Seanad Éireann debate -
Thursday, 2 Mar 1950

Vol. 37 No. 9

State and Semi-State Companies—Motion.

Captain Orpen

I move:—

That Seanad Éireann is of opinion that a joint committee, consisting of members of both Dáil and Seanad should be set up to consider and report on what steps (if any) should be taken to provide for a periodic review of the operation of companies in which the State holds a majority of the issued shares.

I think it would be agreed by all that in the last ten or 15 years we have seen a remarkable growth of these State and semi-State companies, by which I mean companies in which our Minister for Finance holds shares and very often holds the dominating number of shares. When companies of this type are formed there is a tendency for Parliament to feel that they no longer have that control of their operations and the way the money is expended that they would have had had the expenditure been made and the operations carried through by a Department of State. No doubt that is true. There are very good reasons why it is advisable in certain cases to free a company from day-to-day interference by Parliament. At the same time one has to remember that Parliament has voted the taxpayers' money to these companies and even if Parliament can legally release itself from the obligation of looking after what is happening, the moral responsibility to see that all is well with the operation of these State and semi-State companies rests with Parliament. I wish to say at the outset that this motion does in no way suggest that any of these State or semi-State companies are operating in a way they should not. I do not wish anybody to get a suspicion that something is wrong and that what this motion asks for is to unearth something that is wrong. What I maintain is that in many cases all the information is not placed before us that would allow of a just assessment of how these companies are operating. It is often said that companies or boards such as the Electricity Supply Board or Bord na Móna all are highly efficient. They may be, but it is interesting to note that the only measurement of efficiency the ordinary man in the street can apply is by judging from the information given by these companies. We get an annual report from the Electricity Supply Board, an excellent document in many ways, but that is all we get. We have to judge of their efficiency on what information they give us. It is the same with many of these other bodies, so I claim that until the Oireachtas has some opportunity of acquiring the information it wants and analysing it is almost nonsensical to say that we are in a position to judge as to the efficiency or not of the operation of some of the large State and semi-State concerns. This motion asks for an inquiry into whether or not it is desirable to set up machinery, and what sort of machinery if it is necessary, to investigate the operations of these State companies.

It is quite clear that as the State year by year undertakes to do more, unless it delegates that work to civil servants, a Department of State or State companies, the whole procedure of Parliament might become clogged. Obviously, the tradition of the Civil Service does not necessarily suit itself to new undertakings. It is rather apt to be swayed by precedent and therefore there is a very good case in any new development for handing it over to a specially appointed board.

I do feel that with the growth in numbers of these State companies that a good case can be made for setting up some sort of machinery for periodic review of their operations. Now, one thing I hope should come out of a periodic review of operations would be this: that when we knew more about what these companies have done, what they are proposing to do, we might allay some of the idle talk and suspicion that goes on around the country. It is a curious thing, that lack of information is often very much more dangerous than too much information. Perhaps, I might quote from Bacon on this. He says: "There is nothing makes a man suspect much more than to know little". Anybody who has looked at some of those reports, even a model one, can find examples of omission or lack of frankness, which if we did not know the explanation, we might say "Ah, something is not working right". Even the Electricity Supply Board sins in this direction. If you look in the report for the year ending 1948 you will find on a graph showing the output of units from Poulaphouca that the graph shows a gap of two months. We all know the explanation, but would it not have been wise to put in a foot-note to show for that period that one of the stations broke down. Would it not have been frank? That is the sort of thing that ought not to appear. There is one other example that, it seems to me, we ought to know a little more about. These alcohol factories were built for the purpose of acting as a stabiliser for unwanted or unsuitable potatoes. World prices changed and potatoes fetched more in the market than the alcohol factories could pay. Therefore, we imported molasses and, presumably, we are still going on with that policy. We are paying dollars to keep the alcohol factories alive, to add alcohol to petrol, and to increase petrol by 1½d. a gallon with the one object of having a stabiliser for potatoes at a price which the alcohol factories can pay. It looks like Alice in Wonderland, one of those things one would like to look into. These are the things we see on the outside. What we would see if we were able to cross examine these companies, I do not know. For these reasons, I move the motion.

Professor O'Brien

I beg to second the motion. I think this motion gives rise to very big questions of public administration and public economic policy. It really raises the question, as to how one can deal with monopolies in the public service, and in public utilities, which have become inevitable during the 20th century. Up to a certain point, of course, the approach to it was the point of view of a contract in the restraint of trade, to break it up if you could. That is the basis of American legislation in relation to monopoly, the Anti-trust and the Sherman Act. That is now out of date, and the position is now such, that the provision of transport, water, electricity and other public services of that kind are necessarily monopolies in the modern State, and must necessarily in financial terms, have a good deal of State finance for their support. The question is, whether they should be left in private hands, with all the possibility of exploitation, and abuse of consumers, or whether they should be handed over to the State with all the possibility of the red tape of Government Departments, lack of enterprise of the Civil Service, the political fears of Ministers of having to face parliamentary questions on matters of detail which would, unquestionably, interfere with the day-to-day administration of these great concerns which are playing a growing part in modern public life. It is very interesting to follow the literature on the subject, the literature on monopolies in the last 50 years. I think I am correct in saying that the economists in modern times have accepted it really as a problem of administration, a problem of expediency rather than one of principle. The question is to find some sort of compromise between private monopolies, with possible exploitation, and the dead hand of the red tape of the Civil Service department which is tied up by various administrative principles which are not conducive to running businesses which require expansion, progress, invention and the trying out of new ideas. There has been evolved, the, I think, rather unpleasant phrase "ad hoc authorities” to describe these new types of hybrid device.

We have a number of examples of this. We have the Central Bank, the Electricity Supply Board, and we have Bord na Móna. We have a large number of these in this country where the authority, which is nominally a private company, is not really a private company at all, because most of the capital is owned by the State; if not the whole of it, at least the majority of it is owned by the State. The original idea in setting up these ad hoc administrative authorities was to get the best of both worlds, by having on them directors, who were not civil servants, so there would be the enterprise, initiative and the business courage of businessmen, and at the same time which would not be subject to the criticism of the parliamentary opposition or be made subject to parliamentary questions or political embarrassment in their day-to-day activities. The idea was to combine the advantage of private operation and public operation at the same time and, may I say, a great deal of ingenuity has been devised in the construction of administrative bodies of this kind in this and other countries. But actually, in the events that have happened, it looks as if, instead of having the best of both worlds, we have had the worst of both worlds from some of these devices and new bodies, because they retain the forms of a company, owned by shareholders and governed by directors, with an annual general meeting—all the apparatus of company democracy—but at the same time the public owners, who really own the shares held by the Department of Finance, have no control. Risks are not taken by the holders of the shares; they are taken by the public, and the taxpayer has to pay the losses, if losses are made, or the consumers have to pay high charges, so that you have a type of monopoly which may impose a liability on the taxpayer or on the consumer in this new form of company and will escape parliamentary scrutiny or public control. It is to draw attention to what is happening that we have put down a motion asking for an inquiry. There is something deceitful in the position of these companies. Everyone knows they are really public companies. Most of their capital is put up by the Minister for Finance from some fund or other, and the directors can be appointed and removed by him. These directors must necessarily reflect the views of the Department concerned. If the company loses money the Minister for Finance has to pay a grant out of taxation, because you find the companies are formed with all sorts of guarantees which ultimately impose liabilities on the taxpayers. Yet, in spite of the fact that for all practical purposes these are public property, in fact they do escape the only legitimate form of public control, namely, parliamentary supervision and parliamentary inspection. It is to draw attention to that that Senator Orpen and I have tabled the present motion.

The fact of the matter is that these are public companies, run by public money, operated by public servants and imposing a liability on the taxpayer. We feel that these are matters of vital importance to every member of the public, and yet, if the Minister is asked any question in the Dáil about the activities of any of these companies he can wash his hands and say: "I cannot interfere with the affairs of a private company or an independent corporation." No Minister is responsible, because these companies are not directly under any Department as is the Post Office, and, therefore, as I said, instead of getting the best of both worlds, we get the worst. We have got a large number of public corporations in this country run with public money, administered by public servants and in fact, wholly under the direction of the same people, and, at the same time, eluding and evading proper parliamentary control. That is the problem with which this motion asks the Minister to deal. The motion does not purport to suggest remedies but to call attention to the problem. The motion is carefully phrased; it simply demands an inquiry. It asks the Minister to grant an inquiry into this problem which is one of the great problems of modern times. Other countries have faced it, and in England and elsewhere, there is a considerable amount of literature on it. There was a series of interesting lectures delivered by Lord Justice Denning, one of the members of the British Bench of Lord Justices of Appeal. He directed his attention to examining how this problem of public corporations can be subjected to the rule of law and to parliamentary control. The problem is this: how can the Irish public regain control of its own property, for that is what it really comes to? Shareholders in public companies who put up the money themselves have ultimate control of the undertaking at the annual general meeting. They can change the board and change the policy of the company, and in the long run, they have got full control. A great many of these companies are owned by the Irish public and administered by representatives of public departments but the representatives of the Irish public, the members of the two Houses, cannot exercise effective supervision. These companies have been constructed in a way which denies the right of the representatives of the Irish public to make investigations into their own property. As I have said, it is a problem in other countries as well as in this one, and we are asking the Minister to institute an inquiry as to how this problem can be faced and solved here. We are not suggesting a policy of our own. We recognise that a solution may be difficult, but we think it is a reasonable proposition that the problem must be investigated.

Mr. Summerfield

I rise in the hope that the Minister will find his way to accept this motion. Its terms are very innocent looking and very reasonable. I think it is true to state that as far as our State and semi-State companies are operated, they are neither fish, fowl nor good red herring. As the Senators who have moved this motion have indicated, they have got all of the advantages of ordinary competitive business, plus the security of a State umbrella. In two outstanding cases, we find ourselves paying tribute to two semi-State concerns—I refer to the Electricity Supply Board and to Irish Shipping— but I do not think that it is unreasonable to say that ordinary competitive business could be equally efficient and perhaps more so. There is a danger in smug security, and that is the danger for which these State and semi-State concerns are heading. Is it not strange, in an era of price control for competitive business that the Electricity Supply Board from time to time, at intervals, announces that the board has decided to ask for a revision of prices and that they automatically get permission to increase their charges? I submit that they have got those increases and new charges far more readily than people engaged in competitive business with their own money could get permission to increase their charges.

You can easily make profits and show a healthy balance sheet if you are permitted to increase your charges to make those profits inevitable. Coming to Irish Shipping, I do not think it is generally known that the moment that devaluation of the £ took place, Irish Shipping Limited, running with Irish boats, built with sterling investments, manned by Irishmen, and victualled in Irish ports, immediately increased their charges to the full extent of dollar devaluation and, speaking now as an importer myself, and as a representative of business interests, I have yet to be convinced that a case can be made to justify the action which Irish Shipping has taken in putting the whole extent of devaluation on to their shipping charges from American ports when it is obvious that the results of devaluation do not bear fully on their costings. I could enlarge on that, but I do not want to say anything that could be taken as aggressive. I have no intention of being aggressively critical of these two fine companies we have in operation, but I do think that what they have done justifies the mover of this motion in asking that where we set up companies that operate with advantages as compared with competitive business within the State, we, members of the Oireachtas, ought to be very jealous of the privileges given to those companies and we should be in a position, as members of the legislative body, to insist that we have an opportunity to ask, when major decisions are being taken, to be told the reason why. It would be an impossibility to have the board of directors running to the Oireachtas to justify every ordinary routine matter, but I submit that where charges bearing on the whole community are involved, as in the case of the Electricity Supply Board and Irish Shipping, they should be compelled to justify those charges to the Oireachtas, which represents the people of the country.

Protests have been made by the various bodies representing industry against the action of the Irish Shipping Company, but they fail there. As far as I know, that is all we can do. These bodies make their protests, but they fail at that point. If, as suggested in this motion, a committee of both Houses is set up to look into the administration of these companies, then these things which at present are regarded by the mass of the community as very serious matters pressing on industry here would at least be brought into the light of day, and if there is a reason we will know what it is.

The motion is so simple that I sincerely hope the Minister will accept it. It would show that the Government has nothing to hide—I hope they have not—and that they are quite willing to see that, where State moneys are used for the creation and maintenance of companies, everything that happens and bears on the community as a whole will be subject to scrutiny by the elected representatives of the people.

Liam Ó Buachalla

Is fíor don Seanadóir Ó Briain nach bhfuil sé ag iarraidh a lán agus é ag iarraidh ar an Aire géilleadh don tairiscint seo. Níor mhaith liom a rá go bhfuilim ina choinne, mar nílim. Sé an rud atá mé a cheapadh faoin scéal ar fad go bhféadfaimis cuid mhór den eolas sin d'fháil dá mba mhian linn é a lorg agus an chaoi a bhfuil an scéal faoi láthair. I want to say that I have no objection to the motion. It will not do any great harm if the Minister accepts it and if this joint committee is set up. We have had experience of a long series of complaints being made in the Seanad with regard to the operations of Departments in the farming and issuing of Orders. In due course, as a result of those complaints, a committee was set up with very wide powers to inquire into the reasons why these Orders were framed. The committee had power to summon officials before it to give explanations.

We had one or two reports from that committee before us and I wonder if they were of great importance. I felt there was a great deal of substance in some of the complaints that had been made and that the result of investigation would show that civil servants and Ministers had acted in a highhanded fashion. The result of the appointment of this committee, however, has been to satisfy us that the officials and the Ministers and Parliamentary Secretaries concerned were very careful, when they set about framing and issuing an Order, to be able to justify their action. I feel that the same thing will occur in the investigation of the working of semi-State companies.

I was glad that Senator O'Brien did not launch an attack on the principle of establishing State companies. Most reasonable people have come to the conclusion that these companies are very much in the nature of things in these days and may be more so in the days to come. One would wish that that should not be so, but as things are going it seems that Government must take a greater interest in economic and industrial development in a more direct way than it has taken in the past. The right to set up these companies is not questioned: it is there under the Constitution. The number of companies is not very great. The reasons why they were set up are, on the whole, good and sound. Senator Summerfield suggested that the work they do, if handed over to private companies, would be as well or better done. The fact is that you could not possibly hand over this type of work to private companies, for very grave reasons. Private companies would not be prepared to put up the capital and face the risks involved. Again, you have to give very wide powers—taking things by and large— to these companies. One has only to think of the Electricity Supply Board and the right it has to enter on to people's land, the right to erect poles and pylons, to run wires in particular directions as it thinks fit. One has only to think of Bord na Móna and the right it has to enter on certain lands and cut drains, and to make bridges and so on. It is clear that you could not hand over responsibilities of that kind to an ordinary private company.

Much of the trouble with regard to these semi-State companies arises out of a failure on the part of members of the Legislature to study the reports, the profit and loss accounts and balance sheets of these companies. If we want more information about them, that may be easily obtained. One of the great results of the 1944 Transport Act was the manner in which the directors of Córas Iompair were able to simplify the annual accounts. Those of us who have been studying accountancy always wondered why it was necessary to present railway accounts in the way they were presented. It was really a worthy achievement on the part of Córas Iompair to change them in such a reasonable and simple manner. It is only a matter of the responsible Minister indicating to the companies that more information is required on the profit and loss accounts and on the balance sheets. It is only a matter of people genuinely interested indicating to a Minister, or to those in control of companies, that the reports might be more complete and indicating to them what extra information might be supplied. A good deal of the information might be obtained through the Committee on Public Accounts, especially where the State is involved in the payment of subsidy or in the payment of interest, which is subsidy in another form.

Whether it is a good thing to prescribe that the directors and officials of a company should come before a special board and account for every action is another matter. If you do that in the case of companies so peculiarly situated as these semi-State companies are, I do not know whether you will get men to act as directors at all. If you are going to make regulations compelling directors and officials to come before a commission of inquiry and be subject to a thorough-going examination, you cannot very well draw the line at that. We would say the reason is that public money is involved and the community is seriously interested in the working and the results of these companies. That is why we would say they should be hauled before a special committee of inquiry. If we are to be logical, we must admit that the public is interested in the working of all companies, whether State companies, semi-State companies, public companies or even private companies. If people are unhappy and feel there is a conspiracy on the part of the directors of a company to keep prices up or on the part of workers to work in a certain fashion with a view to keeping wages up and consequently prices up, or if they feel there is a conspiracy between the two of them, resulting in the public being unduly mulcted, it seems to follow perfectly that companies of that nature should also be hauled before a special committee of inquiry.

I did have the opinion, and still have it, that it might not be a bad idea if there were some bureau of commercial and industrial investigation, before which genuine complaints regarding charges, methods of working, policies, and so on might be investigated and which would report later on these complaints. I often thought it would not be a bad idea, especially when we have quite a number of industries enjoying protection. I do not for a moment believe that they have abused or are abusing the protection: I have no evidence of that and am satisfied so far that no charge of that kind could be substantiated. However, in the public interest, if people in certain quarters insist on carrying on a campaign against these companies, against the policy of protecting them——

Mr. M. Hayes

Is not that a different question from the question in the motion? Is not the matter of protection for private companies a different thing entirely from the consideration of companies which are State controlled? I suggest that it is a different area of debate.

Mr. Summerfield

It is hard to have it brought in, when others cannot reply.

Liam Ó Buachalla

Perhaps the Leas-Chathaoirleach will decide, but I think I can justify my comments. We are asked to approve the setting up of a commission to investigate the working of semi-State companies.

Mr. Douglas

That is not the proposal in the motion.

Liam Ó Buachalla

Excuse me, then, and I will correct it. The motion says that the committee proposed to be set up should consist of members of both Dáil and Seanad, to consider and report on what steps should be taken to provide for a periodic review of the operation of companies in which the State holds a majority of the issued shares. Does the statement I made originally differ from that?

Mr. M. Hayes

I thought the Senator was talking about protection given to private companies.

Liam Ó Buachalla

I am proceeding to point out certain dangers, what seems to be a logical consequence of accepting what is inherent in this motion. Am I in order in doing that? I am expressing the opinion that, if we decide on a committee of investigation for companies of the nature mentioned in the motion, there is a danger that it must follow from that that there should be a committee to investigate the happenings in all kinds of companies. It is only a question of degree, to what extent the people will declare that they are interested in the doings of these companies and interested or not interested in the doings of others.

An Leas-Chathaoirleach

That is purely presumptive, Senator. We are dealing with a particular type of company.

Liam Ó Buachalla

That is quite true. It is true that on any motion here, if one were to confine oneself very strictly to the wording of the motion, the most one could say would be "I approve" or "I disapprove". It would be very difficult to discuss a motion at all.

Mr. M. Hayes

May I say, Sir, having raised the point of order, it seems to me that there is an immense field for discussion, and it is being discussed in Great Britain and all over the world, as to how a parliamentary Government can exercise any from of control over companies in which the Government responsible to Parliament has a majority of the shares. Surely that can be discussed without going into the question of protection?

Liam Ó Buachalla

Senator Hayes is unduly anxious.

Mr. M. Hayes

Not at all; I am as calm as could be.

Liam Ó Buachalla

I have said I have no objection to this motion and no objection to the setting up of this committee and that I would be pleased that it be set up and report. I would be pleased, in the public interest, if we could devise some reasonable formula whereby the workings of these companies could be investigated. If it is out of order to refer to possible consequences from that, I have nothing more to say. This is one occasion where I can genuinely say I am pleased to see the motion on the Order Paper. There is something in this motion. There is a certain amount of uneasiness with regard to the workings of these companies. If that uneasiness is there, we should take every step possible to allay it.

Mr. Baxter

There is no suggestion of uneasiness.

Liam Ó Buachalla

If there is anything wrong in that way, we should find out what it is. If we think that by investigation of this kind we can get these companies to act in a more reasonable way, we will have done a good day's work. Senator Summerfield has referred to specific companies and has indicated his view that they have not acted in a reasonable way. He referred to the charges made by the Electricity Supply Board and to Irish Shipping, Limited, and the way they have handled this matter of devaluation. He referred to specific cases. If there is uneasiness, as he indicated, we should investigate the matter. If these companies have been acting wrongly, that should be pointed out and if by our advice we can indicate to them how they can do the business better, we ought to give that advice. I am quite satisfied to see this motion adopted and would like to see something result from it.

Mr. Douglas

This is a matter on which I have spoken here on various occasions in the past six or seven years. I never put it forward in the way it is put forward by Senator Ó Buachalla. He seems to think the idea is investigation and that something wrong is being done. That is not what is in my mind, nor was it ever in my mind, and I do not think it was in the minds of the proposer and seconder of the motion, judging by their speeches.

As I see it, in the case of an ordinary public company which is not State owned, if public criticism arises from time to time which is liable to be injurious to the business or in other ways, it is brought up at a shareholders' meeting by some shareholder concerned about the damage that may be done to the company. He may do that out of self interest, though usually he is interested as a person concerned with the welfare of the public company. Where you have what are strictly known as private companies that also occurs, but, it does not reach the public as the meetings are not public. The companies we are concerned with are somewhat varied, and, to keep to the motion, they are all companies in which the State either directly or indirectly holds a majority of the shares. Some of these companies are what are called public utility concerns, of which obviously, the Electricity Supply Board is one, with which everyone in the State is concerned.

Liam Ó Buachalla

Would the Senator give a short list of the companies he has in mind, apart from the Electricity Supply Board?

Mr. Douglas

I prefer not to answer directly, but I shall do so indirectly.

I do not want to refer to companies by name. I only mentioned the Electricity Supply Board because it is one that has been mentioned by other speakers. I mention it only as a type. There are other companies which were started by the State, not because the State particularly wished to start them, but because it was obvious that no private interest was likely to do so, and they were necessary for the country. I do not want to mention names for fear it would get into the Press that I was criticising them. Nothing is further from my mind. There are some companies in which the State has indirect control as they were financed by a company in which the State holds a majority of the shares. But these companies are obviously in a somewhat different category.

One of the reasons why I believe the best way to deal with the question, is not that the Minister would have the position examined in the first instance by civil servants and then brought before the Cabinet, but by the appointment of a committee out of which would come proposals which would be publicly debated. Based on the reaction the Government would make up its mind whether the proposals were going to be useful or leave matters as they were. I indicated the different kind of companies, because I suggest to the House that the same method would not be suitable for all. We have all heard wild talk outside about State-owned companies. I have no sympathy with that. I do not want to be in any way identified with it. People have been saying that they would make the position so difficult that there would not be any more of such companies.

I recognise that in a small country, it is inevitable that you will have certain highly desirable industries, for which private enterprise could not find the capital or would not be in a position to deal with them. One way, as in the case of the Post Office, is to set up a Department which would be subject to the Civil Service and general Ministerial control through Parliament. That has been the established practice for a long time, with some advantages as well as disadvantages. Many years ago I was chairman of a postal commission at which witnesses came forward indicating some of the advantages as well as the disadvantages that might arise. In the Electricity Supply Board, which was mentioned, there is a completely different method, and ultimately the Minister is responsible although he does not give detailed instructions to the board. At the same time, he has pretty close control, although not in any sense, day-to-day control.

Liam Ó Buachalla

The Central Bank has been mentioned.

Mr. Douglas

I am not familiar with the position in the Central Bank, but I would say that a general rule applying to companies would not suit the Central Bank I thank the Senator for that interruption, as it rather illustrates the point I want to make. This matter needs careful consideration as we do not want to do anything hastily. It would be disastrous if, in our desire to achieve a measure of public control, particularly parliamentary control, it resulted in frequent interference and questioning by busybodies, because that would not make for efficiency and would not gain the confidence of the public. It is particularly desirous that anything we might do would not shock the confidence of the public in public concerns, but should rather strengthen them. Therefore, what we have to do must be done carefully, so that the Government would be ultimately responsible for policy, and if necessary major decisions, but would not interfere in details which could not be properly explained to the public.

It would be very bad if they had to do that. I believe that between these two extremes there is a way out. I do not think my proposal would suit in all cases, but it would be well worth trying the plan of setting up a small committee, perhaps not more than a dozen members of both Houses, who would be appointed by the Minister and act as shareholders, meeting once a year for the particular company in which the State owned a majority of the shares. I suggest that the committee should only have the same rights and powers as shareholders.

Liam Ó Buachalla

Would their investigations be published?

Mr. Douglas

I do not think shareholders meet for investigation. At a shareholders' meeting information is given by directors for the benefit of the company. At such a meeting directors are asked for information with regard to the affairs of a company. It is not usual at such meetings to give the name of an office boy who was appointed or why one was changed. The principal difference between a meeting as I envisage and an ordinary shareholders' meeting, is that in the latter case the shareholders, if dissatisfied, have to call another meeting and propose the removal of directors. In my proposal a committee of the Oireachtas if not satisfied with the information given could report to the Minister and make suggestions. As far as possible I believe that such a committee should be appointed over a period. I do not think that we should select 12 people this year and 12 others next year.

As far as possible service on one committee should be regarded as the duty of every Deputy and Senator, who would confine his attention to the public interest. They would be expected to take the same interest in the company as if they were substantial shareholders, remembering that they were there representing the public. I think that would be worth trying. It is quite likely that on examination the committee would say that it should be tried in the case of certain companies. It is certainly worthy of examination. I do not put it forward as a certain cure, but it would provide closer contact and direct questioning. I am not in favour of close questioning of Ministers, except in exceptional cases, because Ministers doing their best are not always in a position to defend. I do not want to appear dogmatic, but I emphasise that this proposal is something that might be examined by a committee. I do not mind whether it is a committee of the two Houses or a body set up by the Minister, but I rather favour a committee of both Houses. Above all let us make it clear that this is not a committee to investigate errors. It is something to provide a contact between the Oireachtas, as the representatives of the public, and therefore the shareholders, and the directors for the good management of the business. In no sense should it be a mischief-making body and it would be disastrous if it were.

Mr. S. O'Farrell

I want to ask a question. With the principle of the motion, I like other Senators, am in agreement. If such a joint committee as is suggested in this motion were set up and if it recommended that periodic investigation or inquiry should take place into these companies, would not it be necessary to bring in legislation to empower them to make such investigation as would be necessary? I merely ask the question because, if a committee thought that an investigation and a report and recommendations based on the report were necessary in future, I do not think that you have any powers at present to ask these companies to produce for any of us or any body of us, any more than for any individual taxpayer, a detailed outline of their expenditure, their receipts, or other aspects of their business.

I only raise the problem so that the Minister can consider it when he is replying. If such a joint committee were set up, if the committee thought there should be investigations, would not the next step be to implement that by legislation?

Business suspended at 6.5 p.m. and resumed at 7.45 p.m.

Professor Stanford

I hope that the House will not consider it an impertinence if I make a few remarks on this motion. I was not able to be present at the debate but I got a good account of it. It seems to me that the debate went astray towards the end of the discussion and that the fundamental principles underlying the motion were not fully appreciated by some of the later speakers. I would like to emphasise the fundamental principle on which, it seems to me, the motion is based. I am quite certain that it is not based on suspicion of any particular company and that it is not intended as adverse criticism of any company of this kind nor is it intended as adverse criticism of the general policy of setting up companies of this kind. They are needed; I think we all agree about that.

What it is based upon is a fundamental democratic principle that the people and their representatives have a right and duty to know how public money is being spent. It is not a question of mere accountancy. We are all quite satisfied that there is no dishonesty in administering the funds or anything of that kind; there is no question of asking about this or that item of expenditure. It seems to me that the notion is that we as trustees of the people should have some say in the general policy of companies of this kind. Incidentally, to say that protected industries come under the motion is a complete misapprehension. That was not intended at all. The motion makes very clear that it refers only to those companies in which the State holds the majority of the issued shares. Some members of the Seanad feel that they are trustees of the people in connection with these companies and they wish to discharge their duties as trustees more carefully, perhaps, than they have done in the past. It is not a question of suspicion or of adverse criticism of the Fianna Fáil Government or of any other Government; it is a matter of general policy. It is, after all, absolutely basic that if we as representatives of the people delegate certain powers we must keep an eye on the exercise of these powers. There must be constant scrutiny of some kind in this matter. The Oireachtas is, so to speak, father of these companies. We do not want to treat them like minors who are incapable of looking after their own affairs, but we do feel that they are a family. When the members of a family set up establishments of their own, they tend to forget the common loyalty they owe to the family at large. When they live apart they tend to forget the family claim. We suggest, as parents, that there should be a family reunion at which we could extend criticism or perhaps praise of the grown-up members of the family. Is this unreasonable or is it too much to ask, as I believe one member of the House suggested?

It seems to be an absolutely democratic motion and one that deserves the full and unanimous support of the House.

Minister for Finance (Mr. McGilligan)

On the 28th of February, 1948, that is to say ten days after I entered the Government, I sent a memo to the Government headed "Review of the Financial Operation of State-Sponsored Bodies" and in that memorandum I suggested as an ad hoc method of dealing with all these State-sponsored bodies the adoption of a simple course, to empower, by changing one of the Standing Orders of Dáil Éireann, the Comptroller and Auditor-General to inquire into the accounts of such bodies.

Consideration of that memorandum led to the consideration of the different types of companies with which we had to deal and at that point I began to realise the amazing difficulties of this subject. Some of the 25 or so companies which I had under my review at that moment, I found, were in the position that their accounts were audited by the Comptroller and Auditor-General. In some cases the accounts of the companies were audited by an auditor appointed by, or with the approval of, a member of the Government. In some cases the accounts had to be presented to the two Houses of the Oireachtas; in some cases they had to be presented to Dáil Éireann alone; in some cases the accounts of these companies established under statute were presented merely to a Minister and he had no responsibility after that to bring forward the report or accounts to either House of the Oireachtas. In addition to that, there was a difficulty regarding the types of companies. I am not pretending that this is an exhaustive review of the companies, but there are some companies in which part or all of the capital is held by, or on behalf of, the State. In that category I would put the three air companies as they were then—and they still exist, Irish Shipping Limited, and its subsidiary, the Insurance Corporation of Ireland, the Minerals Development Company, Irish Steam Limited, the company that is known as Céimicí Teóranta, which was the old Industrial Alcohol Company, and a temporary company, the Irish Industrial Life Insurance Company—that is in liquidation. There is also a group of statutory bodies which have no capital but which receive State grants. Chief among these is the Electricity Supply Board, and there are also two important companies, Bord na Móna and the Irish Tourist Board. There is a third group of companies in which no capital is held by, or on behalf of, the State but the borrowings of the companies—and they are entitled to borrow—are guaranteed by the State. You have companies in that category which mainly developed under the exigencies of war—Tea Importers, Grain Importers, Oil and Fats Limited and Fuel Importers. In addition to these, and I do not put these in any of these categories, I do not separate them, there is the Agricultural Credit Corporation, the Butter Marketing Committee, the Sugar Company of Ireland, the Dairy Disposals Company, the National Stud Company, the Pigs and Bacon Commission, the Racing Board and the Sea Fisheries Association. If one went through all that list and looked at the difference of objectives for which they were established, the different ways and systems under which they get money, and under which they are allowed to have credit, there was undoubtedly chaos with regard to these companies, and the mere simple business of asking the Comptroller and Auditor—General to investigate did not appear, on the whole, to be a good solution.

One special difficulty about the Comptroller and Auditor-General is this: that the Comptroller and Auditor-General, although he is supposed to be a very old institution, in fact, only dates less than 100 years, but he has rather special duties. He was set up to examine the appropriation of moneys, to see what moneys were appropriated for special means, by the ordinary system of supply here, and he has the duty of seeing that no more money was spent than was voted, and of seeing that what had been voted got to the area for which it was intended and, of course, in the main he had to be brought in nearly always to operate after the event. He certainly could not give any forewarning of anything The system of his investigations is well-known to senators. He is assisted by a body known as the Public Accounts Committee, but they report only after the event. They conduct their deliberations without the Press being present, and there is an old-time tradition, that every member of the Public Accounts Committee is bound to silence and secrecy until the Comptroller and Auditor-General reports; so that, in that way, it is very much a late event in the whole history of any accounts he investigates when the public hear anything about it. Under a very old statute which was limited by a statute of 1921, the Comptroller and Auditor-General's Department is also entitled under that Act, which was not carried over here, to examine any accounts that are sent before him by a Committee of the House of Commons. There was a thought at one time of adopting that legislation here, of having it either in the power of the Dáil, or the two Houses of the Oireachtas to send, apart from the ordinary Estimates, to send other accounts to the Comptroller and Auditor-General. In any event, the Office took a peculiar line on that. The Comptroller and Auditor-General did not report because he said it might come into conflict with another part of his work. He decided to let some members of his staff, generally some senior member, examine the special accounts sent before him. The history of that seemed to indicate a weakness, that the Comptroller and Auditor-General is not too sure of his powers under the legislation they have in England. He is not too sure whether he is entitled to access to the books of any of these companies, where he is asked to inquire by resolution of the House of Commons and, I think, it is quite clear, that if he is going to produce a proper account he would have to be allowed to inspect the books and go into the whole of the companies' business.

There have been suggestions made from time to time as to what is to be done. The simplest suggestion is to put in the Comptroller and Auditor-General on top of all these companies and give him power to inspect books; to a certain extent, that which characterises them in a general way, is that they are in some way financed by the State to a greater or lesser degree or where their borrowing has to be guaranteed, that there is sufficient State assistance being paid to enable the Comptroller and Auditor-General to obtain their books for investigation. The second suggestion, one made in England from time to time, envisages that the Comptroller and Auditor-General could do, apart from the assistance of the Public Accounts Committee, with a different group established from amongst the parliamentary assembly, with a body of persons not selected according to Party affiliations as, unfortunately, the Public Accounts Committee is, but selected because people would have some special interest in the subject matter of the company they were dealing with, or some product they were engaged in the manufacture of, or else you would get some people interested in business as such, people interested in local or general finance, that they would form an expert body to help the Public Accounts Committee or the Comptroller and Auditor-General by investigating the books and reporting to them. The third system is one I mentioned in the House earlier, and is one which is in operation in certain portions of the Continent. I know it to be in operation in Sweden, because at the time we established the Electricity Supply Board here the Chairman of the Swedish Waterfall Board suggested that we should adopt the Swedish practice. This practice, which I understand from certain speeches made here, might not be acceptable to some of the directors of these State-aided companies. The system there is that a group of the parliamentary assembly be selected and that a special day—I am talking of the Waterfall Board—is appointed for the examination of the board's activities during the year. The body of parliamentarians selected sit almost as a court. There is a special room devoted to the investigation and it may last for a week. Members of the public and of the Press are admitted and members of the public may send in statements of grievance to cause questions on the investigation to be conducted through the members of the Waterfall Board. It is the officials of the organisation who attend in every case and usually the chairman and, possibly, the permanent members of the board, the technicians on the different sides attend, and they have to be subjected to public examination.

The Swedish system is in order to enable the inquiry to be conducted in an intelligent way, somebody, who that is I do not know, somebody is entitled to make a preliminary investigation into the affairs of the board to brief people who are investigating parliamentarians or even members of the public who can then put their questions up through any member of the group. A fourth suggestion has been made, that instead of having that, you should have a specialised group who would not necessarily be confined to Parliament; that you might have people selected from Parliament, with such outside experts as might be required for some special job, and that they should then sit and go through that sort of public examination. Any of these suggestions may be considered, and the Government are definitely considering them at the moment. We have not got to the end of our deliberations, because the further we went the more the complexity of the matter was disclosed, and the fact that some of these companies have been allowed to grow up haphazardly has added to the difficulty of getting any proper solution of this.

There has been a good deal of comment on this from time to time because Parliaments are more and more taking control or, at least, having some sort of association with this type of body, which is on the increase with all sorts of multitudinous activities. I have three brief quotations from the issues of the Economist, one as far back as the autumn of 1947. The last I have here is the end of January, this year. A comment in the Economist dated the 27th September, 1947, runs on the lines that a new type of public accounting is required for a lot of the State companies that they have in England. They said that the Treasury fails, partly or wholly, to satisfy any of the three functions which its accounting should perform, and I think there is some value in this extract which I shall read:—

"First, members of the House of Commons need crisp non-technical summaries, bringing out the main trends, on which to base general discussions of policy."

Whatever may be said that you will get at any time a crisp non-technical summary that enables you to investigate anything, I do not think the ordinary company is any better off than some of these State-sponsored companies. It goes on—

"Secondly, the committees of the House engaged in more detailed investigation of particular fields should be able to call not merely for petty cash book accounts designed simply to ensure that there is no dishonesty——"

I think that was what Senator Stanford was suggesting——

"and that appropriations have not been exceeded, but for proper cost accounts designed to bring out the full costs and economic efficiency of particular services."

The Seanad will probably also agree with this quotation—

"And thirdly, the Treasury itself needs similar cost accounts to maintain a running audit of the efficiency of Departments."

That is from a journal of considerable repute in England, which devoted and fostered a good deal of thought on the matter at the time. The quotation comes from its issue of the 27th September, 1947. I come to read a quotation from the issue of January 28th, 1950. The journal then admitted that there had not been much progress since its comment of February 14th, 1948, in which it said there was no clear line of division between those questions which Ministers should and should not answer. It continued—

"The issue is a difficult one... on the one hand there are innumerable detailed matters which it would be entirely wrong for the Minister to answer or interfere with; on the other there are major questions of principle and policy for which Ministers must be directly answerable. The trouble is the breadth of the no man's land between."

That is still the trouble, and I think that we would get very definite agreement here that if these concerns are to be allowed to run with any pretence of efficiency you cannot have day-to-day interference by parliamentary questions with day-to-day actions, but, at the same time, it is clear that there are matters—big matters of policy, on which the Minister ought to be questioned in the House, because he ought to have something to do with what this journal describes as "the breadth of the no man's land between". At a later point, this article comes to the suggestion that if investigations of these matters are to get anywhere:—

"members of the boards should appear in person and not be represented by officials of their parent ministry."

I suggest that is a point on which we might also have agreement. On 28th January, 1950, the same journal, giving what amounts to a retrospect of the parliamentary procedure over five years, says:—

"From this point of view, it is particularly serious that no satisfactory method has been found by which Parliament can discuss the affairs of the new public corporations and nationalised industries. No uniform procedure has been followed in the answering of questions on these organisations; the board rule has emerged that a Minister should not answer questions on matters of the day-to-day administration but only on matters of major policy; but this is a line that has proved difficult to draw in practice. There are annual debates on the reports of accounts of boards and corporations, but these are issued only after a considerable lapse of time and there is no method by which Parliament can ascertain whether current policy is going astray. Some kind of grand committee for the nationalised industries could be evolved, but this method would have its own danger. The debates on the affairs of the Overseas Food Corporation have revealed the extent to which it is possible to thwart parliamentary curiosity. There is a risk that, unless some satisfactory basis for discussion can be worked out, the House will acquire a professional suspicion of the public corporations which will inevitably be reflected in the public attitude."

I stress that because that is the situation we have here. There is, undoubtedly, a suspicion of these boards as a whole, and that is not confined to members of the Dáil and Seanad, but the public generally have that view.

Mr. Baxter

A much more suspicious view.

Mr. McGilligan

The public are reflecting the attitude which, I believe, is mainly the attitude of members of the Dáil and Seanad with regard to these companies. Where we will end as between all these interests I do not know. It is a very complex matter and it might well be that the Comptroller and Auditor-General might be the proper solution, certainly for the simpler types of companies, or you might have a parliamentary assembly with a few chosen members instead of picking them by a proportional representation system on party strength. You might also have a combination of several systems of investigation or you might adopt a system of appointing outside auditors, asking them to inspect the books in detail, and to collect whatever information was required by the inquiries that had been made. Or, having got the replies to these inquiries, they could be sent back with further inquiries where the inquirers were not satisfied with the first information they received. There are other ways in which an investigation might be made into the workings of these companies. But, there is one company in which there has never yet been a request by the Dáil or Seanad for an examination. At the formation of the company, the position was taken that a Minister was to have responsibility, and while he was to have responsibility, he was to be allowed to disclaim responsibility for the day-to-day administration. That system is still in operation and it still stands the test. The company is the Electricity Supply Board, which was required to open its accounts to outside auditors sent on them by the Minister for Industry and Commerce, who was responsible for that concern. The system was that the board would make its report on the persuasion of that outside auditor sent in by the Minister, and he brought back to the Minister who appointed him the preliminary report and the accounts in preliminary form of the Electricity Supply Board. It is the Minister's duty to see that further inquiries are pursued and his responsibility to Dáil Éireann was that if something emerged that merited inquiry, the Minister had to cause it to be inquired into. It was his duty to see that anything agitating the public in regard to the affairs of the Electricity Supply Board was specially investigated by this outside auditor who was sent in to be watchdog and to report back first before the Minister reported to the Dáil.

The arrangement was that any member of the Dáil if he had any following —not just a Party following—but a following of people in Dáil Éireann who were perturbed about anything, and wanted a day to discuss the report, would have to get a day or longer for the discussion of it. Although that system is in operation, there never has been one half hour's discussion on the report or accounts of the Electricity Supply Board since it was established, and it was the one body most open to investigation according to the different pledges given by the Government who set it up, and accepted by the Government who succeeded them. I feel it may take some long time still to get these accounts and go back to this "crisp comment"—something that would lead people to make further inquiries, that would put them in the position of seeing the facts and if necessary trying to get further facts and comments on them from the concern.

I think it would take a good deal of further thought. The Cabinet have been considering this matter for a number of years and various memoranda have come back from interested Departments but no conclusion has been reached and it may be that some little time will be required before a conclusion is reached. We must remember that the Audit and Exchequer Department, although nearly 100 years old is a fairly young institution. It was set up only about 1860, after the procedure had developed of having inquiries into expenditure. If you cast your minds back, you will recall that in those days, government was rather a simple matter. There were certain things regarded as proper for the Government to interfere in. There were categories of things which the Government could do and nobody else could do, like the arrangement for the administration of justice and defence. Those were two outstanding things. There were particular cases in which certain benefits were diffused but where the beneficiaries were not in a position to pay or meet the cost. Primary education would probably be classified under that heading nowadays as well as the provision of lights around the coast, and so on.

The growing category at the moment is the category of things in respect of which the Government believes that it has a better judgment or a better right to pass judgment than anybody else. It is a varying group and unfortunately, to my mind, it is on the increase. It is all very well for the Government to say it knows better than anybody else the age up to which children should remain at school, or the hours within which or outside which people should or should not be allowed to drink and matters of that sort; but the area in which the Government is more and more interfering in the private lives of citizens is on the increase and I do not know how, if any of these companies follow that line, how we are to meet it. It is an interference and if we could only get the people to take a different view and to believe that there is an interference which ought not be tolerated, we might get that sphere of Government activity very much restricted.

On the other hand, it is undoubtedly clear, however people may lament it, that the Government is going to interfere more and more in economic matters, in either commercial affairs or manufacturing concerns, and the point is whether we are to have that activity examined and, if so, by what machinery? The system of the Comptroller and Auditor-General is the proper system and you could not have anything better than it for the examination of the old system of Government in relation to the old Departments like Defence, Justice, and so on. The Comptroller and Auditor-General can do all that is required there. When you come to the semi-social or semi-commercial area of duties, I think that we have there a mixed area with which it is going to be very difficult to deal. When you get into the sphere of the trading concern in which the Government is playing its part, I think that that should be subjected to the type of examination carried out by an outside auditor, but with that outside auditor reporting to some people with parliamentary responsibility and parliamentary experience, and especially I should like to see a specialist group of parliamentarians chosen, not because of Party affiliations but because of their association with business, their experience of administration or various factors like that.

When you get into this intermediate stage, where you have things that cannot be classified—nobody pretends that they are either commercial or trading and yet there is public money being spent and possibly wasted—we want somebody away from the busy parliamentarian, away from the busy civil servant and away from the busy Minister to go quietly and leisurely into the affairs of such a concern and report. I do not know how that is to be managed.

I take up the Book of Estimates and take as one example the Vote dealing with Gaeltacht services. I do not know why that Vote should be in this Book of Estimates at all. The service should pay its way, but going through this current volume for 1949-50. I find that that service cost the State £110,000. As the money of the State goes at the moment, that is not a tremendous sum, but, when one examines it, one finds that there are something short of 200 officials borne on that Vote whose salaries amount to about £60,000, so that you have nearly 200 people costing in salaries £60,000 in order to lose £110,000. The mere presentation of these facts must argue—not inefficiency in the persons who are around the service; I am not saying that— something bad in the whole set up, if 200 people costing the State £55,000 in salaries are occupied in that work in order to lose £110,000 on the service.

The answer that will come immediately to me is that it is not a business and never pretended to be, that it is not a trading or commercial concern, but that it is something in the nature of a social service in respect of the Gaeltacht. I suppose that is the answer that will be made to me, but I am not sure that we are getting good value for it and it might be better to give the whole of it to the Gaeltacht instead of paying part of it to officials. Again the answer will come to me: "Was it not better to occupy these people, even if they were occupied at making something they cannot sell at a profit or cannot sell to meet expenses than to have the money divided amongst them?"

That is one of the odd types of services we have. That is being audited by the Comptroller and Auditor-General and what does he do in that respect? He sees that the people are properly appointed, that the money is properly voted and gets to nobody but people in the Gaeltacht or in the direction of materials bought. He reports that as being perfect. He finds nothing wrong with it. He never has and he could not, but there is something wrong with that. How is that to be fitted into the sort of examination that will be made in the case of the simple type of service? The Comptroller and Auditor-General gives you all you want in that respect, but in the matter of the type of commercial audit which I think is required for the trading concern, there will possibly have to be a change with regard to all three.

This matter has been gone into in some detail. People will realise from what I have said that it has not passed without observation and the expenditure of a good deal of officials' time and the time of members of Government. We have not reached any conclusion on the matter and I am quite willing to accept the views Senators have expressed. I do not want them to pass this resolution, because, if they do, I am left with the alternative of either neglecting it or setting up a commission which will be pursuing inquiries along the lines we have already been pursuing our inquiries. I will bear in mind what has been said, and, if necessary, will come back, and, if I feel that I would be assisted by the setting up of such a committee, will ask to have it set up.

Senator Summerfield referred to the Electricity Supply Board charges and said that they got their charges raised with much greater ease than an outside person in private business could have got them raised. I do not know about that. I think the Electricity Supply Board has considerable trouble in getting leave to raise their charges and in fact they raised their charges by a percentage that was very much lower than the percentage by which most charges were raised in the country over the period of the emergency.

Another Senator referred to Irish Shipping Limited. I wish there had been an examination of Irish Shipping, if only to get rid of the confusion which Senator Summerfield has with regard to it. If Irish Shipping said that the recent increase they made in their freight charges was due to devaluation, they could not expect anybody to believe them, and I am surprised to find Senator Summerfield accepting it from them. They were going badly, very badly, at one time. Devaluation gave them a chance and they seized it, but whether there had been devaluation or not, the freight rates of Irish Shipping would have had to go up. Otherwise, the company was going to be another addition to the list of lame ducks in the way of public companies which I have to finance out of the taxpayer's pocket.

Córas Iompair Éireann was also referred to and I think that a considerable amount of the difficulties in which Córas Iompair Éireann now finds itself might have been avoided if the public had any hint of what was going on for the past couple of years. If the public had realised two years ago that there was a non-technical chairman— and he was clearly that, certainly on the railway side—and a manager who was non-technical on any side of transport or traffic and a board carrying on without a chief engineer or chief mechanical engineer, I have the feeling that if merely those facts had been revealed to the public two years ago, there would have been such a clamour that at least technical men would have been brought around that board and the situation would not be as bad as it is now.

There is also the point which I mentioned earlier. It is one of the points in respect of which, if Senators have thought over it, I should like to hear their views. It is a matter which I want considered as a special point. Who is going to inquire if we have some system of inquiry? Is it to be Parliament, because it is in the Parliament that the matter will have to be threshed out or will members of Parliament prefer to rely on people of some specialist type to give them information? I have dealt with that already.

The point on which it is more difficult to get any real line on is how the people who are to make the inquiry are to be briefed. You could set four or five very eminent men in one line of business to deal with Bord na Móna or Irish Shipping, and they might not get anywhere, but if somebody with an intimate knowledge of the affairs of a company like one or other of these is sent in to make a preliminary inquiry and to come out with what he had found and put others on inquiry, something might be achieved; but the trend —possibly a wrong trend—is to make these inquiries public inquiries. and, if it it to be a public inquiry, we might as well have nothing. If the inquiry is to be conducted on the basis of members of the public coming in with grievances they have and somebody putting up those grievances, they are generally going to be about small points which are not going to be met or which will be met in the perfunctory way companies have of meeting these things.

I am afraid that I have not added anything to the deliberations of the Seanad on the point, except possibly to give an indication that the matter has been very seriously considered for a very long time. The fact that it has taken so long to get nowhere, so to speak, may give an indication of the difficulty of the whole matter. I ask the Seanad, having given me the benefit of their views, not to pass the resolution but to let the matter rest here. If it should become necessary, I will come here and indicate what is going on and let the Seanad pass its views on it, or come back and ask to have this resolution resubmitted, so that it could be assented to and the committee of inquiry referred to set up.

Mr. M. Hayes

This is a matter of very great importance and it seems to me to arise, as the Minister has said, from the extensions of the powers of Parliament and Government and from the failure of the modern Parliament to carry out anything like the supervision of the operations of Government which, under the old democratic system, it was expected to carry out. I think that is the fundamental dilemma. There is a tendency, as the Minister said, a continuing tendency, not confined to any country or any Party, to extend the powers of Government. That extension in itself extends the powers of Parliament and then, as Senator Stanford says, we want to apply the principles of democracy to these extensions, but the trouble is we cannot do it. Parliaments both here and in England—the examples we know best—and indeed to a great extent in France, have failed to do it.

The idea of these companies is the creation of a half-way house between complete State Socialism and private enterprise and they have grown up in a haphazard way. That is only natural to expect because no Government here since 1922 took the line that Socialism, as a principle, was correct and that, therefore, we ought to nationalise things because nationalisation in itself was good. What Governments here since 1922 did was to say, when they found a particular problem: "It cannot be solved by private enterprise and therefore we will put public money into it." That was done, in the first instance, by the present Minister, with regard to the supply of electricity.

I remember that, when the point was raised as to what power the Dáil was to have, I was asked the question myself in the Chair. I said I did not know. I do not know yet. I knew enough then to prophesy that this was the beginning of a number of bodies of the same type. I said then, 25 years ago, that some scheme would have to be found to control them. Here, now, in March, 1950, the Minister says the Government is considering whether that can be done. It seems to me that we ought quite frankly make up our minds that it cannot be done satisfactorily.

What we want is to have the work of these bodies done in a business-like way with, in the main, State money and with the power of the Government to appoint directors and to be ultimately in control. In other words, we want to combine the good things of private enterprise with a certain amount of State money and with State control. The question is: Can these two things be done? One answer to all this is to say that the Government of the day, whoever they are, are a committee, under the control of Parliament and, indeed, appointed by Parliament ultimately, which has to control these companies. But, the Government, no matter who they are, are the busiest body of men in the country, having each of them three full-time jobs to do, one parliamentary, the other administrative and the third, the keeping of themselves in political office. The present Minister only does two of these jobs. That is another question.

Mr. S. O'Farrell

If he does not do the third, he will lose the other two.

Mr. M. Hayes

That is not keeping him awake at night, I suspect. As a matter of fact, the suggestion is that we should, in some way, have parliamentary control of these numerous companies. The Minister mentioned 25 of them. What is the principal function of the other House—of the House of Commons and the Dáil, for example—as conceived years ago? The principal function is to control Government expenditure. That is the one thing above all other things that they never do. The position now is that a Government is endeavouring to control expenditure and that a House of Commons or a Dáil is urging them from all angles to spend more. I have done it myself. We all do it. I am not arguing that I am a person free from these particular defects. We all do it The whole tendency of the Dáil on Estimates—I have sat through a great many Estimates myself—is not to say to the Government: "Why are you spending so much", but "Why do not you spend more and more and more money on what I want you to spend money on". So that, in that way, the control of their own committee, that is running the country, is something which, in fact, Parliament has entirely lost track of. Can a Parliament, therefore, which is finding it increasingly difficult to do its own immediate job, find time to do another one? I think it is very difficult. I think it is impossible, as a matter of fact.

The most important thing of all is the appointment of directors. They must be let reasonably alone. One of the problems of appointing any body to supervise them is, to whom are the people who supervise them to make their reports? To the two Houses of Parliament? What kind of discussion will arise in the two Houses of Parliament?

In nearly every case where you have had discussion dealing with individuals it has been a bad discussion. While there may be certain evils, I think it is a greater evil that Parliament should be able to say: "Here is Mr. X, who is not doing his job". Even if he is not doing his job, there should be some other better way of settling that than having discussion about him in Parliament.

In what are parliamentarians usually interested? Not in principles but in small things. The members of a popularly elected House are the most badgered and persecuted people in any country at the moment about small things. Discussion of Córas Iompair Éireann, or of the Electricity Supply Board is why will they not give electricity to Bally so and so; why will not they open branch lines; why does Córas Iompair Éireann want to close down stations? Is not that the whole story?

As for the general question, very few are interested. If they are interested, they are not doing their best to keep their seats and, as somebody suggested a few moments ago, quite properly, if you do not keep your seat, you will have no more influence either in Córas Iompair Éireann, the Electricity Supply Board or Dáil Éireann or any of the various bodies that there are.

The T.D. and the member of Parliament in other countries is becoming more and more harassed by his constituents. He is interested in smaller rather than bigger things and is immersed in an immense mass of futile correspondence because his constituents believe that he is a kind of maid of all work except that he has not fixed hours and they think that he is far too well paid. That is the general position about him. The latest thing I heard was that a constituent asked a T.D. to find him a wife. The easiest thing to say, as the Minister has pointed out, is that the Comptroller and Auditor-General ought to do something about this. It does not seem to me a question of accounting. It is not, as has been said here, that people are suspicious that these companies are not being well run. It is that people in the Dáil and the Seanad have a feeling that, being the representatives of the people, they ought to be in a position of shareholders. I think the truth is that they cannot get into that position and cannot put themselves in that position. They can try but I doubt very much that they can do it.

The Public Accounts Committee is a very successful committee in the other House but its success is caused by the fact that its work has to be done on a very narrow basis and that it is done after the event. They work satisfactorily for that reason. What the motion wants is that there should be some control as to the policy that is being pursued—is not that so—and as to how the policy is being pursued. The Comptroller and Auditor-General has nothing to do with that. Neither has the Public Accounts Committee. Any analogy between the Public Accounts Committee and the Comptroller and Auditor-General is a false one and is not doing the job.

I do not know what kind of review is desired. I heard a certain amount of discussion about this but I do not really know what it is. The Minister says that if people were aware of certain things about Córas Iompair Éireann, there would have been a public outcry. I wonder would there. I wonder is there sufficient public opinion in the country to create an outcry about matters of great importance as distinct from an outcry about small details that are in themselves not very important but that hit somebody right away. When they close down a station, the people in that particular area start to agitate. That, in a democratic State, is the most important kind of agitation, just as the most important question—I have seen dozens of them on Dáil Order Papers—is: When are you going to divide the Hayes-Smith Estate. It is far more important than any other question in the Dáil. The discussion that takes place on Estimates is nearly always a discussion of details.

All the suggestions that have been made about the Comptroller are, I think, not satisfactory. The other suggestion of imitating the Swedes and having a parliamentary Committee with public discussion, does not commend itself to me either. I think the Minister is entirely right when he says, if you want discussion it must be in some way private. That, again, is not what Senator Orpen or Senator O'Brien want, that is to say, a private discussion. Will that lead to a report to the other House, for example, and what kind of discussion are they going to have there?

We used to have a member of this House who advocated constantly on all occasions the getting together of what he called cost accounts. That might be a good thing but it would mean nothing to the average voter. It would mean something to highly skilled people. The truth is that in the name of democracy, having destroyed here and in England one form of aristocracy, we are developing another form of aristocracy, namely, the managers. We are developing towards a managerial State—a new form of aristocracy with new powers. What we are wondering is how we can control our new aristocracy. I do not know that we can do it at all. Perhaps we can.

Then, again, there is the question of specialists, getting specialists to inquire into these bodies, but the Government, if it is a competent Government—and on this kind of thing Governments are fairly competent because their own reputation is at stake—are likely to put on specialists and the suggestion, therefore, of specialists to inquire is specialists inquiring about specialists and reporting to people who, by definition, are not specialists at all. So, the conclusion that I arrive at—I am afraid it is not a satisfactory one—is that we are endeavouring to apply to a very complicated situation a machine made for a much more simple situation and I do not think we can get any democratic machinery which will enable us satisfactorily to inquire into the progress, even the general progress, of these bodies. It is a half-way House that we have at present. The other solution, of course, is full-blooded Socialism, which leads you into the position where you control everything, including the labour of human beings and including the human being themselves, where this kind of discussion, which Senator Orpen and Senator Ó Buachalla and others are having, would not be possible and where the workings of the State machine are not allowed to be discussed. This is not a peculiarly Irish problem. There has been a lot of talk about it in other countries, particularly in England, and it is now one of great importance for the United States of America. Whether it can be solved or not I do not know.

I agree with the Minister that it is hardly the thing now to set up a committee to consider it, as the committee could not devise any other suggestions but those which have been made— that is, to allow some committee to inquire into it. the whole basis of democratic government is that an intelligent public-spirited individual as a Minister, with the help of specialists who are civil servants, will be able to control a Department; but when you see the ramifications of Departments like Industry and Commerce it becomes, practically speaking, impossible to control everything done in it. I do not think it is possible to remain a parliamentary body to have people elected on non-specialist bases, as we are, and at the same time to control all these specialist activities. We should endeavour to examine whether the parliamentary machine itself is not in some way defective. I think it is defective for the purpose of carrying out the job which has been put on it and which, I think, it certainly is not able to do.

Captain Orpen

If we had known that the Government were investigating this problem and considering it, the possibility is that we would not have put down the motion. I am very glad we had not that information. Fortunately, I think, we put down the motion. We had several very helpful and illuminating speeches. In the light of the fact that the Government are investigating this problem themselves, I ask leave to withdraw the motion.

A the same time, I would like to thank the Minister for all the trouble he has taken to supply us with information on what has been done in regard to these companies in other countries.

Motion, by leave, withdrawn.