State Intervention in Commercial Enterprise.

Mr. Sweetman

I move motion No. 6:—

That Seanad Éireann views with alarm the growth of State intervention in commercial enterprise, particularly through the medium of nominal boards and companies, and requests the Government, not merely to refrain from any extension of this policy, but also to dispose immediately to private ownership of as many of such enterprises as possible.

I wish, first of all, to direct the attention of the House to the wording of the motion, particularly the wording of the first phrase. The motion deals with the growth of State intervention in commercial enterprise. I used the word "growth" quite deliberately because I felt that what occurred was that over the years little nibbles were taken at a time, little actions which perhaps we were inclined to overlook because, in respect of the particular matter to which each referred at the time, we had some special interest. But when they were pieced together in one picture they showed a deliberate growth rather than a series of ad hoc decisions. I used the words “commercial enterprise” also quite deliberately because I wanted to make it clear that it was in regard to what are normally considered in these days in which we live as commercial transactions that I was interested and that I was not interested in what might best, perhaps, be described in modern conversation as “public utilities”. I do not consider that public utilities are commercial enterprises in the ordinary sense. They are operated from the public point of view and from the consumers' point of view, as apart from the point of view of a commercial nature in their transactions.

I ask the House, therefore, to look at the whole picture to see that there has been a gradual extension of State intervention in commercial enterprise and secondly in the manner in which that State intervention has taken shape, through what we have come to describe as a nominal board or a nominal company, or a dummy company as it has been termed at other times. If the State is going to interfere in commercial enterprise there are two methods open to it—the direct method or the setting up of a nominal board, a dummy company, utilising the Companies Acts which were framed and phrased for an entirely different purpose and utilising them to achieve something that they were never intended, and in my view should never have been intended, to permit. Having dealt with it in that aspect I ask the House to suggest that these commercial enterprises should be transferred to private ownership. Those acquainted with the Irish Stock Exchange agree at once that there is nothing like the number of Irish investments available for those who want to invest their money in Irish public concerns. Every stockbroker will say, upon being asked when it is possible for him to invest money to purchase Irish stocks and shares, that the demand for these is very much greater than the supply. Therefore I suggest that the method I have mentioned here in the latter end of my motion is one method in which that demand could easily and safely be met.

I might perhaps refer to the two amendments. The amendment which stands in the name of Senator Duffy, if it were confined to public utilities which necessarily must be under State control, is one which I could support in principle though with certain detailed objections. As I read the amendment in its juxtaposition to my motion it assumes that Senator Duffy is anxious to promote the growth of State intervention in commercial enterprise and, therefore, it clashes with the principle of my motion at once in that respect. His amendment is the embodiment of the policy of extended State intervention and socialism and as such could not be accepted, in my view. The amendment in the name of Senator Sir John Keane largely visualises also consideration of the principles to be adopted in respect of what might fairly be described as public utilities. In fact from hearing Senator Sir John Keane on many occasions here advocating this principle of an efficiency audit it seems fairly clear that he is considering that efficiency audit in relation to matters which it is agreed should be under the control of the State rather than under private commercial control. Therefore, to that extent it is hardly relevant to the phraseology of a commercial enterprise. Certainly I do not think the Senator has much the same outlook or intention as Senator Duffy has in his amendment, namely, to promote State intervention in every aspect of our commercial life.

To come back to the general question, this is not a question that has been suddenly sprung upon us. It is one which we have discussed in side-line aspects during the passage of various Bills, each of which in its own particular way affected some segment of our commercial life. They impinged upon the principle but were considered only by themselves and not as part of a general policy. This problem was considered by the Banking Commission which brought forth its report in the middle of the last decade. It was discussed at some length in that report and in the majority report the principle was condemned in no uncertain fashion. It was condemned then as a method by which public liabilities could be increased without consideration by the body properly appointed and constituted to consider such public liabilities, namely, the Oireachtas. In page 287 of that report one sentence is of particular importance. It states:—

"It is manifestly objectionable that subsidiary Government bodies, through possessing in an indirect way borrowing powers designed for private enterprise, should be in a position in effect to increase the debt of the State in a manner that does not come under the direct cognisance or control of the Legislature or the Minister for Finance."

I think I am right in saying that that was a sentiment expressed by that commission in relation to the habit these subsidiary companies had of borrowing additional capital without Parliamentary sanction. Following that commission's report the matter was referred to in the Report of the Commission on Vocational Organisation. Its report was submitted after many years of work of which most Senators are fully aware. In its consideration of the lines upon which vocational organisation was desirable, for very obvious reasons they considered to a very serious degree the method by virtue of which the growth of State intervention in commercial enterprise had taken place up to that date. But however much it was then a fact that there was such a growth, I think that, as I shall attempt to show, the growth has become even more marked, more pronounced, and more rapid since that time.

The Commission on Vocational Organisation in making their report—I am speaking again of the majority report—on this problem did so from two points of view. They first of all felt that there was in the Civil Service a scheme of rules and regulations built up over the years to ensure that, as far as possible, there could not be any divergence or any evasion of the one essential matter, namely, that Parliament should retain its grip on the moneys disbursed by it. In order to do that there were regulations—called at times "red tape"—which at least made certain that the funds would be disbursed in the way envisaged when voted by the Oireachtas. I want to be quite clear that I am not for a moment suggesting that in any of the public corporations or companies in which the Minister for Finance is a shareholder the funds are misapplied. Nothing is further from my mind. What is in my mind is that the Oireachtas very often intended that the funds they were granting would be given to a body for purpose A, but that, in fact, the funds they gave for purpose A were diverted to purpose B because the body in question thought that the better purpose. I shall give an example of that, but it is a fact, if that is done, that there is absolutely no manner in which, under State intervention, that can be controlled or prevented. It is surely undesirable that a system can exist in which that is possible.

If, at any time, any of us were asked what in a particular moment was the best system of government at that particular moment, I think we should probably look back and say that at that particular moment the best and most efficient method of governing a country for one particular moment was that of a benevolent despotism, provided you were absolutely satisfied that the person directing the State was benevolent; but, equally, there is not one of us who would not say that, taken out of its context for a moment and taken for even a short period in the life of a nation, it is the worst system—remember we are all human— and that it is the one system that is absolutely certain at some stage to fall into the hands of somebody who is not, to use the same word again, benevolent.

In building up any system of State control, or any system of State government, it is no use whatever building it up on the basis of saying: "I know very well that the people to whom I am now giving these powers are people who are not going to abuse them." If you give powers that can be abused then, in effect, you are creating a situation or a system which is absolutely certain to mean in the long run that the powers will be abused. In this system of nominal companies we are creating something by virtue of which there is going to be throughout the many aspects of our national life which they embrace a system which is going to be controlled by people who have no responsibility to anybody except to themselves in respect of their direction of these particular enterprises. We are building up a system which is as certain as is the Communist system to mean that, eventually, there will be command at the top with tentacles stretching out through each one of these separate enterprises which can be controlled and used for purely despotic ends, even if not used for the intermediate stage of political ends. I suggest to anybody who considers it from that angle that it is an eventuality which should make us consider whether it is a growth and a system which it is wise to permit. We must consider this from the general aspect of the people who are possibly going to administer such a system rather than from that of the people who are administering the system at the moment. If we restrict ourselves to the latter we are going to make quite certain that we are putting into the hands of somebody who may come along something which he may use in an unscrupulous fashion—in a way that nobody visualises or intends. None of us in any part of the House would wish to see that happen.

The growth of these nominal boards and companies was also discussed rather fully in the recommendations of the Commission on Vocational Organisation. In paragraph 683 it is stated:—

"It is interesting to note that by the device of the nominal company this form of State activity has escaped from the fundamental rules of the Civil Service, which were designed for integrity, economy and Parliamentary control. In these nominal companies appointments of directors and officials (managers, secretaries, solicitors and auditors) are not made on a competitive basis but by patronage; there is no strict accounting of funds to the Comptroller and Auditor-General...."

May I leave that for a moment and acknowledge at once that certain of the companies do have their accounts audited by the Comptroller and Auditor-General. That audit by him is different from the Parliamentary audit that he makes for the Committee of Public Accounts. It is an audit to ensure that the moneys which are spent by the nominal company are not misapplied in the dishonest sense that I mentioned a moment ago. It is an audit to ensure that the expenditure is properly vouched, but it is not the same type of audit as that carried out in the case of a State Department, the purpose of which is to ensure that the moneys are applied solely in the manner decided by the Oireachtas. One of the chief functions of the Comptroller and Auditor-General in auditing the accounts of State Departments is to see that not merely have the moneys voted been properly vouched and the accounts properly balanced, but that they have been spent on the purposes for which the Dáil voted them. No such requirement, however, applies in the case of the audit of the accounts of nominal companies carried out by the Comptroller and Auditor - General. The requirement there is only to see that the moneys have been spent and are properly vouched, and that the accounts are balanced. The quotation continues:—

"there is no responsibility to Parliament, as the Minister who sets up such a company or provides it with public money refuses to answer questions in the Dáil concerning it.

This method of administration is clearly fraught with great dangers to the prestige and integrity of democratic government. It offers a wide field for the exercise of political patronage of a very costly and undesirable type, for not merely may large salaries be given to persons as a reward for political services, but large sums of money for capital and working expenses may be placed at their disposal without adequate safeguards. It could provide an unscrupulous government with a means of making a large number of persons dependent on it for salaries and wages and of obtaining electioneering support by promoting enterprises or industries in certain localities without due regard to economic factors."

It could do these things, and any system of government that could do so, regardless of whether it does do these things is, in fact, a dangerous system, the introduction of which is likely seriously to affect our national life in the future. It is not a new system. It is a system that started first with public utilities. A nominal board was first started as far as I am aware in respect of the Electricity Supply Board which is clearly a public utility that could not be placed for that reason under private enterprise. Not so very long ago the Minister introduced a Bill in this House dealing with the winding up of the Turf Development Board and the starting of Bord na Móna. I think it was stated from these benches at the time that, in respect to the development of turf, if it was to be developed, clearly it had to be developed on a public utility basis by the State. Therefore, I subscribed to that. It is obvious that an undertaking of such magnitude could not be dealt with by ordinary private commercial enterprise.

I do not think of Bord na Móna as anything but a public utility concern. In effect, if it were not for one particular body, I do not think I would have put into this motion the words "nominal boards" at all. I would have left it at "companies". In addition to the Electricity Supply Board and Bord na Móna, another board was set up most specifically, according to the records of the House, for the purpose of regulating the tourist trade. The Irish Tourist Board was set up for the purpose of grading, registering and preventing abuses in respect of the tourist traffic. The Minister when setting up that board took power for it in certain sections to operate enterprises, but made it clear, particularly in the Dáil in 1939, that there was no intention of that happening.

Then we saw comparatively recently the Tourist Board coming along and, through the device of the dummy company, setting up a subsidiary of its own, Fáilte, Teoranta, which deliberately went into commercial enterprises. I still feel very strongly, and I said so on the passage of the last Tourist Traffic Bill, that if there was any justification for that, the proper way to do it would have been for the Minister to go to the Dáil. He could say so openly, rather than having a nominal board promoting a subsidiary in a manner definitely not envisaged by the Minister at the time the Bill was introduced, and in a way, in fact, that the Minister most assuredly implied the powers given would not be used. That is a most specific example of the manner in which, because Parliament had lost control over the funds, that board was able to do something that Parliament had no intention of giving it power to do when the original Act was introduced.

Apart from that question, there was in 1927 a company set up known as the Dairy Disposal Company, Limited. It was set up for a specific purpose. The specific purpose was explained to the Dáil at the time; it was to acquire the Newmarket Creamery and certain other creameries in the South; it was then to pass them over to other control, out of State control; it was to ensure that they would not at that time pass into control outside the country. Above all, it was but a temporary expedient to ensure that, while the State would make the purchase, it would equally pass them on to co-operative societies or some similar private groupings of individuals in the areas concerned. That company was set up 20 years ago, and by its very name, the Dairy Disposal Company, the Oireachtas and the Minister at the time had it in mind that it was to be a purely temporary expedient to get control out of certain hands and pass it on to private enterprise. Twenty years after that the company is still operating as a Government concern. It is operating as a commercial concern, is operating entirely, as far as I am aware, under civil servants; by the same civil servants who to-day are directors of the Dairy Disposal Company, Limited, and to-morrow are responsible for regulating the creamery concerns of all their competitors.

I mentioned already the invidious position of the Irish Tourist Board and Aer Rianta, Teoranta. Exactly the same thing is happening there. We have in the Tourist Board regulations by which hotels in the country will be graded and made to conform to certain standards. At one moment of the day certain people, as members of the Irish Tourist Board, are sitting in judgment on the grading which is to be adopted in respect of visitors to hotels, and the next moment the directors of the subsidiary company are considering how, in competition with other private hotels, they are going to carry on their commercial business. That surely is not a system that presages good for the commercial life of the community.

Apart from that instance of the manner in which subsidiary companies have operated or have been established, I want to refer most specifically to two other cases. The Minister set up a company known as Irish Shipping Limited. I do not want to go into any discussion whatever as to the achievements of that company or otherwise. That does not enter into what is in my mind. What does enter into it is an operation of that company which was carried out some six months ago. Irish Shipping, Limited, as is well known, is a purely Government concern in the sense that the Government owns all the share capital and, therefore, completely controls it. Irish Shipping, Limited, and more power to it, had developed an arm for shipping insurance and some six months ago they decided that the time had come with the end of the war when they could get out of this insurance business. They decided that it was desirable that the insurance business should be transferred to another company. Negotiations were started and were completed by virtue of which the insurance business was transferred to a private company, namely, the Insurance Corporation of Ireland. If there was any justification for public companies going into commercial business it is perhaps to act as what I might term a primer. Irish Shipping, Limited, acted as primer in building up a marine insurance business and then decided, quite properly, to pass it over to the Insurance Corporation of Ireland. It was formally handed over and if that was all that happened I would have no cause for complaint. But what did happen was that Irish Shipping, Limited, while passing over their marine insurance business insisted on being guaranteed that they would be the majority shareholder. They did that and the result is that Irish Shipping, Limited, now holds more than 50 per cent. of the shares of the Insurance Corporation, Limited, and the Government through its nominees in Irish Shipping, Limited, now also control this private concern, the Irish Insurance Corporation, which deals with ordinary business, fire and accident insurance and workmen's compensation.

The Minister may suggest that while they did acquire this control it just came and that it was not control which they proposed in any way to operate but the fact is that the very moment he acquired this control he insisted that the secretary of his Department would be made the chairman of what had been a private concern dealing with ordinary business. Because of the Minister having got this control the position is that yet another private concern has passed into his domain and the secretary of his Department is chairman of this concern. Let me make it crystal clear that I am not passing any strictures, direct or indirect, on the qualifications or the qualities of this secretary. But it does happen that he is secretary of one of the principal Departments of State and I suggest that it is entirely unreasonable for the secretary of one of the principal Departments of State to be the chairman of an insurance company dealing with business of the nature with which it does deal and which must of course have the ordinary dealings with the Department of Industry and Commerce. Under the Insurance Acts insurance companies are bound to make certain returns in certain ways to his Department. However desirable it may be—and again I want to stress that I am not in any way suggesting that the secretary of the Minister's Department is not the most competent person—I do not think it is feasible for any man, even a superman, to act in all these capacities. It is not possible for a person to fulfil the immense responsibilities that must devolve on the Secretary of the Department of Industry and Commerce and to be chairman of a commercial insurance company, director of Irish Shipping, Limited, director of The Irish Assurance Company, Limited, director of Aer Lingus, director of Aer Rianta and possibly a director of the other subsidiary formed to Aer Rianta. I do not know the directors of this company or whether the directors of the parent company are also directors of the subsidiary.

No man, no matter what sort of superman he is, could possibly act on these commercial enterprises and at the same time be secretary of an important Government Department like the Department of Industry and Commerce. We see also in respect of this growth that there are certain people, nearly always the same people, in control of these various boards. I think it is highly undesirable that these people, appointed by the Government as directors of these concerns, are in a position to exercise, if they desire, a stranglehold over the commercial life of the community. They are in a position to do it by reason of the many aspects of life into which the Government have decided that the State shall intervene in commercial enterprise. Consideration of the answer given in the Dáil on the 23rd October last to a question dealing with Government companies shows that again and again the same names are cropping up and that it is the same people who are considered desirable to operate the different angles of our commercial life. We have in consequence about ten people, some of whom are civil servants, who are now in the position of carrying on commercial business as part of their ordinary avocation and in regard to what I may call their extraordinary avocation they are in the position of running State enterprises. And all the advantages lie behind State enterprises in regard to money and power. If a State enterprise requires money it is going to obtain it in a different way from a commercial enterprise, and if it requires extra powers it is going to obtain them in a different way from the ordinary commercial concern. The obvious inference is that it is impossible for them to divorce themselves, when they are State employees, from the fact that they are running commercial concerns. I do not know whether the Minister is of the opinion that this problem has not become a widespread one. I do not know whether he appreciates the number of occasions upon which the State has taken unto itself to go into commercial life in respect of agriculture alone— we have the Dairy Disposal Company, Ltd., the Irish National Stud Company and the Pigs and Bacon Commission, all dealing with some aspect of agriculture.

In respect of the Minister's own Department, we have the two companies which were dealt with quite recently here—Mianraí, Teoranta, and Ceimicí, Teoranta—and we have also the aspect of the Irish Shipping Company taking control of the Insurance Corporation of Ireland to which I have referred. Also, in respect of the other aspect of insurance, we have the State entering not merely into industrial life assurance but into ordinary life assurance. When it became desirable some years ago to amalgamate the existing industrial life assurance companies, whose diversity and overhead expenses were very large, two companies were set up—the Industrial Life Amalgamation Company and the Irish Assurance Company. The amalgamation and winding up was considered a very proper thing, but the future participation by the State in competition with the ordinary insurance company was considered unwise. Therefore, it was hoped that, when the amalgamation and winding up was finished, the new company would be able to take over as an ordinary private commercial concern.

I do not want to weary the House by going over the whole list of concerns in which the State has taken a commercial interest as apart from a public utility interest, but I want to stress with all the vehemence I can command that the Government should be there as the regulator between one private concern and another and if the regulator is also going to be a competitor it ceases to be an honest regulator, no matter what the intentions may be. It is utterly impossible for the directors of the Dairy Disposal Company, Limited, when sitting in their capacity as creamery regulators, to divorce themselves from the position they are in the next moment as the owners of creameries. It must be quite impossible for a civil servant to be sitting at one moment as a civil servant and the next moment as the director of a concern. I am perfectly certain that, as the Secretary of the Department of Industry and Commerce, that civil servant would not approve of the Government entering into the control of a fire insurance office, yet when he is sitting as a director of Irish Shipping, Limited, I can understand it. The two things are not at all compatible and should be completely and absolutely divorced.

There would be no difficulty whatever in the Minister to-morrow determining that the shares of Fáilte, Teoranta, should be put on the market and they would be taken up very quickly and it would become a private concern. The same applies to the shares of the Insurance Corporation of Ireland, which are held by Irish Shipping, Limited. If put on the market in the same way and allotted to the public, they would be taken up, probably at a substantial profit. There should be no difficulty—and this is the final point with which I wish to deal—in the Government determining to-morrow that the Industrial Credit Company should part to the public with any shares it holds that it can part with at a profit. That company was set up to help in underwriting Irish industries by making capital available and passing that capital on to the public and in certain circumstances by giving loans on the lines of the trade loans. That is not the way in which the Industrial Credit Company has been entirely used. It has gone into the ordinary stock exchange market and purchased shares in commercial concerns and used them solely for the purpose of endeavouring to get its own nominees on the boards of those companies, even though the companies were not in need of any capital or assistance and had not ever asked for it.

Not so many years ago, there was a case in court in which the whole machinations of the Industrial Credit Company were laid bare. It was made clear to the court, and to the public who read the report of the case, that the directors of the company took it into their heads that there was a certain commercial concern which it would be very nice for them to control. They gave their stockbrokers instructions that any time any of the shares of that concern came on the stock exchange they were to be bought for the company. In that way, the company acquired a substantial holding in this concern, which never had asked for any assistance and did not want it, which was able to stand on its own legs and was carrying out its own business in its own way. Having bought those shares in that way, suddenly at a general meeting of that company, the Industrial Credit Company canvassed the shareholders to see whether they would be able to get the other shareholders to support a nominee of the Industrial Credit Company as a director of the company in question. If the Minister thinks that that is a proper utilisation of the funds voted by the State to finance Irish industry, I am afraid he and I must sadly differ. It is another example of powers being given and being abused.

There should be no necessity, except purely for priming, for the State to intervene in ordinary commercial enterprise and, in the instances I have mentioned, the necessity for that priming has passed. There is ample capital ready, willing and anxious to take up shares in those concerns and by virtue of which the concerns would pass into proper Irish, commercial, competitive ownership and cease to be the monopoly of the State. That would put an end to these dummy companies through which control can be exercised from the top, right through the whole of commercial life, in a way that could impose a tyranny such as very few of us here can visualise.

Mr. Baxter

I beg to second the motion and reserve my right to speak later.

Mr. Duffy

I move the amendment standing in my name:—

To delete all words after the word "views" in line 1 and insert in lieu thereof the words "with concern the tendency to finance out of public moneys commercial enterprises of a monopoly character not subject to Parliamentary control and requests the Government to introduce proposals for legislation designed to secure the fullest measure of Parliamentary control, consistent with commercial efficiency, over the conduct and operation of such concerns".

As I understand it, the motion is a proposal that organisations established by the State by utilising public money should be disposed of to private concerns.

Senator Sweetman asks that the Government should not merely refrain from any extension of the policy of establishing commercial concerns, but that they should dispose immediately to private ownership of as many of such enterprises as possible. I am wondering what he means by the qualifying words, "as possible". I take it that he has in his mind the feeling that the public might be willing to subscribe capital for some of the concerns that he refers to, and that the public will only subscribe where there is a profit to be made from the investment. Senator Sweetman, like a good businessman, does not desire the public to subscribe to non-profit-making concerns. They are to be left to the State. We leave the cleaning of the streets to local bodies because we do not make a profit out of it. We also leave to the State and to the local authorities the duty of providing fresh water. At one time the water company was as popular as the brewing companies, let us say, but you make much more money out of brewing ale than you do out of providing fresh water, and therefore Senator Sweetman would like his friends to get in on the ground floor of the brewing company and to keep away from the water.

It seems to me that this idea of establishing concerns of a commercial character under the auspices of the State originated in the fact that private enterprise was unwilling to provide the money in sufficiently large quantities for what they believed to be speculative enterprise. The first of these was the Electricity Supply Board—the Shannon scheme. That enterprise will now, or will in a short time, I imagine, involve the capitalisation of about £40,000,000. It is now on a firm footing. As a monopoly it is free to charge what it likes for its service and is sure to make a profit. It was not always certain that electricity would be a profitable undertaking, and on that account those who now would like to see all these industries pass over to private enterprise were not anxious to float a company to provide a national electrification scheme.

The word "monopoly," of course, is most misleading in this connection. There is no such thing as a monopoly when applied to State enterprise. The State is the custodian of the public interest; the State is the people's executive, and it is entirely incorrect, as I understand the term, to refer to an organisation—a commercial concern or an industrial concern promoted by the State—as a monopoly. I have not made an exhaustive investigation into the meaning of the phrase, but nowadays it is fashionable to refer to dictionaries. In this connection I did refer, in fact, to a dictionary to see what exactly was the definition of the word "monopoly." In Virtue's Encyclopædic Dictionary the definition: that is given is this:—

"The exclusive or nearly exclusive right to, or possession of, a given industry, resulting in a power of control over it, whereby prices may be raised through an artificial limitation of supply; a company possessing such control over supply and prices."

What is contemplated there is a privately-owned company having control over supplies, so that it may lift prices. What is the position? It is clearly improper to apply that term to a concern owned by the State, because there is no need for a State company to raise prices to make profits. Assuming it does make profits, these go back again to the community. If the Electricity Supply Board, for instance, makes profits, they are the property of the Irish people. That surely is to be distinguished from the instance that I gave when referring to Guinness, which is clearly a monopoly. The profits of that concern belong to the shareholders, who may or may not be citizens of this country. It is a matter of common knowledge that a considerable proportion of the shareholders of that concern are not citizens of this country, and the profits derived from the business leave this country to the extent that the shareholders have a foreign domicile.

Senator Sweetman is of opinion that the amendment tabled in my name proposes an extension of this policy of Government-promoted concerns. As a matter of fact, it does nothing of the kind. I am not arguing that point, which can be discussed on another occasion. What I am trying to do is to invite the House to reject the proposal that these concerns, which now exist and which are now operated by the State, should be handed over to private enterprise. That is the first purpose. The second purpose of the amendment is to secure the support of this House for the proposal that there should be greater control, in fact effective control, over enterprises operated by the State.

That is one of the problems which should concern us, not the problem of handing over to private enterprise such essential services as the Electricity Supply Board to be exploited in private rather than public interests. That is not our immediate concern. The policy of the country is settled on that point. I do not think that there is any volume of opinion in support of the view that State concerns, already existing, should be sold out to private enterprise. Senator Sweetman will discover that if he makes that the front plank in his platform, there will be no support for that proposal in the country. I believe that many of Senator Sweetman's friends would desert him on that score. I could not see Senator Hayes backing him in a proposal to sell out the Electricity Supply Board.

Mr. Sweetman

Did the Senator listen to me?

Mr. Duffy

I endeavoured to do so.

Mr. Sweetman

I thought I made it perfectly clear that I did not refer to public utilities.

Mr. Duffy

I can only interpret the resolution as I find it on the paper. There is not a word about public utilities in the resolution.

Mr. Sweetman

A commercial enterprise cannot be a public utility or vice versa.

Mr. Duffy

I am at a loss to know what is meant. Is Irish Shipping a public utility or a commercial enterprise?

Mr. Madden

Refer to the dictionary again.

Mr. Duffy

I should imagine that, if the resolution were adopted by this House and commanded the support of the Dáil, the legislation which would follow would not distinguish between the Sugar Company, Irish Shipping, the Insurance Corporation, the Tourist Board and its auxiliaries and the Electricity Supply Board. Where there are monopolies, in the correct sense of the term, there has not been a word of complaint or comment. The Dublin Gas Company is a monopoly in the true sense of the term. It has a monopoly given by Parliament, subject to certain reservations, to make profits for the shareholders and not to provide a public service. Dublin Tramways Company was a monopoly and I never heard any of the opponents of Government-controlled concerns advocating the destruction of such a monopoly. There are many such monopolies, not designedly so, but monopolies in effect. I think it would be correct to say that Irish Sewing Cotton is a monopoly. If so, what advantage does the public derive from the fact that a privately-owned concern has what is virtually a monopoly which is being denied to a concern promoted by the community, because, as I have said, the Government, in these matters, is purely the people's executive, carrying on the business of the community for the people in the same way that the directors of a private company carry on the business of that company in the interest of the shareholders. We are all shareholders in this concern.

Senator Sir John Keane wants an efficiency audit and control. We all feel that there ought to be effective supervision with a view to seeing that the intentions, desires and interests of the public are safeguarded. The purpose of the amendment is to direct attention to the need for supervision by the Parliament of the nation over the conduct of concerns financed by the public. The Government have no money for this purpose except the money provided by the public. My own feeling in respect of many of those concerns in which public money is invested is that, while the control may or may not be effective, the publicity —the information given to the public as to the manner in which the concern is conducted—is inadequate. The people are entitled to the fullest information regarding the operations, policy and tendencies of a concern financed by public money. That is done in certain cases. In some of these cases, the policy of the company is elaborated at the annual meetings. But that is not done in all cases. It would be a good thing for the community and for the concern in question if the widest publicity were given to its activities and an indication given as to whether it was making a profit or the basis on which it was being conducted. We know that a concern can operate in such a way as to show an apparent profit without having, in fact, earned a profit at all. That is one of the things in which the Minister should be keenly interested—to ensure that the public have the fullest information as to what is being done.

I do not suggest that it is the purpose of a concern of this kind to make a profit. There may be excellent reasons for running a public concern at a substantial loss which would be made good out of public funds. That would be the case if there were greater advantage to the community by running the concern at a loss than by making a profit. In the case of the Electricity Supply Board, for instance, I could see an excellent argument, if there were no shortage of power, for providing light and heat to working-class houses at a nominal price, even though that involved a loss. I do not want to be understood as suggesting that the purpose of the accountancy or of the publicity which I advocate should be to boost profit-making. What I am anxious to secure is that the fullest information be given and that, if a concern operated under the auspices of the Government is run at a loss, the Government should have no hesitation in publishing the accounts and showing that, in fact, it has been run at a loss, and that it is regarded as good State policy that it should incur a loss rather than it should deny its services to people who could not afford to pay an economic price for them.

In this city, for instance, and probably in most parts of the country, housing is run at a loss, if it is regarded on a commercial basis. Houses which would, probably, cost £1 a week if an economic rent were charged by Dublin Corporation are let at 8/- or 9/- a week. Everybody who knows anything about the city's finances knows that a rent of 8/- or 9/- a week is not economic but nobody growls about it. Many people have been urging the corporation to reduce the rents of working-class houses even further, and they know that by reducing the rents there must be a greater subsidy either from taxation or from the rates.

In the same way a case could be made for, let us say, cheaper sugar, even though that might involve a greater subsidy from public funds. The price of butter is now fixed at a figure which is considerably below the economic price, but it is regarded as good State policy to provide butter at a particular price, even though that involves a subsidy from public funds.

What interested me in Senator Sweetman's argument was the assumption that the directors of privately-owned companies are more efficient than the persons appointed to take charge of or to manage State concerns. I think everybody in this House will be able to recall instances of privately-owned concerns, in which there has been at one time or another gross mismanagement, apart altogether from the neglect of the public interest. I have had some experience of directors of companies which had a monopoly of their business who were utterly unfitted to control any business.

Some years ago we had the instance of a very large public concern, controlled by a board of directors, which was showing a loss year after year. A committee of inquiry was appointed to advise the directors how the loss was to be converted into a profit. A very voluminous report was prepared by a committee of experts and the board of directors sat down to consider it. It will be within the knowledge of some members of this House that boards of directors always manage to adjourn at one o'clock for lunch, so that they had not much time to consider a voluminous report. This board adjourned at one o'clock having reached the decision that, as there were two cats on the premises, one would have to be destroyed in order to save a half pint of milk daily. At the time the company was losing at least £250,000 a year.

Sir John Keane

I doubt that.

Mr. Duffy

There is no doubt about it. I can give the Senator the name of the concern. The chairman of that concern is well known and is probably a friend of the Senator. The argument of Senator Sweetman is that if you hand over a big publicly-owned concern to a board of directors of the type I mentioned, the situation is saved, and the country will be happy ever after. The real trouble is that when you sell out a publicly-owned concern to a body of shareholders you have no longer any guarantee that suitable people will be appointed to control it. As a matter of fact, directors are appointed because they are large shareholders, and as long as there are proxy votes available there will always be sufficient proxies to elect directors. I urge the House to reject the motion, and to consider whether it would not be desirable to declare that it desires greater control by the Oireachtas over the management and the policy of public concerns.

I do not want to suggest that control should extend so that somebody could get up in the Dáil or in this House and ask the Minister to explain why Mr. A. was appointed a door-porter. That would be ridiculous. One of the fears in the minds of Parties in this country is that that kind of abuse would crop up. I do not think there is as much tendency in that respect as one would imagine. For instance, the Post Office is a State institution, with a Minister in charge and, in the main, the number of questions asked the Minister for Posts and Telegraphs is much smaller than the number of questions asked any other Minister. People have got to realise, and are every day becoming more conscious of the fact, that there must be a machine to operate these concerns, and that the Minister is not expected to enter into all their working affairs. I urge that attention be given to that aspect of the matter. The more the Minister, the more the Government, and the more Parliament interest the public in what is happening the more the public will be conscious that the business belongs to them, the more they will realise that it is in the public interest it should succeed and the more advantage it will be to public enterprise.

Mr. Kyle

I second.

Sir John Keane

I move:—

At the end of the motion to add the following words:—

"and, further, requests the Government to set up an appropriate body to examine and recommend what principles should govern the establishment of public corporations in order to secure the best services possible to the community".

I am sorry if any remarks I made embarrassed Senator Sweetman, because I am entirely in agreement with the principle he advocates in his motion. I think he rendered outstanding service in bringing into the light a number of the abuses which now accompany Government interference in commercial enterprises. If I felt there was a possibility of a shake out, and a return to commercial control, or the bringing in, as the Senator advocated, of private capital where it would be readily available, I am perfectly certain that that would be the right thing to do in the interests of the community.

It is because, in the first place, I recognise that it must be borderline between legitimate public corporations, public utilities and legitimate private enterprise and because perhaps I may be cynic enough to doubt the Government that I want to make the best of a poor job. That is really the purpose of my motion. I think we should try to get the best results. Senator Duffy made no reference to service. I do not give a blow whether service comes from Socialism or private enterprise, but it is because I believe and am convinced that the best service comes from private enterprise that I am concerned with private enterprise. I know Senator Duffy spoke about "wise guys who would not come in unless they get 15 per cent." and Senator Kyle—and I always welcome his intervention in debate, because he is eminently wise— suggested that a company like the Industrial Alcohol Company, a Government company, could be perfectly trusted to give the best possible service. This idea that private enterprise has failed has got no justification whatever. Look at the standard of living increasing year by year under private enterprise and do not merely look at one country. Take America, for instance. Where did its high standard of living come from except through private enterprise? Look at Henry Ford, who gave every man his own car. I am not saying that a high standard of living may not come one day from Socialism. I know Socialism struck a bad wicket in recent years with the aftermath of the war and all the difficulties of production, but there is nothing to show yet that we are going to get this new world, this El Dorado in which we will have everything for nothing from a Socialist Government. Let us judge by results. If Socialism will deliver the goods nobody will be happier than myself.

I think it is necessary to examine the outstanding features of enterprise and whether they can be proved to be sound when embodied in any form of public utility or public intervention in companies. One of the outstanding features of enterprise I suggest is efficiency. First of all it is the outcome of a healthy organism which has gradually grown. Private enterprise has come from trial and error over the centuries. It is an established system which has worked and kept communities together with a rising standard of civilisation in which the working classes have materially benefited. Then there is the factor of incentive which has undoubtedly encouraged efficiency and invention. It is necessary if you are going to get efficiency in any form of enterprise that there should be the factor of incentive. You will not get the best results unless there is some goal or prize in view. That is an outstanding feature of enterprise. Then there are safeguards to the consumer. What safeguards to the consumer are we getting out of Socialism or out of the socialistic platitudes recited by Senator Duffy? Senator Duffy does not concern himself with the efficiency of the product. It may be conceivably in the public interest to meet a loss in private enterprise. The safeguards to the consumer come from healthy competition and it was competition that resulted in the narrowing of profit margins and the best possible service to the public. Above all there was the fear of bankruptcy which could not operate in any publicly-controlled institution. In addition, there was the possibility of change, there were no inhibitions or obstacles to a change of policy and no one suggested that changes of policy or changes of method were not very difficult to bring about in any State-controlled institution. When you come to examine Government-controlled institutions you have first of all the bottomless purse. There is no test that could be substituted for that of solvency. A concern might on the face of it be reasonably sound, but in fact it might be going dead, declining and nothing could be done to bring it to life because you could not apply a test of solvency. Government concerns seem to lack almost entirely the attributes of private enterprise. They lack incentive and the power of adaptation, they do not possess the test of bankruptcy and are artificially detached from the realities of true enterprise.

What I am asking in my amendment is that the Government should set up an appropriate body to examine the whole problem and see what requirements are necessary to serve the public in the new age in which we now are. We are embarking more and more on Government control and interference in business and we have many public utilities which have come to stay. I suggest that there is no blueprint whatever for the best method of control. Every method must be adapted more or less to the business in hand. Take the case of a public utility—Bord na Móna. Senator Sweetman recognised it as a public utility and I do so, too, as I do not see any possible substitute in the form of commercial enterprise being attracted to a business of that kind, on account of its hitherto utterly uneconomic background. I would like to see, in the case of Bord na Móna, some attempt to introduce an element of competition. It is a question that needs examination, but it struck me that it might be quite conceivable to lease a portion of bog or enter into negotiations with some independent concern to produce turf at a price at least no higher than it is produced by the board itself, and then to give an incentive in a form of profit to the company or to give it the benefit of any reduction in price it could effect on the official price. By that means, you would get a standard of comparison and you would have a test as to whether private enterprise, in a matter of that kind, was necessarily— and I expect it would be—more efficient than the public utility. You would then get a comparison in the form of competition.

The Senator dealt with the Tourist Board. I think he has shown there that a most dangerous state of affairs exists. He has also dealt with the Industrial Credit Company, which certainly should no longer remain under Government control. He has dealt with what I intended to speak about, the Dairy Disposals Board, which should never have been kept so long. It was essentially a concern which should have reverted, as was originally intended, to the ordinary line of the co-operative movement.

I am going to deal with a number of questions which I suggest should be considered in principle by an appropriate body. The first is the composition of the board. Senator Sweetman has dealt with one aspect of that, with which I entirely agree. It is most undesirable to have civil servants as a class, let alone one special civil servant, on a number of boards. It cannot be to the benefit of the concern, or the efficiency of the Department with which he is connected or of the boards of which he is a member. After all, there is a limit to the powers of one individual and he could not possibly give the time and attention necessary to those many occupations.

Then there is the question of the consumers' interests, which should be examined by this body. Nobody seems to have primary regard for the essential element in the whole thing, the consumers. There are many ways of dealing with this. I do not see a consumers' member on a board being altogether a satisfactory method, but I feel that the unorganised consumers should be associated with enterprises that are creating commodity services or goods. Possibly there could be a consumers' council. I think something of that kind has been embodied in the new coal legislation in Great Britain. It should be an active body and not merely one that is called into conference at long intervals or whenever the management sees fit. It should be taken into consultation once a month and should be encouraged to come forward with complaints and with views as to how the service could be improved.

Another question for a body like this to consider is the responsibility of the taxpayer. Senator Sweetman has dealt with that. It might be old-fashioned, but there were very good reasons for the control of Parliament over public moneys. What happens now? An Act is passed and large sums of money are divorced altogether from close Parliamentary control. They are given, as in the case of the Tourist Board, to the management to use to the best advantage and, except for accounts which appear annually and reports which hitherto have been very fragmentary in many cases, the public know nothing and, knowing nothing, they begin to become indifferent.

At this stage, I would like to suggest the necessity of keeping public opinion in close touch with Government activities. It is the only hope we have for democracy. An educated democracy: people shrug their shoulders and say that that is talking entirely in the air and that we will never get it. I am hoping we may get it and that we will reach a time when Senator Duffy or Senator Quirke will come to the crossroads and promise people all kinds of things and there will be a number of people there who will say: "You are promising all kinds of things you cannot give: you are talking nonsense". When that happens, they will cease to promise things that those right in the centre of the ordinary political meeting now, unfortunately, believe.

Another matter is the measuring of efficiency. Accountancy is one method. I have seen the accounts and the usual methods of accounts. The usual thing is to say that the accounts are to be published "in the manner prescribed by the Minister". I know Senator Duffy will say: "Look at the bad example of private companies, how they give as little information as possible". That is not true, but even if it were true, two wrongs do not make a right.

The Government should aim at giving the fullest possible information and set their faces against any hiding of the facts. They should get the best possible accountants to ensure that. I am not suggesting that accountants would be likely to do anything wrong. What I mean is, that one way of doing accounts can be very illuminating while other methods may not. Let us, as I say, have the fullest possible accounts. I do not mean only financial accounts, but the information that can be made available by a costings accountant, so that one may be in a position to interpret results. I saw the accounts of Bord na Móna. There was a lot of figures there. It was an example of good food and good material but so badly cooked as to be indigestible. The accounts, I suggest, should have been set out in a clear and more intelligible manner. No doubt that will be done in time. Cost accounting is now a separate branch of accountancy. I feel that in the case of all these public utilities there should be on the staff a cost accountant whose work would go on continuously. I do not think myself that the ordinary auditors are the best people to do the work that I speak of. If necessary, there should be more than one costs accountant on the staff. That should be the position in regard to all these public corporations to which the science of costs accountancy can be applied. In fact there are very few businesses now where it cannot be applied.

The obligation might also be put on these corporations of having an efficiency audit. I asked the Minister to accept that principle on the Railways Bill, but he tried to make out that it would not be practicable; that it would mean the keeping of a lot of files. There was no good in arguing the matter across the floor of the House. I may say, however, that I had no such idea as that in mind. What I had in mind was that there should be a periodical examination by persons of acknowledged ability with an intimate knowledge of the work who would give a general report as to how a particular concern was being run, and so that members of this House would have an opportunity of appraising all the circumstances relating to it in the interests of the public. Some people seem to believe that profits are the test of efficiency. As a matter of fact, the dividend that is paid is a mere nothing on the turnover of any successful enterprise. Efficiency is really what counts. In many cases profits are only the reserves kept back for repairs and equipment. Senator Kyle does not seem to agree with me. That is probably due to his old bad upbringing. Senator Duffy spoke about directors going out to lunch at one o'clock. I know that on any board on which I sit we very often sit on until two o'clock. I urge that we should get efficiency in the case of all these public utilities.

A person asked me not long ago if I believed that a politician would ever be wholeheartedly ruthless on the side of efficiency if it cut across Party interests or political interests. I said that I did not hold such a depressing view as that. I believe that the Minister could be ruthless, and I hope he will assure me that he will be ruthless in searching for efficiency in the case of public corporations. I hope, too, that not for one moment will he allow political interests or the possible reactions of an election to interfere with methods calculated to ensure the highest possible service for the consumer. He should see to it that these public utilities give as good a service as private enterprise. If he does that, I shall be satisfied.

Here again we must have an educated democracy. I claim to be a fairly well-educated democrat. If I saw the Minister setting his face for efficiency and disregarding all political interests, that would make me a member of Fianna Fáil to-morrow. If the Minister found that a concern was not being run on the right lines and sacked the lot, that would be the very best advertisement that modern democracy could get. It is because I fear that the dead hand of political pressure will influence decisions and that concerns will go bad —we shall never know that they have gone bad until it is too late—that I ask the Minister to give an assurance against any outlook of that kind. I ask him to do everything in his power to find out what are the conditions that make for efficiency, and that, having found them, he will apply them ruthlessly, irrespective of political consequences.

Professor Johnston

In seconding Senator Sir John Keane's amendment, I would like to say that I agree with the wording of it but would not like to say that I agree by any means with everything which the Senator has just been saying. I, at the same time, find myself in substantial sympathy with the wording of Senator Duffy's amendment, with the same caveat, that I would not like to be associated with much of what he has said. I am strongly opposed to the wording of the principal motion, but yet in the speech which he made, Senator Sweetman made use of many arguments which appealed to me very strongly. Of the three speakers, I find myself more substantially in agreement with him than with either of the other two. There is some danger of the debate degenerating into a discussion of the abstract virtues of public enterprise versus private enterprise. I am not going to take up the time of the House in discussing that endless topic, except to say that if anybody is interested in my personal views on it he should read the column and a half which appears in to-day's issue of the Irish Times in which I give expression to them. Senator Sweetman suggested that the more of these Government companies that can be sold, and the quicker they can be sold, to private ownership the better. He suggested in particular, I think, that the Industrial Credit Company should be sold to private interests. I completely disagree with that suggestion because I think that the Industrial Credit Company has a useful function to perform in providing financial assistance, of Government origin, for private enterprise of the right kind, which is able, and expected to be able, to stand on its own feet.

Mr. Sweetman

I do not like to interrupt the Senator but I did not say that the Industrial Credit Company should be sold, I referred to the shares in other companies held by the Industrial Credit Company.

Professor Johnston

I am glad the Senator has mentioned that point. I must have misapprehended what he said. I thoroughly agree with the further point he made, that, if the Industrial Credit Company has been going out of its way to acquire the shares of companies which do not need additional finance from any such source, merely to gain control of those privately-owned companies for its own purposes, nefarious or otherwise, then I say that the Industrial Credit Company is not minding the business it was put there by the Oireachtas to perform and ought to be severely reprimanded by the Minister responsible. I do not see why Senator Duffy should boggle at the term "monopoly" when applied to a State concern such as the Irish Sugar Company. There are, of course, private monopolies and public monopolies. If a State-owned concern is a monopoly, why not call it a monopoly? It would, certainly, be most undesirable that a State concern, such as the sugar monopoly, should, under any conceivable circumstances, be sold to private ownership. As a matter of fact, the Banking Commission commented very severely on the fact that there are private financial interests concerned in the capitalisation of the Irish Sugar Company and, I think, recommended that, if it must exist at all, it is emphatically the kind of concern that ought to be organised financially as a public utility, with no privately-owned finance concerned in it, good, bad or indifferent —that, in fact, its financial organisation should be modified as soon as possible in that direction.

There are certain economic activities which, obviously, are of the kind which should be publicly-owned and are suitable for public enterprise. One outstanding example of those is the provision of electric current. That is an outstanding and brilliantly successful example of public enterprise to which we, in this community, owe a great deal—especially during the past ten years. There are other activities, such as transport, which it is becoming more and more recognised should be public enterprises, though perhaps not so generally admitted as in the case of the electric supply. We have now got a virtually publicly-owned—certainly, a publicly-controlled—system of transport and nobody questions the necessity of that development. At the same time, most economic activities in this economy are likely to be examples of private enterprise and there is no question of the State attempting to dominate the whole of our economy— both what is now private and what is now public.

Between those economic activities which most people admit should be examples of private enterprise and those few large, economic activities which most people admit are suitable objects of public enterprise, there is a kind of debatable margin—certain activities in which it seems the State should be able to play a part. That debatable margin has been cluttered up by a whole series of hybrid and spurious companies in which public and private interests are mixed up in the most extraordinary way. No adequate thought has been given to the proper organisation of those various companies. Various abuses have arisen in connection with some of them which have given rise to a good deal of local comment and even to a certain amount of public scandal. It was not part of the intention of Government that this should happen but it is part of the duty of Government to secure that, if the State is to interfere in certain economic activities, its interference will take place in such a way as to safeguard the public interest, as well as further the national interest, generally. There is a whole series of hybrid activities — for example, the Sea Fisheries Association. I think that Bord na Móna used to be one but it has now become more definitely a publicly-owned utility. Roscrea meat factory is one and a great many others were mentioned in the course of the debate.

According to information published in the Banking Commission report, certain of these companies, which have been financed partly by the State, have important, private, shareholding interests connected with them. So inefficiently and inadequately are the limits between private and public interest defined that it is conceivable that, in certain circumstances, the Sea Fisheries Association, for example, could be wound up and the whole of the available assets become the property of the private, shareholding interest, regardless of the fact that by far the greater part of the finance of that association has been provided by the State. In other words, the objection is to the form of a private company being used as a means by which concealed subsidies can be given from public funds to private enterprise in a way which escapes the knowledge of the public and completely escapes Parliamentary control. That is why I particularly sympathise with the wording of the amendment in the name of Senator Duffy. The important thing is to secure that in no circumstances should public money be given in such a way as to escape Parliamentary control. At the same time, I sympathise with the point of view of Senator Sir John Keane that there is a problem how to secure the best and most appropriate organisation for each of those hybrid activities—an organisation of a kind that will ensure confidence and efficiency and a spirit of public service. If anybody is interested in the literature of this matter, he will find quite a lot about it in pages 447-449 of the report of the Banking Commission and, in particular, in the addendum by Professor Duncan following on that section of the report. I shall merely briefly refer to the points contained in these recommendations.

There should be for each economic activity in which the State wishes to give a helping hand, while nevertheless retaining the private character of the activity, a special enabling Act, laying down the kind of constitution that is most appropriate for that particular kind of activity and, in particular, defining the limit of public financial responsibility and distinguishing the interests of the public from those of private persons. Further, if in such relationship there is involved an element of subsidy from public funds, this element of subsidy should be under the most open and clearly defined Parliamentary control and in no circumstances should what are called "loans" be made to any kind of company that cannot be repaid. If they cannot be repaid, it means that they are subsidies. Further, there should be adequate provisions to ensure that their accounts are presented in an intelligible form and, in particular, a distinction made between their capital account and their income account. Above all things these companies which derive money in any form from the State should not be allowed to form any kind of debt without the specific permission of Parliament, without Parliamentary approval. If they have this power, and if they use it, they are in fact adding to the total national debt without the knowledge and consent of the Oireachtas. Finally, the accounts of such companies should be audited by the Comptroller and Auditor-General and presented in a form approved by him and published in the form of a Government paper or made available to both Houses of the Oireachtas. In this matter I am critical, but I am critical not only of the present Government but of its predecessor. The previous Government committed very much the same crimes as the present Government in connection with this matter but not on so large a scale. The original establishment of the Dairy Disposal Company called for very severe comment on the part of the authors of the report of the Banking Commission. Approval for the expenditure of £500,000 was not subject to review by the other half of the Oireachtas but they tried to put that right later on.

The company has been going now for 20 years in accordance with an Act which intended it only as a transitional organisation. It exercises an important part in the total dairy industry. It is especially concerned with the manufacture of condensed milk and milk powder which are the more modern ways of using milk and are likely to be of importance in the future. A student working under my supervision attempted to determine the way that the total rise in the output of milk since the war began was used. He had no difficulty in getting the statistics on butter and cheese production but when he tried to get the amount of milk turned into milk powder and condensed milk he was up against the flat refusal of the Dairy Disposal Company to supply the necessary information. I suggest that it is of the utmost importance that we should know what happens to the milk produced here and to what extent less butter is being made and more milk powder is made. If the Dairy Disposal Company are going to adopt this ostrich-like attitude, Parliament should take note of it. Finally it was recommended in the report of the Banking Commission and also in Professor Duncan's addendum that in any case where the public money is transferred to a private company for any purpose of this kind there should be some one Minister designated as responsible to Parliament for the general policy involved in the expenditure of this public money and that in no circumstances should the Minister be able to say that it was a committee set up to run this concern that was responsible. It is of the utmost importance that the Oireachtas should not lose sight of the spending of public money and it is important that some Minister should be responsible for the general behaviour of any company that has the use of public money.

Sir John Keane's amendment suggests that the Government should set up an appropriate body to examine and recommend what principles should govern the establishment of public corporations in order to secure the best services possible to the community. The Banking Commission recommended that a debt and investment council should be set up to consider the whole problem of the provision of capital for various public purposes, not from the narrow, Departmental point of view but from the wider, national point of view and which would advise the Government as to how capital could be most properly used and what methods could be employed. It seems to me that this council would be suitable for what Sir John Keane has in view. I think you will find the recommendation at paragraph 544 of the report of the Banking Commission. It states:—

"Our suggestion for the constitution of the council is that it should have as chairman the head of the monetary authority for the time being, and that it should have four other members, namely, an official of the Department of Finance, an official of the Department of Local Government and Public Health, the chairman of the Public Accounts Committee, and a nominee of the Minister for Finance who would not, presumably, be a civil servant and who might or might not be a member of the Oireachtas. It might be convenient to permit each member to have an alternative to represent him during any unavoidable absence. It is unlikely that the council would require the services of whole-time staff, at least for some time to come, and we think that its secretarial needs should be met by part-time assistance from the staff of the Department of Finance, supplemented if necessary by the staff of the monetary authority."

I think if at any time we proceed to the point of carrying out this recommendation of the Banking Commission we might consider the new council from the point of view of its possible usefulness in this kind of function as well as for the functions for which it was originally proposed. Having said that, I formally second the amendment.

Minister for Industry and Commerce (Mr. Lemass)

I think it is a great pity that the Seanad should occupy its time and waste mine, at a period when the country is passing through exceptional difficulties and facing problems of unprecedented magnitude, discussing what are little more than abstract issues. Senator Johnston said that the debate had degenerated to abstract issues. You cannot fall lower than the bottom and the debate started at the bottom. We were condemned to that fate from the moment Senator Sweetman put his pen to paper to draft the motion and induce his colleagues Senator Duffy and Sir John Keane to draft their amendments. I do not know of any useful purpose to be served by discussing an abstract issue like this. Let me say at the outset, so that the Government's position will be understood, that when we decided upon the establishment of statutory corporations, of semi-State companies, to conduct commercial enterprises we were concerned only with the best way of getting a particular job well done. In most cases circumstances arose which made the course adopted by the Government inevitable and in every case the course adopted was the best of the various alternatives. Senator Sweetman wants us to decide that commercial enterprises in which the State is involved are an abomination and should be done away with regardless of the consequences. But in the course of his remarks he modified his proposals and offered to spare public utilities, but he did not define or attempt to define public utilities and, as I followed him, he limited his definition of public utilities to the Electricity Supply Board and Bord na Móna. The other concerns were to be disposed of to private enterprise, if private enterprise could be induced to buy them, as quickly as possible.

I have said that we were concerned and will, I hope, only be concerned in deciding upon these matters with the method of getting a particular task well done. If there are commercial activities which, in the special circumstances of this country, can be carried on only on a monopoly basis, is there any particular reason to assume that a privately-owned monopoly is going to be better managed, more efficient, more considerate of public interests, than a publicly-owned monopoly? If we cannot get a privately-owned monopoly organisation established, are we not to do the job at all? That is the issue which the Government had to decide when it set up the Sugar Company or a number of the other concerns to which reference was made here.

Let me say also that I am not convinced that, when industry has to be carried on under monopoly conditions, private ownership makes for efficiency and public ownership the contrary. I do not think that has been our experience. It is true that any monopoly undertaking is in danger of becoming, not inefficient, but less interested in new technical developments, the scrapping of old equipment and its replacement by better equipment and the general tuning up of its enterprise to the point of maximum effectiveness. That is true whether the enterprise is publicly owned or privately owned and there is a problem there which the Government here and Governments in other countries are considering, as to how we can, in relation to the publicly-owned monopolies for which we have taken responsibility, apply the necessary incentives to secure enterprise and efficiency in all circumstances. That problem exists whether we are dealing with privately-owned monopolies or publicly-owned monopolies. It is much easier to handle in relation to publicly-owned monopolies.

I do not want to make comparisons and put the Electricity Supply Board against the Dublin Gas Company, or the Cork Gas Company against a Limerick municipal undertaking, or the Industrial Credit Company against the Bank of Ireland, or make any other comparisons that might be possible, since we have not and could not have here the information which would enable us to give a considered judgment on the merits of these respective undertakings. If it is true that there is a danger of publicly-owned companies being staffed by persons who are appointed because of political affiliations and who are not necessarily the most suitable persons for the posts, we have at least the safeguard that these matters can be discussed here under the protection of the privileges of the House. Names can be mentioned and specific allegations against individuals can be advanced, and the whole thing can be thrashed out here. I am not going to be told that the privately-owned monopolies in this country never appointed people because of political, racial or religious reasons. We know they did, and we have no assurance that any privately-owned concern will be always interested only in appointing people of the highest technical or professional qualifications to their offices, not caring whether they happen to be relations of the directors or not. But if shareholders of privately-owned monopolies suspect these things are happening, they have not the same freedom to discuss them, to direct public attention to them or get remedies brought into operation, as members of the Dáil and Seanad have in discussing enterprises for which the Government is responsible.

A number of concerns has been mentioned here, and I want to be clear as to what is the point of the criticism that has been advanced. The Dairy Disposal Company was one of the concerns. That company was set up 20 years ago to buy out a number of proprietary creameries and dispose of them to co-operative societies. It was an excellent idea of which most people approved. If, in the course of its activities, it found that it had creameries on its hands which no co-operative societies could be formed to purchase, if it found that some co-operative societies were running creameries so badly that they had to take back the creameries again, if there were circumstances in which new creameries had to be built, should they have done nothing about it, should they have just come to the Minister and said: "Let us call the whole thing off, regardless of the consequences"? That, I take it, is the idea which some Senators have. In fact, the Dairy Disposal Company is trying to find a solution of the difficulties into which it ran, difficulties which were not foreseen by those who were responsible for its establishment. The company is still there and still has some of those difficulties. There are still creamery undertakings in its possession which it could not sell to co-operative societies which do not exist. There are other problems of another kind which have resulted largely from the emergency and which may make some such organisation a permanent necessity, but it is no solution for the difficulties of that situation merely to drop the whole business because it happened to be running counter to some theory which Senator Sweetman judged important.

Professor Johnston

It is the lack of publicity I object to more than anything else.

Seanad Éireann debate - Wednesday, 16 Apr 1947

State Intervention in Commercial Enterprise.

Seanad Éireann debate -
Wednesday, 16 Apr 1947