Seanad Éireann debate -
Wednesday, 19 Dec 1979

Vol. 93 No. 7

Industrial Credit (Amendment) Bill, 1979: Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Finance (Mr. McEllistrim)

The purpose of this Bill is to increase the maximum amount of borrowing by the Industrial Credit Company which may be guaranteed by the Minister for Finance and to increase also the maximum amount which the company itself may borrow. The Industrial Credit Company, which was set up in the early thirties, provides industrial credit, mainly of a long-term nature. There is a limit in legislation on the extent to which the Minister for Finance may guarantee the company's borrowings. This limit stands at £75 million at present. Following discussions with the company recently, I have authorised the ICC to negotiate foreign borrowings in EMS currencies to enable the company to meet the high level of demand from industry for investment funds. A total package of £50 million is envisaged up to the end of 1980, and it is the intention that this money will be onlent by the company to Irish industrialists at keenest going rates for Irish currency. The exchange risk will be borne by the Exchequer in return for regular payments to it by the company—there will be no exchange risk for the ultimate borrower. The official external reserves will, of course, benefit from the inflow of foreign funds.

The details of this scheme will have to be worked out, but it will be necessary for me to guarantee the repayment of the principal sums being borrowed under this package. Since we are quite close to the limit prescribed in legislation, we now need to revise this limit. As I mentioned above, this guarantee limit at present stands at £75 million and, as that limit would in any event be reached shortly in the normal course of events, it is now necessary to increase that limit to accommodate not alone the moneys involved in the package referred to, but to take account also of the vastly accelerated rate of business being transacted by the company. I propose, therefore, to raise the limit set down in existing legislation from its present level of £75 million to £400 million and, as will be seen when I refer to the general borrowing of the company, this limit is in line with what I propose to fix as the limit on borrowing by the company for a further period.

Since the company was first set up in 1933 there has always been a statutory limit placed on the extent to which it may borrow for the carrying on of its operations. This limit has been increased from time to time as occasion required by amending legislation. The existing limit on borrowing is £200 million prescribed by the Industrial Credit (Amendment) Act, 1977 Outstanding borrowings now total £127 million and are rising rapidly as the company's business is expanding at a rate which was not envisaged the last time the limit was increased. On the basis of firm arrangements already entered into by the company, it is probable that the statutory limit will be reached by mid-1980. Accordingly it is necessary to raise the present limit to enable the company to continue engaging in its very useful work.

The new limit proposed, that is, £400 million, may be considered to be rather large. ICC business is, however, growing steadily and is at present at a level of over £70 million per annum. It is likely that this growth will continue. On the basis of projections of lending requirements an increase of the limit on borrowings to £400 million should be sufficient to allow the company to borrow its requirements for a further four to five years before Oireachtas approval has to be sought again. I do not think Senators will regard this period as too long.

Senators will note that the Bill has the effect of making the limits for both overall borrowing by the company and ministerial guarantees the same at £400 million. Certain aspects of the company's borrowing requirements to do not entail the furnishing of a guarantee, that is, borrowings from the exchequer, but the experience nowadays is that the financing of the company's operations is more and more being subject to guarantee. Deposits with the company, reflecting public confidence in the ICC, have increased substantially. These deposits enjoy the guarantee of the Minister for Finance as to repayment.

It will also be necessary to provide a guarantee for the borrowing in EMS currencies to which I have referred earlier and for the company's borrowing from such institutions as the World Bank, the European Investment Bank and the European Coal and Steel Community. Guarantees are also being sought by other institutional lenders—this seems to be common practice nowadays—and as the Exchequer element in ICC's financing represents a diminishing proportion, it is considered appropriate to have the two levels the same. Thus, the relationship which existed prior to the 1977 Act between the overall borrowing limit and the power to guarantee is being restored. However, despite the fact that it is intended that the guarantee limit will be the same as the overall borrowing limit, it will remain my policy to give a guarantee only where absolutely necessary.

In the year to December 1979 the company expects to have provided financial facilities totalling £74 million approximately for industry. In the previous 12 months the company disbursed £42 million. Most of the capital needed by the ICC is secured from non-Exchequer sources, and it is hoped that this position will continue. Capital required for the operations of the Shipping Finance Corporation is provided by the Exchequer as it is re-lent at a subsidised rate of interest.

Over the past ten to 12 years, the ICC has expanded the range of its activities to a considerable extent. The company's main activity, of course, is the provision of longer-term loans but it also offers a wide and sophisticated range of other facilities to meet the complex demands of industry. These include share investment in industry, capital underwriting and issuing house services, hire purchase facilities for plant and machinery, equipment leasing and finance for distribution. In addition to the provision of capital, it has also a subsidiary company, Mergers Limited, which specialises in the field of mergers and takeovers by undertaking share evaluations and by advising in negotiations for mergers between firms. It is also concerned with shipbuilding finance through its other subsidiary company, Shipping Finance Corporation.

In view of the need for higher industrial investment to promote economic growth and generate much needed jobs, there will be a continuing and increasing demand for the facilities provided by the company. I am most anxious, therefore, that the company should be in a position to contribute to industry the financial and organisational expertise which it has built up over the years in addition to financial assistance. The present legislation, when enacted, will enable the company to maintain an appropriate flow of funds to industry.

For almost 50 years now the ICC has been to the fore in the financing of Irish industry. Many of the successful industries established over that period started from modest beginnings with the assistance of finance provided or arranged by the company. Facilities are provided for the establishment of new industries as well as the expansion of existing firms and the company has a tradition of giving special attention to proposals in regard to small projects. The continuing increase in the demand for the company's facilities is proof that its importance has in no way diminished with the emergence of present-day financial institutions in the private sector. The present legislation will enable the company to continue its import role in the development of the economy, and I confidently recommend the Bill for the approval of the House.

Mr. Staunton

This is not contentious and from this side of the House the Minister will have full approval on the Industrial Credit (Amendment) Bill, 1979.

I welcome Deputy McEllistrim to the Seanad for the first time since his recent appointment as Minister of State, and we wish him well.

This is very straightforward. It is merely a Bill to enable the ICC to borrow money which, in turn, they can lend to Irish industry. The necessity for this Bill is proof of the very useful work which the ICC have been doing in the interests of this country. I take the opportunity of complimenting them on an excellent job which has been done by them and which has gone quite unsung, because in the development of industry there is, of course, immensely important promotional work to be done by the Industrial Development Authority. There has to be back-up by the local authorities. The financial analysis of these projects, their feasibility or otherwise and the financial funding, especially in this age of escalating costs, are very important factors, particularly in the area of industrial development much of which is speculative. I regret having to use that word, but it is in a hazardous risk area. In comparison with much of the agricultural sector or the services sector, there is undoubtedly a high risk factor in industry. The ICC have been a very important arm of national development activity where for obvious reasons they had to do with national development. They have had to work within different parameters from the commercial banking institutions in this country who have responsibility to shareholders and for profit. They have a different objective—not that the commercial banks' objective is any less worthy but that is not their function. It has been very much in the national interest that the ICC have existed and that they have done this extremely useful work. I am glad to be in a position to pay a compliment to them for this work which they have been doing very quietly and without the kind of headlines that the IDA or other national agencies have been getting.

The Bill is necessary because of the levels of funding at present. We know, for example, that the borrowings in 1978 from the ICC amounted to £42 million. This escalated through this year with an estimate of about £74 million being lent to industry. It is striking that the last Act under which the ICC had a limit of funds from the Exchequer was as recently as 1977 and that we are coming back such a short time after that to raise these limits.

I will mention one or two details concerning the work which the ICC have been doing. Of huge advantage to the country, in recent times of scarce money and extremely high interest rates, has been the access which the ICC have had to the European Investment Bank funds and the guarantee provided for the ultimate borrowers in this country by the Minister for Finance, in so far as interest rates are concerned, that the exchange risk is being taken by the Department and not by the ultimate borrower. This has meant that in the field of industry this year, for example, ultimate borrowers have been in the position of being able to fund a considerable proportion of the cost of projects on a repayment basis of up to ten years with an interest rate on a Fixed basis running at between 9 and 10 per cent. This is particularly advantageous where similar type money from the merchant bank sector on a long-term basis has been running at rates between 20 and 25 per cent. You see immediately the advantages there have been to the borrowing public in the industrial sector through this facility existing under the ambit of the ICC. Their scope has broadened, probably as a result of the original experience. This is not dealt with in the Minister's speech, nor was it his function to deal with it.

The scope of their activity has broadened somewhat beyond the industrial sector in that there has been a considerable amount of funding of different areas of activity in the services such as supermarkets, stores, wholesale organisations and areas such as the restaurant sector, which is not widely known but which might be more widely known in the future.

There is not much more one could say about this Bill because the scope of it is fairly narrow. I welcome this Bill and I assure the Minister that it will have the full support of our party. Again I compliment the ICC and their general manager, Frank Casey, and his staff on the excellent work being done very quietly over the last few years in the interests of this country.

Mr. Brennan

I will not detain the House very long. This is a noncontroversial Bill, as Senator Staunton has said. I welcome the new Minister of State and wish him all the luck in the years ahead. I am sure he will very shortly feel the calming effect of the Seanad Chamber descending on him.

I want to make two or three brief points on this Bill. A recent survey in the United States has shown that small firms there with fewer than 20 people employed have generated over the past ten or 20 years some 66 per cent of all the new jobs in the United States of America. This finding in probably the most highly developed economy in the world underlines the importance of small industries in any economy whether it is a developed economy or a developing economy as our own is. The Minister in his speech and the reports from the ICC have underlined and spelt out their attachment to small industries and I would like to underline it here again today. They pointed out that some 90 per cent of the ICC's loan approvals in 1978 have been given to firms who employ fewer than 100 people. This is commendable and I would like to see it continue. I ask that it be continued and that in some way special programmes for small industries within the ICC might be developed. The now famous programme within the IDA for small industries is widely known and well respected. I would like to see a similar type of programme within the ICC. I am confident that there is a form of programme there and I would prefer if it were more generally understood and known by the public. Too many firms are inclined to say when their day's work is done that they are, after all, only working for the bank. They are, of course, referring to the large proportion of their overheads that go in the bank interest. I would like to see the ICC having a special look at this question in regard to small industries. I am aware that in 1978 they borrowed some £2.5 million from the European Investment Bank and that that was lent onwards to Irish manufacturing industry at something of the order of 9 per cent. This, of course, was admirable but I would like to see, not only a continuation of this but a tolerance, indeed a discrimination in interest rates towards the smaller firm, placing them in a better position to plan their growth. Why not a special interest package for small industries along the lines of the IDA small industries programme? What I am asking to be considered is an ICC special interest plan for small firms. One job in every four in Irish manufacturing industry is in a small industry. That is a significant proportion. Most of these industries are grant-aided by the IDA, by Gaeltarra Éireann or by SFADCo which if examined is a trend growing at a very rapid pace. What I am appealing for is for the ICC to continue to develop native Irish industry, small industry, to run a campaign parallel to the IDA small industries programme, taking a special look at the interest rates available to small industries.

I should like to make one other point. For example in this city—and indeed in others, but particularly in this city—where such a large proportion of our people now live the IDA have established a separate unit and have been doing tremendous work in the city centre. They have been buying sites and developing industries. Can the Industrial Credit Corporation develop a parallel programme of loans at special interest rates for anybody in these areas who wants to develop industry? I have the feeling—it is difficult to put words on it—that there is not sufficient dovetailing of schemes between the Industrial Development Authority and the Industrial Credit Corporation. Perhaps that is not even desirable but, from the outside, it would appear to be desirable. I join Senator Staunton in wishing the ICC well. My remarks are meant to be helpful. The work they are doing for our economy is known and respected by all of us in this House.

Mr. McCartin

I join other Senators in welcoming to the House the new Minister of State and wish him success in his Department, success to himself and his colleagues, which is important to all of us. We shall endeavour to be as constructive and helpful as possible in our suggestions and amendments. We have no quarrel at all with this Bill. Of course it is purely a technical measure. As has been said by two speakers already, it is a pity that the work of the ICC is not sufficiently advertised. I said this in the debate on the Agricultural Credit Bill: if there is any one question constantly put to me by constituents, by people over a wide area, it is a question in relation to the financing of businesses, farms and things of that nature. I receive more of that sort of inquiry than almost anything else. Consistently over the years I have had that experience. I find that the majority of people, even those engaged in industrial and commercial activities of various kinds, are not aware of the existence of the ICC. They have not been sold in the way perhaps that the Agricultural Credit Corporation have been sold to the world of agriculture. I welcome also the fact that the ICC in the past couple of years have expanded their activities into the fields of commerce and trade. While this may not be the area in which primary wealth is produced nevertheless we must have efficient, well-financed services for the development of a healthy economy. Without these, naturally, our industry would be at a disadvantage. Therefore I am glad to note the ICC have started to develop in that area, one no less worthy of their attention than that of manufacturing.

This relates to the questions we raised on the last Finance Bill. I think the Minister made reference to the £50 million it is envisaged borrowing abroad. I take this to be different from the European Investment Bank money. Presumably this is money which the Industrial Credit Corporation will borrow on the European market and, we have been told, at a very competitive interest rate. This will be passed on at the going Irish rates to Irish industrialists. I can understand the reasons for the ICC so doing. Nevertheless I should like to advance again the argument I made here when the question of the ACC arose and to refer to the fact that no explanation or answer was given on that day to it. Indeed, new Ministers may not always have the answers to the questions we pose here, which is understandable. If not, perhaps at some future date they would write to us, explaining the reason for their failure to do so or where we are wrong if we are wrong.

On this whole question, I cannot understand—and I have been saying this for the past 12 months and I think I was probably the first person to bring it privately to the attention of Ministers—why, having joined the EMS we are still forced to pay the sort of interest rates we would have been paying were we not in the Community, the same sort of interest rates being forced on us by the British money market rather than the European market. If our Minister for Finance and our Government are convinced that we can hold our currency within the limits imposed by the EMS at present then I cannot understand why we are afraid to allow this sort of borrowing knowing that at present there are very few fields of industry in Ireland, or agriculture, that can withstand these current interest rates.

If there is any one factor—and people can be misled in this—that can prevent the growth and development of agricultural industry at present it is these sorts of interest rates. While as a country we have been fairly bold and courageous—if I may say so—about the sort of borrowing we are prepared to undertake as individuals, we are very conservative in every branch of industry about the level of borrowings we are prepared to risk. Interest rates always have been something of which the average Irish businessman was very conscious, perhaps too conscious at times, but certainly at present they represent a vital element in every consideration about business, industry and commerce. For that reason the ICC are uniquely placed to give that sort of leadership. We cannot expect it from the commercial banks. It is obvious that vast amounts of money are being made at present in the banking system in this protected area and that the only competition in the area of industry and commerce must come from the ICC. If the ICC are to borrow abroad, if the Government believe that there is not a grave risk of serious devaluation of our currency in the foreseeable future, then why must the ICC charge Irish borrowers interest rates comparable to those they can get anywhere else, assuming they could get the money?

If the value of our currency does not drop then in time will the ICC pass on this money, or retain the profits, or will they spread it out between people who will borrow in more settled times with less risk involved? One way or another, perhaps it is the wrong approach. Being in the EMS, if there is a risk involved, the Government should tell us about it or, alternatively, allow us the advantages of borrowing in foreign currencies. I will say that, juse like the arguments which I advanced in the case of agriculture where we are selling in the European market, we are selling our industrial goods in the European market as well. If the ICC were to borrow on behalf of Irish industrialists in European markets, then it must be borne in mind that those industrialists will be selling their goods in European markets. And, assuming that our industrialists have confidence in themselves, in their competitiveness, there is not a risk involved even if our money devalues because if it does the price of the product we are selling will go up, so I think there is a lot of confusion in this respect. I may not have all the answers but I think what I am saying makes sense. I do not see why in present circumstances we should be saddled with rates of interest of 20 per cent and above in some cases when there is clearly an alternative which can be operated by semi-State bodies to ease the whole money market considerably.

That is the most of what I wanted to say about this matter except, of course, that the ICC will find themselves servicing small, weak industries.

I would like to see the organisation expanding themselves and their staff to the situation where not only will they be able to consider cases, evaluate them and decide whether to finance them but that should have something that is very lacking in the whole area of Irish industry. We have made considerable progress and, in fact, our industrial development is something of which we could and should be proud. During debate on the previous Bill we talked about the success of the dairy industry. The success and competitiveness of Irish manufacturing industry is even greater than that of the dairy industry and this should be recognised. Our ability to compete in the new found markets in Europe is very heartening. Outside this country the success of Irish industry within the European Economic Community is more appreciated than it is at home. Nevertheless I would suggest in that area that the ICC should perhaps as a semi-State body consider placing more emphasis on expertise and advice to the people who seek finance so that not only will they be able to make a quick evaluation of the creditworthiness of the industry or of the applicant but they will be able to follow this up with the sort of advice which is needed in Irish industry and with the sort of expertise in which we have not had a tradition. We have a lot of learning to do in this regard. Most of the advice that we have got from the financial institutions already in existence in this country has been rather negative. I should like to see the development of a positive financial advisory service coming together with the financial help that the ICC can give us. I welcome the Bill.

Mr. Mulcahy

I rise to support the Bill too and to re-echo to some extent what my colleague. Senator McCartin, has been saying. We both spoke, using the same tune, on the Agricultural Credit Corporation Bill. However, I would not be quite as optimistic about it as he is. I have been trying to wrap my brain around the subject to see if I can understand why it is that the financial institutions and the Department are somewhat conservative in their approach to exploiting the availability of low interest money on the European scene as opposed to the high interest money that is available in London. As I said before, given that we have joined the EMS, one would expect to see it being exploited. If we are confident of being able to keep our currency in line with European currencies through the mechanism of the EMS, then perhaps we should have a bit more confidence in borrowing money and accepting the exchange risk.

The Confederation of Irish Industry through their director have been making the point that for small industry it is essential that this particular facility should be exploited and that in an atmosphere where there might be a tendency to cool down expansion there must not be any retraction in the development of small industries because that is where the employment is and can be. I am delighted to see in the Minister's speech that in fact now the ICC are being used as a mechanism to explore this. They had already started in a small way.

There is a very definite statement here from the Minister that the exchange risk will be borne by the Exchequer in return for regular payments to it by the company. There will be no exchange risk for the ultimate borrower. It will be very interesting to see on what terms the ICC will work that one through. Presumably, if they can borrow at say something like 8 or 9 per cent and if they will start on-lending at maybe 12 or 13 per cent, the margin in between will be shared and some money out of that may go to the Exchequer as a means of covering the exchange risk. I presume that something like this is in mind. Certainly it is a step forward and my only hope would be that if the ICC in their first efforts can show that this is a good mechanism, it will be expanded so as to keep up the investment in industry which is required and which will be more than ever required in the future. We will have more opportunity to talk about this when we are addressing the Appropriation Bill later.

Certainly, if the world is awash with cash, which is a statement I made here a couple of weeks ago, we should be scouping up a bit of it. That is the game we are in. With the increasing oil prices now around the corner—I did not hear the news today as to what is happening at the OPEC meeting—more funds will be looking for an outlet in the European scene.

In relation to the ICC, I should like to take the opportunity to congratulate them on the tremendous contributions they have made to the development of Irish industry down through the years, a contribution which in many ways has been hiding under the bush. Though Fóir Teoranta are an independent body, the ICC are the back-up body who provide a good deal of the expertise required to help Fóir Teoranta to evaluate difficult situations. They play a very valuable role in our society and this should be well recognised by everybody. Another of their roles which I take the opportunity to draw the attention of the House to is that they are the training ground for many of the young merchant bankers who are emerging and who have emerged. I have never actually looked at the statistics but from personal knowledge, experience and contact with the people I would say that a very significant percentage of the merchant bankers operating in that expanding sector did their training in the ICC. This is an indirect spin-off for which the company should receive due recognition. I welcome the Bill.

Mr. P. Reynolds

First I should like to congratulate the ICC on their achievement down through the years. I happen to have been a borrower from that organisation and I certainly found that when borrowing money from them at any time the best advice was readily available to one. They would discuss the project concerned and help the borrower in every way. It is easy enough for people to say that they should lend money at a cheaper rate but they are always prepared to lend money at the rate at which they are borrowing at the time.

That is a fair enough recommendation because it shows that they are not anxious to make an over-profit on it. They are quite prepared to tell you the rates at which they are borrowing. Their honesty is certainly without question. Not alone that, but they would be prepared to accommodate you if you wished to borrow money from them at a fluctuating rate or, if you wished to borrow from them at a fixed rate. They do a very good job. Up to now, we have always associated them with a body who were prepared to help industrialists, let them be large or small, but they are now prepared to help the people who are distributing the goods. That is the category I come into. I wonder where the people at that end would be if they were depending on the banks.

I think they are doing a very good job and I want to congratulate them. Both Houses should give them every encouragement because they are prepared to help every section of the community, within reason. Some borrowers may go to the ICC looking for money, but for many reasons the ICC may not be prepared to finance them. They are the best judges at that stage. Occasionally they make a wrong decision, but 99 times out of 100 their decisions are correct. I sent a number of small and large industrialists to them and they were most helpful. I want to put it on the record that the ICC are doing a very good job.

Dr. Whitaker

I would like to join the previous speakers both in welcoming the Bill and in complimenting the Industrial Credit Company for the sound and constructive work they have been doing in developing Irish industry and services with very little blowing of trumpets. I would also like to joint them in welcoming and wishing well to the new Minister.

My principal reason for joining in the debate is to offer some thoughts about interest rates which might be helpful. There are low interest rates where inflation is low and where capital is relatively plentiful. Therefore, interest rates are much lower in Germany, where inflation rates are between 3 and 5 per cent, than in Britain or Ireland where there is an inflation rate of 16 or 17 per cent. The reason is obvious. If people who are saving are offered a rate of interest less than the going rate of inflation, they are being asked to save at a loss.

The question was raised by Senator McCartin of why do we not, when we are in the EMS, benefit from access to the low interest rates in, let us say, Germany. We could, of course, go to Germany—and, in fact, the Government and other State bodies do—for Deutschemark loans, and we get them at nominally low rates of interest. But the kind of borrowing we are talking about for re-lending by the Industrial Credit Company is not borrowing lent today to be paid back in six months or a year, that is over the kind of period for which we would have some vision of how the exchange rates were likely to go. We are talking about borrowing for terms of from 15 to 25 years; and therefore, as we extend the horizon, the degree of risk grows enormously.

We all know that if a differential of inflation rates like we have at present between ourselves and Germany persists for a long time, the rates of exchange between the Irish pound and the Deutsche Mark will have to change considerably. They have already changed, even in the short time we are in the EMS. If one borrows at a low interest rate for a long period, one takes on a very considerable risk of having to pay back a lot more because the exchange rate will have changed over the period to repayment.

If the Industrial Credit Company were to borrow in the German market and relend at the same rate of interest, somebody either the company itself or the Government, would have to guarantee it against loss on that transaction. It would not be re-lending in Deutschemarks to an Irish firm. No Irish firm would take that risk. Such foreign currency loans are available already through the banks to any number of Irish industrialists, but they do not show the slightest interest in them because they know that an exchange risk exists. They also know that, if they were to cover themselves forward to purchase Deutschemarks against the repayment obligations, they would be paying in the price of the forward money an extra rate of interest which would virtually wipe out the original advantage. This is the reason why, on a purely commercial basis, no industrial borrower wants to take on a Deutschemark obligation. It would only be taken on if the State intervened, as it has done in the case of the Industrial Credit Company on a limited scale, to guarantee them against the risk.

I myself pointed out here, when we were discussing the EMS, that one should not expect low interest rates in consequence. There were journalists and others promising us that sort of situation in the EMS, but I tried my best to discount these expectations. I pointed out that even at the time of the "Snake" that existed prior to EMS and in which Denmark was a partner, rates of interest in Denmark were at least 9 per cent higher than they were in Germany. My contribution is that one must expect considerable differences in interest rates as long as there are differences in inflation, and these differences in inflation themselves presage the likelihood in the long-term of changes in exchange rates and, therefore, of what is at the outset just a feared risk becoming an actuality.

Minister of State at the Department of Finance (Mr. McEllistrim)

I sincerely thank the Senators for welcoming me today. It is not a very easy job coming here for the first time.

Senator Brennan asked about special interest rates for small industries. Small firms enjoy a very special position in the ICC and in the IDA. The ICC lay great emphasis on small firms. Senator Brennan mentioned further global loans from the EIB for small industries which are being currently negotiated by the ICC. These will be on-lent at fixed interest rates, with the exchange risk covered at present. EIB loans to the ICC amount to £22.5 million. There is also close collaboration at all times between the ICC and the IDA. Senator McCartin also spoke about interest rates. Interest rates here are generally high. This is an international trend. It will take time for the benefits of the EMS to be extended here.

In my introductory speech I said that the mechanics surrounding this package have not been determined. A breakdown of the lending rate will have to be made as between the basic costs, the administration margin, and the margin for exchange risk cover. The precise arrangement to meet the exchange risk cover—a percentage charge payable by the ICC or as a function of the difference between the actual costs to the ICC inclusive of their management expenses and rate of on-lending—will also be settled later. This is all I can say on this matter at this stage.

On the question of publicity raised by Senator McCartin. we will look closely at it and in future we will ensure that there will be more publicity given to the ICC. In the past wide publicity has been given and they continue to publicise a lot.

On the matter raised by Senator Mulcahy, this is an attempt to put a package together for the industry in the EMS markets. The rate of interest will depend on the rate at which the ICC will borrow and have a small margin of profit. Obviously, if the present borrowing package is successful consideration will be given to its expansion. A sum of £50 million at this stage is a very big step.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.