Amendments Nos. 1, 4, 5, 6 and 7, along with the deletion of section 3 and the Schedule, form a composite proposal. Amendment No. 2 is an alternative to amendment No. 1 and amendment No. 3 is related. Accordingly, amendments Nos. 1 to 7, inclusive, along with the proposed deletion of section 3 and the Schedule shall be grouped together by agreement. Is that agreed? Agreed.
ICC Bank Bill, 1999: Committee and Remaining Stages.
Section 1 agreed to.
SECTION 2.
I move amendment No. 1:
In page 3, lines 33 to 35 and in page 4, lines 1 to 9, to delete subsections (1) and (2).
As a result of the decision of the Minister for Finance to withdraw ICC Bank from sale, it is necessary to make some amendments to the Bill. Subsections (1) and (2) of section 2 are being deleted. Both subsections related to the sale of the bank and if that sale is not going ahead, it is appropriate that these two subsections be deleted. The remainder of the section concerns the ESOT and has been left intact. The original agreement of the ESOP was conditional on the sale by the Minister of his shares in the bank. It will now be a matter for the board to review the arrangement. When the Minister receives the results of this review he will examine the matter further.
Section 3 relates to provisions in relation to guarantees by the Minister for Finance under section 3 of the Industrial Credit (Amendment) Act, 1958. These provisions were included in the Bill on the understanding that the bank would be sold. As this is no longer the case, section 3 has been deleted from the Bill. Section 5 of the Bill provides that the borrowing limit of ICC Bank will be increased, by ministerial order and following consultation with the Central Bank. This method of increasing the borrowing limit is no longer considered appropriate in a situation where an early sale of the bank is no longer envisaged. Accordingly, this section has now been amended to provide for a new borrowing limit to be specified in the Bill and that this can only be amended subsequently in primary legislation. This is the way the borrowing limit has been increased in the past.
The borrowing limit is being increased from £2.3 billion to £3.5 billion. This new limit was set after consultation with the bank. ICC has expanded its business strongly over the past few years, a trend which has continued in the current year. It is considered necessary to increase the limit to the new amount, as to do otherwise would mean further legislation would be needed in the near future to increase the limit once again.
Amendment No. 4 requires a technical adjustment by the inclusion of the word "(Amendment)" in the title of the ICC Bank Act, 1997. Section 8 of the Bill and the accompanying Schedule to the Bill provided for the repeal of the ICC Bank Acts, 1933 to 1997, and the deletion of references to ICC in other legislation so that ICC, once sold, would be treated similarly in law to all other private companies. In the present circumstances it will no longer be necessary to make these repeals. However, a small number of repeals will be necessary arising from disposal by the Minister for Finance of his residual interest in Fóir Teoranta under the terms of section 4. As a result of the Minister taking this action, section 3 (4) and (5) and sections 7, 8 and 9 of the Fóir Teoranta (Dissolution) Act, 1990, are no longer required. Accordingly, section 8 will be amended to provide for these repeals.
Section 10 contains the Short Title, construction and commencement provisions. Subsection 3 provides that the Minister for Finance could make the necessary order or orders to bring any provision or part of the Bill into effect with effect from the same date or different dates. This was to allow the Minister flexibility where it was not possible to know precisely when the Bank would be sold. As the Bank has not been sold, it is proposed that this subsection will be deleted as such flexibility is no longer required.
Section 8 and the accompanying Schedule to the Bill provide for the repeal of the ICC Bank Acts, 1933 to 1997, and the deletion of references to ICC in other legislation so that once ICC Bank is sold it will be treated similarly in law to all other private companies. In the present circumstances it will no longer be necessary to make these repeals. It is proposed that the Schedule to the Bill will, therefore, be deleted and I will deal with the Title of the Bill thereafter.
It is unfortunate that we are amending a Bill so drastically. ICC Bank is a very good bank, it has played a key role in the development of small business in Ireland since it was founded in the 1930s and I wish it a strong and successful future.
I sympathise with management and employees of the bank because irrespective of whatever happened that led to the withdrawal of Bank of Ireland from the proposed purchase of the bank, no blame can be attached to the management, the board or the employees of ICC Bank, but this has created a difficulty for the bank. I pledge the support of the Fine Gael Party to the bank and we will co-operate in any way possible to restore its strength and reputation in the marketplace. We realise some damage has been inflicted but because of its tradition and its reputation, any damage that has been done will be quickly repaired. Nothing stands still. Irrespective of whether the bank is sold, changes must be made. I agree with the Minister that it is appropriate to allow the sections that deal with the ESOP stand. If in new circumstances it is deemed appropriate that the employees should be allocated a tranche of shares, it is prudent to have the legislative framework in place to allow the Minister to do that. The Minister of State proposes the deletion of those sections that were required for the sale of ICC Bank, which are no longer necessary, and to proceed with the remainder of the Bill. I have no difficulty with that.
It is proposed that subsections (1) and (2) of section 2 will be removed because they relate to the sale of the bank. It is also proposed that section 3 will be deleted. Most of section 4 will remain. It provides that certain assets and liabilities will be transferred to the company under the Fóir Teoranta (Dissolution) Act, and that is acceptable. I thank the Minister of State for changing the formulation for restating the borrowing limit of the company. In the circumstances that prevailed until yesterday it was appropriate that the Minister should have had the power by order to raise the borrowing limit of ICC but as it is no longer on the market it is better to revert to the traditional formulation that the Minister will state a ceiling on borrowing. That is what is proposed in section 5. I welcome the commitment given by the Minister of State that if borrowing limits are raised in future, that will be done in the traditional way by primary legislation. I understand the need to raise the borrowing limit for ACC and I have no difficulty with a provision to that effect being incorporated in the Bill.
Regarding the other sections that deal with repeals and revocations, as the sale will not go ahead the provisions in these sections are redundant and they should be deleted as well as the Schedule. I do not have any difficulty with the amendments proposed by the Minister of State. I support the immediate passage of the Bill at the Minister's discretion.
The amendments proposed by the Minister of State are a logical consequence of the bank not being sold and, to that extent, I have no problem with them. The bank is, however, in a difficult position. I am disappointed that the Minister of State used the opportunity of his contribution to restate, in trenchant terms, the Government's view on this issue – that there is no longer any significant strategic or policy justification for continuing direct State involvement in the banking sector. That reinforces the limbo the bank is in. It is as if one served an eviction notice but had not yet got around to implementing it. Inevitably this position creates and fosters doubt as to what the future of the company will be because the only serious way that can be read is that the Government will hold on to the bank until such time as it can find some way of getting rid of it. That is not the way to proceed. We should ensure the bank does not merely become another small bank. If we are to retain ICC, it must have a clear, strategic mandate. it must know what it is doing. There is a role for the bank within the SME sector and it should be reinforced by Government, and that is the business the Government should be about in the next few months.
There is a provision in the Bill to raise the borrowing limit of the ACC. If the Government makes a decision at this stage or in the next few weeks that it will not be able to proceed with the merger and flotation simultaneously, that should be said as soon as possible. If that decision or conclusion is delayed much longer, there is a risk damage will be inflicted on ACC and the TSB because there is a suspicion that it will not be possible to do the two simultaneously. It was a mistake to propose that the two should be done at the same time. If it is proposed to merge first and float later, the Government should say so soon.
Amendment agreed to.
Amendments Nos. 2 and 3 not moved.
Section 2, as amended, agreed to.
SECTION 3.
I move: "That section 3 be deleted."
Amendment agreed to.
Section 3 deleted.
Section 4 agreed to.
SECTION 5.
I move amendment No. 4:
In page 7, to delete lines 8 to 20 and substitute the following:
"is hereby amended by the substitution in clause (i) of subparagraph (d) (inserted by section 5 of the Industrial Credit (Amendment) Act, 1971) of ‘£3,500,000,000' for ‘£2,300,000,000' (inserted by section 2 of the ICC Bank Act, 1977), and the said clause, as so amended, is set out in the Table to this section.
TABLE
(i)the amount so raised or borrowed and standing unpaid at any particular time shall not exceed £3,500,000,000 less the amount (if any) which the Minister has, under a guarantee or guarantees given by him, paid in respect of the principal of moneys raised or borrowed by the Company and which stands at that time not repaid to the Minister by the Company,".
I also move: "That the word "(Amendment)" be included before the word "Act" in line 6 of amendment No. 4". This is a technical amendment to ensure the correct legal language is used.
Acting Chairman
Is that agreed? Agreed.
Question put and agreed to.
I thank the Deputies for their positive responses.
Section 5, as amended, agreed to.
Sections 6 and 7 agreed to.
NEW SECTION.
I move amendment No. 5:
In page 7, before section 8, to insert the following new section:
8.–Subsections (4) and (5) of section 3 and sections 7, 8 and 9 of the Fóir Teoranta (Dissolution) Act, 1990, are repealed.".
This amendment involves the deletion of various repeals and revocations which have been necessary in the circumstances of the sale of ICC Bank. It also provides for some repeals to the Fóir Teoranta (Dissolution) Act, 1990, which are still relevant. Acceptance of this amendment involves the deletion of section 8 of the Bill.
Amendment agreed to.
Section 8 deleted.
Section 9 agreed to.
SECTION 10.
I move amendment No. 6:
In page 8, lines 4 to 11, to delete subsection (3).
This amendment involves the deletion of the provision to give maximum flexibility in the introduction of various provisions of the Bill. Under the revised scenario, all provisions will come into effect immediately the legislation is passed. The Schedule of repeals and revocations has been deleted as these, apart from those dealing with Fóir Teoranta which have been covered separately, are no longer relevant in a situation where ICC Bank carries on as heretofore.
Amendment agreed to.
Section 10, as amended, agreed to.
SCHEDULE.
I move:
"That the Schedule be deleted from the Bill."
Question put and agreed to.
TITLE.
I move amendment No. 7:
In page 3, to delete lines 5 to 17 and substitute the following:
"AN ACT TO MAKE PROVISION FOR ADDITIONAL BORROWING BY ICC BANK PUBLIC LIMITED COMPANY AND ACC BANK PUBLIC LIMITED COMPANY AND FOR THE ISSUE OF SHARES IN ICC BANK PUBLIC LIMITED COMPANY IN CONNECTION WITH AN EMPLOYMENT SHARE OWNERSHIP TRUST FOR THE BENEFIT OF ITS EMPLOYEES OR THOSE OF A SUBSIDIARY OF IT.".
This amendment involves the redrafting of the Long Title of the Bill to reflect the situation where ICC Bank is not being sold in the short-term. It no longer makes specific provision for the disposal by the Minister for Finance of shares in the bank or for provisions in relation to certain guarantees of its borrowings. It also includes a technical amendment in the third last line of the substitution amendment by replacing the word "EMPLOYMENT" with the word "EMPLOYEE".
Amendment agreed to.
Title, as amended, agreed to.
Bill reported with amendments and received for final consideration.
Question proposed: "That the Bill do now pass."
On behalf of the Government and the Minister for Finance, I thank Deputy Noonan for his strong endorsement of ICC Bank, Deputy McDowell for his positive contributions and Deputy Enright. While we all regret that amendments had to be introduced to this legislation, there are advantages and disadvantages to everything. I am confident that ICC Bank, which has been successful over the past 66 years, will be reinvigorated and renewed and that it will continue to grow and prosper, particularly in the niche areas it serves which are vitally important to the future economic growth of the nation. I am confident the advantages will outweigh the disadvantages. I thank the Opposition for its co-operation in ensuring we put in place a safe and secure legislative environment in which ICC Bank can thrive and prosper.
I thank the Minister for his assistance this morning. I also thank the officials of the Department of Finance who helped me during all Stages of the Bill.
I would like to be associated with Deputy Noonan's comments. This is an unfortunate position, but I hope the bank can go from strength to strength with a renewed and clear mandate.
Question put and agreed to.