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Seanad Éireann debate -
Wednesday, 14 May 1969

Vol. 66 No. 12

Shipping Investment Grants Bill, 1968 (Certified Money Bill): Committee Stage.

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

The significance of the word "providing" in line 25 gives me a little bit of trouble. It says:

make to a person...a grant towards approved capital expenditure incurred in providing, for use for the purposes of that business, a new ship or a new part or equipment for a ship, or in converting a ship for such use.

Providing cannot include chartering it from another person under the next subclause. I wonder can the Minister give us the legal meaning of the word providing here? Who is providing it to whom? It is the grant towards providing a ship. Providing is a verb used where somebody provides something to somebody. Who is providing the ship for whom in this case?

One would expect the word "purchasing" a ship here, or some word like that. Providing seems an odd word to use and it is not a word I have come across in a Bill before. I am not sure of its significance. I wonder could the Minister enlighten us as to what is meant by it, how it is defined, what is the significance of it and what limits there are?

It means providing a grant to a company, which is a body incorporated in Ireland, or a company owned by an Irish citizen or a company owned by the Irish Government. It means providing a grant towards the building of a new ship or conversion of an existing ship.

With respect, it does not say that at all. It is giving a grant towards approved capital expenditure incurred in providing a ship. It is the ship which is provided not the grant. The grant is made. When you are talking about providing a ship who is providing it to whom?

I am afraid it is just a question of wording. We intend it to mean a grant to be given by the State towards a company, which is defined, for the purpose of providing itself with a new ship or converting a ship.

Is the grant provided to the operating company which is using the ship or to the shipbuilding company which is building it? It is the shipbuilding company which provides the ship not the operating company.

I understand the word providing is used because it does not apply only to the purchasing of a new ship but the fitting out of ships. It also covers a new part or equipment for a ship or converting a ship. In other words, the word providing is used because it refers to new parts or equipment in existing ships and that is why that particular verb is used. I can assure the Senator there is nothing at all sinister behind this.

"Providing" is not clear. I am afraid as a legal term it is not precise. In relation to conversion, conversion is properly dealt with. It is converting a ship. It is providing a new ship or a new part or equipment of a ship. Who is providing the ship, the part or the equipment to whom? In the ordinary way the provision of such things is by a shipbuilding company to an operating company in return for payment. It seems to me the Bill, as drafted, requires the grant to be made to the shipbuilding company. I understood it would be made to the operating company. Under the Bill, as drafted, it could not be made to the operating company. They do not provide the ship. They buy the ship.

I am advised by the draftsman, who drew it up, that it is intended it should apply to the company which owns the ship not to the shipbuilding company. It is not to the company building the ship.

Right. Then, the grant must be given to the company purchasing the ship or the part or the equipment not the company providing the ship. The word providing is quite clear in its meaning. It means clearly making something for somebody, or putting something at the disposal of somebody. It relates to the person who is doing the act of providing the vessel, and that is the shipbuilder. He provides it to the shipping company. It would not be possible to pay a grant to the operating company.

I do not say that. The Bill uses the words "a new ship or a new part or equipment for a ship". It says "for the purposes of that business, a new ship or a new part or equipment for a ship" and that word "business" makes it quite clear that it is the company operating the ship which will get the grant.

The Bill states "make to a person carrying on or proposing to carry on a business in the State a grant towards approved capital expenditure incurred in providing for use for the purposes of that business, a new ship". The capital expenditure is incurred by the shipbuilding company.

It does not say anything about the shipbuilding company.

You cannot talk about the B and I, for instance, incurring expenditure in providing a new ship.

They incur expenditure in the purchase of a ship.

The Government give a grant to the operating company.

The shipbuilder provides the ship and the grant is to be paid——

To the operating company.

No. You say that it is the shipbuilding company who provide the ship. Therefore the capital expenditure is the expenditure incurred in providing a ship. The Bill does not include any provision for giving the capital to the operating company.

If there is any doubt about this it can be cleared up by means of regulations which we will have to make in defining these grants.

I cannot accept this.

The provisions in this section and their meaning are as clear as the wording of any Bill.

The Minister could pay the money only to the shipbuilding company. Senator Ó Maoláin has made the point that the ship is provided by the shipbuilding company but the grant can only be paid for "approved capital expenditure incurred in providing...a ship". The ship is provided by the shipbuilding company. Nobody can hold that the B and I in buying the ship are providing it.

They provide the ship for the operation of the service.

Senator FitzGerald is creating all kinds of confusion where there is really no confusion. If the B and I want to get a ship for their own business purposes they might buy a ship which has just been built or get a shipbuilding company to build it for them, but they are providing a ship for their own business. That is what they are getting paid for. The shipbuilding company provide the ship to the B and I, but they do not come into the provisions of this Bill at all. The B and I provide the ship for their own use. It seems to me a convenient word to use because if you are examining words closely there is no other word which would quite cover the situation. This seems to cover the situation adequately. The B and I wish to provide a ship. Whether they buy it or make it is a matter which does not arise under this Bill at all.

Unless they build the ship they do not provide the ship. I suggest that the Minister change the word to "purchase". He is speaking about a shipping company buying a new ship or converting a ship. I feel that "purchase" would be a better word. After consideration the B and I might build a ship or part of a ship. Alternatively, if the Minister feels there is danger in using the word "purchase" he could say "purchase or provide". They might employ people to make a part for a ship. This may be particularly true with regard to the woodwork in the ship, or to the wooden cabins. Perhaps it might be unwise to use the word "purchase". The words "purchase or provide" might meet the situation.

The Senator's main mistake is in thinking that one must make the object themselves if one is providing something One may provide food or drink in an establishment but that does not involve one in growing the food or manufacturing the other provisions. They can be got from somewhere. The Senator is simply misled by this assumption that "providing" implies "manufacturing".

I agree with Senator Yeats. If you provide yourself with a motor car you do not have to make it. We are just playing about with words here. I do not understand why it is necessary to manufacture something in order to get credit for providing it. I understand that "provide" means "to make available" for one's use. If I provide myself with a motor car I do not have to manufacture the car. That is my understanding of the situation.

That is quite clear.

"Provide" means "provide to someone". In the present circumstances the only reasonable meaning is the shipping construction company.

I cannot see that it is anything but clear. The Bill says that the Minister may "make a grant towards approved capital expenditure incurred in providing...a new ship". I cannot see why the grant cannot be made to the operating company. The draftsman was perfectly satisfied about it. I have never had any difficulty before with grants which were made available to State companies in that I was unable to get the grants to the companies to which I wanted to pay them. The Senator need not be worried.

The Minister would have difficulty in recalling the use of the word "providing" in similar legislation. I can see how the draftsman fell into the trap in covering the situation here. He used the word "providing" in order not to limit himself too much as to purchasing. By using the word "providing" only, he has limited it to case where the provision is carried out by the shipping company. The gránt has to be made to the shipbuilding company. One cannot turn the English language on its head in legislation. If you do you could come to a sticky end.

That is what Senator FitzGerald is doing now.

(Longford): The Senator is just realising that when in Opposition we attack the draftsman and when in Government we defend him. The Senator is making use of the fact that he wants to draw his own interpretation from the draftsman's work. The Minister is satisfied that the draftsman is right. He is entitled to hold that view. Senator FitzGerald realises that not only can the Minister and the Government be badgered, but the Opposition can badger the draftsman. Supposing Senator FitzGerald should be right, which is very unlikely, and I do not think he is, Parliament has the right to mend its hand. If a meaning should be put on this by somebody outside, for instance, the courts may put a different interpretation on it, there is nothing to prevent the Oireachtas from amending the Bill. I do not think there is a lot of substance in the matter we are discussing. We are only trying to split a drafting hair.

Senator Garret FitzGerald is merely suggesting putting in the word "purchase" as well as the word "provide".

(Longford): That will make it more complicated.

I cannot go back to the Dáil for a thing like that.

There is no point in having a Seanad if we are told when we put forward an amendment that there is some reason why we cannot go back to the Dáil. The Minister is entitled to say the amendment is unnecessary, or useless or perverse.

The Minister did not say we cannot go back to the Dáil, Senator——

On an amendment like that.

——on an amendment like that, which you say everybody agrees on, but they do not.

I do not accept that the function of the Seanad is to amend Bills when it is convenient to go back to the Dáil. We have a power to recommend in the case of a certified money Bill and I should like to propose a recommendation, if that is technically correct, which I think I am entitled to do. I should like to think for one moment about the exact wording of it. I should like to propose the insertion of the words "or purchasing" in line 26 after the word "business". In proposing it at that point I think it is clear that the proposed section be amended as follows:

...incurred in providing, for use for the purposes of that business or purchasing a new ship or a new part or equipment for a ship.

It gets over the difficulty in which the Minister might find himself in being unable to provide grants for the shipping company for the purchase of a ship. It is a simple recommendation and I commend it to the Minister. I trust he will appreciate the expedition with which I invented it.

I appreciate the expedition with which the Senator invented it. There is no need for us to accept this recommendation, to my mind it is clear.

The Chair will be unable to accept the amendment at this stage of the section.

I was premature. I was over-expeditious.

The Chair is in considerable difficulty here. Under Standing Order 81 when the amendments to a section have been disposed of, the Chair proposes the question on the section. My difficulty is a technical one—we are now on the section.

We are trying to facilitate the Minister, but there are quite a number of recommendations which are going to arise. I can see problems on section 6. I was trying to help by dealing with the recommendations on an ad hoc basis. It is very unsatisfactory to have to devise recommendations as they arise but I was trying to expedite matters. We will have to have more time to consider each section if we have to put the recommendations down first. I am prepared to do this, but it may take some time. I am wondering whether in a Bill of this complexity it is wise to do so.

That is the sort of thing I feared we would be up against on Wednesday. I knew very well there was no possibility of getting through this expeditiously because I have experience of the Senator.

There would be a saving of time because the time that it is going to take to sit down and devise the recommendations before discussing each section would not be wasting the time of the House. It has got to be done.

I suggest we adjourn for a few minutes in order that the Senator might devise his recommendations.

The giving of grants is permissive. It will come before the Dáil in the Estimate for my Department and if the method of giving the grant is wrong recommendations can be made later. I have to establish conditions under which these grants may be given. The Bill limits me to a reasonable extent and makes it clear what cannot be done. This is permissive legislation and makes very clear the general principles under which grants are given.

The Minister's idea of how the Houses of the Oireachtas should handle legislation is not mine. I am a little surprised that he should take that view. There are problems on section 6 and I think the Minister has not a sufficient wide range of power as regards the nature of the conditions he has laid down. He is too limited in the conditions laid down. My view may be wrong but I am entitled to put this forward as a recommendation. I cannot take it from the Minister that as the Bill is permissive it should pass without the Seanad looking at it. I am prepared to try to facilitate the Minister in every way possible in view of the urgency of the Bill but I cannot accept that we are to completely give up our power of examining the Bill and our power of putting forward recommendations just because the Bill is permissive.

As far as the Chair is concerned the House agreed to take the Committee Stage of the Bill.

I can give an idea of how we propose to operate this situation on section 6.

We are sufficiently out of order already without discussing section 6. We had better clear our methods of procedure first. In view of what the Cathaoirleach has said we will have to pause before each section so that I can consider what recommendations I want to put down. It seems more sensible to discuss a section and deal with any recommendations to it.

The Chair must consider the Standing Orders. I am afraid as usual the Chair has been over-generous with the House in these matters. I shall put the question on section 2.

The Chair may have been over-generous but perhaps we were over-generous when we agreed to take the Committee Stage without having an opportunity of considering it. I would like to propose either an adjournment or that before each section we are given time to amend it.

When I negotiate with somebody I take their word for it. I have been walked up the garden path several times and I am tired of it. Therefore, I do not know how you are to get out of the mess you got yourself into, but if necessary, with the consent of the House, we could adjourn for 15 minutes and let Senator FitzGerald cogitate on his recommendations and then come back.

Perhaps if you gave me ten minutes——

Perhaps 15 minutes would be better. Otherwise, there will be the same difficulty in trying to frame the recommendations. Take 15 minutes and make a proper survey of the Bill and then come in with the recommendations.

I think it could be done in ten minutes.

Business suspended at 7 p.m. and resumed at 7.10 p.m.

I think the best thing to do is to move on and on Report Stage I will move an amendment to section 2. I hope that will get us back into order again.

Question put and agreed to.
SECTION 3.

I have a recommendation to propose on this section. I move:

In section 3, line 37, to insert after "State" the words "and a majority of shares in which are held by persons who are citizens of and ordinarily resident in the State".

I hope that that is correctly drafted. The point I am making is that the mere fact that a body corporate is incorporated in the State is not sufficient. If this exercise is to have any value it is necessary that the company should be genuinely an Irish company and that the bulk of the shares should be owned here so that whatever profits there were from the ship would accrue to the country.

A body corporate is not defined in this Bill as the Senator knows. We rely on the definition of it in the Mercantile Marine Act, 1955 because the vessel has to be registered in the State under Part II in order to be eligible for a grant. Under section 16 of that Act an Irish body corporate should be qualified to own a registered ship or a share therein and a body corporate is defined as "a body corporate established under and subject to the law of the State and having its principal place of business in the State". A declaration of ownership of the vessel is required under the Act and the principal place of business is the place where all the important business of the company is in fact controlled and managed. I do not have to pay any grant unless I decide that the grant should be given. In common with the British, who experienced difficulties in connection with companies controlled by foreign interests, I intend to impose conditions for the making of grants whereby I can scrutinise the position of any company controlled by foreign interests. It would be under the most exceptional circumstances that I can conceive that a grant would be given to a company controlled by foreign interests, where the financial and economic advantages would be lost to us. I said that on Second Reading and I have clearly defined my own principles in that regard. It will have to be done through the permissive character of this legislation.

Would the Minister say under what section of the Bill he proposes to impose these conditions?

Section 2 says that:

The Minister may, subject to this Act and to such conditions as may be imposed by the Minister after consultation with the Minister for Finance, make to a person carrying on or proposing to carry on a business...

That gives me the power to decide the classes of companies that will be able to get grants.

Would the Minister not agree that it would be desirable to tie this down so that the Bill would not authorise the expenditure of money in relation to companies owned by a majority of shares outside the State? I can appreciate that the Minister gives us his personal assurance but that is a rather loose form of legislation.

I think it is sufficient to leave it as it is.

Recommendation, by leave, withdrawn.
Section agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill."

In this section the Minister has power to determine the capital expenditure that is to be provided in the form of grants. There are two ways in which this can be done, it can be left to the discretion of the Minister so that if he wishes he can very the percentage according as he thinks appropriate, or alternatively there is another way of approaching it which is to let the Minister determine the fixed percentage which so long as he has determined it shall be paid in any case where a grant is applicable. There is a case in favour of the latter. If you leave the discretion to the Minister it gives him power of secret discrimination and he could give a bigger grant to one firm rather than another without there being any means of this being known to the public. We know that when questions are asked we are told that the information is private as it relates to the affairs of a company. This has happened, for example, in regard to hotels. If, on the other hand, the Minister is given power to determine what percentage should be given at any given time and must state this publicly, then so long as that figure is there he would have to give that percentage. Give him the power, however, publicly to change the fixed percentage, by order. I would regard this as being a preferable system because we would know where we were and it would remove the excessive power of the Minister. I am not thinking now of the present Minister but of any Minister.

In reply to the Senator, Irish shipowners have been informed what the Government's decision in principle is, that the rate will be 25 per cent initially and until an announcement is made that a changes is being made it will remain at 25 per cent for all classes of vessels. We considered all the possibilities of varying the rate in respect of particular classes of ships but looking around at the situation in the country and at the number of companies likely to apply we decided that the best thing to do was to stabilise the rate at 25 per cent. All I can say is that I hope it will be accepted by the House even though it is not put into the Bill. If we wish to change or very the amount below 25 per cent— under the Bill we cannot increase it beyond 25 per cent—or decide to have varying grants this will be announced in the same way.

Yes, but the Minister could reduce it at some future time without any public statement. It is highly desirable that there should be a requirement in the Bill that we should state such a figure and have power to vary it.

It will come in under the Estimate. It will have to be explained why the grant is varied. It will be explained in the Estimate.

The Minister also represents tourism and questions have been asked on the Estimate and on other occasions in the Dáil about the amount of grants paid and the different rates paid in regard to the tourist industry and the Minister has replied that this was a private matter and that he could not disclose the information. If that is the approach and there is something to be said for it, that he is using this power to give grants at different rates to different companies, he might decide to give the B and I and Irish Shipping 25 per cent and to give ten per cent to private companies. It seems to me unsatisfactory that we should not have some system of public disclosure of what the current rate is.

I am quite prepared to disclose the current rate in the case of shipping companies. In the case of hotels it is an entirely different matter. In very many cases these are very small private businesses scattered throughout the country. It is inadvisable to disclose the rate and I can only give some idea of how the rates vary from area to area in accordance with the needs of hotels in different parts of the country. I would disclose any variation in the rates and in that way they can be known to the Oireachtas.

I am not raising the question of hotel grants except by way of illustration to make the point. I think we could leave it at that. I might propose a recommendation on Report Stage but, for the moment, we shall leave it at that.

Question put and agreed to.
SECTION 5.

I move the following recommendation:

In line 21 to insert after the word "date" the words "to the individual body corporate or partnership providing a new ship, or new part or equipment for a ship or converting a ship for such use."

The purpose of the recommendation is to clarify the position because the wording here is "approved capital expenditure incurred before that date in so far as it consists of any sum paid after that date". It is not clear to whom it is paid. In view of the doubt arising on section 2 it seems wise to clarify it.

I think the Senator will have to accept my view about section 2 (1). I do not think the recommendation is necessary to the existing subsection (1) (b) of section 5. The Senator is going back to the old argument. I am satisfied that the words in section 2 are adequate for the purpose and that they will not be misinterpreted. They can hardly be challenged in the courts, having regard to the character of this Bill. I do not consider the recommendation necessary.

I take leave to disagree with the Minister.

Recommendation, by leave, withdrawn.
Section 5 agreed to.
SECTION 6.

I want to introduce a recommendation. By way of explanation for doing so I should say that this section requires the Minister to impose certain conditions which, however, relate only to the use of the asset. They do not relate to the company. I have already raised the question of the ownership of the company. I move the following recommendation:

In line 29, after the word "conditions" to insert the words "for securing that in the event of an individual in receipt of a grant ceasing to be a citizen of or ordinarily resident in the State, or if a body corporate in receipt of a grant ceasing to be incorporated in or resident in the State, or of a majority of the shares in such a body corporate ceasing to be held by persons who are citizens of and ordinarily resident in the State or of the members of a partnership in receipt of a grant ceasing to be citizens of or ordinarily resident in the State or body corporate incorporated or resident in the State, the Minister may require the repayment of some or all of the grant."

The purpose of the recommendation is to require the Minister to make this condition. As the section stands, I think the Minister could make such a condition under section 2 but he does not have to do so. The conditions he has to impose relate to the assets, to insure against shipping charters and so on. There is nothing there to require him to make conditions of this kind. I am not clear from what the Minister said whether he intends to provide that, if it ceases to be incorporated and that if we are going to provide grants for ships which are to be manned by Irish sailors and operated by Irish companies with a view to foreign receipts coming in here, this condition is not only fulfilled in the first instance but that it remains fulfilled.

We cannot have a position in which when the grant has been paid the body corporate changes its residence or its shareholding or something else changes and as a result the profits could accrue to people outside the State almost immediately. The recommendation is intended to require the Minister to make conditions to prevent that happening and would ensure that in such circumstances a grant would have to be repaid in full or in part depending on the length of time for which the ship had remained in the ownership of a genuine Irish concern.

I think the Senator is quite right to raise the question but I shall make conditions which will provide that information will have to be given at constant intervals by which I would be notified of any change in the qualifying status of the recipient of the grant. That covers change of ownership of the company concerned or its domination by foreign interests. I shall make conditions of all kinds in relation to the prohibition of a company chartering a ship in such a way that the company ceases to have control of its operations. I am sure the Senator is aware that there are only about half a dozen shipping companies in this country and the Bill is designed to provide the Minister with sufficient powers to deal with the situation. We shall not have a lot of fly-by-night companies asking for grants and the position in which I would be sorely tempted to give a grant for some particular economic good and might get myself and my Department and the Government into trouble later on because the grant was made to a company whose intentions were fraudulent or who intended somehow to spirit away the profits of their business from the State. It is not that situation. We are not living in a world of gnomes. We are not dealing with grants for a vast foreign concern which is already in the country where you could have undersirable ownership. I think the Senator should accept the fact that I will make these conditions which will enable me to have power to ensure all the safeguards required in the use of these grants. I do not think there is any likelihood of a grant being given to a company which would act contrary to the public interest. Nevertheless, I am going to make these conditions and one of them, as I have said, will be that they will have to notify me of any change in qualifying status.

I take the Minister's point about gnomes. I I understand they reside in Zurich and I suppose it is one place you could not bring a ship to. I am not quite satisfied. The Minister spoke of making regulations and there is no power to make regulations, only conditions. There is a substantial difference between regulations and conditions. The Minister said he will require notification of change in status of the company or of the ship—I am not clear which and he also spoke of the chartering that is covered by section 6. I am happy about that. But the problem is what happens if the company or the individual to whom the grant was made changes his or its position. Suppose the Minister makes the condition under which he must be notified of a change in status taking place but what I want to know is, can he, under the Bill or will he, make conditions that the grant is payable on condition of the individual or the company retaining its status and that it would be repayable in whole or in part if that status changes? The Minister has not adverted to that. He has only said that he will require to be notified of the change but not what will happen if the position does in fact change. Does he feel that the Bill gives power to him to make such a condition about the grant being repayable in such circumstances? There is nothing in the Bill to indicate this.

I am quite certain that the Bill gives sufficient power to enable me to make conditions that will prevent undesirable events of that kind occurring.

That is a slightly evasive answer.

I do not mean it to be evasive. The purpose of this Bill is so very much confined to Irish shipping companies that the Senator is, I think, exaggerating the dangers we might be faced with in making grants of this kind.

I am not exaggerating the danger. I do not think there is any very great danger but if we give grants to a company and that company is taken over, as might easily happen, by a company outside the State, is the Minister satisfied, if that happens, that the conditions he will have imposed will enable him to recover the grant?

Yes, I am absolutely certain.

Recommendation, by leave, withdrawn.
Section 6 agreed to.
Sections 7 to 12, inclusive, agreed to.
Title agreed to.
Bill reported without recommendation.
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