On section 1, it is not usual to have points on the definition section, but I have one on this Bill. There is a danger of confusion in the Bill in regard to guarantees given by Irish Shipping and guarantees given by the Minister for Finance. The definition of "guarantee" attempts to ensure that this confusion does not arise in the interpretation of the Bill. But unfortunately it defines that "guarantee means, except in section 2 of this Act, a guarantee given under that section". My problem is why this does not read "except in section 2(1)" because it appears to me that guarantees other than guarantees given by the Minister only appear in section 2 (1). The effect of the definition as it stands was to make me search the other subsections to see if both guarantees were mentioned. I suggest that it would be better drafting of this Bill if it said "guarantee means except in section 2 (1) of this Act; a guarantee given under that section."
Irish Shipping Limited Bill, 1982 [Certified Money Bill]: Committee and Final Stages.
I take it the Senator is saying that because the word "guarantee" is used only in section 2 (1) it would be better to have section 2 (1) in the definition.
Yes. The word "guarantee" in the sense of guarantee by Irish Shipping rather than guarantee by the Minister for Finance is, as far as I can see, in section 2 (1) only.
Section 2 (1) reads:
The Minister may guarantee, in such form and manner and on such terms and conditions as he thinks fit, the due payment by the Company of any moneys (including moneys in a currency other than the currency of the State) payable by the Company in respect of any guarantee given by the Company...
That guarantee in line 23 is the guarantee other than the one given by the Minister. Guarantee in that sense occurs only in that subsection.
I still think the fact that the Senator is pointing it out in the terms in which he is pointing it out shows that it does not cause any ambiguity.
No. Let me be absolutely clear on this. That definition is necessary because two types of guarantee are mentioned in subsection (1). My point is that it is only in subsection (1) that I can find the two types of guarantee. All the guarantees mentioned in subsections (2), (3) and (4) appear to be guarantees given by the Minister for Finance under subsection 2 (1). For anybody, like me, studying the Bill, it took five or six extra minutes because it said "except in section 2" rather than saying "except in section 2 (1).
If there were not clarity I would feel the need for putting it in there. A careful reading makes it quite clear to whom or to what the word "guarantee" refers. For that reason the definition should stand. I would only be too willing to accept what the Senator says if I thought there is lack of clarity. I do not think there is any lack of clarity in it which would cause any confusion later on.
My suggestion is that it is not good drafting. It would be better drafting if it said "except in section 2(1)". The present drafting wasted some of my time. It will probably waste the time of anybody else reading the Bill.
The indication I have is that each reference to guarantee in subsections (2), (3) and (4) is to the guarantee under the section.
Agreed. That is the point I made at the outset, which means that the only time any other guarantee arises is under section 2(1). We are absolutely ad idem about the effects of the various subsections. My point is that, given that position, the draftsman should have said in section 1 “guarantee means, except in section 2(1) of this Act, a guarantee given under that section.”
Section 2 comprehends
It is subsumed in it. I would not suggest that we should go to the trouble of inserting an amendment here and sending it back to the other House. A note to the draftsman that he has wasted the time of a Member of this House by sloppy draftsmanship would not be out of order.
I take the Senator's point that a general sharpening of draftsmanship might be to the benefit of the House.
Section 2 is the heart of the Bill. A number of Senators would like clarification on this section, as far as it can be clarified now, on the question in regard to what new arrangements are. The Minister indicated in his reply on Second Stage the decision to build in Cork. There is, of course, absolutely common cause on that. The question at issue, in the sense that there was any question at issue on Second Stage, was the particular manner in which this should be done. I understand from what the Minister said in his reply that the position will be that there will be a subhead in the Estimates for his Department which will provide each year for the repayments over and above those repayments which would have had to be made by Irish Shipping if they had been able to sign a contract for £14.2 million and borrow at 8 per cent for eight years. I should like to ask how will that will read. Will it read as a payment to Irish Shipping to be paid by them to the financial institution?
On the same point, I am not quite clear, I think the Minister said during his concluding remarks on Second Stage that Irish Shipping would have an obligation to meet the charges on £7.1 million, approximately a quarter of the total cost of the carrier. Is that the case, that the Exchequer will be responsible for approximately three-quarters of the annual repayment costs?
The original was £7.1 million, plus £7.1 million equity and the remainder. I take it that Irish Shipping are being guaranteed that they would have no further financial commitment other than the one originally mentioned.
Senator Dooge asked about the actual payments. I mentioned in my reply that phased payments would be paid by the Government through the Department of Transport and would appear as a subhead in the Vote for the Department of Transport. As of now the description would not have been settled on as to subhead number but that is the mechanism through which the pay-back will be shown.
Here I think we have the nub of my difficulty and I think it is a difficulty shared. If that reads "payment to bank X" then there is no reflection on Irish Shipping. If it reads "payment to Irish Shipping" there is a reflection on Irish Shipping. I think it is important. This is part of our difficulty.
I think that is a good point. I assure the Senator and the House that it will not appear as a subsidy to Irish Shipping, certainly not.
I had assumed with Senator Dooge that given the first paragraph in page 2 Irish Shipping will have to "assume formal responsibility for the full £28 million cost." That would consequently mean that the Exchequer payment covering the so-called subsidy element of this total cost would have to go to Irish Shipping to be paid on by them which would cause this confusion.
The payment will be made to ISL as the Senator says, but it will not be a subsidy and it would not be in accordance with the fact if it were described as a subsidy.
This is a real difficulty. The Minister mentioned in his reply that there was no difficulty. He made it quite clear in his Second Reading speech and he is making it quite clear in his reply that this was a subsidy to Verolme not a subsidy to Irish Shipping, but to somebody reading a Book of Estimates in the future there is the difficulty of misinterpretation. Let us all be humble: what we say here today quickly becomes something filed away. Over a period of 12 years apparently there will appear a sum in the Book of Estimates year after year and if that appears as anything remotely like "subsidy to Irish Shipping" this is something undesirable; this being substituted for "Subsidy to Verolme Dockyard" in the Estimates of the Department of Transport is an undesirable thing.
I would like, first of all, to comment on what the Senator said when he said that what we say here will become a matter of record. Abraham Lincoln said that. At the opening of his Gettysburgh address he said that people would not remember very long what he had to say. Irish Shipping Limited are satisfied with the arrangements we are making. In the subhead in the Estimate for the Department of Transport it will not read as a subsidy, whatever the formula of words, to Irish Shipping Limited.
All I can do is wish good luck to the Minister's ingenuity in this regard.
If the Senator would have a look through the various Estimates from various Departments and examine terminology there he will see that there are wonderful resources in the various Departments for describing various people to whom money has to to be paid out.
I see as fine a collection of misdirections as exists.
In the case of section 2, will the banking organisation to which the Minister referred benefit from the tax concessions available under section 84?
No, they will not.
On section 2(1) I would like to raise this point because it has come up on section 2. The Minister has mentioned that consultations are going on with his Department. I would like to say that I hope that as a result of this arrangement it does not involve long, detailed consultation. When Irish Shipping were giving evidence before the joint committee they mentioned that on one occasion they had lost £2 million due to delays in decisions arising out of the purchase of ships. I hope that the Minister will make every effort that all decisions made, not just on this matter but on other matters in regard to Irish Shipping, will be made with due expedition.
I accept the point the Senator is making. I am pressing the Bill with such urgency so as to make sure that that is the case, that we meet the wishes of Irish Shipping Limited on that.
I have been raising points on section 2 (1), but in regard to section 2 (3) we are here concerned with the question of whether foreign currencies are involved and this indicates that they will be calculated by the exchange rate prevailing at the time of the giving of the guarantee. When is the guarantee going to be given? We are now talking about a ministerial guarantee. Here is one of the questions where my point on section 1 comes in. Is it possible that the Minister could give a guarantee for the total amount in the beginning and that there could follow exchange fluctuations which might be to the disadvantage or possibly to the advantage of Irish Shipping? Is the position one of global guarantee or is it an annual guarantee in regard to the particular burden which will fall on Irish Shipping each year?
I would like to assure the Senator that no extra burden will fall on Irish Shipping anyway in this regard because as the Bill indicates the burden would fall on the Exchequer. The answer to the question as to when, is the date of the signing of the agreement.
The Minister just said the Bill says that there is a guarantee. Where is that in the Bill; that there is the guarantee that Irish Shipping will not have any extra charge over what they would have had under the original arrangement?
The arrangement being negotiated is one which will leave no financial obligations on Irish Shipping other than the financial obligations that they would have had under the original arrangement.
I accept that completely. The Minister has now indicated his intention in regard to the arrangements going to be made but the Minister's intention or the arrangement to be made is not part of the text of this Bill. The Minister certainly did give the impression, and I think actually used the words that the Bill ensures that there will be no further burden. The Bill allows the Minister to ensure that, but does not guarantee that.
The arrangement that would be made and the guarantees that are being provided for in this Bill will see to it.
Does the Minister know at this time whether in fact there will be a single guarantee by the Minister for Finance or annual guarantees by the Minister for Finance?
I do not think that anybody would buy a pig in that poke. I think it would be a single one at the start of the proceedings.
But is it the Minister's intention that any subsequent exchange fluctuations would not act to the disadvantage of Irish Shipping?
That is right.
There is an indication here that the question of any repayments which have to be made to the Exchequer will be determined by the Minister for Finance. I take it that the Minister can also give us the assurance that these interest rates will again be such as to be not greater than the interest rates which Irish Shipping would have been able to negotiate if they had not been directed by the Government to build in Cork.
I can assure the Senator that in accordance with the general approach Irish Shipping will not be put at any financial disadvantage.
In regard to section 5, this does indicate that we will get post factum information in regard to guarantees which have been given. There is reference in section 5 to particulars of the guarantees. My question to the Minister is how particular will the particulars be? We have had the experience in this House of having financial returns in regard to guarantees and funding and sometimes we have to take out our pocket calculators in order to work out what is the basis, what rates of interest have been involved here, what sums have been involved. How much detail does the Minister envisage will be here? Will there be enough detail for simple-minded Senators?
First, I should like to say that the particular branch of the human race which is called simple or innocent Senators has not come into my ken yet. The financial particulars of the guarantee will be detailed enough for Senators to be able to see exactly what is happening with regard to the particular guarantee funds. I would be quite confident that the guarantees will be clear enough to an average intelligent person reading them.
What I am asking the Minister here is that he should assure us that his colleague, the Minister for Finance, will not talk over our heads and will not bemuse us in this regard. I do not think it would be sufficient to have the information in the form in which we have had certain information in the past. We have indicated here that there is a very real difficulty. The Minister said it will need ingenuity in regard to the Book of Estimates to avoid giving a wrong impression that there is a subsidy. We certainly would need fuller particulars than are usually given in such returns to the House and I would be glad if the Minister could convey that to his colleague.
I would say that my reading of section 5 (a) is that particulars of the guarantee are the general particulars of the guarantee. If he looked at (b) and (c) he would see that there are specifics there which should satisfy any Member of the House.
No, this is my real difficulty. If all I get is (b) I am in a hopeless condition, because all I have is a global amount and I do not know how it is being calculated. My real fear is that all I get is what is in (b).
The amount of the payment will be shown in the report and the amount of any repayment to the Minister in respect of the payment.
That is two figures. That has been the trouble with returns in the past, that we get only a global figure and this does not convey information.
In putting that section together we thought that we had covered it in such a way that nobody could cavil at it, not even the most pernickety person. I regret very much that the Senator does not think that (a), (b) and (c) taken together form a comprehensive statement which would make it very clear to the House exactly what the details of the whole transaction are. I am pretty sure that when the Senator comes to examine it in the first instance he will see that in the combination of (a), (b) and (c) there will be a clear statement of the position easily intelligible to a Member of the House.
I share Senator Dooge's concern about this and I would ask the Minister to do what is possible within the terms of section 5 to see that it will be clear from the details laid before the Oireachtas what proportions of the guarantee are concerned with economic cost factors and what proportions are concerned with social cost factors. I believe strongly now that we must improve radically the accounting systems, the financial data systems which are available to us in the House. I hope that the Minister can provide the fullest possible information when it comes to the point.
I want to reiterate what I said already that section 5, as written there, seems to me to be comprehensive. I am not questioning the right of Senators to try to push that out to the limit of information they are entitled to and that is the absolute limit. That having been said, I would like to indicate also that there is no reason why what is laid before the House should not be the subject of full discussion either here — courtesy of your Chair — or in the rare case that there is time to spare in the other House. I will indicate to the Minister for Finance the concern of the Senators who have spoken on this particular matter and ask for the fullest possible report to be laid before the House.
I am grateful to the Minister for that. Lest he think I am more pernickety than the most pernickety I will accept his assurance. As he said, the first time the return is made to us we can give our opinion of it.
Is mian liom buíochas a ghabháil leis na Seanadóirí a labhair i rith na díospóireachta agus a chur in iúl dóibh go bhfuil mé an-socar as an méid a dubhairt siad.