7.5 million is already spoken for, thereby causing unnecessary delays and complications and circular transfers of money, which is futile. That is the point we are trying to make. By the dropping of the word "loss", we might do it without any amendments or any threat of implications to the revenue of this State. That should be in order if the Minister's interpretation of the parliamentary draftsman's wording is also in order, and I accept it is.
I might advise the House that it has now gone slightly beyond the time. Are we in a position to dispense with section 6?
Yes, if the Minister could assure me that by Report Stage he could look at that suggestion of the dropping of the word "loss".
If the boat had been grant aided for some four years, it would not be a question of a clawback of all of the grant; it would only be a percentage.
I accept all that.
Let us assume a figure of 20 per cent. I assure the Deputy that everybody who will fill the office of Minister for the Marine and Minister of State at that Department will be as humane and reasonable as possible. There will be no question of trying to claw back the money on the day of the disaster.
On Report Stage, will the Minister consider the dropping of the word "loss"?
I will come back to that.