Here we have amendment No. 1 in the names of Deputies De Rossa, Mac Giolla, Sherlock and McCartan. Amendments Nos. 2, 3, 29 and 32 are alternatives; amendment No. 30 is consequential on No. 29, and No. 33 and sections 4 and 5 are related. I am suggesting, therefore, that we discuss amendments Nos. 1, 2, 3, 29, 30 32, 33, and sections 4 and 5 together, by agreement.
Building Societies Bill, 1988: Committee Stage.
Sections 1 and 2 agreed to.
SECTION 3.
I should like to raise an objection to that procedure. I agree that amendments Nos. 1, 2, 3 and sections 4 and 5 be taken together, but amendments Nos. 29, 30, 32 and 33 would, in effect, stand on their own even if the approach taken on the earlier amendments was not adopted. It seems to me that amendments Nos. 29, 30, 32 and 33 should be taken when they are reached. It may not be necessary to include them if we succeed on the earlier amendments, but if we do not, they are separate amendments relating to specific sections.
I shall try to facilitate the Deputy in that regard.
I move amendment No. 1:
1. In page 10, lines 43 to 46 and in page 11, lines 1 and 2, to delete subsection (4) and substitute the following:
"(4) Whenever it is proposed to make a regulation under this Act, a draft of each such regulation shall be laid before each House of the Oireachtas, and the regulation shall not come into effect, until a motion approving the draft has been passed by each such House.".
I am moving this amendment on behalf of The Workers' Party. I accept the ruling of the Chair that we should take amendments Nos. 1, 2 and 3 and sections 4 and 5 together. I will be seeking the permission of the Chair to deal with sections 4 and 5 in the course of this debate because The Workers' Party are opposed to those sections. The object of the amendment is simple and straightforward and it is similar to amendments that come before the House very frequently. We are seeking to change the method of dealing with regulations that are drafted by a Minister for the purpose of implementing the minutiae and provisions of a Bill once it has been passed. We want the regulations to be presented by the Minister to the House and we want the House to ratify them in advance of them becoming law.
The more popular form nowadays is contained in the Bill in that regulations once made stand unless a nullifying motion is passed within a specified period. Needless to say for Independent Members, and Members of small parties, this presents difficulties. Indeed, it presents difficulties for all parties in Opposition because the only time available to them to act against a regulation that is not to their liking is during Private Members' time, a very scarce commodity. That time is valuable and useful to deal with other matters rather than with the specifics of a Bill or regulation introduced by a Minister. It is our view that because of the importance of the legislation, and because of the impact it will have on the general area of the law, the Minister should present his regulations for debate, comment and, if necessary, amendment in the House.
I do not think I need make that case in any greater detail. I should like to remind the House that many of the Minister's colleagues when presented with this argument, and our form of amendment, readily agreed in the interests of debate and democracy to accept it. I hope the Minister will accede to our request on this occasion.
The Workers' Party are opposed to section 4. We are concerned that any regulations introduced under that section should be subjected to the greatest parliamentary scrutiny possible. I have grave doubts as to whether section 4 is constitutional. It provides for legislation by ministerial regulation.
On a point of order — I am sorry to have to interrupt the Deputy — I should like to give notice of my intention to raise on the Adjournment the Government's proposed changes with regard to announced allocations for the building of sports centres in the context of the use of lottery funds in Sligo, Athlone, Galway, Cork and Kilkenny. I understand that I must put that request to the Chair before 4 p.m.
The office of the Ceann Comhairle will communicate with the Deputy.
Section 4, which deals with regulations to remove difficulties, states:
If, in any respect, any difficulty arises in bringing any provision of this Act into operation or in relation to the operation of any such provision, the Minister may by regulations do anything which appears to him to be necessary or expedient for removing that difficulty.
In other words, if the Minister in seeking to get the legislation up and running encounters any undefined difficulty he may introduce regulations. In accordance with section 3, those regulations may not be subjected to debate, observation or vote in the House. The Minister may, courtesy of section 4, consign the Bill to the dustbin, the shelf or wherever one puts something that is not politically expedient. I have never seen a provision that gives such extraordinary powers to a Minister contained in a Bill. It appears that those powers allow for legislation by ministerial order. I have very fundamental questions about that. I have seen provisions similar to those in section 3 arise virtually in every piece of legislation which has come before the House whereby the Minister in order to implement the minutiae and nuts and bolts of legislation requires regulations to do so, for example, regulations to put the legislation in place, regulations to establish an office or secretariat, regulations on the rules governing applications to or from the Minister or applications under the sections themselves. All those forms of regulations enable legislation to be put in place but this provision is entirely new. This section allows the Minister to scrap the Bill entirely from top to bottom merely on the basis of meeting a difficulty or because he might find it expedient to remove the difficulty in whatever way he so decides.
We will discuss section 4 more fundamentally later on in Committee Stage but I refer to it at this point merely because it is another section which allows for regulations to be made. The regulations to be made under section 3 will be regulations which in the current form will not place any onus on the Minister to make a presentation to this House of what he intends to do. This Bill could in fact be set at nought in the Minister's office, and that is certainly not my understanding of the way we as legislators should act. If section 4 is to remain in the Bill any regulations, because of the importance of this legislation, should come before this House. I hope the Minister will recognise that fact and agree to accept the amendment I have proposed.
I should like to advise Deputy McCartan that he will not have an opportunity of coming back again to section 4 because the House has already agreed to discuss sections 4 and 5 with his amendment.
We are on Committee Stage.
That is why I did not interrupt Deputy McCartan to advise him accordingly because I know he will come back again.
I should like to formally move amendment No. 2 which we are also discussing in conjunction with this amendment. My amendment, No. 2, proposes in page 10, subsection (4), line 43, after the word "Act" to insert the words "save for regulations made pursuant to sections 4, 5, 31 and 32 of this Act". I also want to move amendment No. 3 which we are debating——
Deputy Shatter will appreciate that there is a technicality in respect of amendments.
We are discussing them together.
Only one amendment can be moved but the other amendments may be discussed. If required, separate questions can be put on each amendment later. Standing Orders require that only one amendment can be formally moved.
I have a great deal of sympathy with the views expressed by Deputy McCartan. I suspect that we both take more or less an identical view on the fundamental need for regulations of major substantive importance made under far-reaching legislation, such as this legislation, to come before this House for a vote of approval before they become operative, rather than having this negative procedure whereby the Minister can publish the regulations and place them before the House and then, unless a negative vote is passed within 21 days, they become operative. There is a slight difference of approach between Deputy McCartan's amendment and the amendment I propose on behalf of Fine Gael.
Section 3 of the Bill gives the Minister for the Environment, the Minister for Finance, the Minister for Justice and the Central Bank wide powers to make regulations. The powers under section 3 relate to regulations in the strict sense of the term in that they will be regulations to be made for the general purposes of the Bill or will prescribe matters the Bill expressly states should be dealt with by way of regulations. It is quite normal in major pieces of legislation for some of the substantive procedures which will be applicable to be provided for through ministerial regulations. I would also accept that there are regulations which may have to be made under this Bill but which may not be of such large importance as to require on all occasions an approving vote by this House for them and that this House could, in the context of some of the different regulations that may arise to be made, exercise a degree of control by the power conferred by section 3 (4) which would allow the annulling of a regulation within 21 days.
Under other provisions in the Bill, the regulations which may arise may be so fundamental as to create a situation in which the particular provisions in the Bill may be virtually meaningless until we see the substance of the regulations. There are provisions in the Bill which could be described as skeletal in that they lay out what is intended generally by the Government and envisage the possibility of a series of safeguards and controls being put into place but which, without those safeguards and controls being put into place it is unknown whether, for example, the consumer may have the protections in reality to which he is entitled.
Deputy McCartan referred to section 4. I want to refer to sections 4 and 5 and then go on to refer to other areas in which I think there should be adopted a different approach from that proposed by the Minister. First, section 3 (4) does not simply relate to section 3. It relates to all regulations. This is curious because it would have been expected that the provision in section 3 (4) which lays down the procedure to be applicable to the making of all regulations in the context of a Bill which has a variety of different sections, which gives regulatory powers of different importance under a series of different headings to a variety of different Ministers, would form a separate section in the Bill rather than being subsumed or hidden within section 3. One suspects that it is hidden within section 3 because section 3 is the more usual, less inoffensive section regarding regulatory powers. The Minister's regulatory powers under section 3 are constrained by the statutory provisions enacted in this measure.
Sections 4 and 5 are a different kettle of fish altogether. Both have the extraordinary effect that they appear to envisage that the Minister can, by the issuing of simple regulations, replace both Houses of the Oireachtas and the President in the context of the enactment of legislation. In other words, instead of amending the legislation after it has been enacted and if amendments are needed, by the bringing before this House of a building societies' amendment Bill, they let the Minister, by ministerial dictate, if you like, produce a regulation which can substantially change any section or subsection in any part of this Bill. That is to say that the Minister could — and I am not suggesting that this is his intent — drive a coach-and-four through the Bill, through all the consumer protections provided in the Bill and through some of the constraints imposed on building societies by the Bill, simply because he thought some of its provisions were giving rise to difficulties in its operation.
I am firmly of the view that sections 4 and 5 are unconstitutional. I do not believe it is constitutionally possible for the Houses of the Oireachtas to abdicate their legislative constitutional responsibilities and to hand them over willy-nilly to a Minister or group of Ministers. I believe there is constitutional precedent in case law for that view.
It would seem to me that the powers conferred under sections 4 and 5 are entirely unnecessary and dangerous. They could create circumstances in which a Minister might be under pressure from building societies not to create difficulties. Perhaps building societies want to raise the mortgage interest rate by a couple of percentage points, and the Minister might decide — perhaps there is a general election approaching — to be seen putting up the mortgage rate by one or two percentage points as he travels down the road into the last couple of weeks of an election campaign. So the building societies are called in and they say: Minister, we do not like some of the constraints you have imposed on us under the provisions of this Bill — for example, in the area of conveyancing — and we do not like the way we are being constrained in that we have to keep separate accounts to indicate that we are not using conveyancing as a loss-leading mechanism to get additional loan business, or we do not like the constraints imposed on us with regard to the provision of financial services and we want to involve ourselves in some other areas. The building societies may say that this section will prevent the provisions of the Bill being properly implemented and they will tell the Minister what they will do. They will tell him that they postponed increasing the mortgage interest rate by a couple of pecentage points for a couple of months if, by regulations, he will amend the provisions in this Bill they do not like.
This section is not simply a question of bad drafting. It is not simply a question of the Minister, his colleagues or their advisers trying to cover up or to make provision for any simple operational difficulty that might arise with its implementation. These particular provisions are political smoking guns which, in the long term, could be misused. I am not suggesting this Minister would misuse them. I am simply saying it is inappropriate that they be included. I contend they will leave whoever may be Minister for the Environment following the passage of this Bill open to manipulation at the hands of the building societies in circumstances in which, for political reasons, the Minister may wish to postpone or prevent a mortgage interest increase, when there might have to be some trade-off so that the Minister is not politically damaged at an inopportune time for him by the eventuality of mortgage interest rates increasing.
I contend sections 4 and 5 in any form should not be included in this Bill. If there are operational difficulties with this measure due to an express statutory provision contained therein passed by this House, the Minister has the same remedy as all of his current colleagues in Government and all of his predecessors in the Department of the Environment, which is to introduce an amending Bill to remedy that defect. One does not remedy the defect by way of regulations.
My initial reaction to section 4 — in so far as the Minister can, by regulation, vary any provision of this Bill if it creates operational difficulties — is first, it should not be there; second, I firmly believe it is unconstitutional; and third, I believe it is enacted in its current form and regulations thereunder are made subsequently, they will be found to be unconstitutional if ever challenged. I believe section 4 should be opposed and should not remain in the Bill.
I say the same of section 5 which presents a similar problem. Its provisions stipulate that if there are any modifications of any enactments in force relating to companies or banks, and it appears to the Minister to be expedient to modify the provisions of this Bill for the purpose of assimilating the law relating to building societies to that relating to companies or to banks, the Minister may do so by regulation.
Under the provisions of this Bill building societies are neither companies nor banks; they are a curious statutory hybrid. For example, banks have shareholders, as have companies, and they may be publicly or privately quoted. By and large banks are quoted on the Stock Exchange; some companies are, some others are not. If I have deposits in a bank I am not automatically a shareholder. Building societies, as we are establishing them under the provisions of this Bill, are neither one thing nor the other. The principle of mutuality is gone. For example, if one is a depositor or has a share investment account apparently one is a shareholder. Yet, in other ways, one has no involvement in the running of the company at all because it is not a company, it is a building society. It may be useful for building societies at some stage to want to assimilate their position identically to that of banks and companies. That may be appropriate in the context of a time when their structure is identical to that of banks and companies. However, after the passage of this Bill, their structure will not be identical, although they will be involved in many similar financial areas to those operated by banks and will be competing with banks.
I do not see any justification for a provision which allows the Minister, by regulation, to amend portions of this Bill in this way. I believe section 5 is unconstitutional. I do not believe it will work. I believe that regulations made thereunder will be challengeable and will be successfully challenged. Therefore, my second point is that I believe section 5 should not be included at all. It may be the case that the Minister will not be willing to withdraw sections 4 and 5 but I believe he should. Indeed, I am disappointed that the Minister has not seen fit to seek to amend them in a way that would render them acceptable.
I raised this issue at some length on Second Stage. On the assumption that it may not be possible to get a majority of the Members of this House to vote for the deletion of sections 4 and 5, the next best alternative is by way of amendment No. 2 which I have tabled and which would require any regulations made under sections 4 or 5 to be brought before and seek the express approval of this House before becoming validly enacted regulations under this Bill albeit they may still be unconstitutional. At least it would leave to this House a positive approval role, not just a negative one. At least the Houses of the Oireachtas would continue to have some legislative function in the context of building society legislation.
Section 4 has a three year time limit in that the Minister can act as sole legislator for three years only. No doubt that proviso was inserted by the Department or the Attorney General's Office because they had suspicions about the constitutional infirmity of section 4. I would ask the Minister to place on the record of the House the advice he has received from the Attorney General's Office about section 4.
That would be some advice.
Section 5 has no time limit. We could enact this Bill and, in 20 years' time there could be some change in company law, pursuant to which the Minister of the day could amend this legislation by way of regulation.
First, I contend these sections should not be included and, second, if they are included, at the very minimum, they should require an affirmative vote of this House to accept regulations.
I might refer to the second part of amendment No. 2. That deals with sections 31 and 32 which no doubt will be discussed at greater length later, so I shall not enter into a lengthy discussion of them now. Suffice it to say that section 31 extends to building societies powers to engage in conveyancing. The provisions of section 32 extend to building societies powers to provide auctioneering services. There are a number of curious factors about both those sections but we shall deal with them in detail later on.
One of the claims made for section 31 is that its provisions will render conveyancing a great deal cheaper and more efficient, resulting in the home purchaser having to incur less outlay and expenses when purchasing a home. Section 31 recognises something very fundamental, which is that conflicts of interest can arise specifically between lending institutions, in this instance the building societies, and the borrower. It recognises that there can be a whole series of conflicting circumstances and, in the context of the Minister's approach to this legislation, even if building societies are empowered to engage in conveyancing, regulations need to be made to provide a whole series of protections.
On Second Stage, I went into some detail on the areas in which it is envisaged protections may be required, and I intend to pursue that further when we deal with the detail of section 31. The reality is that section 31 is so vaguely put together that it is not known what meat will be put on it by the regulatory powers the Minister has taken to himself pursuant to that section. That section should not come into force until regulations are enacted, otherwise building societies may be carrying out conveyancing without any of the consumer protections put in place that are necessary. Because of the importance of ensuring that protections are there for the community, and because of the importance of ensuring what the Minister believes to be the objective of this provision is attained, I do not believe section 31 should come into force without this House seeing the detail of the proposed protections the Minister wants to put in place to protect the house purchaser. Accordingly, I believe that should require an express approval order from this House for regulations.
The same applies to estate agents. The Minister envisages building societies playing the role of estate agents and provides for the enactment of regulations to provide a variety of protections for the general public and the consumer. We do not know the detail of those protections. In parts of sections 31 and 32 it goes beyond mere regulatory powers. The regulations that will have to be made will fundamentally impact on the nature of the services that building societies, after the passage of this legislation, will be empowered to provide and will fundamentally impact on the effectiveness of any protections put in place for the general public and the consumer. It is not appropriate that regulations of such a fundamental nature simply be published by the Minister and, unless negatived within 21 days, become part of our law.
In a nutshell, amendment No. 2 is designed to ensure that if we are stuck with sections 4 and 5, any regulations made must get the approval of the House and on the basis that sections 31 and 32 will, in some shape or form, remain part of the Bill, the regulations made under those sections must get approval. Ultimately, amendment No. 3, which I am referring to in this context, provides that none of the regulations made under sections 4, 5, 31 or 32 and laid before the House will become operative without the approval of the House, and that neither sections 31 or 32 at a later stage should come into force until the regulations are made.
I would hope that the Minister would have a detailed response to these issues. I am disappointed he has not sought to deal with them in his amendments because they were raised at great length on Second Stage. These are not simply technical or harping objections or criticisms, they are of fundamental importance in the enactment of this legislation. In the context of sections 4 and 5, the use of those sections could fundamentally change this Bill to the extent that all the consideration we will give to all the sections later in this Bill could, ultimately, become irrelevant because the Minister would arrogate to himself under these sections powers to amend any particular provision in the Bill that he saw fit to change following the Bill's enactment.
We will give the Minister half an hour and then we will respond.
I hope that will not be the practice that has been followed here for the last few pieces of legislation that we have been talking about, otherwise we will be here until the end of the year without a single section being passed. If that is the attitude Deputies are going to start the day with, then so be it, but I do not think it is the way to get through legislation which has been called for and to which everybody has already given their approval on Second Stage.
It is a year overdue.
We will not get into an argument at this stage about that. This is the first Minister for the Environment who had the courage to introduce this Bill. Many people have been talking about this for a long time. It is huge complex legislation and it took some time to draft it and it took me a while to consider it. I think the Deputy will appreciate that.
If amendment No. 1 on section 3 (4) was accepted it would result in all regulations to be made under the Bill coming before the Dáil and the Seanad for discussion and approval prior to their implementation. Given the ongoing large programme of primary legislation that has to be dealt with, I do not regard the amendment as realistic. It certainly runs contrary to many of the demands made on the House at other times about the slowness and the lack of legislation being promoted through the House.
The whole legislative process would become a logjam while the implementation of primary legislation and policies would be delayed and disrupted by a plethora of relatively minor matters. Deputy Shatter alluded to this and said that the House could end up dealing with nothing but regulations and that legislation might never become operative or effective. This would run contrary to the stated aims of all sides of the House over the past couple of years. Apart from those practical problems which the amendment would give rise to, I do not think the arguments put forward are well founded.
Under section 3 (4), regulations under the Bill will have to be laid before each House of the Oireachtas and Members of either House will have an opportunity to put a motion to annul the regulations. From listening to Deputy McCartan, one would suspect that this was being done in a hidden way. That is not the case. That is not the case as it applies to this legislation or, indeed, to any other legislation for that matter. The Members of the House do have the opportunity to annul regulations if they choose to do so. Secondly, regulations under this section cannot go beyond the specific powers conferred by the provisions of the Bill. Thirdly, the procedure proposed in section 3 (4) is not new. One would feel from listening to some of the contributions — and it is not only in relation to this legislation but a number of other items of legislation with which I have been associated recently — that something new is being adopted by the Government in dealing with the whole procedure of regulations attached to legislation. That is not so. It is a well established practice in legislation and it has served legislation well down through the years.
Finally, regulations under the Bill will be the subject of discussions and consultations between the relevant regulation making authorities — that is, the Minister for Finance, the Minister for the Environment and the Minister for Justice as well as the Central Bank. All that discussion and consultation would have to go on, particularly in this legislation, it is not confined to the Minister for the Environment. It is wrong to suggest, as Deputy Shatter did, that the Minister for the Environment in some way is going to manhandle all this subsequently by way of regulation. Consultations are laid out, and particularly with relevance to the Central Bank and this makes it a very safe way of doing business as far as I am concerned and as far as the regulations attached to this legislation are concerned. All in all, when I consider those three items, I am satisfied that section 3 (4) is the proper and efficient way in which to deal with matters which the Bill require to be dealt with by regulation.
There was reference to amendments Nos. 2 and 3. If those amendments were accepted the same would apply: they would result in regulations under sections 4, 5, 31 and 32 having to be laid before each House of the Oireachtas for formal approval before they could be brought into operation. The same arguments made on amendment No. 1 would apply here. Given the fact that the regulations must be laid before the House thereby giving Deputies and Senators an opportunity to put down a resolution annulling the draft regulations, and that the regulations must accord strictly with the relevant provisions of the Bill, I do not think it is necessary to require that the regulations should await positive approval by both Houses of the Oireachtas every time a Minister, after consultation with the other relevant Ministers and the Central Bank, decides to have regulations applied to the legislation. It would be a guaranteed method of making the thrust of the legislation non-effective. It would slow up the whole process and logjam the House to a terrible degree. That must be appreciated by everyone.
Any regulations or provisions of regulations that are likely to be controversial or have major implications for particular groups will be identified well in advance by those likely to be affected. From listening to some of the people who have contributed already one would be suspicious that the people who would be affected would not have full knowledge of what was being attempted by the Minister by way of regulations. We all know that the regulations are laid before the House and particular groups in our society are well accustomed and are well aware of everything that happens so far as the legislation is concerned. These items would be identified well in advance by those who would be likely to be affected.
The section, as drafted, allows ample opportunity for Members in either House to put down a resolution annulling the regulations. While that might not happen too often, the facility is there should an individual or a party wish to utilise it. Maybe it is not used too often, and perhaps that is an indication of the satisfactory way in which legislation is dealt with here in the first instance. To suggest that the regulations in some way are intended to escape the knowledge of either the Members of the House or the people, the organisations and the interests they represent is going too far as far as I am concerned and does not stand up.
Reference has been made to section 4. This section has been opposed by Deputies De Rossa and Shatter. It is well to remember that it simply provides a mechanism whereby the Minister could, by regulation, modify a provision of this Bill if a difficulty arose in bringing it into operation. It could not and would not be used, as some Deputies seem to suggest, to change the intent of the Bill as passed by the Oireachtas. How could it? It is not beyond the bounds of possibility with a Bill as large and complex as this which covers so many different areas, that unforeseen technical difficulties might arise in bringing a particular provision into effect. For example, it could transpire that the provisions in relation to meetings of societies, or the election of directors, or the preparation of annual accounts could contain some relatively minor provision which could create undue practical difficulty for societies.
In section 4 I provide the straightforward method of dealing with such technical problems, no more or less than that, without the need of amending primary legislation. I suggest it is reasonable. If one were to concede the point that there should be amending of primary legislation every time a minor technical difficulty arose in the implementation and effective use of the legislation, that would be intolerable. If one were to multiply that across the board as regards the arrangements for any other legislation, if Deputy McCartan had his way, the total time of the House would be concerned with moving amending legislation for trivialities — perhaps not trivial to the people involved, but in so far as our understanding of minor matters is concerned, it would be totally out of proportion to the importance attached. That is why section 4 is there.
Could the Minister supply a precedent for section 4 from any other comparable legislation?
Yes.
It would help me to understand. Let the Minister tell us where else this occurs.
The Canals Act, 1986, the Farm Tax Act, 1985 and the Valuation Act, 1987.
Well done.
The water has run out of the canals since that Act was passed.
Perhaps, but the legislation is still good.
I do not think that is a world shattering topic.
The Valuation Act, 1987 was legislation of considerable importance.
There are many deposits in the canal but they are not all legal.
Quite so. The Valuation Act, however, had a particular relevance to all the matters that we would be contemplating here as being important. This section does not go even as far as some of the provisions in the same Canals Act and the Farm Tax Act. Both of those Acts allow regulations to amend other enactments. It should also be noted that the provision lapses after three years, as Deputy Shatter rightly remarked.
A matter was raised not too audibly by Deputy Quinn but it was audible enough for the Minister to hear so far as the constitutionality of the section is concerned. This matter was checked consequent on its being raised at some length on Second Stage. Very careful note was taken of all matters raised on Second Stage. Because of the large number of matters involved it took a little time to get them together. The matter of constitutionality was checked legally to be absolutely sure and my best legal advice is that there is no constitutional difficulty attaching.
Section 5, I understand, is also being discussed with this section. The concerns expressed on this section are not well founded. After all, this is quite a narrow provision which could permit the Minister for the Environment to apply to building societies relevant future changes which the Oireachtas could make to company and banking law. Many of the provisions in the Bill parallel similar existing or proposed provisions in the Companies and Central Bank Acts. The Minister would not be allowed to break new legal ground, as it were, but a mechanism would be provided whereby laws already adopted by the Oireachtas could be readily applied to the societies. Some of those laws have not yet been passed by the Oireachtas and may be adjusted or amended here. The facility allows it to be possible for the Minister to apply that legislation, or the legislation in its amended form, to the societies also. Surely that must be seen by all concerned as a sensible approach.
All that would be permissible by regulations under section 5 is the modification of provision in this Bill to bring them into line with changes that have been adopted in company and banking law. This provision is particularly relevant at present because extensive new company and banking legislation is before the House. It is quite possible — indeed, one could say it is probable — that the House will make changes in one or both of those pieces of legislation. It is wise — in fact, it is very important — that it would be parallelled in this legislation because of the very close relationship between Central Bank legislation and building societies legislation proposed here. That is why I gave an undertaking that when the Central Bank legislation was going before the House, the building societies legislation would run in tandem with it. That is our intention and I think the Whips agreed that that is good. In fact, the parties recommended that on Second Stage. There may very well be amendments accepted, promoted, in either piece of legislation and they would have to apply in a very particular and special way to the building societies legislation. I want to have the three pieces of legislation in parallel and this is the facility to allow the Minister to do that.
This Bill may be passed before the other two; that is the likelihood as things stand at the moment in the Order of Business. It hardly seems necessary that I would have to come back to the House in those circumstances. It would be too much to suggest that if those changes took place in any of that legislation, and if this Bill were cleared through the House in advance of them, amending legislation would need to be made.
It was suggested — I think by Deputy Shatter on Second Stage — that this section might not stand up to close constitutional scrutiny. That matter was also checked. I must put on the record that the legal advice is that the approach is not constitutionally objectionable. In those circumstances I would ask that the Deputies might reconsider their position and to accept the bona fides of the advice I have received.
I waited to hear what the Minister had to say in regard to this matter. I am not unduly concerned about section 3 although it is not ideal, and I am not unduly concerned about section 5 because there are limitations on it but, quite frankly, the Minister's defence of section 4 is not at all adequate. Section 4 is a very unique piece of legislation which will run into severe difficulties in the court, in my opinion. Sometimes claims are made here from Opposition benches that something might not be constitutional. We get reassuring paternalistic statements from Ministers saying that the legal advice is that it is all right. Everyone is supposed to take that as holy writ, therefore you are not supposed to pursue it or you are in some way unreasonable if you do.
Does the Minister realise how frequently nowadays the courts keep declaring unconstitutional legislation passed by this House? The number of such cases in the last couple of years I believe has been somewhere between 12 and 15 each year, so much so that Deputy Kelly, who only recently produced the second edition of his large volume of the Constitution, had last year to produce a supplement to it because, although it was only three years old at the time, there were already more than 200 new decisions relating to different aspects of the Constitution. A week or two ago I saw a report in The Irish Times of some further Act declared unconstitutional and it merited just a few paragraphs because it is no longer an uncommon thing to happen. We can take it that the rate at which the courts will declare various legislation, both contemporary and older, to be unconstitutional will be quite considerable. The kind of assurances given by the Minister that he got it right in his Department, and it was all right——
Legal advice.
Legal advice, yes. That has no standing at all. I do not want to be personal about the Department of the Environment but I would respectfully draw the Minister's attention to the fact that the legal section of that Department and the Supreme Court do not seem to be on the same wavelength as far as the Constitution is concerned. For example, there has been a celebrated difference of opinion on the extent of the protection of the right to private property in the Constitution where the Supreme Court obviously do not take the same view as has been the traditional view within the legal section of the Department of the Environment. We have all suffered greatly by that.
It is at least understandable.
It has been apparently very difficult to get amendments made in the law which clearly should have been made in the law and which——
Which he evinces among former colleagues.
——if they had been made it would have prevented the scandalous situation we have seen recently where speculators were awarded £2 million and other very large sums of money in circumstances where they had not the remotest moral entitlement to that kind of money.
Surprisingly, the Minister quotes three precedents for this section 4. I will have to go and check them because they do not seem to be noticed if they existed, but I make the comment on them that they are all of very recent origin which makes them a little suspect because it means they have not been challenged in the courts as yet. I do not see that the Farm Tax Act, 1985 is of much value to the Minister as it is repealed. Neither do I think that the Canals Act, 1986 is of much significance because that legislation really has very little effect on anyone other than the Board of Works presumably——
And CIE.
——and CIE or whoever is supposed to be operating canals now which are not very extensive. The Valuation Act, 1987 could be significant and I would like to take a look at it, but I doubt very much if these three Acts have yet been challenged in the courts. It would be interesting to see the outcome because the facility with which the courts are declaring different pieces of legislation unconstitutional at the moment is considerable indeed. I would not like to be backing section 4 of this Bill because I do not think it will survive.
I would not put section 5 in the same category because the power to amend there is confined only to bringing it into line with whatever changes have been made in company law and banking law. That is fair enough. The Minister cannot go beyond whatever changes are made, so our delegating to him the power to make changes is done within very clearly defined parameters. I think the High Court and Supreme Court would find that acceptable and the measures would not be looked on as the Oireachtas abdicating its responsibility under the Constitution. As with section 3, I think the type of amendment Deputy Shatter proposes is right. I agree with the Minister that there will have to be a huge number of regulations under this, and if everyone would have to be positively passed here before it would come into operation, that is going too far. There would be a huge volume of them. Deputy Shatter's suggestion that regulations under sections 4, 5, 31 and 32 should be positively passed and that the others should operate as they are in the Bill under section 3 (4) in the negative fashion is a satisfactory compromise. I recommend that to the Minister because the very controversial provisions are going to be under those four sections. They are very difficult, and I think that is a good compromise.
The Minister really will have to take a look at section 4. There is not much good in this House passing this on a vote if it is going to go anyway. Things have been declared unconstitutional by the Supreme Court that certainly are not as offensive to the basic rights of citizens or to the legislative rights of the Oireachtas as this is. There have been quite a number of cases dealing with the purported exercise of powers of delegation which have been found unsatisfactory. Let us look at section 4 on its own. Suppose you were to make a minor change in it and instead of saying: "If, in any respect, any difficulty arises in bringing any provision of this Act into operation .... the Minister may by regulations do anything which appears to him to be necessary or expedient for removing that difficulty", you were to change the word "this" into "any" and apply that test: "If any difficulty arises in the operation of any Act the Minister shall by regulation change it as it seems to him to be expedient". Or, let us say, substitute the word "Taoiseach" for "Minister" and then this House and the House upstairs and the gentleman in the Phoenix Park could all gracefully——
Charge to Lahinch.
——go home because they would have no function. By changing a couple of words in section 4 you could abolish the entire constitutional legislative function of the Oireachtas. That is ridiculous and I think it is the way the High Court would look at it. They would not go along with it. That is what you might have seen in Eastern Europe pre- perestroika or pre-glasnost. It is going too far.
It is what you would find in Panama.
You would still find it in Panama and maybe in Paraguay, Mark II, but it is not acceptable here and I do not think it will be found to be compatible with our Constitution. the test is: do not take it literally as it is there, just change a few words; change "this" into "any" and change "the Minister" into "the Taoiseach" and then pass it and the Taoiseach of the day would have power to change in any way he wanted any legislation that had been passed by this House. The word "difficulty" is not defined in this section, therefore the question of what is or is not a difficulty in the operation of an Act is a subjective thing so far as the Minister is concerned. That is not good enough. This is a regulatory Bill to regulate the operation of building societies. They are vast institutions now, by our little standards anyway, with assets of hundreds of millions of pounds. Some of them have assets of billions of pounds, and proportionately within Ireland they are very big even though by world standards they are tiny. Therefore, they are very powerful within Ireland. If they were to go to a nice Minister who likes to be helpful to everybody and explain to him behind closed doors that a difficulty within the meaning of section 4 had arisen — in other words, that they do not like the regulations because they are too stringent and they would like things freed up, with no control and much easier operation for the big boys — and if the Minister could be convinced that there was a difficulty in relation to the operation of a provision of this Act, he could remove the regulation. What is the point of bringing in regulatory legislation if the regulations which bite and actually control can be regarded as difficulties in the operation of the Act? If there is a difficulty which is acting in a way which is restraining the proper exercise of commercial freedom by a building society, the Minister should have to come to this House and say that he has listened to the building societies saying that this provision is inhibiting them wrongly and he should suggest a change to the House. If the House is satisfied, it will change it. That would be open and above board, but it is questionable whether it should be done privately. I do not think it should operate that way. It should be removed.
I would love to read the opinion of the Attorney General on this matter. I think he would find it very hard to go along with it. To try to cut down they have put a three-year time limit on it. If this is as necessary as the Minister says, it should not have a three-year time limit. The three-year limit was put in to give the High Court the impression that this is temporary, that it should not be judged as permanent law would be and that the same criteria should not be applied to it. That is not sufficient. If there are all these precedents, are there simlar time limits on the others? I presume not.
Section 4 is very doubtful and the Minister should withdraw it. He can justify section 5, and with the amendment suggested to it section 3 can be justified. These are three important sections because there will have to be many regulations made and we cannot be unreasonable in regard to them. With respect, the Minister is unreasonable in insisting on section 4.
We are not making the kind of progress I should like to see. I will try to be as concise as possible. We have 120 sections to go. This Bill was over a year later than the industry expected, through no particular fault on anybody's part and 1992 will not be deferred to accommodate us. It behoves this House to move as fast as possible in getting this legislation enacted. Then the real work will start when the Department write the regulations. Somebody in the Department is looking for belt, braces, and suspender belts in relation to section 4.
I would concur with the analysis by Deputy O'Malley. I would not be in favour of the standard Workers' Party resolution vis-à-vis the regulations until such time as this House improves its own efficiency. To give one example, it takes 20 or 25 minutes to vote when we should be able to do it within three to five minutes by way of electronic mechanism. Until such time as there is general Dáil reform we do not have the luxury of every regulatory provision coming before the House and being subject to a motion of affirmation.
Regarding the amendment to section 3, I fully support Deputy Shatter's request. Lest the Minister argue that this will unnecessarily tie up the time of the House, provoke delays and make the business of the House cumbersome, there is a provision whereby the Whips can agree that an order will be taken without debate. It is sensible because it does not take up any time. Regularly this House takes items without debate. The argument may be that we cannot have affirmation by way of motion of a regulation to give effect to any one of these four sections because of the possibility of delays, but if the regulation is a reasonable one it can be put through without debate once people have had a look at it.
The Houses of the Oireachtas have the task not just of making law but of scrutinising the enactment of laws by the Executive. A lot of what the Administration does, provided people are aware of it, is not subject to negative obstruction. In many cases it is positively encouraged. I do not see why the Administration fear a request for an affirmation by way of motion of regulations in areas which will be in some dispute.
A potential difficulty in section 4 has been identified. I will not repeat what Deputy O'Malley said so succinctly. Let us suppose in the liberalisation of the operation of building societies certain changes are required involving work practices linked to a productivity deal or a request for an increase in money and that the staff refuse to undertake these new work practices unless they get an increase in money. Consequently the representatives of the big five building societies, who are not noted for their shyness or lack of access to the Custom House under its present incumbent, might say that they cannot make this section work because of a "difficulty". The difficulty might be the rather truculent attitude being adopted by some members of MSF. Would the Minister be empowered to introduce a regulation that would remove that difficulty? What would removing that difficulty amount to?
I am deliberately making the extreme argument in order to draw attention to the possibility that in some circumstances this could be seen by the Supreme Court as being in conflict with the Constitution. The time-table of three years indicates that this is seen as a transitional section. The Department wisely anticipate that there may be unforeseen problems and they want a certain degree of flexibility in responding. They are stating with a degree of humility that there are 120 sections in this Bill which they think address all the problems but they are not 100 per cent sure and they want an expansion joint built into the legislation to accommodate unforeseen problems. I have no problem with that concept.
There is a lot of positive common sense in the making of law. If the Minister wants the House to agree to that degree of flexibility, there should be a corresponding counter balance in that he should let us have sight of the regulations before proceeding. I would earnestly ask the Minister to consider this point. I would not necessarily expect him to accept Deputy Shatter's amendment now but I would ask him to consider it because it is a reasonable counterbalance to what the Minister is seeking, which in some respects could be a blank cheque. Not all of the Minister's successors will be as reasonable, balanced, sane, mature and wise. There could be a change of Government after 15 June. This House is at the mercy of the lowest common denominator in politics, not of the current distinguished holder of that office who resides in the Custom House. That is another good reason for looking for this trade.
I will not take up the time of the House in relation to section 5 because broadly speaking I agree with the analysis put forward by Deputy O'Malley. We are, in essence, going to agree the sections through the relevant Companies Act and the changes in the Central Bank Bills as they go through. Therefore, the requirement for a democratic scrutiny will prevail. Again there is the argument in relation to bringing forward the regulations and how the Minister is to align the operation of a particular section in the Building Societies Act with the Companies Act. I commend the Minister for seeking this kind of flexibility because lack of it has in the past prevented necessary legislation coming forward at the appropriate time; but there is a quid pro quo, that of bringing forward the regulations.
I will conclude by repeating my refutation of what I think is the standard argument of defence: regulations coming before the House do not necessarily have to take up the time of the House but can be taken by agreement without debate if, having had sight of them, all of the parties and Members are satisfied that they are a reasonable response by the Minister of the day to difficult circumstances. On those grounds I would urge the Minister to accept the amendment in the name of Deputy Shatter.
I want to come back to the Minister's reply to the propositions put forward by me in pursuing The Workers' Party amendment, No. 1. I do not believe that volume of work is a basis on which to abandon principle in this House. The fact that our procedures are outmoded, inefficient or whatever should never be seen to be taking away from the basic principle which is, that if we are going to give effect to important legislation by way of regulation, this House must have the opportunity to scrutinise, debate and, if necessary, vote on those regulations in due course.
I agree with the suggestions that have been made as to ways of tackling the enormity of the task. There is a possibility of appointing a special committee of the House to look at regulations. It has been agreed that the parties might well agree, having had sight of the regulations, that there is no contest and that the matter can be tabled without debate or the guillotine used so that we can get on with the business without difficulty.
We are too easily abandoning an important principle. Deputy Shatter's amendment is being commended by the Progressive Democrats and the Labour Party as perhaps preferable. If, at the end of the day, that is the one we stand on, The Workers' Party will have no problem in supporting it. If the Minister were to give some indication that he would have fair regard to amendment No.3, I would certainly withdraw amendment No. 1 in favour of it. Let me make the point before we finish on this: the vast bulk of regulations of whatever hue or complexity introduced under this new Act will be under sections 4, 5, 31 and 32. So The Workers' Party will not be conceding a lot by abandoning amendment No. 1 — the general principle — to the more expedient, perhaps more tidy one, amendment No. 3.
The Bundestag of Germany have a special committee of that House which deals with every regulation, directive and resolution that emanates from the European Parliament and, within a time period of, I think, six months, they can scrutinise, report on and recommend necessary legislation to implement and deal with the workings of the European Parliament as it effects the national law in Germany. That is the kind of workload they are prepared to undertake. They are not prepared, as we are here, to allow every directive of the European Cabinet to pass into the national law by ministerial regulation. That is the sort of job we are supposed to be getting on with here.
This legislation is fundamental and represents a major departure in the area of building society law and the related areas of auctioneering and conveyancing. It has been suggested here that because it might represent a heavy workload it would not be right for us to have regard to the regulations if and when they are introduced. Last year when we were dealing with the Intoxicating Liquor legislation the Minister accepted amendments and brought in the regulations to implement those provisions; and we spent time discussing the number of washhand basins a restaurant should have for males and females, as the case might be, the number of chairs to be provided and the area for people to stand in as they have their pre-dinner drinks. All parties contributed and we dealt with it in a very short time. If we can find the time to debate those matters, this House has an obligation and a duty to find the time to deal with the regulations the Minister will introduce under this legislation. I do not accept the suggestion that all regulations must clutter the House. We can find some mechanism to put those that are not contentious through without debate and find time to look at those that should be debated.
As I understand it, the Minister's provision allows only for annulment of a regulation. We are notified that the regulations are made. We are not circulated; it is a matter for us to search out the regulation and, if we are not happy with any aspect, the option is a motion to annul the regulation in its entirely. The section does not allow an opportunity to amend. That is a wholly unsatisfactory way to deal with such regulations. There may be aspects of such regulations that are not satisfactory or that may worry us. We might be in agreement with 90 per cent of them yet our only option is to put down a motion to annul the regulation in its entirety. This is not satisfactory and it is all the more reason the Minister must listen to what we are saying here. Let us forget about the suggestion that there is suspicion on this side of the House. There is not. We are talking about doing our job as legislators and being true to our obligations.
The other argument the Minister makes is that the legislation is innocuous specifically because the powers are delimited to the sections within the Act and he cannot provide regulations above and beyond what is already laid down in the section set out seriatum in the Bill. That is clearly not so. Section 4 is a writ for the Minister to do whatever he wants with regard to this legislation. The Minister is in no way limited under section 4. It is open to him to regulate his way out of any difficulty that might be presented by the building societies in particular or anybody who wants to lobby him. There is no limit in section 4 and that is a major worry. That is not suspicion; I am merely talking about the way we as legislators interpret this Bill and how it may work.
We have to put this legislation into context. There are major competing interests such as the Law Society, the lawyers, the building societies, and auctioneers and invariably there will be an invasion with the approach of 1992. One only has to look to the neighbouring jurisdiction to see how this type of legislation has operated there. A degree of competition, practice and malpractice has arisen. The abuse of people's interests has been well documented in terms of this amalgam of building societies, conveyancing and auctioneering properties all in one. I am not saying that will necessarily happen here. There are very useful regulations and constrictions in the Bill and those of us who have looked at this legislation carefully are most particular that those constrictions and regulations remain, but that will not happen if section 4 remains in the Bill and certainly not if section 3 is coupled with it. We have no opportunity to debate the regulations or deal with them here. Let us learn lessons from what has happened elsewhere when similar legislation was introduced.
It is possible that great pressure will build up with regard to this legislation. Huge lobby interests will bear down on the office of the Minister and it is not acceptable that all those issues can be dealt with in the office of the Minister by way of regulation. I do not accept the Minister's second point that he is in some way delineated. I accept it with regard to section 3 but not if section 3 is coupled with section 4. Section 31 provides for the introduction of conveyancing. Very wide-ranging powers are given to the Minister under that section. He is allowed to deal with the matter by regulation. While parameters are laid down, they are extremely wide but are nothing compared to the provisions in section 3. The same applied to section 32 with regard to the auctioneering authorities. I do not accept the suggestion that the Minister is very much constrained by the limits of the Bill, under sections 4, 31 and 32. The range is so vast——
I would dissuade the Deputy from ranging too widely over the Bill. Let us deal with the sections under discussion.
The third point raised by the Minister was that in implementing regulations he would have discussions with the authorities concerned, the Central Bank, the building societies and so on. Why not have discussion and debate with the Members of this House, the legislators? Why are we not involved in the process? The Minister can take time and use the energies of his Department in debating and discussing the matter outside of the House but we say, come into the House and debate them here if necessary.
Finally, I thank the Minister for the precedents he says exist for this type of legislation. I have grave doubts about these issues. They have been well ventilated by other Deputies who have vast experience in the area of law as practitioners and as academics, and I will not go into that but I will certainly be looking at the three examples the Minister quoted. The arguments he advanced do not convince me that we should abandon the amendments being pursued here.
I stand by amendment No. 1 in the name of The Workers' Party because the principle is important but there appears to be consensus that we accept amendment No.3 in preference on the basis that the sections to which it refers are crucial and the most important in the legislation. I would be prepared to withdraw my amendment No. 1 on the basis that the Minister would give serious consideration before Report Stage to adopting an amendment along the lines contained in amendment No. 3. Otherwise, I hope Deputy Shatter will push his amendment. The indications are that there is sufficient support on this side to allow our will to prevail on this occasion.
I would ask, for clarification purposes, whether the Deputy wishes to withdraw his amendment.
I am leaving the option open for the moment. I want to hear the Minister's response and also what Deputy Shatter has to say with regard to pushing his amendment. I will indicate later whether I will withdraw the amendment.
I thank Deputies O'Malley, McCartan and Quinn for the support they have expressed for amendments Nos. 2 and 3 which are linked. I want to assure Deputy McCartan that I intend to push my amendment this evening if the Minister is not prepared to accept it. The Minister's response was most disappointing. He used the argument against Deputy McCartan's amendment that if every regulation had to come into this House to be debated first or for an approval motion, the work of the House would become log-jammed. I accept that it is not always necessary to bring legislation, in respect of which regulations may be appropriate, before the House for approval motions. Indeed, if we had reformed the structures of this Parliament we would have a separate Oireachtas committee through which all regulations such as EC or ministerial regulations would be processed and possibly would require approval. In that way there would be a true degree of accountability and scrutiny of the massive numbers of regulations produced by way of statutory instruments by different Ministers, but we do not do that.
The Minister went on to use the same argument as regards amendment No. 2. As other Deputies have said, that amendment is more specific. It confines the need for approval motions to four particular areas, to regulations made under sections 4, 5, 31 and 32. Unless the Minister has a raft of prepared amendments under sections 4 and 5 that none of us know anything about — on the assumption that these sections are there bona fide for the reason the Minister describes, in case there is some minor operational matter that needs to be put right — I do not really understand how accepting amendment No. 2 could portend the House being clogged up for months to come in processing regulations.
There is a specific precedent for what is proposed in amendment No. 2, that is, a provision contained in the Criminal Justice Act, 1984. Under that Act the Minister for Justice was given regulatory powers subject to the negative veto as is contained in this Bill. Deputy Woods who was then spokesperson on justice, speaking on behalf of the Fianna Fáil Party, made exactly the same point on that issue as I am making on this one, which is that the regulations are so important as to require debate and approval in this House. The then Coalition Government agreed to amend the Criminal Justice Bill and the necessary amendment was made by the Government on Committee Stage.
On Second Stage I invited the Minister to bring this amendment before the House but he has not done so. This is an important amendment. It is about issues which are of some considerable importance in the context of the Bill. It is a safeguard mechanism in the context of how the Bill will operate. In particular it ensures that any changes made under sections 4 and 5 do not fundamentally encroach on the intent of the Bill and that sections 31 and 32 will not come into being until the relevant protections that the Minister appears to think are necessary are probably in place.
The Minister said that all these regulations he intends to introduce may be discussed with particular groups. In my time in this House, I have never heard of any Government publishing draft regulations for informal discussion by Members of this House prior to presenting them as a fait accompli. It is not acceptable for the Minister to say that he will have talks with the building societies or whoever may be affected by this legislation behind the scenes, that if regulations are introduced they will be all right and we will not have to worry about them. We as legislators have a role to play.
I specifically asked the Minister to tell us what advice he received from the Attorney General's Office. The Minister said that he has been advised that the approach adopted in sections 4 and 5 is not constitutionally objectionable. I want to know whether he received that advice from the Department of the Environment or the Attorney General's Office. We have been talking about the constitutionality of section 4. If it is unconstitutional even amendment No. 2 would not solve that problem although it would at least give this House an active role. I would like to draw the Minister's attention to a Supreme Court case, Cityview Press versus An Chomhairle Oiliúna, reported in the Irish Reports, 1980, page 381. In that case the Supreme Court discussed the powers of the Oireachtas to delegate legislative functions to Ministers or outside bodies and whether it was constitutional to do so. The Supreme Court formulated a general test and said:
The test, in the view of this Court, is whether what is challenged as an unauthorised delegation of parliamentary power is more than a mere giving effect to principles and policies which are contained in the statute itself. If it be, then it is not authorised, for such would constitute a purported exercise of legislative power by an authority which is not permitted to do so under the Constitution. On the other hand, if it be within the permitted limits — if the law is laid down in the statute and details only filled in or completed by the designated Minister or subordinate body — there is no unauthorised delegation of legislative power.
In relation to section 4 the details are not filled in. The law is not laid down beyond saying that the Minister could correct anything needed for operational purposes. It would seem that, if one were to apply the test enunciated by the Supreme Court in the Cityview Press case, there is an unauthorised delegation of power in section 4. I would accept that this is more debatable in relation to section 5 as there would be some constraints. Both sections, in particular section 4, raise serious constitutional issues. I want to know whether it was the Attorney General's Office or the Department of the Environment who gave the Minister the advice he referred to and I ask the Minister to indicate how he reconciles the views expressed in the Cityview Press case with the legal advice he has obtained.
The broad range of powers being conferred on the Minister in sections 4 and 5 differ substantially in substance from those contained in the Valuation Act and the Canals Act which deal with more particular and specific issues. They have not been challenged as yet in the courts. That is relatively recent legislation. As this legislation is a good deal more controversial and would apply far more widely it is far more likely to be challenged. I invite the Minister to accept amendments Nos. 2 and 3. On a number of occasions the Minister has indicated that he wants Members on this side of the House to contribute positively. Amendment No.2 is not an attack on the Minister's legislative prerogative, rather it is designed to improve the Bill. The same applies in respect of amendment No.3. They are designed to improve something which I suspect is unconstitutional and will improve it to the extent that the House would have a specific role — to authorise the making of regulations. I invite the Minister to accept both of the amendments. It is quite clear that there may be majority support for the amendments if put to a vote.
The Bill is a very important one. I said at the outset of my Second Stage contribution and I repeat it now that by and large this Bill has the support of the Fine Gael Party but we are anxious to ensure that the Bill is right and there are not inbuilt problems which could upend if following its enactment. If we enact the Bill containing provisions which are potentially unconstitutional and would allow the Minister to act as a legislator, instead of sections 4 and 5 assisting the Minister, in that he would not have to rush into this House with amending legislation in the autumn or assisting some successor, they could result in the Minister having to rush into the House very soon after the Bill has been enacted. Therefore, I hope the Minister will give some further consideration to amendments Nos. 2 and 3 and consider accepting them.
I would like to add my voice to what has been said in relation to section 4. No doubt it would be an excellent section for any Minister to have in place and if it passes through I think we will find a similar section included in all legislation that goes through the House. For three years he would be able to chop and change anything he liked to remove a difficulty. I am sure the Minister has the best of intentions and I would not disagree with him if he said that this type of power was absolutely necessary. I wonder however whether such a provision is constitutional, or whether it is legally proper to pass a Bill containing a provision which would allow the Minister to change it? The words "necessary" and "expedient" are used but who would decide whether it was necessary or expedient to do so? Therefore, this provision could be used to remove every possible difficulty which may be perceived by the Minister over a period of three years.
I have not seen a similar section included in other legislation. Perhaps it has and I would like the Minister to tell us if this is so. I am not a legal person. Perhaps some of the others in the House can tell us if they have ever seen a similar section included in other legislation. It appears that this is a section which should not be included in a Bill. Where regulations are to be made it should be specified in what area these would be made. This emphasises the need for an amendment of the type we have proposed, which we have proposed to other legislation and which would stipulate that such regulations would have to be approved by the House rather than that they would go through unless annulled within 21 days by the House. I would like the Minister to tell us if a similar section is contained in other legislation and to give us some idea why this section is needed.
I believe that the provisions in section 5 which would give the Minister the power to make regulations to assimilate two codes of law are probably constitutional and free from any major objection. A clear policy is laid out in the section which would enable the Minister to assimilate two codes, introduced into this House in tandem, with a view to having a level playing pitch between the banking system, which is under the control of the Central Bank at present, and the building society system which will be under the control of the Central Bank when this Bill comes into being. I have no major difficulty with the notion of giving the Minister the power to assimilate two statutory codes in any particular way which may be required. If one introduces two separate Bills in an effort to create a level playing pitch between two separate activities, undoubtedly there would be difficulties in drafting in that you do not know what will happen to one on Committee Stage and what will be accepted to make the two Bills diverge as they go through the House. I have no principled objection to the second section. From a legal point of view it does not occur to me that sections 4 and 5 are wrong. However, section 4 is wrong on two grounds, first, there is the question of principle and second the leg of constitutionality. I could also add the question of self respect because if we are legislators it starts as a basic concept here that we should get what we enact in order and we should not put into law a measure with which we are so unconfident and so ill at ease that we have to give somebody else — the Minister in this case — the power to amend it effectively in any way that appears to him to be desirable on the very loose pretext that a difficulty arises.
Deputy Mac Giolla correctly asked what a difficulty is. A difficulty can be virtually anything, it could be something which is merely an unforeseen complication, it could be an administrative burden which was unforeseen and it could be something much more substantial. It could mean that a loophole had appeared in the legislation and that a major abuse seemed to stem from the existence of such a loophole. In those cases the word "difficulty" is so vague as to mean virtually anything. I wonder if the phrase "if any difficulty arises" adds anything to the sense of that section because if a difficulty is something which exists objectively in the mind of the Minister, if it is a set of circumstances which is deemed undesirable by the Minister — which is about the most broad definition you can put on the word "difficulty"— it really means that the Minister is given discretion to amend the legislation in the light of circumstances, to put it no more concretely than that, for a period of three years. Is it necessary to do that?
I agree with Deputy Shatter when he quoted the Cityview Press case of what is required of this Oireachtas before it puts in place any power of delegated legislation to a Minister or other body. It sets out clear policy guidelines and a clear delimitation and circumscription around the power it is giving to whatever body or persons to exercise that power. I wonder if section 4 is enacted in its present form how it could be said that there was any direction to the Minister as to how he should resolve any difficulty he comes across. Is there any direction of substantive policy which is either implicit or explicit in this Bill which would say that the Minister would resolve it in one way rather than another? I do not think there is. In those circumstances, the power given to the Minister is a rudderless one as far as direction built into it is concerned. It is something which is entirely at the discretion of the Minister and in the circumstances it is undesirable from the point of view of democratic principle.
On the constitutionality front the Minister will be aware that more recently the Imposition of Duties Act was challenged and it seemed to be an equally open-ended power given to the Government or the Minister for Finance — I do not remember which — to impose duties of excise or customs on certain goods at will. Even though the Act provided that an order made had to be confirmed or would cease to have effect within a given period, the same principle applied. It is the principle of darning and stitching on the Revenue side, that you give the right to a Minister to plug loopholes or change the law substantially to meet unforeseen difficulties. In this case the words deserve close scrutiny. What do the words "if in any respect" mean? They must mean something, this is not a case of two people leaning up against a pub and indulging in colloquial conversation. The words have a definite legal meaning. It is not to be just a narrow definition, it is to be a liberally construed section. "If, in any respect, any difficulty arises in bringing any provision of this Act into operation ... " That is fairly clear but even in that case there is possibly an argument that it is a limited purpose for which it is reasonable to delegate a power to deal with the issue. The next bit says "or in relation to the operation of any such provision" which is utterly open-ended and deserves close scrutiny. If there is a difficulty of any kind in relation to the operation of any provision of this Bill the Minister may, by regulations, do anything which appears necessary or expedient to him. This is phrased in such a way as to make it deliberately designed to make it non-open to court scrutiny thereafter. It is not even a necessitated obligation under the European Treaty. It means things which are necessary but also things which he thinks are expedient for removing that difficulty — this means a difficulty in any respect — and for bringing that provision into operation, which is a separate matter. He can either remove the difficulty or change the Act to bring it into operation or for securing or facilitating its operation. "Any such regulations may modify any provision of this Act so far as may be necessary or expedient for carrying such provision into effect for the purposes aforesaid." It goes on to say that no regulation shall be made in relation to any provision of this Act after the expiration of three years commencing on the day on which the relevant provision of this Act came into operation.
Why should there be a limit of three years in those circumstances? Is it a concession to the self respect of this House? Will the Minister have a three year trial period in which to iron out difficulties and will difficulties which may emerge up to three years be dealt with by ministerial regulation? If a difficulty arises three years and one month as opposed to two years and 11 months after the date of coming into operation, will amending legislation be necessary? What is the principle behind it? It is sheer and unadulterated lazy-mindedness in the drafting and carelessness in principle as to what the respective roles of an Executive and Legislature should be. It is a lazy-minded, undesirable and open-ended provision which, if it is used, is infirm legally and flawed constitionally.
The Minister has come into the House with a provision of this kind in the Bill and has given as an excuse that the Canals Act, 1986, had a similar clause. However, that was a technical Act which was designed to transfer statutory functions for CIE to the Commissioners of Public Works. It involved a wealth of 18th and 19th century legislation which might pose some difficulties and which, in any event, has not been challenged by the courts. For him to cite that as a precedent is a bit much. The Farm Tax Act, 1985 has gone. That was an entirely new Act of a fiscal kind and all I said about the measure in the Bill before us I would have said, had I been here, about the provision in that Act. If I am right in what I say about the Bill before us I would have been right about the Farm Tax Act. I do not see this as much of a precedent of that kind. Of course, it has the precedent value in that the Minister thinks that by referring to it he can in some sence embarrass any Member who voted for it at the time. Does that carry the issue of principle any further? I wonder if it does. The Minister cited the Valuation Act, 1987——
The Deputy raised his own embarrassment, not me. I did not mention it in that way at all.
I was not a Member to vote and, therefore, I am not embarrassed.
Deputy Shatter would be glad to embarrass those who got involved in that legislation at that time. That is his pre-occupation.
What was transacted here before is a matter of the greatest indifference to me. Precedent is one thing when it is a matter of determining certain issues, such as the order of this House, but as the Ceann Comhairle, and very frequently, the Leas-Cheann Comhairle, are the first to remind me, an error, an omission or an oversight from the Chair is no precedent to cite when one is clearly in breach of other principles. The Valuation Act, 1987 which must have passed while I was a Member, set up this tribunal and it effectively modified 19th century legislation in relation to valuations and the method of deciding on valuations. I will not digress on that subject but I should like to say that the law in that regard is a total farce. To cite it as a precedent before including this section in the Bill is most undesirable.
If this provision is to be included in the Bill before us why is it that it is not included in two or three Bills that go through the House? I can imagine that there are some Bills which are so simple and direct that we might as well leave them as they are, without any right to amend, but certainly every Social Welfare Bill, if this is to become acceptable, should include a provision like this. If a loophole emerges why not plug it? Every Bill of any complexity could be pointed out as legislation that will benefit from having a clause of this kind. We have difficulty here deciding dividing lines between the Legislature and the Executive. Last night I said I thought that Fine Gael in their proposal were trenching into the area of the Executive but in this provision the Executive is trenching into the area of the Legislature. If last night's motion was a bit of political trespass into the realm of Government the provision before us is a fine example of Government trespassing into the realm of the Legislature and asking for powers which they ought not have.
It proves what a confusing place this House is.
I object to this provision in principle and as a matter of parliamentary self respect. I have doubts, certainly in respect of section 4, on a legal and constitutional basis as to their desirability and their validity. In those circumstances the Minister should see his way to accept Deputy Shatter's amendment. In my view it is sensible and restricted in its form. Senator Brendan Ryan asked me one day if there was any excuse for allowing the Seanad to veto every regulation made under any statute. He said it was a non-representative body and it was given equal rights to strike down delegated legislation with the Dáil. That is a wider question but I notice that the Seanad would have the same rights such as they are, the exiguous rights, under the Minister's text and under Deputy Shatter's amendment. If we are talking about being a democracy, when the day comes, as doubtless it will some time, that the Seanad is not controlled by the same power blocs wield influence in this establishment — undoubtedly and statistically it will happen some day — there will be chaos because of the powers that have been given to the Seanad to effectively obstruct any form of Government being transacted in this country. That is something to look forward to. I should like to indicate opposition to this provision and I call on the Minister to indicate that he will either accept the amendment now or introduce on Report Stage an amendment designed to meet Deputy Shatter's worries.
I was rather disappointed with Deputy O'Malley's contribution in so far as it related to the precedents I named in the House concerning section 4. I am disappointed to think that Deputy O'Malley would feel that the House would be less concerned with other legislation than it would be with this. I can see Deputy McDowell's point, that if something is right in one Act it should be right in another. It was not found to be in any way offensive to the House on several occasions when other legislation, with more stringent provisions than that proposed in section 4, was passed. I do not see any legislation being promoted as more important or less important than other legislation. All legislation requires the sanction of the House, the Seanad and the President. He was being somewhat less than complimentary to the Front Bench spokesperson who would have dealt with such legislation. The provisions in other legislation that I offered as a precedent are more far reaching than section 4. Deputy McDowell introduced a political tone to this and I should like to finalise it. If the provisions I referred to were acceptable to Members when the National Coalition were in office I fail to understand why they are so objectionable now. The Deputy introduced the element and I did not offer it as a reason for promoting this provision this afternoon.
I was not a member of the National Coalition.
The Deputy was not; he is not one to get involved in coalitions, yet.
Obviously, the Minister excepts him to be in one after 15 June.
The point is well taken as far as Deputy Shatter is concerned. If the House on previous occasions found it acceptable to have similar provisions of less portent than I am suggesting for this Bill, and did not have any exception to it, why is so much hassle being raised now about a provision that does not go quite as far as the precedents I have quoted? The section does not go as far as similar provisions in the Canal Act or the Farm Tax Act. They allow regulations to modify the provisions of any "enactment" and not just the enactment under which they are made. The section seems to be a sensible provision and it could not be used to change the intent of the legislation passed by the Oireachtas. The whole purpose of it is that it could enable the Minister to deal with an unforeseen technical difficulty that might arise giving effect to any provision. Deputy McDowell did not have any objection to that element of the provision in section 4 as drafted. He found some exceptions to other parts but not to that part and found it reasonable to expect that that might be so. I agree with the Deputy that this provision has to be used carefully and it would be expected that any regulations made in that way would be so used. That is what the Legislature is there to safeguard and guarantee and that is the reason for placing these regulations before the House. I find it incredible that people would suggest to me that those who have an interest in these matters, Deputies, supporters or whoever, might not be aware of these provisions, or might be less aware of them because they are laid before the House and not dealt with in some other way. I do not believe that.
If Deputy O'Malley had his way and if it were to be a case in point that the Minister could subsequently change the wording of this section to put in changes of personalities other than the Minister for the Environment or if he could include any particular words, then of course there would be a good case to be made in support of Deputy Shatter but we can deal only with what is in the text and not with what might be in it if somebody wished to alter it. If one applied that basis of argument to any legislation, one would change the whole tone, purpose and intent of the legislation. That is not the case and so far as I am concerned it is spurious to be putting forward that kind of argument. To make the kind of changes Deputy O'Malley referred to by way of different wording and intent, is a pretty big if. If this happened, if that happened or if certain words were changed, would certainly give a different direction and power to that section, but that is not what we are dealing with here.
I have to say that Deputy Quinn has at least been consistent in hoping that legislation might be processed through the Dáil a little quicker. He is anxious to expedite legislation, and so am I.
He is gone now.
It will help to speed up the process.
The Deputy is a good friend of his and he might convey what I have said here to him.
I will pass on the Minister's compliments to him for leaving the debate.
Maybe he is still listening.
The Deputy can pass on my compliments that he at least had the good sense not to sit here through continuous repetition of the same point ad nauseam.
Deputy Quinn has persistently made the case — and this was referred to also by Deputy McCartan and Deputy Mac Giolla; I think Deputy McDowell might have had the same intention even if not expressed in as straight a way as the other Deputies — for reform to the House. While Deputy McDowell was not in the House, the other Deputies, led by Deputy Quinn——
I heard.
——spoke about reform of the House in dealing with regulations and so on. This was very interesting but was hardly going to be effective in promoting this legislation through the House in a speedier way. If there is a case to be made, and if the House thinks there should be——
A committee.
——a special committee or some other arrangement for dealing with regulations in their totality in so far as all legislation is concerned, that is a matter which should be processed and promoted in some way other than in connection with this legislation. If there is a case to be made for it, then so be it, but it is for the Whips, the leaders of parties of the Oireachtas in its entirety to deal with that matter. I do not think it is a matter for me to deal with here.
Deputy Quinn will forgive me for saying that he represented the fact that there seems to be a better relationship now between the building societies as a collective entity and the Custom House than that which existed heretofore. I agree with the Deputy.
How is that relevant to the legislation?
It is not relevant to the legislation but because the matter was raised on behalf of the Labour Party by their spokesman——
The Minister will chase any here.
I will chase that one anyway.
Does this mean that mortgage interest rates will not go on 16 June?
No, it only means something which is relevant to the Deputy. We are getting amendments from two sources in the Deputy's party but if they managed to get their act together and put them down from one side I would have been much happier.
The Minister will notice that all the amendments from our party are along exactly the same lines.
Every amendment is well noted and well considered. I think the only difficulty Deputy Shatter had with section 4 was in relation to the drafting of the section. I think that sums up the attitude of Deputy McDowell also. They seemed to have difficulty in relation to the drafting of section 4.
It is too wide.
That was the basis for their objection. The Deputy brought to light the Cityview Press versus An Chomhairle Oiliúna as a particular case in point and he wondered if it was considered in the light of this legislation. That is a well known and often referred to case and while I cannot state positively I think it would be normal to except that such a case as that would have been referred to in regard to this matter. However, to put the Deputy's mind at ease in so far as the adviced received and tendered in this regard to the Minister is concerned, legal advice was received following the Deputy's comments on these matters on Second Stage. The Deputy made a very comprehensive contribution on that occasion and because of that I had the matter referred to the Attorney General's Office who are tendering the advice on this occasion. I am quite sure that the Minister's legal department also had an input into the submission to the Attorney General's Office but in the final analysis it is the Attorney General's Office who give the advice. I do not think Deputy Mac Giolla was present when I quoted the precedents I was——
I have taken note of them.
Deputy Mac Giolla might well appreciate that it is not just any difficulty which is involved in that section — it is the difficulty in bringing a particular provision into operation.
Or operating it.
If we want it by extension that might be the case.
Deputy McCartan dealt at some length with reform of the House. He seemed to range quite a long way from the text of the Bill in so far as what he would like in that regard. That is a matter for another day. The Deputy also referred to European arrangements in dealing with regulations and so on but there is no point in my wasting the time of the House in dealing with something which should be taken up at a different level. Deputy McCartan persisted in his view that regulations were difficult to come upon. The question that it is difficult for Members or interested parties to become aware of regulations which apply should be set aside once and for all. It should not be promoted either that there is not a method or means whereby things can be annulled if they are found to be offensive either by interested parties or those representing them in the House.
Deputy McDowell referred to a possible difficulty in so far as its constitutionality is concerned. I am pleased to see that the Deputy has returned to being a good constitutional performer. I remember during a recent debate on other legislation the Deputy tempted the Minister to test the waters of constitutionality. I am glad that the Deputy has changed his attitude in so far as his obligations to the Constitution are concerned in this instance——
The Minister is talking about the Planning Bill. We will deal with the Minister on that and it will be an embarrassing day out.
Now that the Deputy has finally restored his confidence in the Constitution perhaps he would like constitutionality to be a major player in dealing with the legislation.
The Minister's compromise on that will be very interesting to behold.
It is very carefully considered and I think the Deputy will agree that it is as promised.
He has not read the Bill.
In fact the kernel of that Cityview Press case, while well known and interesting in itself, was that the Minister is confined to the powers conferred on him by the legislation and cannot exceed them. I do not think it is possible to exceed that power by taking section 4 on board. That is my attitude to that. It is not unreasonable to ask the House to pass this Bill, as framed.
While appreciating some of the points made by Deputies I think they will agree that all the provisions of section 4 do is empower the Minister to modify the provisions of the Bill by regulation if that technical difficulty arises in enforcing the provisions. The Deputy is quite right in saying that that power will lapse after a period of three years from the date of commencement of the relevant provisions of the Bill.
As I have said, there are similar provisions in other legislation. I do not know whether it is right or proper, or should be conceded, that a Minister should hold up a precedent as being a proper reason for the inclusion of such a provision in legislation but at least it is a good point to make. It seems to me that if Members of the House could find no objection to similar provisions in other enactments, it would be proper and right to promote such a provision at this time.
Listening to all of the cases made I have to say they have been somewhat repetitious. I have not heard any good, case to do down something already in existence in other legislation and which has worked satisfactorily. So be it.
I want to refer to the point of precedent. The Minister has mentioned three previous enactments in which a similar section appeared. Although I have not seen them I take it from the Minister that they are similar, that this provision is almost an exact replica of what appears in three other Acts — the Canals Act, 1986, the Farm Tax Act, 1985 and the Valuations Act, 1987. The first point to be made about them is that they are recent enactments. How did we miss out on the year 1988? However, in the year 1989, we are perpetuating that precedent. It also begs the question: how did Ministers ever manage without this marvellous section in enactments for the previous 60 years?
The second point the Minister made was that everybody in this House passed that provision in those three previous Acts. I should like to know from the Minister whether the relevant section was ever reached in this House in relation to those previous Acts? For example, was the guillotine introduced? Indeed one might well ask: how many sections of this Bill will be reached and debated in the House since it contains 127 sections and five Schedules? Will sufficient time be allowed to debate the whole Bill, every section. Indeed one can ask the question again: was sufficient time allowed to debate those previous Acts in their entirety? Was the guillotine introduced; was this provision ever reached before in the course of debate in this House? The point to be made is it has been reached on this occasion, it is being debated this time; it has not been guillotined because it happens to appear in the first four sections. Probably that is how it was slipped through on the other occasions. The fact that it is now being discussed here can have grave implications. Now is the time to decide whether this is or is not a precedent. A time lapse of three years is a bit much after which to decide one has created a precedent. The fact that that provision was passed in two Coalition Bills gives the Minister a great stick with which to beat the Opposition, saying: "In 1985 and 1986 it was all right; I got it through in 1987 when it was not discussed: now, in 1989 it is being contended there is something wrong with it." The point is that in 1989 we are debating it in this House. The Minister advanced many excuses.
At one stage he seemed to say that he would not be changing the wording of the Bill — I do not know whether he actually said that — but the wording of the whole section as drafted, allows him to do anything which appears to him to be necessary or expedient for the removal of a difficulty. Section 4 also contains the words:
.... and any such regulations may modify any provision of this Act ....
"May modify" means that he may cut out a piece, possibly add a piece, change a piece or omit a section or part thereof. I do not know what "modify" means but I am sure it means all of those things — to effect fairly drastic changes in the provisions of the Bill, because the Minister has power to do so. The fact that he may say: no, I have no intention of doing that cuts no ice with Members in this House and certainly not with me. The Minister may not be in office after another three weeks or whenever; we do not know. Therefore what the Minister says are his intentions are of no consequence. The point is the powers he is given in this section.
The Workers' Party feel very strongly that no Minister should be allowed to have the powers conferred in this section. It makes nonsense of whatever we may say, amend, discuss and agree in all of the other 126 sections and five Schedules of this Bill, if the Minister can chop and change and modify to suit his purpose, as he feels to be necessary and expedient, in order to remove whatever difficulties may arise in enforcing a provision of the Bill. For example, it renders it very easy for a Minister, when a civil servant comes to him and says: look, this is creating great difficulty because, if we do this, that will happen, or whatever, with all sorts of predictions of trouble, expense and so on. It makes it very easy for a Minister to say: do not bother; we will change it by regulation; let us do it this way; is that what you would like? The civil servant will then respond: yes, that is fine. It is as easy as that for three long years. I do not know what will be the implications of 1992 for the provisions of this Bill but it would appear it will have something to do with them.
The Minister has not in any way alleviated my fears in regard to the dangers of a section like this. It is most important that the House is debating the section. Certainly we are opposing it.
Probably we have gone as far as we can in debating this issue. However, I want to respond to two points the Minister made. The Minister wondered why it was that it seemed to be acceptable to have included this provision in other Acts yet it was not acceptable in this Bill. I made the point very specifically that the Criminal Justice Bill, 1984, when published, provided for regulatory powers subject to the nullifying provision. Deputy Woods, of the then Opposition, objected to that. Indeed I and a number of colleagues raised that issue with our party in Government. Because of the serious implications and importance of that Bill it was agreed that it would be amended. The type of procedure I am now suggesting be applied in the context of certain regulations having to come before the House for approval before becoming operative, as is proposed in amendments Nos. 2 and 3, was the exact procedure adopted in the case of the Criminal Justice Act, 1984.
If the Minister wants to throw precedent at me in this regard, if he wished to be consistent with his colleague, from the then Opposition benches, with regard to another measure, he would be willing to accept the amendments I have proposed here. Of course, the difference was that the previous Government were open to argument and discussion, were prepared to be receptive to a constructive proposal to improve a Bill, were not interested in trying to play party politics with it by pointing to the plethora of similar Acts introduced by previous Fianna Fáil Governments in which they would not allow regulations, first, to be approved by this House before becoming operative.
It is open to this House to regard some legislation as having more far reaching implications than others. It is proper for Members of this House to take the view that in some circumstances it is appropriate that regulations be published and become operative within 21 days unless there is a motion annuling them and, in the context of other legislation, it is appropriate that they do not become operative without a debate in this House and a motion approving them. That is what is proposed in amendments Nos. 2 and 3. The Minister has not advanced any good reason he cannot accept amendments Nos. 2 and 3.
We differ on the constitutional implications of section 4. I do not believe there is anything to be added to it other than what the Minister has said — that the Attorney General's office approves of his approach and so do his legal advisers in the Department of the Environment. We now know if that section is ultimately enacted and found to be unconstitutional both the Attorney General's office and the Minister's office will be blamed, therefore, the blame will not be confined to one particular Department.
It has not been unusual in past years for the Attorney General's office to get it wrong on constitutional issues. If they did not get it wrong on constitutional issues so regularly the large number of successful constitutional cases in the courts would never take place. Nevertheless, I appreciate the Minister openly responding and confirming that he did seek advice from the Attorney General's office. I have to put on the record of the House that I appreciate that the Minister looked into the issue when it was raised on Second Stage. While we differ on constitutional issue, I hoped the Minister would have accepted amendments Nos. 2 and 3. If he is not willing to accept this, I am anxious, like other Members of the House, to deal with other sections. I think we should now deal with the particular amendments before the House.
May I make one short comment, and I do not wish to prolong the matter. In fact, in some way Deputy Mac Giolla makes my case.
I have made the Minister's day.
Not my day but the Deputy has made my case in this regard. Perhaps this might help the Deputy to readjust his attitude towards this amendment in so far as he made a big point about the existing legislation to which I referred that had similar provisions that is, that they were less than three years old or something to that effect and that an opportunity had not yet been availed of to test them. That was the kernel of what the Deputy said. Of course that is not true. It is true that the provisions I am talking about might last three years as well but this proves the point that they are only needed to help to introduce and facilitate the legislation and that the three year proviso might just fall into place with what the Deputy has said.
This is the most convoluted language I have ever heard in my life.
The Deputy said that three years was not an adequate time scale in which to test the other Acts. I am saying that three years is all I am asking for in this instance. As far as Deputy Shatter is concerned, I cannot accept amendments Nos. 2 and 3. I am not prepared to ask the House to get involved in a situation where every regulation for every single item, minor or major, that attaches to the introduction of any legislation will come in here and delay the time of the House, which is precious, in that way. It is not necessary. If the Deputy wishes to pursue the question about some other arrangement for dealing with regulations attached to all legislation then, of course, it is open to his party leader to do so. I think, and it was conceded by Deputy O'Malley, that that would be an unnecessary intrusion in the business of the House.
Amendment put and declared lost.
I move amendment No. 2:
In page 10, subsection (4), line 43, after "Act" to insert "save for regulations made pursuant to section 4, 5, 31 and 32 of this Act".
Amendment put.
The Committee divided: Tá, 40; Níl, 65.
Tá
- Barnes, Monica.
- Barry, Peter.
- Begley, Michael.
- Birmingham, George.
- Bruton, Richard.
- Carey, Donal.
- Clohessy, Peadar.
- Cosgrave, Michael Joe.
- Creed, Donal.
- Crotty, Kieran.
- Deenihan, Jimmy.
- De Rossa, Proinsias.
- Dukes, Alan.
- Durkan, Bernard.
- Enright, Thomas.
- Farrelly, John V.
- Flaherty, Mary.
- Flanagan, Charles.
- Gibbons, Martin Patrick.
- Griffin, Brendan.
- Harney, Mary.
- Hegarty, Paddy.
- Hussey, Gemma.
- Kemmy, Jim.
- Kenny, Enda.
- McCartan, Pat.
- McCoy, John S.
- McDowell, Michael.
- McGinley, Dinny.
- Mac Giolla, Tomás.
- Mitchell, Jim.
- Nealon, Ted.
- Noonan, Michael.
- (Limerick East).
- O'Brien, Fergus.
- O'Keeffe, Jim.
- O'Malley, Pat.
- Shatter, Alan.
- Sheehan, P.J.
- Wyse, Pearse.
- Yates, Ivan.
Níl
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Andrews, David.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brennan, Matthew.
- Browne, John.
- Burke, Ray.
- Byrne, Hugh.
- Calleary, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Gallagher, Denis.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Haughey, Charles J.
- Hilliard, Colm Michael.
- Hyland, Liam.
- Jacob, Joe.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- Mooney, Mary.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J.
- (Limerick West).
- Connolly, Ger.
- Coughlan, Mary T.
- Cowen, Brian.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- Ellis, John.
- Fahey, Frank.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- Foley, Denis.
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Rourke, Mary.
- Power, Paddy.
- Roche, Dick.
- Smith, Michael.
- Swift, Brian.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Walsh, Joe.
- Walsh, Seán.
- Woods, Michael.
- Wright, G.V.
Tellers: Tá, Deputies Flanagan and Durkan; Níl, Deputies P. Gallagher and D. Ahern.
Amendment declared lost.
Amendment No. 3 not moved.
Section 3 agreed to.
SECTION 4.
Question put: "That section 4 stand part of the Bill."
The Committee divided: Tá, 65; Níl, 31.
Tá
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Andrews, David.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brennan, Matthew.
- Burke, Ray.
- Byrne, Hugh.
- Calleary, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Mary T.
- Cowen, Brian.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Ellis, John.
- Fahey, Frank.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- Foley, Denis.
- Smith, Michael.
- Swift, Brian.
- Treacy, Noel.
- Wallace, Dan.
- Gallagher, Denis.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Haughey, Charles J.
- Hillard, Colm Michael.
- Hyland, Liam.
- Jacob, Joe.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- Mooney, Mary.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J.
- (Limerick West).
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Rourke, Mary.
- Power, Paddy.
- Roche, Dick.
- Walsh, Joe.
- Walsh, Seán.
- Woods, Michael.
- Wright, G.V.
Níl
- Barnes, Monica.
- Barry, Peter.
- Begley, Michael.
- Birmingham, George.
- Bruton, Richard.
- Carey, Donal.
- Cosgrave, Michael Joe.
- Creed, Donal.
- Crotty, Kieran.
- Deenihan, Jimmy.
- De Rossa, Proinsias.
- Dukes, Alan.
- Durkan, Bernard.
- Enright, Thomas.
- Farrelly, John V.
- Flanagan, Charles.
- Griffin, Brendan.
- Hegarty, Paddy.
- Hussey, Gemma.
- Kenny, Enda.
- McCartan, Pat.
- McGinley, Dinny.
- Mac Giolla, Tomás.
- Mitchell, Jim.
- Nealon, Ted.
- Noonan, Michael.
- (Limerick East).
- O'Brien, Fergus.
- O'Keeffe, Jim.
- Shatter, Alan.
- Sheehan, P.J.
- Yates, Ivan.
Tellers: Tá, Deputies P. Gallagher and D. Ahern; Níl, Deputies Mac Giolla and McCartan.
Question declared carried.
Section 5 agreed to.
SECTION 6.
Amendment No. 4 in the name of the Minister. Amendment No. 6 is consequential. I am suggesting, therefore, that we discuss amendments Nos. 4 and 6 together. Is that satisfactory? Agreed.
I move amendment No. 4:
In page 12, subsection (1), line 1, to delete "subsections (2) and (4)" and substitute "subsections (2), (4) and (5)".
At present building societies which comply with certain requirements have the power to make unsecured loans for house improvements in accordance with paragraph 4 of the Building Societies Regulations, 1987, which were made under section 3 of the 1986 Act. This amendment will ensure that any society which is entitled under existing legislation to make such loans will continue for a transitional period to be entitled to do so despite the repeal effected by section 6 of the Bill.
The corresponding power in this Bill is contained in section 23 (1) (e), but since this, being unsecured lending, is an adopted power it cannot be exercised until passed by special resolution and approved by the Central Bank. However, once a society adopts a memorandum containing whatever power wishes to adopt, this transitional provision will cease to have effect as each society will then have had the opportunity of deciding which powers it wishes to adopt. All existing societies must, under section 124, adopt a memorandum within two years of the commencement of the section. I recommend the amendment to the House.
Amendment agreed to.
I move amendment No. 5:
In page 12, lines 14 to 18, to delete subsection (3).
This amendment proposes the deletion of subsection (3) from section 6. This section deals with the question of redemption fees. The Minister has said that this Bill is designed to give a better deal to the house purchaser and the consumer. The case is made in the context of section 6 (3) that it is appropriate in the context of fixed interest loans for building societies to be able to charge redemption fees to the borrower who wishes to redeem his loan at an early date. The Building Societies Act, 1986, prohibited the general charging of redemption fees by building societies. This applied to all loans, including fixed interest loans. That Act was effective in curtailing building societies from exploiting their position in the market by penalising borrowers who sought to repay their loans at an early date.
There is an argument that there should be a different approach to loans based on a fixed interest rate as opposed to other loans. I am not totally convinced that it is necessary under this Bill to reintroduce redemption fees, which were abolished as short a time ago as 1986. I would also question whether it should be possible for building societies to seek redemption fees in the context of loans which may have preceded 1986. It seems to me to be creating a situation that there are fixed interest loans taken out in the period 1986-89 up to the enactment of this Bill, without risk of having to pay redemption fees, but this Bill will now reintroduce redemption fees in respect of those loans. Perhaps the Minister could clarify what his reasons are for including subsection (3) in the Bill and indicate why he believes it is necessary to change that aspect of the 1986 Act at such an early date.
Section 6 (3) simply provides that the prohibition on the charging of redemption fees will not apply in the case of certain fixed interest rate loans, that is, loans where the rate of interest is fixed for a period of one year or more. My purpose in this is to ensure that there are no barriers to societies providing fixed interest rate loans. I want them to be able to do this. As matters stand, the blanket ban on redemption fees would mean that it would be commercially unattractive for building societies to offer fixed rate loans, because societies could face a loss where borrowers opted to redeem their loans at a time of falling rates, while societies would be stuck with paying a fixed rate on the moneys they had raised to fund those loans. I would like to make it clear that the charging of redemption fees will continue to be banned on all variable rate loans, that is, ordinary mortgage loans. It is to help to provide a better, wider range of facilities.
I wonder does the Minister have any statistical information that he can supply the House as to the number of fixed interest rate loans made by building societies in respect of mortgages in each of the years from 1980 up to 1988. Could the Minister indicate what portion of the mortgage market is involved? Could he indicate, for example, what would be the position of someone who took out a fixed interest rate loan in 1987 or 1988 in the belief that if they redeemed their mortgage the question of a redemption fee would not arise? Does the Minister have any statistics to indicate, for example, that there were no fixed interest rate loans made available by building societies during that time because of the impact of the 1986 Act acting as a disincentive?
I am trying to be helpful in asking this. I want to tease it out, and I am open to argument; but I am concerned about the impact of this. The rules were changed in 1986. It put people on fixed interest rate loans in a position where they could redeem their loans without paying redemption fees. That position pertains up to now. There are two sets of people now who have problems. There are the people who took out loans prior to 1986 and found their situation improved by the 1986 Act but who now find that if they have not redeemed their loan in the intervening period they will be back in the position where they could be liable to redemption fees. At least those people when they took out their loans originally knew they were at risk of redemption fees. There may be a second group of people who took out loans between the enactment of the 1986 Act and the coming into force of this Bill without being at risk of redemption fees and who are now going to find their mortgage arrangements are retrospective varied by the provisions in this Bill, and I would be concerned about that.
I do not know whether there are such people. I would ask the Minister to do some homework on this and come back to the House on Report Stage. If there is an argument for redemption fees being applicable to new fixed interest rate loans in that this provision coming into operation would act as a catalyst to the building societies to provide fixed interest rate loans when they have not provided them or have provided very few in the last two or three years, there would seem to be at the very least an argument that anyone who got one between 1986 and 1989 would retain an exemption from liability for redemption fees because they took out their loan at a time when they were not at risk of redemption fees since there was a statutory prohibition on them.
It is important to have the relevant information from the building societies. I specifically introduced this proposal to delete this subsection from the Bill on Committee Stage so that we could tease this out and I could hear the Minister's thinking on it and we could find out who will be affected by this. I am not sure to what extent the 1986 Act has acted as a disincentive to building societies providing these loans. I am not sure to what extent loans of this nature have been playing a substantive role in the market in recent years. They may have been a feature of the fifties and sixties, but to what extent they have been a feature in recent years with variable interest rates is questionable. They were more a feature of my childhood days and possibly the Minister's childhood days than a feature of the current market.
Then again it may be the case that building societies might to some special customers offer a concessionary arrangement by giving them a fixed interest rate loan that they may not be prepared to give to others. For example, would I be right in saying that perhaps the employees of building societies would get fixed rate loans? Perhaps those in a managerial position in building societies get fixed rate loans. I want us to tease out who in reality is getting them at present. Perhaps the Minister could give the House some information on that aspect of matters. I would assume that anyone who is an employee of a building society would get a concession, as do bank employees, in regard to the interest they pay on loans raised for housing purposes. We need to tease out who would be affected by the change in the law being brought about which will reintroduce and impose an additional payment on the house purchaser and, in a sense, penalise someone who has a mortgage for seeking to pay off the capital sum due on that mortgage at an earlier stage.
I have one final point. The rationale is that the building societies themselves may have entered into loan arrangements with the moneys they are providing for long term fixed interest loans. Of course, if the building society realises its capital at an earlier stage there is nothing to stop it either making that capital available for a loan that is not on a fixed interest rate, and possibly giving them a greater return, or investing those moneys themselves in whatever way they deem appropriate. It would seem that the rationale the Minister gives, that the building society might be financially disadvantaged, does not at first sight stand up. I would ask that the Minister clarify that aspect of the reasoning behind that subsection.
It is more or less what I feel is the situation. I do not want to create any barrier to fixed interest rate loans in the future. It is as simple as that. There have not been any taken out since 1986 and the 1986 legislation is what stops them. I want that option to be there. As far as I understand, there have been no fixed interest rate loans since 1986. The situation is beginning to develop in the UK that it is coming back in as a very satisfactory option, and I would like that option to be there. If there are people who took out fixed interest rate loans between 1986 and 1989, I can do something about them. This move is purely to give a wider option to mortgage seekers.
To conclude on this matter, if the Minister could make those inquiries and come back to the House with that information on Report Stage I would be prepared not to push this amendment at this stage. I will withdraw the amendment and we can reconsider the issue on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 6:
In page 12, between lines 18 and 19, to insert the following subsection:
"(4) A society that, immediately before the repeal of section 3 of the Building Societies Act, 1986, is entitled, by virtue of that section and regulations thereunder, to make loans to members for the purpose of carrying out improvement works to a dwelling shall continue to be entitled to make such loans as if that section had not been repealed until, but only until——
(a) the date on which the memorandum of the society takes effect in accordance with section 124 (8), or
(b) the date on which the power to make loans under section 23 (1)
(e) becomes exercisable by the society.
whichever is the earlier.".
Amendment agreed to.
Section 6, as amended agreed to.
Progress reported; Committee to sit again.