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Seanad Éireann debate -
Wednesday, 26 Feb 1964

Vol. 57 No. 7

Private Business. - Central Bank Bill, 1963—Committee and Final Stages.

Section 1 agreed to.
SECTION 2.
Question proposed: "That Section 2 stand part of the Bill."

I wish to oppose subsection (2) of this section and suggest to the Seanad that it be deleted because I think it marks a very dangerous trend in our recent legislation. It shows where bureaucracy is stretching out its strong hand to try to make the Houses of the Oireachtas more insignificant by putting obstacles in the way of some semi-State categories becoming members of either House of the Oireachtas. I should like to suggest to the Seanad that this is in no way a party policy decision. It is just one of those processes of bureaucracy, a tidying up, as it were, but at all times increasing its own powers.

We need only go back over some of the legislation enacted to provide an example of the type of thing I have in mind. I can take three bodies comparable in magnitude to the Central Bank setup in our national life. In 1958 the Agricultural Institute was established and elaborate precautions were taken in regard to setting up the Board of that Institute. There was no restriction in any way put on the activities of the members of the Board or the Directors of the Institute itself. They are quite free to be nominated to membership of either House of the Oireachtas. In fact, they are quite free to sit in either House. At the moment we are privileged in having a member of the Board of the Agricultural Institute sitting in the Seanad. I refer to Senator Prendergast. That was the attitude seven years ago.

I do not intend to take too long on this matter. Three very important measures were passed in the early part of 1961. We had, first of all, the Dairy Produce Marketing Act under which Bord Bainne was set up. We know the care and attention exercised by this House, and all bodies, in fashioning the statutes governing Bord Bainne. I refer particularly to section 21 which sets out the disqualification of a member of either House of the Oireachtas for membership of the Board. Subsection (1) of section 21 states that where a member of the Board becomes a member of either House of the Oireachtas then he has to retire from being a member of the Board. That is an advance in relation to a restriction which existed in 1957. I think a member of the Board is free to seek election and it is only on being elected that he then has to resign from the House.

We might under great pressure go so far, but subsection (1) of the Bill sets out that a member, upon being nominated, has to cease to be a member of Seanad Éireann. The House knows the hazards of nomination to the panels of Seanad Éireann and it knows the many exceptionally talented people, ranging from the President of the Royal Irish Academy down to distinguished ambassadors, and so on, who had sought membership of Seanad Éireann and failed to get the necessary votes for election. Why should it be insisted on that a person has to retire from the Board before even seeking election? I think that is going much too far.

We can go back to 1961 and cite another very important Act—the Pigs and Bacon Act. Again, the same provision applies there. We know, too, of a third important Act in 1961 which established the Institute for Industrial Research and Standards. Again, the same provision is there—that it is on election that the choice has to be made. There was a departure in relation to the Industrial Research and Standards Act. It was one of the few Acts which sought to put obstacles in the way of employees of the board. They had to be seconded if they became members of either House of the Oireachtas, but the secondment had not to begin from the moment they were nominated. As far as I can see, there is no restriction on the members of the Central Bank, from the Secretary down, to seek election to either House. Why then should that restriction be placed on the Directors of the Central Bank?

Why should there be that change of policy between 1958, with no restriction, 1961, with fairly stringent restrictions, and today with its prohibitions, especially designed to keep from the Oireachtas men who might have independent views, while, on the other hand, we note the growing tendency of the State to put its own officials on boards as actual members of them? In the Dairy Produce Marketing Act the Minister has the duty to nominate one of his own Department as a member of that board. We are all familiar with the fact that there is a distinguished civil servant acting as Director of the Central Bank. I am not objecting to this. I think you may say it is quite good to link up in that way, though from that point of view, there is far more objection to civil servants sitting on semi-State boards than to members of semi-State boards sitting in the Oireachtas. You cannot have it both ways. Unless we put in restrictions which will make it absolutely taboo for any members of the Civil Service to sit on semi-State boards, which I would not advocate for one moment, we cannot consistently and logically rule in the other direction and insist that members of the Governors of the Bank should be ineligible even to seek to become candidates for Seanad Éireann.

As a concession, perhaps, we might leave in the second part of this section where it says that a person who is for the time being entitled under the Standing Orders of either House of the Oireachtas to sit in the House shall be disqualified from being, or becoming, the Governor or a Director of the Central Bank of Ireland. Such a provision making it impossible for those in the House to become members of the board might be useful in so far as it would free Ministers from any suggestions of political pressure when seeking that members of either Seanad Éireann or Dáil Éireann be nominated to new boards. That provision may be a practical one, and we can leave it in, but I suggest that the first one is totally impracticable. Consequently, I believe if it were gone into carefully it would be found unconstitutional.

I should like to support Senator Quinlan in his objection to this proposed change in the law. The Central Bank Act, 1942, provides that members of the board of the Central Bank shall not be eligible to become members of Dáil Éireann or of Seanad Éireann. I was never very much in favour of this prohibition but, at the same time, I can see there might be arguments in favour of it. I can see that the same person should not act in the Legislature when important financial decisions are taken and on the board of the Central Bank where important financial decisions of another kind are taken. A conflict of interests and considerations might arise. But, as I said on the Second Reading of this Bill, whatever may be said for this prohibition in relation to the Central Bank it is very difficult to justify it in relation to other boards. However, that is not relevant today and I do not intend to pursue it.

The new suggestion goes very much farther than the Central Bank Act. It prevents anybody who happens to be on the board of the Central Bank even from being nominated, even from taking the first step towards becoming a member of the Dáil or Seanad. That seems to be against the spirit of the times.

Everybody is calling out in the newspapers and elsewhere for more expert discussion of the difficult problems which have to be discussed today. There is a very large volume of opinion to the effect that there should be more experts in relation to financial and commercial matters in the Dáil and Seanad than there are today. The members of the board of the Central Bank are all people with certain financial standing. Some of them represent the commercial banks. Some of them represent the Minister, but nobody is on the board of the Central Bank who does not acquire a considerable knowledge of financial affairs in the course of his duties. This Bill prohibits such a person even from attempting to enter public life. That is going a great deal farther than the present Act.

Although I do not entirely agree with this myself, I am prepared to concede that it might be argued that a member of the Oireachtas should not be a member of the board of the Central Bank and therefore I do not object to the second part of this section. I agree with Senator Quinlan on that. However, this proposal goes a great deal farther than that. It means that these gentlemen, all of whom we must assume to have certain expert knowledge of financial matters, cannot even think of going into public life. They cannot even put themselves forward. If they could allow themselves to be nominated to the Dáil or Seanad and, if elected, then had to resign from the board of the Central Bank, I could see some reason in it, although I think the reason is not as strong as is sometimes thought.

The proposal in this Bill excludes people even from taking the first step towards taking part in the legislative life of the country. It seems to me that every citizen should have the right to present himself in a democracy for membership of either House of Parliament. This Bill singles out a group of people and excludes them from that elementary right to present themselves to the electors of the Dáil or Seanad in order to enter public life. In other words, the Directors of the Central Bank, according to this Bill, are grouped with aliens, with people of unsound mind and with convicted criminals. They are four classes of people who are ineligible for nomination to the Dáil or Seanad. I think that is rather hard on our friends in the Central Bank.

I have not very much to add to what I said on the occasion of the Second Reading. There has been a long-felt want in this country, going back over the years, for some type of review of the activities of State companies generally. Many suggestions have been made. When I became Minister for Finance, I thought I could make useful suggestions but the more I studied the problem the more difficult it appeared to me to do anything about it.

The ordinary joint stock company have at least shareholders to criticise their actions but the State company have no such body of people to criticise them. The only body that has power from time to time to review the actions of these companies are the two Houses of the Oireachtas. I think for that reason it would be a great pity if that criticism or praise, as the case might be, might appear to be conditioned by a political partisanship in either the Dáil or the Seanad. That would apply generally to State companies and to the Central Bank in particular, I think, because the Central Bank is a very important body and there is no possibility of having any review of its activities except in either the Dáil or Seanad.

No great harm might be done perhaps in the ordinary State company by being a little bit prejudiced in one way or another but great harm could be done to the Central Bank if any prejudice were shown in the Dáil in relation to their actions. They have assumed the function of reviewing our economic position here every year and they have not shrunk from the task which they think is their duty of criticising the Government on occasions when they think criticism is due. It would be a great pity if that criticism were not given because of some undue political influence on the board of the Central Bank itself.

I do not want to disagree with Senators who say that members of the Dáil or Seanad might be as good if not better members of these boards than the people on them: I quite agree with that. However, there is a great temptation for a member of the Dáil or Seanad to be swayed by his own political opinions and maybe honestly so. He might honestly think his own political policy was the right one, whatever the Central Bank might say. Even if he were able to get over that and had not influenced the Bank in any way, there would always be suspicion, at least, if the Central Bank were to offer nothing but praise to the Government for their activities, and if there were a few Government members on it, that it is easy to expect a review of that kind from the Central Bank seeing who is on the board. Their view, therefore, might not be accepted as an honest and impartial view in all the circumstances.

I think, having gone into these questions very thoroughly when I became Minister for Finance first, that the step that has been taken, as Deputy Quinlan says, not only by this Government but by other Governments, too, to exclude from membership of State bodies members of the Oireachtas was a wise one on the whole. I would ask the Seanad to stand by that decision in this case, too.

The question of nomination troubles me somewhat. I can follow the Minister's argument as it is related to membership of the Central Bank vis-a-vis membership of either House of the Oireachtas but the suspension of membership of the Central Bank on the mere fact of nomination is, I think, a little too harsh. In spite of the vocational composition of this House, a large percentage of us here are pretty well recognised as dyed in the wool supporters of one of the three Parties.

However, there are six members here—I think the same can be said of the eleven nominations made by the Taoiseach—who come from the two universities, three from each. I think it is wrong that, say, a member of the Central Bank who might be a member of the staff of either university, or associated with it externally as a distinquished alumnus, would be restricted in the first instance from the very initial step of having himself or herself nominated to membership of Seanad Éireann.

I am excluding the Dáil altogether, and members of this House, except those who come from the National University or Dublin University. I think it places too harsh a restriction on men such as those in the event of their being members of the Central Bank. I know one person at the moment who is a member of the Central Bank and who occupies a Chair, or may have done so, in the National University. If such a man, as a member of the Central Bank, were put forward by people in his particular university for membership of Seanad Éireann, I think this will impose too harsh a restriction altogether because the members of the universities are the people who, by their actions and their voting here over the years, can claim to belong to the truly vocational idea of the House.

I would ask the Minister, therefore, seriously to reconsider this question on the basis of nominations only. I accept his argument about membership of the Central Bank and of either House of the Oireachtas at the same time, but considering it on a basis of university membership, I think he should reconsider it at any rate, and perhaps come back to us with an argument in favour of this nomination restriction, as I would call it. I believe this is worthy of serious consideration.

I rise to make substantially the point that has been made by Senator Lindsay. The Minister has, at any rate, made a case, whether we accept it or not, as to why people should not be members of either House of the Oireachtas and Directors of the Central Bank at the same time, but I do not think he has made any case as to why it is objectionable that a member of the Central Bank should seek membership of either House of the Oireachtas. Would it not be sufficient to call on him to resign his directorship of the Central Bank when he gained admission to either House?

There is another thing that strikes me about section 2 subsection (1) in relation to membership of this House. As we know, there are two ways of becoming a member of this House. One is by election to it and the other by nomination to it. If a person initiates the first step of becoming a member, if a director of the Central Bank takes the first step, that is, making known to the people who are in a position to elect him that he will accept membership of this House, if elected he must resign from the directorship of the Bank. But if a person desirous of becoming a member the easy way — by nomination — makes known or gets somebody else to make known to the person who can put him in this House that he is prepared to sit in this House if nominated, he is not obliged to resign from his directorship of the Central Bank.

One person could be just as politically-minded as the other: maybe the constitution of this House leads to that rather absurd position, but I think it is an argument for urging on the Minister to take out of this subsection the provision which disqualifies a person who seeks membership of this House before he is actually elected.

The Minister in his reply dealt solely with the question that it was not desirable that an individual should sit on both the board of the Central Bank and in either House. That is not the point of my suggested amendment to the subsection. It is irrelevant at this stage. Here we are concerned only with whether the individual has the right to take the first step to be nominated. There is an underlying assumption that all members of State boards are political, that they can think only in terms of being full members of one political Party or the other. I hope that is wrong, and from my knowledge of members of semi-State bodies I feel it is. Many of them are extremely independent minded people and have given very independent views on many occasions.

Those people contest the Seanad elections as they are at present. Many of them do so knowing full well that the electoral college as constituted gives them no chance, but it is a matter of prestige to be selected as the standard-bearer of, say, the Royal Irish Academy, and a person may accept such prestige knowing full well he is only showing the flag until better times arrive, until this or some other Government will have the courage to implement the recommendations of the recent Seanad Commission which say there should be a very definite part set aside which would enable people who are more committed to vocational organisations, representing vocational points of view more, should be elected to the Seanad.

We hope that day is not far off and consequently this subsection will provide a very difficult and wrong obstacle to such men if the Government implement the recommendations —I think, the unanimous recommendations — of the Seanad Commission. Consequently. I appeal very strongly to the Minister to reconsider this, which could set a very dangerous precedent. Every argument the Minister advances about segregation applies with double force to segregation between the officers of the Civil Service and the officers of State boards.

If overlapping is wrong as between members of the Houses of the Oireachtas and semi-State boards, it is doubly wrong and doubly detrimental to independent action to have overlapping between the Civil Service and the State boards. It can be there in moderation, but I do not like the present situation in which I can see only efforts to make this country more and more a Civil Service run State. We appreciate and applaud what the Civil Service are doing, but as citizens we have got to stand up for our rights and ensure that democracy does not mean a Civil Service dictatorship in this country. We have all a part to play. We are all growing into adulthood here and, therefore, I appeal to the Minister to at least reconsider this and come back on Report Stage and tell us about it.

What objection has the Minister to having the same rule applied here as to the ESB? I cannot make out why the difference. I spoke on this earlier and mentioned the case of a man employed by the ESB who sought election. As the law stood he was properly nominated. We thought there might have been a flaw in the Act and what we did was to say: "By all means accept nomination but if elected he can lose his job, pro tem, while a member of the House.”

I cannot see why the Minister will not agree to a man being a member of the Central Bank and the Seanad. I cannot understand it. I am not a lawyer but I think I have a bit of commonsense and I think it is absolutely against the Constitution. Nobody is going to contest it, to deny any citizen, who is not barred by crime, from being nominated. I cannot understand why we do not have it the same as the ESB. Senator Yeats took exception to what I said the last time. It ought to be brought in line with the ESB.

I can assure Senator Boland that that is exactly what we are doing. We are bringing the law in regard to the Central Bank into line with that relating to the ESB. If a member of the board of the Central Bank is nominated to the Dáil he thereby loses his right to sit on the board of the Central Bank but he is a member of the Dáil. Constitutionally, I think we are all right anyway.

That is not the case with the ESB.

Yes, they are all being brought into that position. There is nothing in the electoral law to disqualify a person because he sits on the board of the Central Bank or the ESB. If he is nominated to the Dáil, it is a valid nomination but he loses his seat on the Central Bank board, so constitutionally, we are all right.

I may be getting very thick in my old age but I cannot see it.

The same applies if a member of the Central Bank is nominated to the Presidency. It is a valid nomination but he loses his place on the Central Bank board.

I am wrong there. I thought he could not be nominated.

Under this Bill, he can.

He can be nominated but he must immediately give up his seat on the Central Bank board even before he is elected to the Dáil.

He automatically gives up his seat. It would seem from what was said by Senators on the other side that I had impugned the impartiality of the members of the Dáil and Seanad. I did not. I thought the great majority of the members of the Dáil and Seanad would act impartially. I said that in a case of this kind there was always the possibility that a man who was out-and-out Fianna Fáil, Fine Gael or Labour, believing in his own policy, and rightly so, would be accused by people outside of being partial. That is the worst I could say of him.

That would not be any harm.

As I say, even though we might have members of the Dáil and Seanad acting perfectly impartially and neutral, the public might not give them credit for that at all. A point was made by Senator Lindsay, and also by others, that it was unfair to legislate that a person should lose his place because he was nominated, but I think if we accept the principle we have to go that far also because there is always a possibility between the time of nomination and election or rejection some important decision might be taken by the Central Bank on an important report issued by them. We have to deal also with the fact that at election time people are more fired by enthusiasm for their own parties than they might be between times. There is more danger at election time than at any other time that a person who is nominated might be accused of taking a partial view.

Surely he would have that view in his mind whether he was nominated or not.

Why does the Minister suggest that a member of the Dáil or Seanad would be under suspicion and be the cause of undue influence on the board of an institution like the Central Bank, that he would cause more influence there than would an established civil servant on such a board? I think the two are very much parallel and a person appointed to one can be appointed to the other.

I am glad the Senator mentioned that point because I overlooked referring to civil servants. My experience—I think it is longer than that of most civil servants—is that they are remarkably neutral, unprejudiced and objective. I admire the Civil Service. I have never, in all my experience, heard a civil servant say anything uncomplimentary about the Minister who preceded me and who was from the other Party.

They might visualise his return to office.

None of us is casting any aspersions on the civil servants or their activities in relation to boards. I cannot see what is the difference between the objections that can be raised to them and the objections that can be raised to a sitting member of the Dáil or Seanad.

Question put.
The Committee divided: Tá, 26; Níl, 15.

  • Boland, Gerald.
  • Brady, Seán.
  • Brennan, John J.
  • Browne, Seán.
  • Cole, John C.
  • Connolly O'Brien, Nora.
  • Costelloe, John.
  • Donegan, Bartholomew.
  • Fitzsimons, Patrick.
  • Flanagan, Thomas P.
  • Healy, Augustine A.
  • Hogan, Daniel.
  • McGlinchey, Bernard.
  • Mooney, Joseph M.
  • Nash, John Joseph.
  • Nolan, Thomas.
  • Ó Ciosáin, Éamon.
  • Ó Donnabháin, Seán.
  • Ó Maoláin, Tomás.
  • Ó Siochfhradha, Pádraig.
  • O'Sullivan, Ted.
  • Ruane, Thomas.
  • Ryan, Eoin.
  • Ryan, William.
  • Sheldon, William A.W.
  • Yeats, Michael.

Níl

  • Brosnahan, Seán.
  • Carton, Victor.
  • Davidson, Mary F.
  • Desmond, Cornelius.
  • Fitzgerald, John.
  • Fitzpatrick, Thomas J.
  • L'Estrange, Gerald.
  • Lindsay, Patrick J.
  • McDonald, Charles.
  • Mannion, John.
  • O'Brien, George.
  • Ó Conalláin, Dónall.
  • Prendergast, Micheál A.
  • Quigley, Joseph.
  • Quinlan, Patrick M.
Tellers: Tá, Senators Ó Donnabháin and Fitzsimons; Níl, Senators Fitzpatrick and Quinlan
Question declared carried.
Sections 3 and 4 agreed to.
Title agreed to.
Bill reported without amendment.
Agreed to take remaining stages today.
Bill received for final consideration.
Question proposed: "That the Bill do now pass."

The Bill is called the Central Bank Bill. On the Second Stage, the whole of the Bill was discussed to some extent. Being called the Central Bank Bill, the public are naturally interested in how it functions as a Central Bank.

The Senator must confine his remarks to the contents of the Bill on this Stage.

May I refer to any discussion that took place on 18th December last on the Second Stage?

Not unless it is something that is enshrined in the Bill.

I think Section 2 deals with the appointment of Directors of the Central Bank. In so far as it deals with the appointment of Directors, it might influence the policy of the Bank. I think the Senator is in order in discussing the policy of the Bank as the Bill deals with the appointment of Directors and the Directors are the people who frame the policy.

The Chair will deal with matters as they arise. To Senator Desmond, I would say that the discussion on this stage must concern itself with matters in the Bill.

In the Bill, we are finalising today the function of Directors, their eligibility to sit on the Board and to be nominated to the Board. I am anxious to know how that would affect the Central Bank and how it may influence the policy of the Central Bank. The Central Bank has been, up to the present, I expect, and is today a very important institution in the State, influencing policy in general as regards money and how it is to be lodged and how the people will get it.

The Senator I am afraid is going outside the scope of the Bill.

I was being guided by a reply I got on the last day from the Minister, on a point I raised, when he explained the influence of the Central Bank on commercial banking.

The Senator is going completely outside the scope of the Bill.

I want to outline very briefly what seemed to be the only case made by the Minister for section 2 (1). He said the Central Bank is in a very special position and has a very special relationship to the Government. Consequently, in the interval between nomination and the holding of an election, there might be some very important decision which the Minister thinks, for a candidate, might be prejudicial.

I want to underline that I should not like that this would be used in any way as a precedent for subsequent legislation. If there is any attempt in future legislation to insert what I regard as this very odious and highly-restictive clause, I ask Senators to be on their guard against it and to ensure that this Bill will not be used as a precedent for such action.

Question put and agreed to.
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