Dáil Éireann debate -
Wednesday, 4 Jul 1990

Vol. 401 No. 1

Private Members' Business. - Insurance Bill, 1990: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Rabbitte

Before the adjournment of this debate I was about to conclude by saying that The Workers' Party will be opposing this Bill. As far as we are concerned the capital restructuring of Irish Life is a completely separate issue from its proposed privatisation. A case may be made for a restructuring — which would give shareholders a right to a greater share in the company's profits — but this is not a case for privatisation. Those pushing for privatisation are trying to merge the two issues simply because the case for privatisation is so weak.

The Irish Life board have taken the decision to maintain their dominant position in Ireland and to expand abroad. This is exactly the same corporate policy adopted by companies like Cement Roadstone and Smurfit whose growth abroad has produced little benefit in Ireland. The expansion of life assurance business abroad is likely to produce even less benefit at home because of the need to meet the requirements of local states with regard to investment policies and so forth. Indeed, initially it is likely to drain capital out of Ireland to meet foreign solvency ratios.

Experience in Britain would indicate that the financial community has a lot to gain from the offer of sale of Irish Life shares. The costs of such an issue would be heavy. There would be rich pickings for stockbrokers and the financial institutions from fees and commissions. The relatively small number of private Irish Life shareholders, who include some stockbrokers, would make a killing in the event of privatisation.

Irish Life hold strategically important stakes in a wide range of Irish companies; its vote maintains Cement Roadstone Limited in Irish hands and could have determined the outcome of the battle for Irish Distillers. It may not be possible for the State to maintain voting control of Irish Life in the new circumstances.

The sale of Irish Life would be in clear breach of the commitments given by Fianna Fáil in the very recent past and would be in conflict with the spirit of the commitments given by the Government to the unions during negotiations for the Programme for National Recovery which have not yet expired. The pressure for privatisation is coming from speculators who would wish to make a killing on the Stock Exchange in the event of the sale and from senior management within Irish Life who would stand to benefit financially from privatisation as they would then be freed from Government imposed restrictions on salaries of executives in the public sector.

Given the experience in the case of the PMPA and ICI — both of which had to be rescued by the State — it would be an act of folly to risk handing over Irish Life to the private interests who made a botch of both those companies. If Irish Life has to be sold off if would be virtually impossible to prevent its control passing outside the country. The main argument advanced for its privatisation is the restrictions which exist in some States in the United States on State-owned companies. I contend it would not be beyond the ingenuity of Irish Life to find a way of operating within the existing US legislation, so that argument no longer holds water. As one of the most important financial institutions in the country, Irish Life should have a crucial role to play in stimulating employment, especially in the construction industry, and would be a major force for urban renewal.

The priority should not be expansion in the US but increasing investment here. Irish Life, unfortunately, was just the first target. If the Government are successful in steamrolling through the sale of Irish Life to private interests, then we can expect a number of the more profitable and successful State companies to follow. Irish Life's contribution to the economy cannot be measured simply in terms of the dividend paid to the State but rather in terms of the impact that the proper use of its assets, which are worth about £4.5 billion, could make. The suggestion that the proceeds of Irish Life could be used to reduce the national debt makes very little sense. It is tantamount to selling off the pots and pans to pay the gas bill.

It is a shame if the Government persist in their determination to take the Committee and Final Stages of this Bill in three hours next week. A great deal of misleading information has been put out about the significance of the decision we are about to make. Even the commitment so recently given by the Minister for Finance concerning the use of the golden share has been proved to mean, according to the Minister himself, that he is only going to hold out the prospect in order to kill off the golden goose. What he is doing is tantamount to theft on a large scale from the Irish people.

Mr. Nolan

I welcome the opportunity to speak on this major legislation. I compliment the Minister for Finance and the Government on bringing it forward. Unlike the two previous speakers I am satisfied that the Government are taking the correct road in agreeing to the privatisation of Irish Life. The original corporate objective of Irish Life as set out in its memorandum of association was to carry on the business of life assurance. The context in which it was established was such that it was to act as a rescue agency for several small firms who got into difficulties in the thirties. That objective has now become irrelevant and the company has formulated a new corporate strategy. Indeed it is interesting to note that similar circumstances occurred recently in the insurance field when the Government had to step in in a similar capacity to help out in regard to PMPA and ICI.

The Government agreed in July 1988 that Irish Life should be restructured to facilitate its development as an Irishbased institution in the financial services area. It is important to reiterate that privatisation would enable Irish Life to overcome, on a permanent basis, the problem of the legal objections of certain states in the United States to foreign Government controlled companies operating within their jurisdiction. It is only fair to say, because it has been mentioned by a number of speakers, that Irish Life are in fact doing business in the United States. They are, however, doing so by means of a back door method which a French company used; the procedure was called the voting trust where a majority of the trustees of these companies were to be US citizens. While this might be a shortterm solution to getting into the expanding US market, for an international company of the size of Irish Life a more permanent footing is needed.

Irish Life has, for some time now, sought a change in its structures. This will have the effect of allowing Irish Life to expand and it will also allow the State to realise some of the assets that could be used to benefit the Exchequer. Some recent figures have been put on the value of that to the State as being £250 to £300 million. Apart from that there is also the added interest which normally the Government would have to pay to service such a loan, and if this were to be used to defray some of the colossal national debt which we have, about £2,000 million, that £250 million might seem insignificant. However, if the £20 to £25 million interest payments which occur on an annual basis were to be added to it, over a ten year period the Exchequer would see the value of realising some of its assets in Irish Life.

Reference was made to the fact that the unions in Irish Life are dissatisfied with the privatisation of their company. It is worth noting, however, that the Minister and the Government have secured in the legislation the golden share option and this has been used successfully by the British Government in the privatisation of such companies as British Gas, Jaguar, Rolls Royce and the British Airport Authority, where it has worked very effectively.

It is important not to underestimate the value of Irish Life in the Irish assurance market. It is the leading company in this market, currently holding something like 40 per cent of the Irish assurance market with total funds and reserves now in the region of £4.56 million. Great credit must go to the management of Irish Life for the manner in which they have conducted the business of Irish Life because they have been allowed by successive Governments to work on their own, independent of departmental or Government interference to a large extent, and the company have been successful within the confines of the legislation and how they can operate. They have been hamstrung by legislation and from a general viewpoint I do not think there is any reason for the State to involve itself in life assurance. I do not, therefore, understand some of the comments from the Labour and Workers' Parties as to why they do not see a bright future for the company as an independent, to a certain extent, commercial entity. It is worth noting and restating that the Government will not give total control to the private sector in this. They will have a major role to play in the new company that is set up.

A lot of comment has been made about the solvency ratios of Irish Life. Irish Life are rather unique in that they enter into commitments with policyholders which extend over many decades. For that reason the consumer must be satisfied that the office will be there to fulfil its commitments when these policies mature. A much higher level of solvency is demanded of life assurers than of most other forms of enterprise. The life assurance company must not only demonstrate that they are not insolvent in the conventional sense, that assets exceed the real value of liabilities, but that they possess a great degree of solvency. In the first instance, they must demonstrate that they have assets in excess of their actuarial liabilities. As I understand it, these are assessed within the regulatory constraints by the company themselves, having regard to future projections. In addition, the company must have sufficient surplus to meet future requirements. It is important to state that the purchaser must have confidence in the company with which he is dealing. It has been proved down through the years that Irish Life's policyholders have the utmost confidence in them.

As I have said, the company have worked with little if any direct interference from the Government. They have been allowed a free hand with minimum State interference. This company have succeeded in what many people would say is a very competitive area. Given that they will now be freer to seek business and to seek funding from outside the State, they can continue to prosper. From the point of view of the State and the Government, we can get a better return on our investment.

The primary function of this legislation is to enable restructuring to take place, and the sooner this happens the better. For a long number of years we have been listening to commentators saying that Irish Life should be privatised as soon as possible. It is timely that that is happening now so that the new companies will be set up and ready for the internal market in 1992. As a quoted company, Irish Life will have access to very substantial resources which will assist in their expansion not just at home but also abroad. As a result of the internal market there will be great potential for this new company.

The sale of the Minister's shareholding following restructuring will yield a significant capital gain which can be used to the benefit of the Exchequer. It is important that this matter be referred to again. Because of the substantial burden of the national debt and the interest payments on that debt, it is important that the Minister should do everything within his power to try to reduce that debt. It is also important that the company develop their management skills further in order to take advantage of the opportunities afforded to them following the passage of this legislation. As I have said, the track record of the company has been first class to date and I have the utmost confidence that they can build on their successes.

Finally, we must build on the strength of the successful firms in this country in developing the economy further. We will need to rely on the skills and experience of companies such as Irish Life to ensure that every advantage is taken with the opening up of the financial markets in the EC in 1992. I hope this legislation will be passed not just by this House but also by the Seanad, prior to the summer recess. I wish the Minister every success with the legislation and I wish the new restructured company continued success. I have the utmost confidence that they will become a major financial player in Europe after 1992.

Mr. Durkan

Unlike most other people in this House, I do not have hard and fast views as to the correct procedure to follow in relation to this legislation. I have listened to the previous speakers extol the virtues of privatisation and public ownership. Solid arguments were put forward on both sides. There is a lot of expertise in this House and, indeed, outside it. I often wonder how one would define "expertise." I used to believe that the real experts are those who know when to call in the experts, but I am not sure if that is valid at present. Quite valid arguments have been put forward both for and against privatisation. In the past, both in the case of public and private ownership, difficulties have arisen for a variety of reasons, some due to market forces, some due to bad management and some due to circumstances outside the control of the companies concerned.

As previous speakers have said, the origins of Irish Life are well known. The company were formed as a result of the collapse of a number of companies and the need for insurance cover in various areas. Since then, admittedly, developments have taken place which seem to raise the question as to the validity of continuing on that course. Arguments have been put forward by Deputy Rabbitte in relation to the attractiveness of privatisation as a means of getting away from public service pay embargoes and so on. This brings us back to the arguments we have often heard in this House regarding the need to provide for our public servants an adequate pay structure so as to attract the right people into the service. That argument is not valid at present.

I wonder whether we can take the question of privatisation versus public ownership in isolation or whether we have to examine, as previous speakers have said, the implications of 1992 and liberalisation and the effect it is likely to have on the State or semi-State sector. Without doubt, the effects on the insurance industry will be considerable, both positive and negative. One question which comes to mind is whether the changes that will take place will be beneficial to the consumer.

Irish Life have been a very successful company and have provided a great service to the people. I will deal later with the difficulties experienced by the consumer on occasion in extracting from assurance or insurance companies their rewards at the time they are due. Generally speaking, Irish Life have done a good job and have come through the difficult times of the late thirties, the forties and the fifties. It has laid a very firm structure on which to operate. The question arises as to whether they might be better served by being private or semiprivate. The procedure proposed by the Minister is probably based on the British model which has seemed to be fairly successful so far. However, there are downsides. The Minister could find himself at some later stage having to face a liability in the event of some difficulty arising and pressure being brought upon such a company, since developments of a highly competitive nature are likely to take place. Murphy's law must always apply — if something can go wrong it will go wrong.

The Government seem to have adopted the policy of realising certain assets in order to balance the books or improve the budgetary position. That is quite all right. The previous Fianna Fáil Government decided on an extensive campaign of realising assets in the national housing stock and bringing forward ten years' sales in order to capitalise and achieve a lump sum in a single year. It was very successful but there will be a void for at least eight or nine years to come. No Minister can dip into that area for a considerable time.

In this case we are informed, according to today's Press, that the Minister was somewhat concerned at what he saw as the lethargic progress of this Bill through the House. He saw this as an impediment to his objective of balancing the books. Once this asset is realised it will not be available for future use. There could well be a negative element in the event of international competition creating a situation where the Minister might inherit a liability. That element has not been referred to, except by my colleague, Deputy Noonan. With all the positive elements of such packages there is also the other side of the coin.

I want to refer briefly to the general insurance and assurance position and ponder on how this is likely to develop in the years ahead and whether it will be to the advantage of domestic consumers, both policyholders and shareholders, many of whom may be outside this country after the passage of this legislation. In the free and open market there is likely to be less emphasis by an international company on ensuring that the bulk of their business is carried out on home soil. It is a very competitive business and many of the multinationals, some of them Irish corporations, have found it more lucrative to operate abroad rather than at home because the economic base here is somewhat limited. This brings us to the reason for proceeding with this legislation.

It is unfortunate that life assurance and pensions seem to be lucrative areas, while motor, fire and other high risk areas are not so lucrative and there is no rush from any quarter to become involved in this sector of the market. I regret that a little more care and attention has not been shown for those areas which have caused considerable problems for Irish consumers over several years and will continue to do so for years to come. Is there any way the Minister could introduce some element which would be seen by the people who seek motor and fire insurance to protect their interests in that they may see on the horizon the possibility of reduced premiums? They are two separate areas but it is all insurance or assurance. The average Irish consumer will see a new company of international standing forging ahead and will ask why some of the benefits of this expertise cannot percolate into the area of motor insurance.

An Ceann Comhairle

The Deputy is deviating somewhat from the subject matter of this Bill. He may certainly make a fleeting reference but he should not continue to deal with a very distinct and separate aspect of insurance.

Mr. Durkan

I refer to this because it is an issue I have raised on numerous occasions. It is raised every time life assurance is discussed. Questions are asked as to why one side of the insurance industry is so profitable and the other such a burden on the consumer. The point is well made.

The responsibility of any insurance company to policyholders has been discussed at considerable length by speakers on both sides of the House. I hope this responsibility will be borne in mind by the company under the new structure and by the Minister. He should use his influence through the agency which will remain open to him in the new structure to ensure that the interests of policyholders are brought to the fore and that they get the benefit. Their money will provide the cashflow and it is important that the interests of those people should be borne in mind.

I compliment Irish Life and other companies in the same business on the work they have done in providing pensions and life assurance. They have done an extremely good job, sometimes in a rather difficult climate. Many firms have availed of facilities offered by Irish Life. The construction industry organised pension schemes through Irish Life which were years ahead of their time and gave great financial support to the people involved in that industry. From my dealings on behalf of constituents with life assurance companies there has often been a reluctance to place the same emphasis on the small print at the bottom of the page compared with the large, glossy, glaring headlines at the top of the page. Very often when somebody dies unexpectedly the company goes into the long history of the cause of death and why a certain condition was not brought to the attention of the company at the time. In the context of the proposals before us now, I wonder whether matters will change for the better or for the worse. There may well be a tendency for things to change for the worse from the policyholder's point of view, but I sincerely hope that will not be the case. I am not referring specifically to Irish Life but this applies to almost all companies who deal in this type of insurance. Obviously life assurance has been regarded as a lucrative area.

How well will the newly named Irish Life Company compete with companies from France, Germany and Holland in the period post-1992? I know the Minister and various Members, including some on this side of the House, will say that they will compete more effectively on the basis of the proposed structures than they could have done otherwise. The same argument has been applied to the cooperative movement. However, questions have been raised in recent times as to whether that is true. Again, it may be no harm to weigh the benefits against the negative aspects and we must ask whether circumstances will be similar in ten years' time as they are now. We should also consider how the company will react to competition from European companies who will be able to operate there in a free market.

Deputy Rabbitte quoted a former managing director of Irish Life suggesting that we move more money out of the country, but I cannot verify that other than say that I heard it in the House today. If there is a recession in this country, or the economy is in the midst of a downturn, the tendency is to move money out of the country. That may have the effect of giving the company an immediate artificial injection, but it does not do a great deal of good for the country. If a company's development has slowed down, or failed to make progress, one of the oldest and accepted ways of dealing with this is to trade out into a better area through the procedures that are normally available to them. That applies, in particular, to the property market in which insurance companies, and Irish Life in particular, have a considerable interest. However, the tendency to take the easy option and to move money into what appears to be more lucrative areas is all very fine but if you want to make real profits — that being the general idea — the obvious thing to do is to reinvest where you are, even when times are bad, on the basis that you will get the benefit when improvements come about. Insurance companies, the banks and the building societies and all those involved in lending money to the building industry find it hard to accept that fact and they find it very hard to wait while they find it quite easy to sell their mortgages, insurance policies and pension plans. This should be borne in mind in case at some later stage if the economy is not going too well two or three large insurance companies decide to move out of the country in order to protect themselves and improve the structure of their own firms. I do not think this is necessarily a good thing. I think there is room for a blend which should not necessarily be dictated by the health of the economy in the parent country at any given time.

We saw the collapse of ICI and PMPA — two totally different situations, of course. Problems arose within these companies in the past five or six years. The State had to bail out these companies which had traded into difficulties. They did not get into difficulty overnight and this did not befall them some morning at 5 p.m. or at 9 o'clock when the computers went into operation. It happened over a period of time. During the ICI debate, I remember asking why nobody had shouted "stop", or nobody had put the brakes on, and how the situation could have developed to such an extent that a problem affecting the whole insurance and banking industries should suddenly have erupted with possible dire consequences for the Exchequer and for the whole country. I hope we have learned a lesson. I hope there are sufficient safeguards in this legislation to protect the Exchequer, the taxpayer and, indeed, the economy as a whole. Many of these corporations have far bigger budgets than this country has. The frightening aspect is any move out of the country, particularly by companies who have had the advantage of having been State or semi-State companies and have benefited from that protection over the years. While it is easy to say they can develop better in open markets, we must ask whether they are fully aware of the competitive element they will face as soon as they are in the open arena.

Again and again we hear about the level playing pitch in the post-1992 period. We hear about the goal posts being moved or changed, perhaps the goal posts may be narrowed in the future which will make matters more difficult or, at least, seemingly more difficult for companies who have enjoyed the privilege of being State or semi-State companies sheltered from the threat of outside predators.

In conclusion, I would again like to comment on the building industry which I have already referred to briefly. I hope we will not be in the situation where this company, or a multiplicity of companies, might find it more lucrative generally to become involved in the construction industry in other countries at a time where there is a downturn in our own economy. If that were to happen we could have a very serious problem on our hands. The company would have a very healthy balance sheet and operate satisfactorily but they would have moral and financial responsibilities to the people of the country.

The State used to provide funding for low cost housing for those in the lower income group but the number of people now in that market are very few and far between. I am sure that we will have the opportunity to refer further to this point in another debate. I would point out to the Minister that the majority of Irish people are not multimillionaires and those people on low incomes cannot get large mortgages from insurance companies, banks or building societies, nor can they get SDA loans or HFA loans. I am sure that other Deputies would agree that the number of people in this position is growing. People who have good incomes and the ability to save can get loans from an insurance company, building society or bank but the people who would previously have qualified for an SDA or HFA loan are finding it increasingly difficult to obtain house mortgages. In the event of the State not directly providing loans for these people there should be a moral responsibility on companies such as Irish Life to make some provision for them. In fact, the Minister for the Environment has stated that these people should apply to such companies for loans. The chances of these people obtaining house finance at present are very slim, and they are getting slimmer.

With the growth of "yuppieism" over the past couple of years there seems to be a tendency to accept the standard that the fittest shall survive. We are inclined to forget and neglect those people who ten years ago would have expected to be able to provide for themselves at no cost to the State. These people are being pressurised to the extent that they cannot obtain mortgage finance from the usual sources. They will be left to live in bad housing and the State will ultimately have to house them through one means or another. I do not think that is a healthy process and it should not be ignored in this debate.

As I said at the outset, there are divided views on the advisability of proceeding in the way proposed in this Bill. However, it is only with the passage of time that people will be able to say whether the Minister was right and the experts on all sides of the House will find out whether they did the right or the wrong thing. It is essential that those Deputies who have experience in this area should put their views on the record of the House. Even with all the expertise available, experts have been proven to be wrong before and as time goes by no doubt they will find out that they are not infallible.

Mr. M. Higgins

I should like to refer to some of the comments made by previous speakers. Deputy Durkan made some very interesting points but in the latter part of his contribution he used the phrase "I would hope" again and again. It is worth noting that this debate is about the disposal of a State asset. It is important to remember just what a State asset is: it is an asset held by the institutions of the State responsible to the elected people in this House for all the people. It is about the taking of an asset secured by statute. There is agreement between the two major parties on giving this Bill a Second Reading. Yet they have used the phrase "I would hope". This is like saying "I will sell you my horse but I would hope that you will treat him well".

Deputy Durkan also used the phrase "it is only with the passage of time that we will know". I can tell the Deputy that we do not have to wait to know what the outcome of this Bill will be. There is nothing original in this proposal. These views — I will refer in a moment in detail to what I mean — are old hat. Anyone who is half literate economically only has to look at what has happened in Britain. These are pieces of furniture moved from the secondhand shop of Thatcherism. One may say that they have been around since 1972 — I will refer to this in a moment — but the opposite of these proposals were advanced in 1972. Their arguments were borrowed arguments and they were debunked.

Deputy Nolan in his enthusiastic speech about the golden share referred to Jaguar. That was a very bad example because it was the failure to use the golden share which allowed a Ford bid for Jaguar. Deputy Nolan should know that and I am sure the Minister could tell him that this is so. There is also the scandal which has been revealed about Ministers in Britain who could have used the golden share and who now sit on the boards of companies which were affected by the decision not to use the golden share. I am not going to make any allegations about the Minister or any member of his party in that regard. What I am simply saying is that we do not have to wait to see what the outcome of the Bill will be; the evidence is there in Britain about much of this.

I want to refer to other points made by Deputy Nolan and the scandalous abuse by the monopolised media of their position. A headline in one of the evening papers more or less suggests that there will be a tax bonanza for the taxpayers if the Minister manages to get away with this legislation before the summer. In fairness to the Minister, he has continually disabused the Irish public of such a facile notion. It is very interesting to ask why this headline is in the front page of this particular paper. Perhaps it is not unrelated to the ownership structure of that paper which is part of the monopolised print media. Their concentration of power and share ownership in the Irish print media — I repeat this every week in this House — is one of the things which would not be tolerated by people who purport to believe in the market in any civilised country in the world. The idea that a single individual could control so much, perhaps between 75 per cent and 85 per cent, of all the news printed in any week is an outrageous condition of total monopoly. Yet because the State is not involved this issue is not addressed at all.

The headline on one of the evening papers states that the taxpayers will enjoy a bonanza through the sale of their asset which is worth £250 million. It is insulting to say that this will be taken out of current revenue by way of tax relief. I wonder who is floating these ideas because they are not being floated accidently.

Deputy Nolan said that the sale of this company would yield a capital sum of £250 million. I will refer in a moment to what the Minister said in his speech about it being a capital gain. I wonder where that idea came from. I will refer later to how the sale of an asset and the effective erosion of your interest in it can be regarded as a gain.

Deputy Nolan said that if you had £250 million you would save on the borrowings in relation to the interest payments. He could not understand the reservations of the Labour Party and The Workers' Party about Irish Life. We do not have any reservations about the performance of Irish Life. We have no illusions about why it came into existence or about this debate. Neither have we any doubts about their capacity in relation to the future. In a way, the Minister has solved some of the problems and Deputy Nolan's comments are indicative of the kind of perception of this legislation. Within the first few minutes of his speech Deputy Nolan said that the Bill is about the privatisation of Irish Life but, by the time he got to the end of it, it was about the restructuring of Irish Life. That is very interesting because there is confusion between the two concepts of privatisation and restructuring. The confusion is not accidental because the Minister, in an ideological speech, said many profound things. I compliment him on the manner in which ideology is creeping into his speeches and in the statements coming from the Government.

The Minister's speech on Second Stage was profoundly ideological. For example, in relation to some of the concepts he said:

I find it necessary to underline these facts to assure those who feel that a change in the State's shareholding will in some way affect the security of policyholders. It will not. I say it also to counteract those who might argue that Irish Life is a company controlled by the State whose investment policy can be directed by the State for particular policy reasons.

The House will notice the anti-State thrust of the speech, that there is something wrong with the State being involved. I will continue to quote:

It is not. We are dealing with a financial institution in State ownership which can easily, and, it will be argued, can more readily be run without the need for a majority State holding.

One must look for what might be called the subject of a statement like that. Let us look at it again in relation to the revealing words in it. "We are dealing with a financial institution in State ownership which can easily, and, it will be argued, ..." Who is arguing that? Where is the orthodox wisdom which suggests that there is something inherently wrong with State involvement, State control and so forth? It is part of the arrogance of the people who write this rubbish to imagine that they are telling us some truths written in stone. I will again quote: "can more readily be run without the need for a majority State holding". Who decided that point? Why is it a disability or disadvantage to be involved with a majority State holding? That statement is not a neutral economic or political statement, it is a profoundly ideologically anti-State piece of rhetoric which would do credit to any one of the many people who have been in and out of the Treasury during Mrs. Thatcher's period in office. It does not have to be stated; there is something inherently dirty, filthy, rotten, not to be desired about involvement with the State. Why not have the guts to come out openly and say that we are against State involvement in the economy and so forth? It is this creeply-crawly kind of rhetoric which is not politics and has no mandate from the public. It is just slipped in. "It will be argued..." By whom? To whom? On whose behalf? There is another phrase, "can more readily be run without the need for a majority State holding".

I said I would give examples of the profoundly ideologically nature of the Minister's speech. Further on in his speech the Minister stated:

This decision represents a fundamental change in the status of the company, a change from State control to a more widely diffused ownership.

How is that consistent with the previous statement that the company were not guaranteed by the State, were distant from the State, were not directed by the State, and were not controlled by the State? Lo and behold, the company is rescued from that control in the speech. Watch for the manner in which it is suggested that there is a national consensus that there is a natural truth in favour of privatisation. The Minister said:

From a general viewpoint, there is no overriding reasons for the State owning a life assurance company.

That is a militant right wing statement, it is not a neutral economic statement and it has nothing to do with financial policy.

I lectured in financial economics 25 years ago and I would find such a statement in an essay from a first year student an outrageous piece of rubbish. If that statement had been made by a first year student he or she would be told to stop reading the strips in the Evening Herald and to read economic text books. However, perhaps the reason for making such a statement is to exploit the consensus in favour of private greed over public policy which we have taken from over the water. These little bits of ideological rhetoric may have been put in the speech as a substitute for policy.

While I am dealing with the Minister's speech — before I deal with principles in this legislation — there are other outrageous points on which I wish to comment. I should like to think that parts of the speech are accidentally vague. For example, early on in the speech I read the following gem:

The ownership of the company came about through historical accident.

The origins of the company are well known. It is interesting that when private assurance companies fail it is an historical accident. Note the rhetoric masking the ideological greedy view that is stealing the public's asset in the interests of a few private people to whom I will refer in a moment. The Minister went on to say that it was not a conscious decision to nationalise life insurance in the State but rather an ad hoc solution to a problem of an insurance insolvency. That is a fine mouthful. In other words, because it was not nationalised by one of those pale pink Wilsonite people it should be privatised. Why not tell the truth? Why not say how the company came into existence? Why not say why people are hostile to State involvement in Irish Life? Why put in these bits of mealy-mouthed obscurantist rhetoric to hide the true intention?

In one part of his speech the Minister said that the company would be rescued from State control by this legislation but before that he said that Irish Life are not guaranteed by the State and look to their own resources to meet the statutory EC solvency requirements applicable to all life insurers. He also said that the company never had to rely on State funding. I wish the people who wrote this speech would make up their minds. The Minister also said that State ownership is not necessary. If a different Minister said, "Privatisation is not necessary", what arguments would follow and how would they be different? Why have people deliberately tried to confuse this by mixing the case for capital restructuring with the case for privatisation? Why have people not had the guts to make the case for privatisation, which is weak, and why are they sheltering behind capital restructuring?

These are important questions and are part of the reason the Labour Party will not support this robbery from the people, the abuse of the State, through Parliament, to take from the people something they own to sell it to a smaller group of people who are part of the same society who no longer will be accountable. According to the Minister: "We are dealing with a financial institution in State ownership which can easily, and, it will be argued, can more readily be run without the need for a majority State holding.".

The Minister also said:

The Government believe that the company must develop as an Irish-based international financial services company specialising in long-term insurance and savings. Key elements in achieving this strategy have been the continued development of the Irish and UK business, the acquisition of a US life insurance company and the development of links with other EC life insurers.

Where is there any indication of the policy implications of that? For example, why should the board of Irish Life have chosen to put what they see as their prospects from the US market above the prospects of the EC? What is the Government's view on balance of both these opportunities? What is the meaning of phrases like "Irish Life has had a great past. I know Government would like to think Irish Life will have a great future"? They are meaningless.

The Minister said a crucial impediment to implementing the strategy is the idea of unlocking profits. Some policyholders are already writing to Irish Life asking if the profits they might reasonable expect to be distributed to them are to be taken from them and whether reserves are to be used and investment structured in such a way as to remove the benefits from them.

Later the Minister stated that the Government considered the consultants' reports. Let me reiterate what my colleague, Deputy Taylor, said this morning. What an outrage it is that we will have continual references to consultants' reports which have not been made available either to Members of this House or the public for scrutiny in relation to detailed options. It is again standing behind somebody for protection. The Minister said:

I met the main union representing the staff of Irish Life—

I presume he meant the MSF—

and the Irish Congress of Trade Unions. I listened carefully to their views and concerns particularly as regards employment. I had discussions with the chairman and the managing director of the company and received clear assurances on employment. I should point out that Irish Life have consistently expanded their workforce in the past ten years...

What about the employment effect in the related activities of the company?

I have sat here for a very long time and listened to the arguments about privatising Irish Life. People are really saying they want the brakes taken off them so they can embark on something rather like the Smurfit acquisitions trade in the US. This is a kind of high glamour activity. It is also highly lucrative in terms of both remuneration and shareholdings. The best comparison I can make is of a successful co-operative in a village or small town into which people had put their money through shareholdings. The Minister of State will know there are many such concerns in the west. It is rather as if the manager of such a co-operative one day decided it would be nice, instead of the village and the people owning the shop, to own a bit of it himself and he sold it altogether outside the parish and community and in turn he got a little share of the ownership and a hike in salary. That is the long and the short of it in relation to Irish Life.

The Minister made a strong ideological statement to the effect that, and I quote:

This decision represents a fundamental change in the status of the company, a change from State control to a more widely diffused ownership.

Note that earlier they were not in State control at all. The Minister continued:

From a general viewpoint, there is no overriding reason why the State should own a life assurance company.

I want to ask the Minister of State and the Minister for Finance what evidence there is that the ownership of the company, when they have been floated, will be in any way more diffused? What is meant by "a widely diffused ownership"? I have heard that phrase. It is in the liturgy of the British Tory Party. They always talked about diffused share ownership. It is in Mrs. Thatcher's speech about creating a nation of shareholders. That is the kind of notion, the absolute untruth that all citizens are equal in capacity——

Acting Chairman (Mr. Wyse)

Deputy, I do not wish to interrupt you, but on a number of occasions tonight you have used the word "untruth" and words of that kind. I would like you to make your contribution without accusations of that kind.

Mr. M. Higgins

I am talking about Mrs. Thatcher's promise to the British people. I will manage to put it in a different way, Sir, if it makes you happy. I think you understand the sense of what I am saying. The assumption, the statement, taking a State company, that all citizens are equal in capacity to buy shares and participate in industry or services is an absolute nonsense. I find it sad to hear it here in this House after it has been so clearly debunked in Britain. When this kind of scam went on in Britain in the selling-off of the telecommunications industry even MPs became involved in the racket and applied for shares. It was not the ordinary people living in Wigan, Newcastle-on-Tyne and such places who were going to own the new telecommunications industry from their savings. The institutions were in, the people around the city were in and some of them got caught. It was in the papers, as they say down in County Clare. Anyone could read about this daft notion that you would have a diffusion of ownership.

People who are going to vote for this Second Stage are asking if it would not be nice to know how much of it will float in Dublin, how much will be floated in London and how much in Tokyo. The only thing we are certain of as I speak this evening is that the company are owned by all the people in Ireland but they are being taken from all the people and being given to some of the people who can be easily identified in terms of their capacity to buy shares. As I will show, it is being given to them at an undervalued sum and it is equally certain that, having been thus given to them, they will be free to sell their shares and make speculative profits on what the people in general owned previously and they now own privately. That is why privatisation, being as it is the theft from the public realm to enhance private speculative greed, has a moral dimension. I agree with the last speaker on the morality of what is at stake.

The Minister said: "Disposal of the Minister's shareholding and the consequential freeing of the company to raise additional private sector share capital will provide the Irish public with an opportunity to invest directly in a successful Irish company". The activity rate for different groups on different stock markets have been studied and are known in the Department of Finance. This has been of academic interest for a long number of years to those of us who are interested in fiscal economics, but what shred of evidence exists for the Minister's statement that it will provide the Irish public with an opportunity to invest directly in a successful Irish company? One could be reasonable and could want to be accurate and one could say "some members of the Irish public" but, of course, that would not achieve the effect.

Mrs. Thatcher, the schoolmistress of this school of ideology, is being followed here. She has said so often that she is very, very happy that the British public are all now investing, but they were not all investing. There was a selected section of the British public who were over-whelmingly legally, and illegally, buying into a share of what was once owned by the British public.

Will somebody explain a rather simple and fundamental moral point to me? The Minister in his speech said:

Disposal of the Minister's shareholding and the consequential freeing of the company to raise additional private sector share capital will provide the Irish public with an opportunity to invest directly in a successful Irish company.

The public already own it. If I owned my house, it is rather like telling me that by it being taken over I now have a chance to invest in it and that it is a fine desirable property. We know that Irish Life is a desirable property, but we own it; all the Irish people own it, but it will be taken from them and some of the Irish people will have a chance to participate in that theft from the general public. It is time to expose the morality of this. One can hide behind all kinds of language but at the end of the day we are dealing with an asset which, this evening, is in public ownership but which, if this legislation goes through, will be thrown open for ownership by a small group, some of them not necessarily Irish.

I wonder how Holdco and Newco will be translated in the Irish language — I am very tempted to ask for an Irish language version of this Bill. When Irish Life was first founded I spoke to some of the people involved and they spoke about the advantage of asking people to take out their insurance with Irish Life with the word "Irish" in it instead of "Royal Liver", with all the resonance that "Royal" had and so on. They spoke about the advantage of it being an Irish company and now that company is being turned into Holdco and Newco which in time can be owned by anybody. Of course, there need not be an Irish version of such an acronym from the English, because in the new grand times that we believe in, there is about as much merit in speaking about a case for national responsibility or contribution as there is of — as is usually expressed colloquially — the wind.

The decent people who were involved when this company came into existence had some spark in them, but there is a profoundly anti-national, anti-Irish public, in the thinking behind this proposal and its consequences. They are saying that it is irrelevant whether one puts the money from the flotation into one's pocket and heads on an acquisitions trail to the US. Who knows whom one might hire from among the tens of thousands of Irish illegals who are out there, and does it matter? The Minister in his script threw in the insulting phrase:

It is essential that Irish Life should retain its Irish ethos and its local base.

Its base, I understand, can be paralleled with many of the people I mentioned earlier who are located here but who speculate abroad, who do not provide jobs directly or indirectly but who no doubt provide a kind of Third World type employment in the service sector for instance, supplying strawberries and cream at the races, in the Curragh and elsewhere.

I know what a base is, it is something from which one takes off in a helicopter and comes back occasionally, but what does the Minister mean by the "Irish ethos"? After this little arrangement is finished between the two main parties what was owned by the Irish people will not be owned by them any longer. The funds that were invested in the Irish economy will be free to be invested outside this country. The people who own it may, in fact, be institutions which are not necessarily Irish but which are internationally based. What is meant by "the Irish ethos"? Will people go around and say "God bless us and save us, we are from Ireland" as they are travelling around America on their acquisitions trail? What a lot of nonsense using a phrase like that in the speech of the Minister for Finance — Irish ethos and its local base. It reminds me of someone who used to go to Europe endlessly mouthing "we are a small country but a proud country". That phrase is at about that level.

Then there was the hype about the golden share which is so important that it will last five years. There is no attempt in the Minister's speech to deal with any of the genuine objections that had been made in relation to the question of how the golden share can fit comfortably or uncomfortably within the ethos of European Community legislation. The Commission will look at it and tell the Government what to do with their ethos and the golden share.

There is, in addition, the fact that this is unworkable and it is open to corruption and abuse. Contrary to what Deputy Nolan thinks, in the Jaguar case it was not used to facilitate one offer. A golden share was not exercised on several occasions in Britain mostly on the grounds of what could be reasonably assumed to be very near the thin, dividing line of corruption, as the people who had the capacity to use it later turned up on the boards of some of the companies when they had retired from politics. The golden share is not explained, it is not real and it is not a protection.

The Minister in his speech said:

We will need to rely on the skills and expertise of companies such as Irish Life to ensure that the fullest advantage can be taken of 1992 and the opening up of financial markets in the Community.

I agree, but why do the skills and expertise of the company have to be privatised before they are released? There is no justification offered and then there is the business of the few pieces of silver they used to throw from the carriage:

The union representatives have expressed to me a desire for employee share schemes...

I do not know whether they did, but in relation to these employee share schemes, it is interesting that where they have been applied, if the likelihood of getting shares in the new entity was based not on what one was earning or on where one was in the structure of the company but on years of service, and if, for example, the person who opens the door in Irish Life and was doing so for forty years had ten times the right to purchase shares as the managing director who was there for four years, a stop would be put to the gallop of people who were looking for bits of the firm that was owned by the public. However, that is not the way it is. Irish Life will be swinging under the new conditions, when the people's asset has been taken from them.

The process outlined in relation to the restructuring of the company is complex. Indeed, the dedication of those involved in the theft of the company from the people is extraordinary. The Minister stated, and I quote:

The restructuring of the company will be a complex process and, together with the flotation, will take up to 12 months or more to complete. It will involve the considerable devotion of resources by the company and within my Department. I will be appointing financial advisers to assist in the sale of the shares on the State's behalf....

The Minister has been given no mandate to sell these shares which are the property of the people. Prior to the last election the Minister did not go before the people to state that he was standing for election and seeking the right to sell Irish Life, and if they elected people of the same mind to this Chamber he would also sell Telecom Éireann and have a good run at Aer Lingus and a few more companies. That is what is immoral about the procedure and the disguising language. At least Mrs. Thatcher the old Tory, the old school mistress who taught all those lessons has the courage to go before the public to say that she wanted a mandate to smash the welfare state and that she was against socialism. But our crowd would not do that. Instead, they slipped the arguments in the back door and tried to implement their decisions without first seeking a mandate. They are being cowardly in introducing this legislation as we approach the recess and proposing that we take all Stages without adequate discussion thinking that it can be fixed up.

In relation to the flotation, who will be appointed and at what cost? I also ask the Minister to indicate if any comparisons were made with Britain where there have been similar flotations and to comment on the detailed academic studies which show, for example, that the Thatcher Government in Britain made enormous killings, when in relation to the scale of fees, they floated companies or are ethical stockbrokers going to be appointed here who will give a discount?

In relation to the launch, the Minister has this to say:

It would be inappropriate for me to speculate on the value that will be realised, for reasons I will not explain. The value of the shares will be ultimately determined by the market conditions at the time of flotation.

I thank the Minister for saying this. What he is doing is selling shares in something he does not own. There is considerable speculation, in relation to the value, on what are the upper and lower figures. Is it not nice that the market will decide? He is going to take out the family furniture without knowing what he will get for it but he tells us that this is the best thing we can do. In a few moments I must go through in detail some of the most incredible points made in the Minister's speech.

In describing the powers to be provided under the Bill — Deputy Nolan ended his contribution by calling this the restructuring proposal and opened it by inadvertently calling it the privatisation proposal — the Minister said: The Minister may hold the shares or dispose of those by sale, exchange or otherwise as he sees fit.

I would like to give one final quotation from the Minister's speech which I think clearly indicates that our last vestige of self-respect as a nation and as a people and of our belief in people's ability to work in the great State companies and to create jobs is gone and it is as follows:

After restructuring and flotation, Holdco will be one of the largest companies listed on the Irish Stock Exchange. Other life assurance companies in the State will be entitled to invest in the shares of Holdco on behalf of their policyholders but, under present law which prevents a subsidiary having shares in its parent, Newco will be unable to do so.

We must get used to the name Holdco which I am told is the same in Irish. One can call it what he likes but we know what it is. The point that needs to be made is that the Minister is not doing anything significant because Irish Life are already a very significant company. In a few moments I will deal with the problems that may be encountered in restructuring the company and the balance which has to be struck between the rights of policyholders and the rights of shareholders, but before doing so I wish to cut through all this nonsense. Very simply what is involved is that a company which is structured in a particular way in public ownership will be floated on the Stock Exchange.

Let me dispose of the Minister's speech by asking where is the evidence to support his speech? Who are the people who will buy shares and what is the investment strategy of Irish Life? Furthermore can the Government indicate whether they favour the company expanding into the United States, the EC and answer questions about the golden share, Community law and the operations of the company? Why was the figure of five years chosen? Why did they not opt for the figure ten years, 15 years, 20 years or 25 years?

There is also the question of what protection will be provided against the taking out of shares in Irish Life by foreign institutions. The truth of the matter is that Irish Life, which could have been a massively successful institution playing in the international services sector, could itself have acquired smaller players in Europe and the United States. Indeed, Irish Life was headed in that direction in the United States. However, they may now become a potential acquisition victim and this Bill fails to provide a single shred of protection, I challenge the Minister to stand up and give a guarantee that Irish Life will stay in Irish ownership. As he is an honourable man, he will probably not do that as he is unable to do so.

This evening we are presiding over the decision to sell something which was not established by us but rather over the decades by Irish people with funds raised in Ireland. That company is now being stolen from the people. The only way to describe it is that it is being removed from their ownership to be floated in an unspecified way. It is all very fine to speak about parliamentary language but if someone living in a slum in Dublin said that they liberated a box of crisps from the back of a lorry they would be treated in a very thick way by the forces of the law. This could be described in the same way. What we are doing is liberating Irish Life so that a few people will be able to speculate in it. I emphasise we do not need such investment as we already own the company. I repeat my challenge to those who want a mandate for this kind of Thatcherism to go to the public and tell them what they want to do. They did not go to the public to argue that they would reduce income tax for a single year by a couple of pence if they would allow them to sell something we all own, as well as Telecom Éireann, Aer Lingus, Aer Rianta, the Great Southern Hotels Group, RTE and so on. This gutless crowd of imported Thatcherites would not have the courage to go to the public because they know they would be told exactly where to go. These are just old ideas trotted out by tired people who have no mandate for this kind of highway robbery from the public.

It is very important to realise what is meant by this historical accident referred to in the Minister's speech. The accurate position is that Irish Life take their formation from the failure of private sector life insurance companies. I would like that statement to be included honestly in some speech from the Government side at some stage. It got into the life assurance business — I do not intend to go through it all — because of the imminent threatened collapse of three Irish life assurance companies and the threatened withdrawal from the market of a number of British companies. In 1938 a new company was set up to take over the business of nine of these offices. It was known as the Industrial and Life Assurance Amalgamation Company. The Government promised to make good any deficiency and got 18 per cent of the equity for their trouble. The promise eventually cost the Exchequer over £1 million. Five British offices held 72 per cent of the shares and four Irish companies held the remaining 10 per cent. Irish Life were set up as a subsidiary to write new business but took over all the business in 1945. When the parent company were wound up in 1947 the Government bought the 72 per cent stake owned by the British companies for £110,000, bringing their stake to 90 per cent which they have increased slightly up to 90.25 per cent. The remaining shares held by the old Irish companies are now distributed among about 165 private shareholders. The largest single shareholder after the State, with about 4.6 per cent of the shares, is the Irish Life staff pension fund. All that is summarised in the Minister's speech in two words "historical accident".

One would not be consistent with the ideological thrust of the speech if, not only having assumed that there was an anti-State consensus in this country and having peddled all the old ragged arguments from the near-Thatcherism, one also had to do the good job of disguising the facts. That is what a phrase like "historical accident" means. When the private sector fails it is an accident, when the State makes a mistake it is gross mismanagement. Those of us who sit on these benches — the Labour Party and The Workers' Party who are of the left — are regarded as the people who are ideologues. The only distinction between our ideology and the other is that we have the courage to state it.

There are very important issues that must be addressed. In relation to the very basic one — what kind of arguments have been made in favour of privatisation? The two basic arguments have been, first, that the company need to be restructured in capital terms and, therefore, that this is the case for privatisation. Let me say immediately that it is possible to speak about the capital restructuring of Irish Life without speaking of their privatisation. However, the people who have a weak case for privatisation are seeking to milk this factor of the necessity for capital restructuring. It is a mask, a scar, a screen because they are afraid to make the case for privatisation which will not stand up. The company's capital could be restructured without it. The second argument has been abandoned in the midst of this debate. It is like people saying that the football is not really pumped up enough, we will have to throw in a new ball. What deflated the old ball that the game started with, was the bogus nature of the arguments for participation in the US economy. That one fell apart very quickly. It is dropped out now at this stage and is being replaced by new arguments. Restrictions operated in certain states — that is how the argument began — would prohibit the entry of companies controlled by foreign governments, and so on.

The fact is that, apart from Irish Life's own acquisition in Iowa, which is obvious, General Accident and others fought court battles in relation to acquisition. British BAT did the same thing and won their court battles in the end. What it is saying is that protectionist policies in the United States dictate that we must privatise and change the shape and structure of that which we own here in the name of all the people in order to keep the conditions of fair trading and practice intact. What kind of logic is that? Another question is provoked by this second justification for this robbery from the people. Why the US market over the European market where competition rules exist and where it would be very much more logical in many respects for great deal of Irish Life's investment strategy to drift towards?

Apart from these two specific reasons, in relation to the selling of Irish Life, there are, as I have stated, ideological assumptions contained in the Minister's speech, ones which are rarely aired. They did surface in some of the other contributions. These are the general points that are made in favour of privatisation. I have listened to them over the years since I came in here. They are singularly unimpressive. First, selling off a State company and putting it into the private sector will improve efficiency. The private sector companies are inherently more productive; the private sector companies inherently give the consumer a better choice. The idea is that anything that was owned by the State is automatically inferior, tending towards inefficiency, lesser competitiveness and so forth. That argument is debunked by the very history of Irish Life. It was formed in the conditions of private sector failure. It was a success where many other private sector ventures of a related kind were failures. What is not being said is that its very success made it attractive as a target for acquisition. The second, general point is the now very significant appeal to greed, the suggestion that what is owned in common by the public has something inherently backward about it; that in this modern world some people are very rich and have a natural right — rather like old natural law theory — to own disproportionately part of what was once held in common. It is contended that there is something inherently unsatisfactory about the nature of public ownership; that there is something inherently superior about the private ownership of the few versus that old fashioned notion that the people in general would own anything. It is that logic that brought Mrs. Thatcher to the idea that even the water in one's glass could not be owned in common, or in public, lest a penny be made from it. It is that tired, old, debunked logic that is represented here in relation to proposals such as this.

A third more general argument advanced is that by selling it off some money will accrue to the public purse. This smacks of the argument, God help us, that we all walk around with a bit of the national debt around our necks. Even one's cat or dog has a bit of the national debt attached to it if one wants to abuse statistics like that, as if all the citizens participated equally in the benefits of the excessive borrowing which I well remember coming, and I well remember from where the proposals for excessive borrowing emanated. The same people who wrote the speeches in favour of excessive borrowing are now writing the speeches for selling of State companies. It is this lack of accountability which I find praticularly unimpressive. By the way, I would absolutely emphasise I am not referring to anybody present; I am simply saying that I was around at the time that people were going to spend their way into growth. I have read the speeches and many of the people who made those speeches are the same people now in favour of cutting back the economy and developing these anti-State philosophies.

Let us take this last argument. Suppose one got £200 million or £250 million, I think the Minister for Finance, being intelligent, will not go the argument of the Evening Herald, the idea that one could use a once-off sale to generate income that would enable one to adjust revenue and relieve taxation, would mean one could only do it if one looked around and asked: what is left to be sold next year, and kept rolling on like that. I would not impute such madness to the Minister for Finance. I do not believe he holds such a view, but I do believe that the articles in the evening papers I have mentioned are being used mischievously to fool the Irish public into a state of mind in which they accept what is glorified theft from themselves.

There are issues which have not been addressed in the Minister's introductory remarks, ones which were raised this morning by Deputy Taylor and others. What of the position of people who took our policies because they liked the idea of Irish Life in its present form? Suppose I was an Irish Life policyholder "with profits" or whatever and happened to have chosen Irish Life over a British company. Remember that a very interesting issue arose in relation to the different Finance Acts that are available in the Library of this House; we used to discriminate in favour of Irish insurance companies versus others contending that it was, if you like, pro-Irish — to use a very old fashioned phrase — or pronation to do such a thing. What happened all that thinking? The answer is that everything changed. But what about those policyholders? And if their policies are "with profits" or whatever, who gave any mandate to the Minister for Finance to interfere in the company in which they had invested? If I took out a policy against the contingency that I might not reach some advanced age, I have not said that I wanted my money taken out of Irish Life and put into some new company to go off on an acquisition trail in the United States. There is no point in contending that I can be compensated; I cannot because I had a choice only when I took out the policy initially. I am now much older; I do not have as much of a choice now. How can one compensate any policyholder for that? One cannot. The idea is that the policyholder, having expressed confidence, having created something, is having that something changed in a completely unaccountable way.

This raises the question: what consultation has there been either with the existing shareholders who might do well as a result of privatisation or particularly with policyholders about the future of what is their company at present? If I recollect correctly the policy decision taken in 1972 was to enhance the position of the policyholders. Now the decision is to facilitate what might be the potential, unspecified, no one knows, of known shareholders after flotation. What right has any Minister to do that to the rights of policyholders? If I were the Minister — whenever this legislation is passed — I would not be in a rush with it because I warn him that he will spend years in court anyhow, that policyholders have every right and intention of keeping him there, both here and in Britain, and he will not be free of them for many years.

A question that must be answered before we come to the end of this Second Stage debate is in relation to the valuation process for the company. Obviously the company will have a different value depending on the different levels of State participation retained. It is not impossible — because the memoranda have been prepared — to arrive at an upper and lower set of valuations for the company at different levels of State participation and in terms of whether we are talking about Irish Life or about the company broken up.

Lest people think I am imagining all of this, because it is interesting every now and again to think of the views that people had some time previously, I have here a copy of the Minutes of Evidence of the Joint Committee on Commercial State-Sponsored Bodies — Irish Life Assurance plc — of 20 October and 3 November, 1987. At pages 11 and 12 of the Minutes of Evidence of 20 October 1987, Deputy Roche had this to say:

I am not quibbling about the price but the point I am getting at is, who makes the decisions with regard to Irish Life and whose interests are being served? The decision was made because you, and the company, were pressing for mutualisation. In your terms that made a lot of sense. I do not know whether the Department of Finance in 1972 were capable of making a judgement with regard to the long-term consequence of what they were doing. I think they were not...

I pause to say that this is Deputy Roche of the Government party speaking on 20 October 1987, and I will continue to quote him:

The point I am really getting at is that the pressure for privatisation which is coming from Irish Life, and which I referred to earlier, is coming because you people want to get into the American market. I am not persuaded that the taxpayers who are the shareholders are going to be served by that. That is the point. I have no quibble with you as a corporation because you have to make your decisions as to what you think is best for the corporation but we as politicians have to see what is best for the Irish taxpayer. It was your pressure that motivated that decision. It did not originate in the Department of Finance; it originated in Irish Life, rather that idea originated in Irish Life. We have the same thing with privatisation. You want to move into the American market and that is one of the technical reasons for your wanting to privatise at this stage. I know that you have had discussions on this over the years and it has come out of Irish Life but I cannot see how you as Irish Life — I know that you have big difficulties because you have a submission before the Government — can persuade us that privatising Irish Life is not going to be another huge cockup like this.

Those are Deputy Roche's words on 20 October 1987. My hope is that Deputy Roche has not changed his mind in 1990.

Mr. Quinn

It will be changed for him.

Mr. M. Higgins

There are many more quotations with which I have decided not to burden the House. Even in July 1986 similar views were emanating from across this House about what a dreadful thing it would be to privatise Irish Life and how the whole thing was being set up by a few people within Irish Life and so forth.

To return to the case being made in relation to people being for privatisation in the case of Irish Life and the general arguments in favour I had disposed of. I had raised the question of the valuation, about how much Irish Life is worth. That is not an academic question. For example, the point has been made by Deputy Rabbitte that at the moment Irish Life shares are worth a certain amount but that, after flotation, they could be worth a great deal more. There is a small number of people who might have a chance to, as the Evening Herald would put it, enjoy a bonanza in relation to the flotation. The question is where have we any guidelines in relation to the Minister's speech. There is a reference to articles of association of the new company, but after the capital restructuring, if shareholders are to have more rights — and the shares, therefore, would be worth more — what are these additional shareholders' rights and what will it cost the new shareholders in compensation — and this is the interesting point — to the with profits shareholders who are already there, and what is their relationship in turn to the policy holders?

I believe there is a question that the Minister is dodging and that is the question of the apportionment of the reserves of the company. Where is this question answered about the disposal of reserves? There is a piece — I can come back to it — in which the Minister speaks about how he will avoid certain forms of stamp duty, but that does not answer the question. The fact of the matter is that the reserves are really undistributed profits, and if they are undistributed profits the Minister is left with this problem of deciding on the balance of distribution between the policyholders, the existing shareholders and the new shareholders. It is just not resolved in the Minister's speech. There is no point in pretending it is. The Minister cannot say that if he is allowed to sell the thing off he will come back at a future date when he has articles of association and that we can have a little natter about that. No one sells anything like that.

The valuation of the reserves are possibly of the order of £258 million. One estimate has been that maybe 60 per cent to 83 per cent would go to shareholders. I am saying these issues are underneath the question that no valuation has been put on the company, but the valuation is a most political problem. The tradition of Britain, the kind of minor Thatcherism that these ideas are borrowed from, is one of undervaluing the national asset so that after flotation when the real value of the shares is established in the market place the people can make a quick kill as happened in relation to the telecommunications industry.

Again there is the uncertain question in relation to those who are certain to benefit, that is those who are involved in the flotation, the stockbroking kind and others, I liked the phrase where the Minister said that there will be a great devotion of resources within the Department of Finance and that new financial advisers will be hired and so on in relation to the flotation itself. I would advise caution, because it has already been documented that the experts who are asked to advise in the case of Britain consistently under-estimated the public property that was being privatised and thereby set up the massive speculation that took place after the launch of the shares in practically every one of the British launches. People might say that it behoves me to give an example of that. The financial advisers established to the British Cabinet and to the Minister in particular put a price on British Telecom. The shares opened at 130p and at the end of the first day of trading were at 241p. I can in fact give details of every other issue that took place in Britain.

First there is the moral issue of the removal of this public company into private ownership. The sloppy way that the flotation is referred to makes it ripe for speculation of the same kind. The procedures are exactly the same as the British Telecom ones. There is absolutely no guarantee that people will lose by under-pricing. Not only was that speculative gain there as in the British Telecom case between 130p and 241p but when an analysis was made of the shareholders who participated in the hike in a single day from 130 to 241p they were a very tiny segment of British society. It was not as diffused as Mrs. Thatcher would say. The only thing was that there was at least one resignation from the House of Commons over a case of fraud which followed. In other words, the moral ethos, as one might call it, of this neo-Thatcherism had led to such a state.

Let us be clear that any shareholders gaining speculatively from Irish Life in the future will in fact be gaining at the expense of the State, at the expense of the Irish people who now own the Company. I repeat my statement: at the moment everybody in Ireland owns Irish Life. After privatisation a selection of people endowed with resources, with the capacity to trade in stocks and shares, the new Irish, will own Irish Life. One can say this is the Irish people; but what one is doing is transferring from a general definition of the Irish people to a very specific one. If that was the case we could have one single person owning the whole country. We could say that nothing had changed. That was what one might call the economics of Papa Doc's Haiti, and that is what we are heading for here.

It is not that there is a wider group of people who will come into the share purchasing arrangements, people who are going to participate, the people who have always wanted to have certificates, to carry them around with them or to store them in a bond box, or somewhere like that, that they bought in Francis Street, this kind of yuppie group of people. The thing that is very interesting about that is that they are in fact capitalising on something they had publicly. Few of them were privately educated. In this emancipated peasant's country there is not a great tradition of that. The fact of the matter is that having got an education they then concentrate on their private advancement through setting greedy eyes on what it was that probably attracted them in the first place.

It is in fact an interesting transfer of wealth and ownership from the public to a group of people who have already taken benefits from the State to become a kind of a sophisticated hijacker of public property. One can identify these in an inverse way, to take my example of the person who opened the door in a public company to the managing director. Relate it to the top so that the person with the highest salary will have first whack at what will be given towards the employees, and then run one's way down through the company. Then one can come back and offer the moral argument which I used to hear years ago "weren't they all free to buy them if they wanted to?". That is a good one. Is not everyone free to go into the Berkley Court? Thanks very much. Will everyone not be free to buy Irish Life shares? Will the people who are below the poverty line, a million or so people, not all be free to buy Irish Life Shares? People in Simon hostels, people in hospital wards, people attending casualty wards, old people, young people, everybody can buy a bit of Irish Life. That is the kind of old nonsense that is in the Minister's speech. That is why it is such an anti-egalitarian proposal. What is being proposed about Irish Life is an immoral proposal, an anti-republican proposal, an anti-Irish proposal, an antinational proposal. There is not a single core value that the old party of the small print Irish republic ever stood for that is not contradicted by that document, and I would advise the people to read it very carefully, to watch very carefully in terms of what exactly is being proposed.

Who would benefit from privatisation? The certain winners are the people who are involved in fees and commissions. They will certainly benefit because whether it is sold at a low price or a high price they are certain winners. There will be certain gain for those involved in floating the shares, the fee percentage people, one might call them. There will be certain gains for the people in the peripheral areas of flotation, not only mainline stockbrokers but people involved in the whole question of launches. People who will make gains will continue in business after the flotation. There are often considerable transactions in relation to these shares, thereby generating the percentage again and again. Those with knowledge, money and confidence, people with surpluses, in other words those with a capacity to speculate, will be able to subscribe for the shares. Some of those people who are issued with shares will certainly make a profit on them. It is interesting that in one flotation in Britain people were encouraged to borrow from the credit institutions to buy shares. That happened in the case of the BP company. People borrowed because they thought they were in for a kill, rather like the case of British Telecom. They borrowed from financial institutions who were massive investors in relation to some of these flotations. Once the shares were sold, they were open to institutional manipulation. That is what happened in Britain and one need only look at the Financial Times about twice a year to see that.

There will be benefits for Irish Life's private shareholders, to which one Deputy referred to earlier. If the company is worth £500 million, these shares are worth £1,000 each. It is very interesting that some of the holders of the private shares include a number of stockbrokers. There are three members of one stockbroking family who own, between them, 1,740 shares, worth £1.74 million. The largest single shareholder is a pension fund, with 4.6 per cent of the shares.

A case can be made for a capital restructuring of Irish Life. If the company are as wonderful as the Minister and backbenchers have described them, why does the State not invest in them and facilitate their borrowings? If the company have a built-up fund of £400 million to which they have access and which has enabled them to make their acquisitions in the United States, why is there such a rush with this legislation? That is like saying I have £100 in my pocket but I cannot buy a calf until I have £200.

The other important question about Irish Life is, apart from the general ignorant view that anything private is superior to anything public, which is a primitive jungle-economics view, there is no evidence to suggest that Irish Life are being inhibited in an absolute way by their present regulations from expansion abroad. You can say this is the view of the managing director or the board, but that is not a sufficient answer. The distinguished committee of which Deputy Roche was a member and in which he made such a wonderful case against privatisation, were not able to get answers as to the valuation of the company, why they were restricted and so on.

In relation to the removal of Irish Life from an Irish investment ethos, it is true, as other Deputies have pointed out, that Irish Life control between 10 per cent and 15 per cent of the shares in most of the major listed companies on the Dublin Stock Exchange. Many of these are held on behalf of policyholders and pension fund members whose money is managed by Irish Life. Those who were asked to choose between different life assurance companies chose an Irish company with an Irish investment portfolio. I know several such people and I know they have written to the Mr. K, as I will call him, who is involved in Irish Life. They sent copies of those letters to me. They said when they were asked to choose between Royal Liver and Irish Life, they chose Irish Life for very definite reasons, and said they would appreciate it if their money was left there. I do not know what reply they got but perhaps we will find out some time.

The main objective has been to get the best possible financial return. There must be a time to buy and sell shares. Irish Life have been an important anchor in the Irish economy. Reference was made already — and I support these references — to the time when the Irish-owned Roadstone Limited and the British Readymix company were battling for control of Irish Cement Limited. At that time the use by Irish Life of their block of shares was particularly significant. Irish Life supported the Roadstone bid and facilitated their success. Equally Irish Life's 11 per cent share in the Irish Distillers dispute was very significant. Does the Minister believe this kind of role is not as important as facilitating some senior members of Irish Life in going on an acquisition trail so that they can inject into themselves a sense of Smurfititis, feel heady and talk about big sums? These people have no right to do that with the public's money. The policyholders have not given a mandate for that. No political mandate has been given for the sale of this company or for any other semi-State company.

I do not believe the golden share is realistic. I cannot see how it can guarantee that the current role of Irish Life in the economy will be retained. I have already dealt with what I called the Evening Herald blackmail headline that to sell Irish Life would enable taxes to be cut by 10 per cent. That is an assumption that the people are fools. As I have said, I do not believe that headline was accidental, considering the stable it comes from and the owner of that stable.

In relation to the restructuring that could take place, when one reflects on the changes of policy that took place from 1972 onwards, it is very interesting that the arguments of 1972 are now effectively being turned on their head. The pressure then was for a form of enhanced benefit for policyholders. As I have said, the capital of the company could be restructured without any of the State shares being sold off to the private sector. I would like to ask the Minister a simple question. How did he arrive at the figure for suitable State ownership? Why was it not 64, 54 or 44 per cent? What is magic about the figure? The House is entitled to an answer. If I do not get an answer in this House I might take out a policy with Irish Life, go to the meeting of policyholders and get an answer there.

The question of expansion of the company has been dealt with and in this regard I do not disagree with the Minister or with anybody who has spoken on this side. The company have been a success and have been able to expand. They have made significant acquisitions, even abroad, and are poised for further acquisitions. It all comes down to the fact that they are in a position to make further acquisitions now or they may, in a strangulated form, be ripe for acquisition themselves. This legislation will make Irish Life a target for acquisition within a very short number of years rather than enabling them to go on their own acquisition trail. There is no doubt about that. The candidates are already lining up. I can think of one large French insurance company, whom I will not facilitate by mentioning their name, who have been looking at the company. They have many advantages including their United States link. They could straddle an insurance market in both the United States and Europe. There are many possibilities open to them and the diversity of their activities make them an attractive acquisition. They will be acquired rather than they doing the acquiring.

We are now involved in a fundamental contradiction. This legislation is being adduced as something which will enable and facilitate Irish Life to go on expanding, acquiring and creating new jobs when in fact it is making the company vulnerable for acquisition. Where is the evidence that the State's selling its shareholding will facilitate the expansion of the company, least of all facilitate employment through investment? The company may require fresh share capital to carry out planned expansion. The argument in the Minister's speech is that there is no incentive to shareholders to put up extra cash because the locked and limited return is simply too small, the shareholders being entitled to 2 per cent of any surplus distributed while policyholders get 98 per cent. There is nothing in this legislation that solves the problem of taking benefits from policyholders to facilitate shareholders, including new shareholders. All capital restructuring can do is readjust the share-out of the surplus and the disposal of reserves between shareholder and policyholder.

There are at present 65,000 policyholders, 35,000 of whom have their interests represented by British actuaries. The whole restructuring scheme will have to get the permission of the Irish courts. No evidence is offered of any consultation with policyholders regarding the effective revision of their contract, entered into in good faith. If you take out a policy you are entitled to as many guarantees on your side as they have in relation to your payments. It is a very simple contract. We cannot legislate away the contractual rights of policyholders. There is also the question of the reserves and so on.

When one strips away all the rhetoric, a possible case for capital restructuring is being used as a screen for a privatisation case that has no substance. The Minister's speech deals with the real agenda which is the privatising of this company, and then moves on to the privatising of other companies with its strong, borrowed ideological thrust. The Minister's speech did not take the case for capital restructuring and set it apart; rather it tried to hide behind that case to make a proposal for privatisation.

One of the speakers from the principal Opposition party used the phrase "I would hope that". That was rather like sending up a prayer after letting the horse out the door —"I would hope that my horse would not be mistreated". It would remind one of Patrick Kavanagh's poems —"I would hope that you will not kick my dog, but he has to go out". That is the kind of opposition there is to the sale of something which the public own.

Let me finish by making a summary comment. This Bill is about privatising Irish Life. Capital restructuring is a screen, a mask to hide the Bill's purpose. The Government elected by the Dáil, which in turn is elected by the people, are in temporary charge of a company and are the 90 per cent nominated shareholder of an asset owned by the public worth perhaps over £700 million. Where is their mandate to dispose of that public asset into the realm of the private? It is very interesting. Equally the internal restructuring of the company can be achieved without the sale of the majority stake to the private sector. No argument in reply to that has been put forward. No one has justified the magic figure of 34 per cent. Why not 64 per cent? Why not say 54 per cent plus the pension funding of 10 per cent? Let us have a little riddleme-ree about the figures. Where has this figure come from? Who are the 15 per cent people? Why can they not combine? How will the golden share intervene between different combinations of groups? There is no answer. The Minister will be standing there with his golden share defending the Irish ethos. It is rubbish. He is going to sell it off in chunks.

There is also the strategic niche sector position of Irish Life. It has been acknowledged on all sides that it is a successful company which even in a changed format would enjoy a ranked position on the Irish Stock Exchange. Its own portfolio of investments represents some of the major players on the Irish Stock Exchange. Why imperil that relationship by giving away people's shareholding? How will the Minister with the golden share enable Irish Life through its purchases to play the same role as in the case of Irish Cement and Irish Distillers? People are entitled to answers to these questions. There is no point in coming back with something thoroughly deceitful and saying all that is intended is a new structuring of the company.

Public representatives should be able to answer the questions of their constituents. Any of us could be asked why we own something in July worth £700 million which in the autumn we will not own, while some of our neighbours will own it. The public should be putting such questions. I showed the text of the Bill to a man of 80 in Galway, an old Republican, and he asked why the people are not outside the gates like they were for Jack Charlton in a rage about the stealing of something from them which was built up in conscious opposition to foreign insurance companies at a time when the private sector had failed. He asked why the people are allowing this to be stolen from them and I had no answer. I said they are more excited about football than about the future of their country. I can only hope that it changes. People ask why there is not a sense of outrage at the anti-national, anti-Irish, anti-Republican nature of what is happening A greedy few have to be facilitated through the taking of something which is not the property of any Minister of any Government of the day.

I have spoken again and again about the rights of policyholders, decent people choosing to be Irish in relation to investing the little money they have. How are they to be replied to? Suppose they are not interested in the country; what changes in the level of guarantees in relation to their future can be accepted? Why should they be accepted? What consultation has there been with policyholders? Can this confidence be retained in the new structures?

I spoke to a retired insurance man last night who was one of those who used to sell insurance. The old phrase is that there is no one with endurance like the man who sells insurance. He was around at the time when the private companies collapsed and the new company which later became Irish Life was brought into being. If you were going from door to door asking people to invest in Holdco and Newco you would have a fine chance of gathering fivepences and tenpences. While it may be a simple point, the fact is the faith of many small, decent people in their own company, the people's company, is abused, mocked and derided by the legislation. The are now being told that it did not matter tuppence that they had a sense of respect for their country and for an Irish company that would create jobs in Ireland. It is very interesting that the main political party are leading this charge to sell what they do not own but what the people own. None of the technical questions I referred to, from the question of valuation to the question of flotation has been addressed, good, bad or indifferent in the Bill.

I agree with the Minister and I believe he is acting in good faith when he says he has confidence in the company's future. Deputy Nolan was under the mistaken impression that those of us who speak like this did not have confidence in the company's future. The fact is that we have even greater confidence in the company's future than Deputy Nolan and others. We believe the company have a future without being privatised.

The arguments being put forward by the people who hold senior positions on the board of Irish Life are rather like the man saying, "Please do not hold me back, you must let me on now". It is just that, a lot of bluster and bluff. I have already made the point that Irish Life have significant reserves and no case has been made for the time scale for the shortfalls for the capital investment they propose. Could somebody come into the Dáil and say, "The following is a list of desirable capital investments by Irish Life, which they have not been able to make because of capital shortfalls"? The fact is that they have not gone near approaching, not to speak of exhausting, their existing capital reserves, which are available for investment.

The company need not be damaged. They are not a drain on current revenue. Why take something that was successful, and take the yield from the once-off sale? If the capital realised by the sale was fired into current income, one could say that this is a good thing for a particular year. As I have said, I have exempted the Minister from such facile thinking and it is only repeated by one or two people in the House who rely on the Evening Herald as their main source of economic theory. The fact is that there is not a case for this but the tendency slipped into the Minister's speech when he referred to the yield as a capital gain. How is it a capital gain in any sense? Perhaps I am being over simple, but when I studied economics I understood that you could own an asset and then you sold it and you then did not own it, but if in fact you had sold it at a higher price then what you had bought it for, that was a capital gain. That is not what is happening here. We are talking about an accumulated asset that is supported by a certain level of reserves, to which there is a contested ownership between shareholders and policyholders. How can you say you are going to the market not knowing what you are going to ask for the asset and that you will allow the market to decide on the value of the shares? Are you going to describe what you eventually get a capital gain? That is nonsense.

It is possible to acquire further investment capital in Irish Life by different forms of flotation through the private sector and through other institutional forms of investment which would not involve the sale of a significant part of the State holding to the private market. I may expand on what I mean by this in a moment. A person who might want to give Irish Life a return, admittedly at a lower rate then if the shares were sold, could negotiate with pension funds and institutional funds to release shares to them which, in turn, could release capital which could be spent on investments. I agree that something needs to be done about the question of the return to the shareholders. One cannot speak in the long term, over a ten, 15 or 20 year period of a company with a wonderful record such as Irish Life, having such a low return to shareholders. I agree that is a problem but it is not the same problem as saying that you have to give the Minister the right to dispose of his shares in order to solve the problem. No convincing case has been made for that. One does not have to be and ideologue of either side to understand that. It simply does not make economic sense. If a member of a board came out with an argument that to solve one problem you must nibble at another problem, nobody would believe that, and correctly so.

In many ways the Minister has made a strongly ideological statement during his Second Stage speech. I believe this legislation will be disastrous for the company, for the economy, for workers within Irish Life and for those involved in the secondary activities facilitated by Irish Life's investment. In addition, in many cases, even if one believed in selling — my colleague Deputy Taylor said this morning that we in the Labour Party had no reason to believe a case has been made for selling even a single share which the State owns — and even if one believed in shifting the State's shareholding, it is absolutely outrageous that not only has no case been made for the distinction between the State majority holding and the State minority holding, which is elementary in considering this argument, but a figure has been "cooked up"— and I use the phrase advisedly — of 34 per cent at one stage in the debate, but it may change and no attempt has been made to justify this figure. There is no justification for it in terms of the future potential of the company.

There is an opportunity, and it has not been taken in this legislation, to write in the rights of employee ownership and pension fund participation. It is very interesting, for example, that in the new pension legislation there is provision for representatives of the employees to be represented on trustee boards. In view of the strategic model of Irish Life and their exemplary role in the Irish economy, it would be very interesting to allocate a minimum proportion of voting shares to the Irish Life Pension Fund and to speak about a proportion of shares being allocated by a mechanism to the staff.

The fact is that the proposed changes in Irish Life are not those that will strengthen the confidence of policyholders. They will not guarantee the controlling interest of the taxpayers and will not enhance or protect the participation rights of the staff and will not give Irish Life the flexibility to raise further capital from the public and private sectors, whether domestic or foreign. They will seriously affect Irish Life as a prime target for take-over by institutions outside the country rather than enhancing their capacity to diversify in the international investment field.

The Labour Party will oppose any attempt to pass the Committee Stage of the Bill in a rush this session. We have already listed dozens of questions, apart altogether from the major political ones, of a responsible technical and financial kind which deserved answers and which will involve amendment. In addition, I have an obligation on Second Stage to say that these are borrowed ideas, failed ideas. Neo-Thatcherism is in decline in Britain and has been rejected by the British people while at the same time these ideas are being trotted out here. What kind of colonisation is it that people have to be afflicted by taking on the rejected ideas of the coloniser next door all the time?

It is outrageous to think that at a time when there is a possibility that there will be an appeal to national self-respect that what was patiently built up, innovatively changed and a success should have, as the only mark against it, the State owned shares in it. Many people on the Left frequently say that these arguments are about being pro-State and anti-State. They are not; they are about the use of the State. The State is being used in this legislation as an instrument, to take the ownership of something from the public and give it to the private sector. It is not a question of a person being neutral about the State. That is why the Minister's Second Stage speech is riddled with a series of abuses against the notion of the State, people pouring out their suppressed poison against the State. As I have said, bits of it are the venom they got from our neighbouring island — anti-State, there is no need for the State, etc. It is poisonous hate for the thing which often employed them, that educated them for next to nothing and built up the economy.

If Irish Life were among the companies which get about £1.2 billion, a few million short of what we spend in education, every year from the public sector to get the ailing cow of the Irish private sector up on its legs and be available for a drop of milk, I wonder if they would be taken over in this way. There is a belief that there is something modern, clever, technical and wonderful about the notion of privatising something. It is the concept of the use of the State to socialise the costs of production — to shift to the State the cost of training, of exporting, of subsidies, etc. The other arbiture is to use the State over which one has temporary control to remove obstacles and enable the private sector to have what was in the realm of the public. This is what is taking place.

I am very glad that a division will take place at the end of the Second Stage debate. This legislation will be opposed by the Labour Party, The Workers' Party and the Independent Deputies for the very simple reason that not only is it a hysterical and ideological attack by the Right on a successful trading company, nationally and internationally, but it is also profoundly not in the national interest. It is also profoundly, and I use the word carefully, immoral legislation. It makes a mockery of this House to say that we can have a democratic consultation about what is in effect changing the ownership of a company from every single citizen to a select group of people who will be able to buy at a reduced valuation and then speculate with abandon. It is a profoundly immoral system which can facilitate such practices. It is the inherent immorality of the Right wing vision in Irish politics, the suppressed greed of it and the naked anti-solidarity view of it, that says you can take and go on taking. It was the public realm and the State that facilitated the appearance of all of us here.

Why should there be such a stripping away of any basis of solidarity with our nation, our people, our workers and the people who rely on our investment? Do we so hate ourselves that it would be an unrelievable blemish on Irish Life for the State to be the majority shareholder in it? This is why the debate about the disabilities which are imposed by State involvement reveal such a great insecurity and an absence of what used to be called in the Gaeltacht féin-mheas. Where did all this come from? How accountable are the people who have introduced these treasonable, anti-Irish, anti-national and anti-republic notions into the country? This Bill is anti-Irish, anti-national and immoral and this is why the parties of the Left will be very proud to vote against it and, one would hope, after others have seen what the Bill is about, help to defeat it.

An Ceann Comhairle

I call Deputy Seán Barrett. I do not want to inhibit the Deputy but I must advise him that the Minister has to be called at 11.45 p.m. and I take it that one of his colleagues also wants to contribute.

Mr. S. Barrett

I have listened for the last hour and a half to the contribution of my colleague, Deputy Michael D. Higgins. While I would agree with some of the points he made, I would disagree with most of what he said. I agree that the Minister's presentation of the legislation before us is very poor. I also agree that it is important for him to immediately issue some form of publication, perhaps a White Paper, outlining for policyholders the position in relation to Irish Life.

The fundamental disagreement I have with Deputy Higgins is that, with respect, he spoke a load of poppycock when he said that the Government were selling an asset belonging to the Irish people to fat cats who will gain from the unfortunate peasantry on this island. The reality is that while the State technically owns 90 per cent of Irish Life it gets practically nothing from them — it got £440,000 last year from a company worth £4.5 billion.

Deputy Higgins is shocked to think that the main Opposition party are facilitating the Government in seeing this terrible act being perpetrated on the Irish people. I want to point out to the Deputy that the Fine Gael Party are the only party in this House, perhaps with the exception of the Progressive Democrats, who have any sort of mandate to speak about the privatisation of Irish Life.

Mr. M. Higgins

That is correct.

Mr. S. Barrett

In 1987 the Fine Gael Party went to the Irish electorate and told them out straight that they intended to sell Irish Life and why they would do this.

Mr. M. Higgins

I accept that.

Mr. S. Barrett

I recall on that occasion that the Labour Party opposed what we were proposing and the main Government party, Fianna Fáil, castigated the Fine Gael Party for even attempting to think of selling off the "State silver." We on this side of the House have a mandate to speak about this issue because we are convinced that what we said then and what we are supporting now is right for every Irish man, woman and child. The reality is that by selling Irish Life we will not be giving away the State silver, rather we will be providing the Irish taxpayer who is funding a debt of £25 billion with an opportunity of reducing the servicing of it by anything up to £25 million.

I believe the Irish taxpayer would be better off with £25 million less per annum to pay in servicing our national debt than what we are getting at present from Irish Life, £440,000 per annum. In terms of simple economics it is a better deal for everyone of us in this House, our wives and children, friends and relatives and the people we represent outside this House to sell off Irish Life. In addition to the State getting approximately £250 million for their 56 per cent shareholding in Irish Life and the effect this will have in the reduction of our national debt, it will provide us with an opportunity of having £25 million less to pay out to foreign banks. I should like to point out to the people who say that we are selling out to capitalists that this country is owned, at present, by foreign banks and foreign institutions.

Every opportunity we get to reduce the burden and the outflow of money from this country should be taken. Irish Life are not in the ownership of the Irish people in the real sense of the word. Irish Life are owned by a relatively small number of "with profits" policyholders with Irish Life. Those with non-profit policies, like the 50 pence per week policy, do not have a share in Irish Life. The same applies to pure life assurance contracts and the life assurance attaching to pension funds. Who benefits from Irish Life? The main recipients of the profits of Irish Life go to people who invest large sums of money in single premium bonds and unit linked contracts. We are not selling off the State silver by agreeing to accept this Bill on Second stage. That is a ridiculous argument.

In addition to getting £250 million when the sale goes through, the State will participate in the annual profits produced by Irish Life because it will own 34 per cent of Irish Life. The Minister said that, under the present corporate arrangements profits are largely locked in and cannot be distributed to shareholders. That is a fact. This is a mutual company, it belongs to policyholders and not to the Irish people. It is inaccurate to present your argument against this Bill on the basis that you are anti-privatisation because you are selling the State silver. This has nothing to do with selling the State silver. If we had a debate about selling Telecom Éireann or another commercial State company we might have a different argument but the opposition to the sale of Irish Life is ill-informed. The Irish people will be better off if we can realise an asset worth £250 million for a 56 per cent shareholding than under the present regime of getting a miserly £440,000 in 1989 from a company worth £4.5 billion.

In 1992 Irish Life will be minuscule in the real world of investment institutions. In 1992 companies ten times the size of Irish Life will do business in this country and send money from it to different parts of Europe. Unless we recognise that fact, prepare ourselves for it and allow Irish Life to become a large financial institution, we will not have a single life company capable of dealing in opposition to the multinational companies operating within Europe at present. People talked here about a sense of nationalism as if those of us who support this legislation are traitors. We are protecting the staff and the investors in Irish Life because we are facing up to reality. This has nothing to do with ideology, the sale of Irish Life is a practical proposition that is good for the Irish people and policyholders. It will also be good for the staff of Irish Life and the people in the future because it will reduce our national debt and our annual repayments by a minimum of £25 million. It will provide the Irish taxpayer and the ordinary citizen with an opportunity to participate by owning 36 per cent of something worthwhile instead of owning 90 per cent of something worthless.

It is wrong to use this occasion to confuse the issue for the public. It is also wrong to confuse the policyholders. It is wrong for responsible politicians to present an uniformed argument. It is not about selling the State silver and it was not about selling it in 1987 when we proposed the sale because we were facing reality. Any company facing difficulties will look at ways and means of reducing them. Ireland today faces enormous difficulties.

I received a written reply to a parliamentary question I asked last week regarding the number of net new jobs created in manufacturing and in international financial services for the years 1987, 1988 and 1989. the number of jobs created amounted to just over 5,000, after all the grants and incentives; 235,000 people are still unemployed and there will be many more unemployed if we stick our heads in the sand in regard to issues like this and say that we cannot touch Irish Life. If that is our attitude, not alone will we strangle them, they will be out of business after 1992; they will not be big enough to face up to the cold winds of competition. Of course they must have a good capital base and be able to get finance to develop and expand. Not only will they develop and expand in the interests of the existing policyholders, they will develop and expand so that Irish people can get jobs——

Mr. Rabbitte

In America.

Mr. S. Barrett

——in this institution. These are the practical problems which we face, not the ideological ones which are being created for political advantage. People should think again before opposing this very sensible move by the Government. I am sorry that Fine Gael in Government did not get the opportunity of introducing a Bill in this regard. In 1987 we presented our arguments on television to the people in regard to Irish Life and the situation has not changed one iota.

The history of commercial State companies has been very disappointing because of the continuous interference by Governments in their running. Before we get into an ideological argument about selling the State silver, we should allow State companies to operate commercially. Traditionaly, we have not done that. Ministers of all parties have interfered over the years. Admittedy, there have been people on these boards who were not capable of making good decisions; our system of payment to top and middle management and the staff of these companies is antiquated and not comparable to what is available in the private sector. Impositions have been put on these companies to provide a form of social service without being prepared to pay for it and then we expect them to behave commercially.

There was a recent example of interference in a commercial decision, the sale of Cablelink. The RTE Authority made a commercial decision that Cablelink should be sold to the highest bidder which, on this occasion, was an American company. Telecom had put in a much lower bid. Once again the Minister interfered. He has now forced Telecom to purchase Cablelink at the escalated price the Americans were prepared to pay for it. The reasons they were prepared to pay for it were different from the reasons Telecom should buy it. They were looking to the future potential and what they could do that Telecom are not in a position to do.

The taxpayer is left with Telecom having to borrow to pay the inflated price for Cablelink. I estimate, and any financial institution will back me up, that the taxpayer will be asked to pay £4.5 million per annum in repayments for the purchase of Cablelink and the income is £1.2 million per annum. To satisfy the decision of a Minister who interferes in a commercial decision, the taxpayer is left with picking up the bill for £3.3 million minimum.

Mr. Kemmy

Whose fault is that?

Mr. S. Barrett

It is the Minister's fault.

Mr. Kemmy

It is the Deputy's fault as well.

Mr. S. Barrett

No, listen carefully to my argument. The argument I am putting forward in relation to Irish Life is totally different from the argument one should look at when talking about commercial State companies. Irish Life are not a commercial State company in the real sense. The Government are not getting revenue from Irish Life, neither is the Irish taxpayer. There are a few bits and pieces I would question, but we are talking about the general principle as distinct from the technicalities, which is to allow the setting up of two new companies.

The Irish citizen is better off in this deal by selling Irish Life. We reduce our national debt and our annual repayments. We participate in bigger profits that are not locked in as they are at present, and this heart bleeding for the unfortunate people because they are losing the State silver is not realistic. With regard to the policyholders, there is an obligation to see to it that anybody who has entered into a contract with Irish Life should not suffer in any way by this proposal.

Mr. Rabbitte

What do they do when the State silver is sold?

Mr. S. Barrett

I am satisfied that that can be guaranteed, and it should be guaranteed. We are not selling off the State silver. That allegation will do nothing in the interests of the people we represent.

I am very sorry, I did not realise I had gone on so long. My colleague Deputy John Browne wants to say a few words.

An Ceann Comhairle

Deputy Browne, but I have to advise the House that in accordance with the resolution of the Dáil the Minister for Finance is entitled to some 15 minutes and is due to speak at 11.45. The Deputy has about two minutes.

Mr. Browne

(Carlow-Kilkenny): I was sitting peacefully here having put away my notes thinking I was not going to speak. In the minute or two left me it is almost impossible to put any “shape or make” into this. I had intended saying that only a little over a week ago we were discussing Fóir Teoranta here and we had many complaints about help given to and money lost in companies. I suppose one could say Irish Life are a precursor of Fóir Teoranta but a very successful one and a great company. I will skip everything I had planned to say except that, while I enjoy listening to Deputy Michael Higgins, he went on for a long time. This Dáil needs reform and one of the reforms it needs is in regard to the length of Second Stage speeches. In the long run, no matter how much you protest you are not going to repeat yourself, it is difficult to go much longer than half an hour without repeating yourself. However, I want to join with him, Deputy Michael Noonan and others who have asked how in the name of goodness we came up with two names, “Holdco” and “Newco”.

Minister for Finance (Mr. A. Reynolds)

I thank all the Deputies who contributed. To take the last point made by Deputy Browne "Holdco" and "Newco" are terms used in everyday commercial life as representing holding companies and new companies. Nothing in the Bill compels Irish Life to keep "Newco" or "Holdco". Naturally they will keep the good commercial name of Irish Life some way or other in their new companies. Put no more emphasis on it than that. It is an everyday working term whether you are dealing with business or what we are dealing with here.

Let me be clear on what we are doing in this Bill. We are attempting to remove the constraints on Irish Life and to allow them to develop. We are doing this in a way which protects the rights of policyholders and employees of the company and we are putting in place some basic safeguards to ensure that the company can develop as an Irish based financial services industry.

There is no question of a quick sale of a lack of consideration of the company's future. Irish Life are a particular case and we should be pragmatic. That is the Government's approach. What we all wish to see is the continued success of Irish Life and the Government firmly believes that the restructuring and flotation is the best way to achieve this.

I would like to deal now with various points that were raised. Deputy Noonan called for a White Paper on the Irish Life issue and for greater public information on the plans for the year ahead. I have listened carefully to the arguments he put forward but on consideration I do not see that this course is necessary. The issues have been examined by an Oireachtas Joint Committee. The Government have stated their intentions clearly on several occasions. I have answered repeated questions in the House on this subject. I have explained the position to the unions involved and have had discussions with the ICTU. This Bill provides the further opportunity for debate.

In the coming months the policyholders will be fully advised on the aspects of the restructuring as it concerns them. The restructuring will be put before the courts. I take the Deputy's point that the courts, of course, will have to decide. I am not going to try the court case here and it would not be proper for me to do so. The advice I have is that the proposed restructuring scheme will be consistent with the precedents and there are enough independent "referees" as it were — the insurance supervisors, the independent actuary, Irish Life's own actuary — to see to the fairness of the matter. Given the involvement of the courts, the technical and confidential nature of aspects of the flotation, the information already available and the opportunity provided by the debate here tonight, I do not see what could be added by a White Paper.

In the time available to me, I will respond in some detail to the requests for information.

The golden share provision was referred to by several speakers and doubts raised as to its effectiveness and validity, in particular as regards EC provisions. Let me clear up the position. The share is of indefinite duration. I sought to assure concerns by undertaking that it would not be redeemed in the first five years after the flotation. Deputy Rabbitte and others suggested that unless specific provison was made for it it could be discarded the week after flotation takes place. I put on the record of the House that it is of indefinite duration. I sought to assure concerns that it would not be redeemed inside the first five years; no more than that. This strengthens the position of the golden share. It does not mean, as Deputies have sought to portray, that it will last only five years. In general terms, the golden share will protect Irish Life from unwelcome takeover and allow the company to retain their Irish ethos and local base. It will do this by preventing private shareholders, either individually or in concert, from acquiring more than 15 per cent of the total share capital. The directors will be required to monitor shareholdings and will be given powers to ensure that the 15 per cent limit is enforced. If the 15 per cent limit appears to have been exceeded the directors will be required to enforce the limit. This 15 per cent was arrived at in consultation with Irish Life and took account of the trade union view. Fifteen per cent is the norm in the UK, for example.

We have examined the golden share carefully from an EC viewpoint. The advice available to me is that the arrangement does not contradict EC rules. It will not, in itself, discriminate between Irish and non-Irish shareholders. Leaving aside the golden share, there will, in practical terms, be a large Irish holding which will reinforce the golden share.

Reference was made to a draft EC Directive on takeover bids. I am advised that this Directive does not make a golden share arrangement impossible. The draft Directive in question deals with situations where a takeover bid is launched once a certain level of shareholding — one-third — has or may be reached. The golden share, however, will limit private shareholdings to 15 per cent and, I am advised, is unaffected by the proposed Directive.

Deputy Noonan raised the question of the focus and manner of the flotation of the shares. No firm decisions have been taken in this matter nor would it be prudent in advance of a flotation to disclose one's full "battle plan", as it were, for the sale.

I envisage, however, a broadly-based flotation aimed at institutional investors and the ordinary investor. There will be a foreign element, but the preferred route will be to maximise the proceeds from domestic sources. The flotation will be in Dublin and in London.

Consideration will also be given to strategic share placings with financial services firms who can assist Irish Life in developing their business at domestic and international levels. The trade unions have expressed an interest in an employee share involvement in the flotation and I intend to examine that possibility bearing in mind what was said here in this House. As for tax-efficient ways for employee share schemes, I believe that such arrangements already exist in tax law generally. No plans have so far been made for a policyholder involvement, but the House will realise that all these matters will be the subject of detailed advice for the expert financial advisers whom I will be appointing to guide me in the sale. The position is that tenders were sent out in the normal way. Various firms, both foreign and Irish have tendered to the Department of Finance. They are being considered there at the moment and in due course the results will be announced.

Deputies also referred to the capacity of the Irish market to handle the flotation. Given the flow of investment funds, the Irish market can cope. Indeed, funds which might otherwise be invested in foreign equities will, I am sure, be kept here to invest in the flotation. Deputy Rabbitte's fears on this issue may prove groundless. At the beginning of this year because of the lack of investment opportunities for Irish pension funds and investment funds money flowed out of this country and contributed to one of the interest rate increases we had in the latter part of last year.

It was also put to me that this Bill does not require the Minister to retain a specified shareholding in the Irish Life Holding Company. I do not see this as necessary and it would be an unusual restriction on the Minister's rights as a shareholder in the company. Such a restriction does not exist at the moment in the case of the State's holding in Irish Life itself. It is the intention to retain a large shareholding in the restructured company. There are no plans to alter this position but the Government must retain the discretion to exercise their rights in the public interest in relation to their shareholding in the company.

I was taken to task somewhat for not giving an explicit assessment of the valuation of the company and that no sensible shareholder would sell shares without knowing their value. I have, of course, taken expert financial advice on what the value might be on flotation but it would be most imprudent to discuss that here. Indeed, the one sure way for the financial speculators to profit would be if I were to say now what this expert advice revealed.

I was asked about details of the actuarial scheme for safeguarding the policy-holder's interests. I can give a broad outline of the basis of the scheme, but I want to assure the House that, under the Insurance Acts, a full and detailed outline of the scheme together with a report on the scheme by the actuary to Irish Life will be published in due course. Details will be given to policyholders.

The scheme put forward by Irish Life envisages the creation of a special sub-fund, or reserve, of assets for the with-profits policyholders. The sub-fund will provide the with-profits policyholders with a share of the profits on their portion of the business at least as favourable as that which could be expected if the existing arrangements for distribution of profits continued in being. The equity of this arrangement will be subject to court approval. It is Irish Life who will be seeking court approval, not I, so it is up to them to carry through the court aspects. Deputy Taylor said that the transfer of business will be made by ministerial orders. In fact the transfer order referred to in the Bill will be a court order.

Deputy Noonan asked how the proceeds of the flotation will be used and sought an assurance that they will not be used for current budget purposes. I can assure Deputy Noonan that the proceeds of sale will be used in an appropriate way to help ease the burden of the National Debt and, therefore, of debt-servicing costs.

There was also the question of the use of the terms "Holdco" and "Newco", and I have already dealt with that. In fact the Bill refers to the "holding company" and the "new company" and the advice I have is that this does not preclude the use of more appropriate names for these companies when the restructuring is being done.

Deputy Taylor raised the question of whether Irish Life needs the capital to expand, in view of the ability it has shown to grow to its existing size. In my opening remarks I made it clear that it is the future which we must be concerned about and that access to capital is essential. The consultants described it as essential to any viable competitive strategy for the company and that there must be access to all the range of equity and debt capital, not just specific or restricted types instanced by the Deputy.

The company can fund its expansion from internal resources at present. What is important is access to capital and not short-term capital needs. Furthermore, the company realistically can only plan new expansion now if it has the certainty that access to equity capital will be available as required. It is a matter for the company, however, to formulate its capital needs. In floating the company we will be removing a barrier to fulfilling those needs.

Deputy Taylor also raised several issues on specific sections of the Bill. We can go into some of these on Committee Stage and tease them out there. He also referred to the relief from stamp duty on the transfer. A similar provision applies to transfers of banks under the Central Bank Act, 1971. In the case of companies, generally there are provisions in the Finance Act, 1965 to exempt bona fide group reconstructions from stamp duty. Irish Life would probably qualify under these exemptions but the specific legislative provision puts the matter beyond doubt.

I was also asked where the provision exists in the Bill for minority shareholders to exchange their shares for shares in the holding company. The draftsman advises that this is not necessary. The minority shareholders have these rights as shareholders already. In my case, however, it is necessary for the Oireachtas to confer the legal power on me. The actual share exchange means that I will exchange my 90 per cent for 90 per cent of the shares in the holding company whose shareholding will be a mirror image of the existing shareholding in Irish Life.

Irish Life will transfer its business, including its subsidiaries, to Newco. The position of the subsidiairies is not affected by the transfer other than their change of ownership from Irish Life to Newco.

Deputy Taylor referred to the Programme for Government which states that any changes in the ownership structure of particular companies will only take place if it is in the public interest and in the best interests of the company and its employees and following consultation with the social partners.

I think I outlined in some detail in my opening remarks the long and careful consideration given to the issue of Irish Life, the consultation with the unions, with the company and the open manner in which we proceeded. I cannot accept any claims of bad faith on the Government's part.

Deputy Rabbitte referred to expansion abroad by Irish Life and suggested that it should expand into non-core business here. This is one reason the restructuring and flotation is to be desired. It is necessary for Irish Life to become an Irish-based international financial services company and in this way enhance their market and employment opportuinities both here and abroad. The Deputy referred to the US. That is only one market. The aim is to expand in all relevant markets and a restructuring and flotation will aid this. The ability to bring in new capital and new partners, especially in the context of 1992, can only be seen as a welcome and necessary development. This facility will be severely constrained if there remains a State holding of 90 per cent. The Deputy remarked on the UK experience. We are proceeding on a pragmatic basis and the parallels with the UK are not entirely applicable. The aim of the flotation will be to achieve a proper price for the State shares and to enhance the future of the company. As to the value of the company, this has been the subject of expert advice and I have already dealt with that question.

The Deputy also referred to senior management. If anything, we should express our appreciation of what they have done to build up this company. I am sure all Deputies would subscribe to that.

Deputy Durkan raised a few questions in relation to aspects of various premiums and other aspects of insurance which are not relevant to this but are indeed the responsibility of the Minister for Industry and Commerce. The Deputy also referred to other areas which on his behalf I will refer to the Minister for Industry and Commerce.

Deputy Barrett, in referring to the economic aspects, more or less repeated and approved of what I had to say when introducing the Bill.

I do not have time to respond to all the questions raised by Deputy Michael Higgins in his contribution, which lasted an hour and a half, but in response to his question who will be appointed as financial advisers I can tell him that this matter will be dealt with in the normal way by the Department and the successful people will be announced in due course. He also made reference to Holdco and Newco, companies I have already dealt with. In response to his question why we opted for the figure of 34 per cent and not some other figure I can tell him that advice was received from the consultants in this regard. They advised us on the best approach to adopt in trying to attract strategic investors while retaining a substantial stake in State ownership at the same time.

Deputy Higgins also asked what is going to happen to the reserves. In response, let me point out that they will continue to form part of the assets of the company. The rights of shareholders and policyholders in this regard will be addressed by the courts who will have to be satisfied that the with-profits policyholders are getting a fair deal.

Deputy Higgins also asked who gave me the right to transfer the funds of the policyholders from one company to another. The procedure under the Assurance Companies Act, 1909, provides for the transfer of life assurance business from one assurer to another. This matter will also be dealt with by the courts, as I indicated in my opening remarks, when the policyholders will be fully consulted. I have no doubt that the courts will uphold their rights in this regard.

Deputy Higgins referred to the Irish Life holdings in various large companies quoted on the Stock Exchange. These investments have been made on behalf of the policyholders. There is nothing sinister about this and I have no doubt that this will continue to be the case when the business has been transferred. Other Deputies indicated what may go wrong with Irish Life but I fail to understand what they are getting at as Irish Life is supervised in the same way as every other company. Indeed, it is the strongest company around.

Deputy Higgins also stated that this legislation will have disastrous consequences for Irish Life and its staff. I regret that he said this and I do not know what he is getting at as all we are trying to do is ensure a better future for the company, its staff and policyholders. There is no doubt a big question mark would hang over the company and many other companies in this line of business in 1992 if no action is taken now to ensure a better future for them. Even though Deputies have expressed doubts about this, I have no doubt that they will have a better future. We have to decide which side we are on. The Labour Party and The Workers' Party have stated what their policies are and I have outlined now what the view of the Government is. Deputy Noonan put the view of Fine Gael on the line. That is what democracy is all about and this House will decide on the issue tonight.

Question put.

The Dáil divided: Tá, 120; Níl, 23.

Tá

• Ahearn, Therese.
• Ahern, Bertie.
• Ahern, Dermot.
• Barnes, Monica.
• Barrett, Michael.
• Barrett, Seán.
• Barry, Peter.
• Belton, Louis J.
• Boylan, Andrew.
• Bradford, Paul.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Séamus.
• Briscoe, Ben.
• Browne, John (Carlow-Kilkenny).
• Browne, John (Wexford).
• Bruton, Richard.
• Burke, Raphael P.
• Calleary, Seán.
• Callely, Ivor.
• Carey, Donal.
• Clohessy, Peadar.
• Connaughton, Paul.
• Connolly, Ger.
• Connor, John.
• Cosgrave, Michael Joe.
• Cotter, Bill.
• Coughlan, Mary Theresa.
• Cowen, Brian.
• Creed, Michael.
• Cullimore, Séamus.
• Currie, Austin.
• Daly, Brendan.
• Davern, Noel.
• Deasy, Austin.
• Deenihan, Jimmy.
• Dempsey, Noel.
• Dennehy, John.
• de Valera, Síle.
• Doyle, Joe.
• Durkan, Bernard.
• Ellis, John.
• Enright, Thomas W.
• Fahey, Jackie.
• Fennell, Nuala.
• FitzGerald, Garret.
• Fitzgerald, Liam Joseph.
• Fitzpatrick, Dermot.
• Flaherty, Mary.
• Flanagan, Charles.
• Flood, Chris.
• Flynn, Pádraig.
• Gallagher, Pat the Cope.
• Geoghegan-Quinn, Máire.
• Harney, Mary.
• Harte, Paddy.
• Higgins, Jim.
• Hillery, Brian.
• Hilliard, Colm.
• Hogan, Philip.
• Ahern, Michael.
• Allen, Bernard.
• Andrews, David.
• Jacob, Joe.
• Kelly, Laurence.
• Kenneally, Brendan.
• Kenny, Enda.
• Kirk, Séamus.
• Kitt, Tom.
• Lawlor, Liam.
• Lee, Pat.
• Leonard, Jimmy.
• Leyden, Terry.
• Lowry, Michael.
• Lyons, Denis.
• Martin, Micheál.
• McCormack, Pádraic.
• McCreevy, Charlie.
• McDaid, Jim.
• McEllistrim, Tom.
• McGahon, Brendan.
• McGinley, Dinny.
• McGrath, Paul.
• Mitchell, Jim.
• Molloy, Robert.
• Nealon, Ted.
• Nolan, M.J.
• Noonan, Michael. (Limerick East).
• Noonan, Michael J. (Limerick West).
• O'Connell, John.
• O'Dea, Willie.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Jim.
• O'Keeffe, Ned.
• O'Leary, John.
• O'Malley, Desmond J.
• O'Rourke, Mary.
• O'Toole, Martin Joe.
• Owen, Nora.
• Power, Seán.
• Quill, Máirín.
• Reynolds, Albert.
• Reynolds, Gerry.
• Roche, Dick.
• Shatter, Alan.
• Smith, Michael.
• Stafford, John.
• Taylor-Quinn, Madeleine
• Timmins, Godfrey.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Joe.
• Wilson, John P.
• Woods, Michael.
• Wyse, Pearse.
• Yates, Ivan.

Níl

• Bell, Michael.
• Byrne, Eric.
• De Rossa, Proinsias.
• Ferris, Michael.
• Foxe, Tom.
• Gilmore, Eamon.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• O'Sullivan, Toddy.
• Pattison, Séamus.
• Quinn, Ruairí.
• Gregory, Tony.
• Higgins, Michael D.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Moynihan, Michael.
• Rabbitte, Pat.
• Ryan, Seán.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.

Tellers: Tá, Deputies V. Brady and Clohessy; Níl, Deputies Howlin and Byrne.

Question declared carried.

Committee Stage ordered for Friday, 13 July 1990.