I should like to raise a couple of points of relative detail on the Bill and on the Minister's statement, first of all on what he said about our obligations to the International Monetary Fund as regards restrictions. It was not clear to me whether our circumstances in regard to the present limit of £250 is agreed by the Fund. The Minister said that when we joined the Fund in 1961 there were traditional arrangements which permitted the maintenance of some exchange restrictions on current transactions. However, the Minister said that in 1961 we accepted the full obligations of the Agreement not to impose restrictions on current transactions except with the approval of the Fund.
Can I, therefore, take it that we have the approval of the Fund for the £250 restriction and that this is in accordance with our arrangement with the Fund? Secondly, the Minister made some reference, either here or in the Dáil, to the fact that we have had to take action to ensure that facilities for foreign exchange in this country are not availed of by people in Britain. I am not clear as to what action we have taken. Reference was made to communications with Britain. What form did these communications take? Was it a matter of creating new restrictions or enforcing restrictions that had been allowed to lapse and what is the mechanism for ensuring against large-scale evasion? How would the Minister set about ensuring against an Englishman who had friends or relatives in this country asking them, if they did not contemplate foreign travel in the ensuing year, to go in and collect £250 on their passports and transfer it to him? What control is the Minister to exercise to ensure this does not happen? His statements on this are extremely vague and it is important that we should know how this protection is to be afforded.
I noted the Minister's reference to the circumstances in which emigrants going can take as much as £5,000 per family. This will give rise to a hollow laugh in relation to many emigrants who are unlikely to be in possession of such a sum. However, there may be people emigrating who possess property of that value or the sale of whose land may yield more than that amount. Accordingly, the decision to limit it to such a figure seems severe: that people should be limited to £5,000 capital per family when they are going away to start a new life seems a severe provision. Is there provision to modify that if there is an application from somebody who makes a good case or is it to be a rigidly enforced limit without regard to humane considerations that should arise?
The Minister said in his statement that current transactions have for years past been free and such supervision as is applied to current transactions is directed towards ensuring that they are not used as a cover for unauthorised capital transfers. I was rather surprised at that because I had heard, and have had it confirmed by what the Minister said, that in relation to certain current purchases from abroad exchange control restrictions have existed even if not enforced. This has been the case in the matter of oil in particular. Am I wrong in thinking that the possibility of such restrictions has been adverted to and that people purchasing oil have had to run the hazard of getting it through the exchange control mechanism?
If that is the case the Minister's statement would not appear to be entirely correct. Of course, I may be misinformed on this. It may be that for purchases of oil and for other current transactions permission is automatically given and there is no such restriction, though the agreement may be adhered to for other reasons. I should be glad to receive an assurance that the Minister meant what he said and that there is no question of the power being used to influence transactions of that kind in a way the Government might wish to influence them.
In the original Act there are two schedules giving a list of authorised dealers and authorised depositors. The Act provides in section 31 for the appointment of persons in addition to those specified in the Schedules to be authorised dealers and depositors. Is that power under section 31 of the Principal Act being exercised? If so, have there been many cases or is it a rare thing to add to this list or is it the position that a reputable banking organisation can automatically secure an addition to this list? What is the position as regard the exercise of the powers given under section 31 of the Principal Act?
They are points which seem to arise from the Minister's statement on the original Act and the amending Bill. More broadly, I wonder if the Minister could clarify our relationship with the Sterling Area? Is it simply that we are an ordinary member of the Sterling Area or do we have a privileged position in view of the very close financial links between ourselves and Britain? Is there a special relationship existing or are we one of the members of the scheduled territories of the Sterling Area and treated by the British authorities on the same basis as everybody else? Some enlightenment of our position here would be of general interest so that we might better understand where we stand in relation to this matter.
There is one matter of grave importance which I consider is proper to raise on this Bill and that is the decision of the British Government, I think last March, to impose restrictions on the export of capital to Ireland. This matter has not received as much publicity as it deserves. It is an important matter of principle and a matter of practice. As regards the matter of principle, this country has always enjoyed free movement of capital from Britain. The fact that there is any restriction on the free movement of capital is likely to hurt us more than it will hurt Britain because we get an import of capital to the tune of £30 million a year.
It seems extraordinary that up to just two years ago this country was an independent trading country. We had no free trade area status with Britain but we always had free access to the British market for virtually all our goods, without any possibility of the imposition of any tariff or levies of any kind on our goods going in. We had free movement of capital from Britain to Ireland. We now enjoy the dubious benefits of this free trade area which has not brought the benefits which the Minister for Agriculture and Fisheries thought and promised in regard to the price of cattle.
In addition to that, all our goods going into Britain will have to bear a levy and the arrangements in regard to the free movement of capital from Britain to Ireland, which has existed for as long as anybody can remember —there may have been restrictions in the nineteenth century—has been broken by the action of the British Government. Through the negligence of the Irish Government and their lack of foresight in this respect free trade with Britain and the establishment of this very close relationship with Britain mean that we are cut off with regard to the flow of capital from that country.
This is a matter of very considerable importance because our plans for the future development of this country will depend, as the Minister knows better than anybody else, on a very substantial inflow of capital. If we are to achieve any growth we need this inflow and it will have to be much greater than it is now. Despite this we are in a position in which the British source of that capital inflow has been cut off by the arbitrary action of the British Government. We are now in a position in which we are suffering from a close-down of this inflow of capital.
I am aware that this is quite a serious restriction. I know there are restrictions on the inflow of capital from the USA but this does not seem to have such a bad effect. I am equally aware that the inflow of capital from Britain is extremely difficult. Unless the amount of capital is less than £25,000 permission has to be obtained from the Bank of England. This means that for the time being, and as far ahead as we can see at the moment, the inflow of capital from Britain to this country is stopped. We may be in a position to partly get around this by providing small factory space at Shannon. This may help to some degree so that small industries will be able to come here.
We are in a very serious position because of this move by Britain which has ensured that the flow of industries into this country has, for the time being, stopped. The Minister ought to tell the House what action he has taken in regard to this. He ought to tell the House what assurance he has received from Britain. I think the British action was an intolerable one to take with regard to a country with which it had always had free movement of capital. Apparently we are, in this country, to take in British goods with all that entails for our industries here and at the same time the capital which we need to build up our industries here and to set up new industries is to be withheld.
In a situation in which the British economic position is so disastrously serious as regards their balance of payments that with her enormous resources she cannot afford to allow the odd million or two of capital into this country for industrial purposes, it puzzles me that while our situation is so serious, we do not have any problem in this regard and can permit the outflow of capital. It seems odd that in relation to such a small undeveloped country as ours that our capital can flow out freely whereas in respect of Britain, one of the greatest industrial powers, British capital cannot be allowed into this country at all. This seems to be ludicrous.
The Minister should tell us what he has done about this. He should tell us what assurance he has received. As regards the import levy the Government have failed to act with vigour. In both cases we allowed our rights to be whittled away. In both cases we made inadequate provisions. In both cases our economy has suffered severely. I think that this capital inflow matter may be the most serious one but both cases will lead to a restriction of foreign investment in this country.
We can no longer say as we used to say to foreign firms: "You can set up your factory in the full knowledge that your goods can enter Britain freely and no import levy will be imposed on them." That is no longer true. When foreign investors come to this country and try to decide where to put their industries, either North or South, they can be told by the Northern Government: "We are an integral part of the United Kingdom and you can enjoy the free movement of your goods into Britain but in the Republic that is not so." There is no restriction of capital movement in Northern Ireland but we have it now.
The problem of attracting foreign industrialists to this country has been very seriously aggravated. The seriousness of this problem is not sufficiently understood because the Government have not felt it proper to explain to people how serious those difficulties are. This is a mistake. When something of this kind happens people should be told frankly that this is a serious matter. We have some inflow of German and American capital into this country but the British inflow of capital has been the main source of new industrial activity. Every year, without exception, more British firms come here to set up industries than either German or American firms. The inflow of capital for industrial purposes from Britain has been very important to us. This has been effectively stopped by this act on the part of the British Government. This arrangement which we had and which helped to give great employment and output in this country and which helped our economy and helped to a very high degree foreign industrial development, the biggest single source, has been effectively stopped. The seriousness of this has not been adverted to by the Government. The whole question of restrictions on capital movement is something we need to consider very seriously. If Britain is going to impose restrictions of this kind, it would be a great mistake for us to restrict the outflow of capital to Britain because of the reciprocal reaction from the British Government. Our last stand then would be worse than the first. The force of that argument is not now as strong as it was. We are now in the position in which we have no longer the excuse of refraining from taking action. The net effect of our taking any action of this kind now would be that it would lead to greater restrictions in the future. Our policy certainly needs to be looked at again in the light of this unfortunate position.
Finally, I should like to ask the Minister if he would avail of an appropriate occasion to state fully the Irish position on the world liquidity problem. If the Minister has, in fact, stated this fully and I have been negligent in reading his speeches, or have not read the right one, perhaps he would draw my attention to a recent full statement on where we are standing in this world complex of world liquidity. The nearest statement I have had of the Irish position was in a speech by the Secretary of the Minister's Department in Trinity College a year ago. This was a statement made by a public servant subject to the necessary limitations. I think we ought to have a Ministerial statement which would explain where we stand as between British, Americans, French and others. We should get a full explanation of what the Irish Government's policy is, a development of what the Secretary of the Minister's Department stated in Trinity College a year ago, brought up to date and given with the full authority of the Minister as a statement of Irish policy. If the Minister has made the statement he need do no more than direct my attention to the relevant address in which the matter was dealt with. I do not suggest he should deal with it at length here now but I do suggest the public should be notified and told what our policy is.
One of the odd things about our foreign policy in any area is that even where we have a foreign policy and where we take a line of different opinion neither the Dáil, the Seanad nor the Irish public are told much about it. In many cases the line the Government take is one that would be acceptable nationally. These are not matters of Irish controversy. Nevertheless, the public are entitled to be told our policy, financial as well as political, and it is desirable that the public should be kept informed, that the Dáil and Seanad should be informed and that public opinion should be brought along with the Government. There is something odd about the Irish Government stating to foreigners what the Irish policy is and trying to get them to understand our policy. While the rest of the world knows what our policy is we do not know what our policy is or what is being said on our behalf. There is a failure of communication here.
This is more generally a matter for the Minister for External Affairs but many Ministers in carrying out the duties of their Departments are involved in international communications and they have to talk. There are opportunities for the Irish Government to tell the Irish people what is going on. There are conferences of Ministers, transport, for example, where the Minister for Transport and Power would be involved, FAO where the Minister for Agriculture would be involved and WHO where the Minister for Health would be involved and in the present Minister's case it would be the International Monetary Fund. I think much more could be said to the Dáil and the Seanad and the Irish people as to what our position is. This can do nothing but good. We will not get involved in controversial battles in the Dáil and Seanad over world liquidity problems but the public are entitled to be brought along with the Government in the policies presented in our interests and the interests of the world generally.
I would ask the Minister if he has not spoken in full on this matter to choose some appropriate occasion to do so, not necessarily at a dinner; it does not sound like an after-dinner statement, but on some other occasion when an audience would be receptive to it and when the matter would be neither too dull nor too boring.
