Seanad Éireann debate -
Wednesday, 13 Mar 1940

Vol. 24 No. 8

Unemployment Assistance (Amendment) Bill, 1939—Committee and Final Stages.

Section 1 agreed to.

SECTION 2.

Mr. M. Hayes

I move amendment No. 1:—

To add a new sub-section as follows:

(2) Nothing in paragraphs (b), (c), (d), (e) and (f) of sub-section (1) of this section shall be construed as having retrospective effect, and the amendments of Section 26 of the Principal Act effected by those paragraphs of that sub-section shall come into force as on and from the 1st day of April, 1940.

Section 2 of the Bill amends the Principal Act by making bodies liable for the amount of money which they would have had to pay had the Principal Act been drafted after the fashion that the Minister intended. I am proposing this amendment, that nothing in certain paragraphs shall be deemed to be retrospective, in the confident hope that the Minister will accept it because on the Second Stage of the Bill he told us that this Act was not retrospective and lest we might make more mistakes, in order to get the Minister's intention properly into the Bill, I suggest that we should say definitely in the Bill that it is not retrospective. In column 691 of the debates for the 6th March of this House the Minister said:—

"I have never listened to so many specious arguments in my life as I have just listened to from Senator Douglas. He wound up with an attack upon this Bill upon the plea that it is proposed to be retrospective in its effect. It is not."

If it is not retrospective in its effect it seems to me that the simplest thing is to say that quite clearly as it is put in this amendment. Then, I think, if the Minister accepts the amendment, he could delete Section 4 which is put in to make certainty more certain. The Minister was foiled in his last effort to get certain amounts of money from certain local bodies and in this he is making assurance doubly sure.

On the merits of the amendment, the Principal Act of 1934, I think it was, purported to place a certain burden upon local bodies. A legal opinion was taken by the Corporation of the City of Dublin, which stated to them quite clearly that the burden was less than they had been paying and less than the Minister had demanded. The legal opinion told them further that they were entitled to pay only the smaller amount and to recover from future payments the amount which they had overpaid in the past and they did that. The Dublin Corporation is, of course, a subordinate body and having got legal opinion was bound to act on that legal opinion. The Government is not in that position. The Minister spoke on the last occasion about legal advice but I think he refrained from saying that the Government had legal advice that their view was correct and, so far, the only legal opinion that has been produced or alluded to and the only name of senior counsel that has been mentioned are the opinion given to the Corporation of Dublin by a particular named member of the Bar. I do not know whether the Minister had any opinion. If he had any legal opinion it certainly never saw the light and he never gave it to anybody. The position is that the Corporation of Dublin acted within the law and, having acted within the law and having fulfilled their legal obligations, this Bill now proposes to make them pay money, in 1940, for which they were not legally liable before the date of the passing of this Act. That, I think, is a vicious principle, apart from the sum of money involved, which is £63,000. If it were even 6/3, I think the principle is a vicious and a wrong one and could not be upheld. Since the Minister is at one with me in being against retrospective legislation to make people liable for sums that they were not liable for in the past, I hope that he will accept the amendment.

Minister for Industry and Commerce (Mr. MacEntee)

I have said that this Bill was not retrospective in effect, and I do not intend to be a party to any action which would cast doubts upon the truth of that declaration. It is quite clear that if this amendment were introduced the acceptance of it by the Government would imply that the Bill was really of retrospective effect and that the doubts which had been expressed by the Dublin Corporation in regard to this matter were well founded. We are not prepared to accept that position at all. This Bill has been introduced, as I have said, to avoid litigation which would be futile, though expensive both to the ratepayer and to the taxpayer alike. This amendment, far from settling anything, would unsettle everything and would leave us in exactly the same position as if the Bill had not been brought in. It would render nugatory all the efforts which the Oireachtas has made to clear up the situation and to leave it, as we hope it will be left after the enactment of this measure, without any ambiguity or any uncertainty whatsoever. For that reason I cannot accept the amendment.

Mr. Douglas

May I point out to the House that there is clearly an ambiguity? The Minister made it perfectly clear that he did not regard this Bill as retrospective, and he was quite politely and kindly sarcastic at my expense because I believed it was. He referred in his last speech—certainly he referred to it at some time on the last occasion—to the fact that if one turned to the discussion on the 1934 Act one would see that there was a clear intention on the part of the Oireachtas, as shown by the speeches of Ministers and others, but he said that certain doubts had arisen. If, as I think is the case, this Bill will make certain local bodies, the Dublin Corporation in particular, liable for payments for which they were not legally liable before this Bill was passed, payments in respect of previous years, it has a retrospective effect. The Minister held that it was not retrospective, and we held that it was, but if the Minister still contends that it is not retrospective, I certainly think that he should be willing to have this amendment inserted. It seems to me that this is very largely a matter of words, because I hold that, if after legal opinion was secured the corporation did not make any payments and no action was taken to force them to do so, then it must be assumed they were not liable at the time.

Mr. M. Hayes

Surely the position is now that the Minister is by law making certain people liable for payments for which they were not legally liable before this. Some time ago, in his capacity as Minister for Finance—if it was not he, it was the present Minister, at any rate, the Minister for Finance—gave notice that income-tax from next month would be levied at the rate of 6/6 in the £. If, instead of giving notice that income-tax would be raised in that way after a certain period, he had announced that the income-tax for 1937-38 would have to be paid at the rate of 6/6 in the £, think of the fuss that would be raised about it if he made people liable for sums which at the particular moment of the announcement they were not liable for. He could call it a Bill to remove doubts and to get more money. Similarly, if the corporation were to strike a rate higher than that which they had originally announced, owing to the Minister's machinations and operations—and that is what is going to happen—and supposing they were to say that that was also to be the rate for 1939, the Minister would immediately say that that was improper and illegal. But the Oireachtas can do that. There is no doubt that the Minister can do what he is trying to do, but it is an utterly vicious and a wrong principle. It is a sound principle that when any person or any body makes a mistake, that person or that body should pay for the mistakes. The Minister, his advisers and the Oireachtas made a mistake in the framing of the original Act, and they are now going to compel the citizens of Dublin to pay for the mistakes of somebody else. That is a very bad principle. It is one of the things that brings Parliament into disrepute. I suggest that the Minister is doing a very vicious, a very improper and unjust act if he uses the Parliamentary machine to enact retrospective legislation of this kind. It would be regarded as an extremely unjust act if the corporation sought to increase rates retrospectively, but that is, in effect, what is being done in the case of this taxation. I might give expression to this view. I believe myself that the Minister got legal opinion from his own legal advisers that the corporation was right in their action, and that is why he brought in the Bill that is now before the House.

Mr. MacEntee

I do not know whether it is necessary to keep on chopping arguments and prolonging the debate unnecessarily, because it is quite clear from his own words that Senator Hayes does not seriously believe in the arguments he is advancing.

Mr. Hayes

I do, Sir. They are quite clear.

Mr. MacEntee

Take the first of his arguments: that it is a sound principle if a body makes a mistake that it should pay for that mistake. Apply that to the corporations. If there is any doubt as to what was the interpretation of Section 26 of the 1933 Act, then the corporations were mistaken in the interpretation which they put on that section in the years 1934, 1935, 1936, 1937 and up to the year 1938. They were mistaken when they were levying and collecting rates for the purpose of making their due contributions to the Unemployment Assistance Fund. If mistakes should be paid for by those who make them is the principle upon which the Senator is basing his argument, then I think he has destroyed the case for his amendment. The effect of the amendment would be to relieve the corporation of the consequences of the mistake, which he holds they made during those years. Our view is not, however, quite on all fours with that of the Senator. We do not think they made any mistake during those years. We think they interpreted the Act during those years correctly, and accordingly all we are seeking to do is to ensure that there will not be any future doubt as to how the Act is going to be interpreted. The purpose of the Bill is to clarify the situation, and I could not possibly stultify the Dáil and the Government by accepting the amendment which would suggest that there was still a doubt in the minds of the Government or its advisers as to what the true effect of the section was.

The Senator has suggested that the Government had not been advised that the interpretation which we placed on the section was the correct one. I pointed out on the last day that the net point upon which the corporation founded its attitude in the matter was raised on amendments submitted to the Dáil and to the Seanad. In the case of the amendment in the Dáil, I think the issue could not be stated more precisely. The amendment was:

To insert before the words "rateable valuation" the word "effective".

Now the corporation ground their attitude upon the presumption that the words "rateable valuation" used in the section of the Principal Act must be interpreted as meaning the "effective rateable valuation". That issue, as I said, was raised in the Dáil, and the amendment which was put down by Deputy Corish was defeated. Again, here in the Seanad, Senator Staines put down a series of amendments. I think this matter was discussed on every stage of the Principal Act as it was going through the House, and on each occasion, the end which Deputy Staines was aiming at was to ensure that when the corporation contribution came to be assessed, it would be based upon the effective rateable valuation of the municipality. The Seanad at the time took the same view as the Dáil did in this matter, and, so far as words could ensure it, they saw that the section was drafted in such a way that the corporation's contribution was to be assessed, not upon the effective rateable valuation, but upon the gross rateable valuation of the city. That was the net issue raised on these amendments. The Oireachtas decided, I think wisely, that the assessment should be on the gross rateable valuation and not on the effective rateable valuation.

The Corporation of the City of Dublin, and most of the other local authorities, assumed when the Act became operative that the section of the Act had been drafted to give effect to that decision, and they acted on it for four years. If a doubt has been raised in this matter since, it would be much too an expensive matter to go to the courts and to have the courts decide the question whether the Oireachtas or the technical advisers of the Government had failed to express the clear intention of the Oireachtas in regard to it, or whether because of some verbal failure or, as I put it the other day, a textual error, the original intention of the Oireachtas had been defeated. Moreover, the ultimate result would have to be the same, some representative of the Government would have to come here and say: "The equities of the situation are such that we feel that the contribution to be paid by the Dublin Corporation and the other large municipalities to the unemployment assistance fund must be of such an amount; the courts have held that the section, as drafted, does not, in fact, provide for that, and it is necessary for us to ask the Oireachtas to amend the law accordingly." Therefore, the only thing that would be gained, as a result of taking another course, of taking the course which appears to appeal to the Senator, would be, not that the burden of the Dublin Corporation would be ultimately lighter, but that the burden on the ratepayers of the city and upon the taxpayers of the country would be heavier as a result of the legal expenditure needlessly incurred. That is the position as we see it. The Senator has constructed a very long argument about the ill-effects of retrospective taxation, but suppose we were to accept his amendment, what would it do, except to necessitate retrospective taxation?

Mr. M. Hayes

Surely not?

Mr. MacEntee

If the Senator will turn to the Budget statement of last year, he will see that, in framing the Budget, account was taken of the fact that £63,000 had been, as we deemed it, wrongfully withheld by the local authority. We were expecting that the law would be so clarified in this year that the local authorities would meet their just obligations to the Exchequer, and accordingly, to that extent, taxation was not being imposed. But if we accept the Senator's amendment, it simply means that we, as the representative of the taxpayer, forgo this sum of £63,000 which is owed to the public Exchequer by the local authority. We then would have to come formally to the Dáil to impose additional taxation, but the effect of which would be equivalent to taxing the people retrospectively in order to make good this £63,000 deficiency.

I think there are no merits whatever in the amendment. For four or five years a certain interpretation was placed upon this Act by all the parties concerned, and it was acted upon. In 1938, the county boroughs—whether as a result of consultation among themselves or not, I do not know, but the coincidence was, shall we say, remarkable—decided, although they levied a rate for the purpose of paying this contribution on a certain basis and had collected the proceeds of that rate, to pay only part of it over to the public Exchequer. We cannot allow that sort of thing to continue. We could not allow that sort of practice to form a precedent and to be set up as a model to imitate. The position is that the money having been collected from the citizens for this purpose, we think we are entitled to get it, and to get it, we hold, on the true interpretation of the section. If there is any doubt in the mind of any other interest concerned, it is the duty of the Oireachtas to clarify the doubt, and to make the position plain and clear. That is all we are doing, and we are not introducing a measure the purpose of which is to collect taxation retrospectively.

Mr. M. Hayes

The Minister said a good deal, but he did not say that, in 1939, he got any legal opinion as to the meaning of the Act. The Minister has been eight years in office, and he is not unintelligent, to put it in its mildest form. He knows as well as I and all intelligent people know that when a lawyer was asked, in 1938, to say what the Principal Act meant, he did not read the Dáil or Seanad debates. He was spared that. He did not read what Deputy Corish said, what Senator Staines said, or what the Minister for Local Government said. He simply read the Act, and found that the Act meant a particular thing. This Oireachtas is all powerful. The corporation is a subordinate body, and there having been a doubt, the corporation was bound to take an opinion. I suggest that the Minister did take the opinion of a lawyer who did not read the debates, but who said: "The corporation opinion is right; you will have to amend the law," and this is the amendment of the law.

It is a vicious and a bad principle, and the Minister's attempt to suggest that the county boroughs did something mean, something in the nature of sleight-of-hand, is quite unworthy and quite untrue. He is a trustee for the people; these corporators were trustees for the ratepayers; and they simply took the obvious steps to find out what their obligations were. When they found what they were, they paid them, and the Minister now says to them: "You are going to pay me what I thought your obligations were, no matter what the law was. I am going to make the law right now, because I have the big stick." There is no doubt that he has the big stick, but he is very foolish to use it.

Amendment put.

The Committee divided: Tá, 11; Níl, 19.

Tá

• Barniville, Henry L.
• Butler, John.
• Conlon, Martin.
• Counihan, John J.
• Douglas, James G.
• Fitzgerald, Desmond.
• Hayes, Michael.
• Johnston Joseph.
• McGillycuddy of the Reeks, The.
• Madden, David J.
• Rowlette, Robert J.

Níl

• Campbell, Seán P. Concannon, Helena.
• Cummins, William.
• Goulding, Seán.
• Hawkins, Frederick.
• Hayes, Seán.
• Honan, Thomas V.
• Johnston, James.
• Lynch, Eamonn.
• MacDermot, Frank.
• Mac Fhionnlaoich, Peadar (Cú Uladh).
• Magennis, William.
• O'Dwyer, Martin.
• O'Neill, Laurence.
• Nic Phiarais, Maighréad M.
• Quirke, William.
• Robinson, David L.
• Ruane, Thomas.
• Stafford, Matthew.

Tellers:— Tá: Senators Conlon and M. Hayes; Níl: Senators Goulding and Hawkins.

Amendment declared negatived.

Sections 2 and 3 agreed to.

SECTION 4.

(3) Every council by whom money is payable to the Minister under this section shall pay such money to the Minister in such one or more instalments, at such time or times, and in such manner as the Minister shall direct either generally or in respect of such council in particular.

Mr. M. Hayes

I move amendment No. 2:—

To add at the end of sub-section (3) the words "provided always that in giving such direction the Minister shall provide for such payment by equal instalments spread over not less than three years."

The purpose of Section 4 is to make assurance doubly sure that the Minister will get this money retrospectively, but I will not argue that point any further. Obviously however, a considerable amount of money is to be paid—some £63,000—which is much more than would fall to be paid in a normal year, even under this Bill, when it becomes an Act. In the other House it was pointed out to the Minister that it would be advisable to spread the payment of that money over a number of years. In that House an amendment to the effect that it should be spread over, I think, ten years, was rejected, and an opinion was expressed that three years would be a reasonable time. I think that the Minister indicated, at any rate, limited agreement with that view, and I have put down this amendment in order to give him an opportunity of saying now whether he has come to any conclusion as to how this burden will be put upon the various bodies concerned, and whether it will be collected in one year or spread over a period of years, and, if the latter, over how many years.

Mr. MacEntee

In view of what I said in the other House I think I should be entitled to resent an amendment of this sort going into the Bill. I have not been approached by the Dublin Corporation yet as to the manner in which they propose to discharge the liabilities under the Bill, if it is enacted. Perhaps it has been premature to expect them to come. But I did indicate in the other House that we should be prepared to consider an arrangement on lines which would provide that the Exchequer was not at any loss. By that I mean that the Minister for Finance might be disposed to regard the moneys withheld as a repayable advance to be repaid within a reasonable period. I have had some discussions with the Minister for Finance in regard to the matter and I believe that he would be prepared to meet the corporation reasonably—I may say, with much more consideration for their position, and with a greater desire to meet their convenience, than they evinced in the contrary direction. However, that is the position and I think the Seanad may take it that, bearing in mind our obligations to the other sections of the community, no undue hardship will be imposed on the Dublin Corporation or upon any other local authority by the Exchequer in exercising its rights under this Act.

Mr. M. Hayes

That is quite satisfactory except, of course, that the Minister is a free agent and the Dublin Corporation is bound. They could not have shown the consideration to the Minister of which he speaks, when they had a legal opinion, and the Minister need not have done so as has been shown this evening.

Amendment, by leave, withdrawn.

Sections 4 to 9, inclusive, and Title agreed to.

Leas-Chathaoirleach

When is it proposed to take the next Stage?

Mr. MacEntee

I do not know whether the rules of the House would permit me to take it now.

Agreed to take the remaining Stages of the Bill to-day.

Question put: "That the Bill be received for final consideration".

Agreed.

Question put: "That the Bill do now pass."

Agreed.

Bill to be returned to the Dáil without amendment.