Seanad Éireann debate -
Thursday, 22 Mar 2001

Vol. 165 No. 15

Trustee Savings Bank (Amendment) Bill, 2000: Committee and Remaining Stages.

Mr. Costello

With the Cathaoirleach's indulgence, may I raise another issue before amendment No. 1? Senator Quinn wants to speak on this issue and Members may wish to go to the other House to listen to the debate on foot and mouth.

I want to raise a circular that many of us received from Mr. Barry O'Shea about the ESOT and the fact that it states that this particular legislation is different from the others transferring public sector institutions into private ownership. There is no 18 month clause, as it is known, which allows employees to avail of any shares distributed under the ESOT within 18 months of the termination of their employment. This has financial implications for many people who have been working less than 20 years, particularly married women. Will the Minister respond? This is before the Equality Authority, but if this legislation is passed it will be powerless to act on it. If it were appropriate, I would put an amendment down but I wish to hear the Minister's response first. It is incongruous that this is the only legislation missing the 18 month clause which deprives certain categories of employee of what is now regarded as a traditional right under the ESOT, namely, to avail of shares within the 18 month period.

I want to raise that now before we deal with the amendment to get the Minister's response and allow other people to address it who want to go to the other House.

An Cathaoirleach

It is most irregular but in view of the exceptional circumstances obtaining this morning, and with the Minister's agreement, I will allow it to be dealt with first so that Senators may go to the other House to listen to the debate.

Mr. Quinn

Having gone through the legislation, it would appear that it has no reference to the share ownership of employees yet this appears in every other Bill. If we wish to bring this up, at what point do we do so?

Mr. J. Doyle

I support what has been said. It is difficult to find any reference to the ESOT in the Bill. I suppose it would come in under section 1(3) in the setting up of a third company, Cancara Limited, to bridge the gap between the Trustee Savings Banks and the Irish Permanent. The Minister said at Second Stage that it was proposed to bring in an amendment to the Finance Bill. Could he indicate what was proposed in that amendment on Committee Stage of the Finance Bill on the ESOT?

The ESOT, too, was different from others in that it does not contain the 18 month clause. The Revenue Commissioners, in correspondence, asked the joint committee that drew up the ESOT document why this was left out. It is detrimental to certain employees.

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

I thank the Senators for raising this important issue which was brought to their attention. To allay their fears, it was at the request of the unions that the 18 month rule was removed. That is what they wanted and we agreed. Everybody signed off on it and everyone is happy with it.

Mr. Ryan: Except the Equality Authority.

Mr. Cullen

Another point is that if changes were made, it would be in a Finance Bill, not this one. To have no ambiguity – they wanted the 18 month rule removed and we agreed.

Senator Doyle raised an issue which came up at Second Stage. I will read out a note on that. Amendment No. 42 introduces a new section into the Bill as published. This new section is concerned with the employee share ownership trusts and approved profit sharing schemes – APSSs – being established for the current employees of TSB and ICC Bank in the context of their impending sale to Irish Life and Permanent and Bank of Scotland, respectively. Under the terms of the restructuring arrangements of these sales, the employees are being given 5% of the share capital of their respective companies with the possibility of purchasing a further 9.9% at the market price. Changes are necessary to the existing ESOT and APSS legislation to accommodate the schemes set up in these particular circumstances, although in broad terms they will be established on the same basis as in conventional ESOTs and APSSs, that is to say open to all employees and on similar terms. The one important difference is the need to ensure that the benefits of these ESOTs and APSSs will be restricted to the employees involved in the restructurings. There will be no justification for other employees of the takeover companies expecting to benefit also. It is to protect the employees of the two respective banks. This amendment will achieve that.

In addition, provision is being made to enable TSB and ICC employees to continue to benefit in the event that the businesses in which they are currently employed are sold on again by the take-over companies. The ESOTs must be protected in case the company is taken over again, not that there is any indication this is likely to happen. We are simply making sure the ESOTs are protected. Provision is also being made to enable take-over companies to establish ESOTs and APSSs in their own right, and to include ex-TSB and ex-ICC employees in them. The normal annual limits of tax relief shares which can be appropriated to participants under APSS will continue to apply to the aggregate of all shares appropriated to those employees under such schemes, as is normal. In other words, there will be no double benefit.

Mr. Ryan

A Chathaoirligh—

An Cathaoirleach

I am sorry, but we must dispose of the amendment. I will allow Senators to raise other points they wish to discuss when we are dealing with the section. I made an exception to allow the Minister of State, Deputy Cullen, to provide the clarification Senators sought.

Mr. Costello

I thank the Minister of State for his clarification, but I do not think I agree.

Mr. Cullen

To further clarify for the Senator, if unions wanted the 18-month clause reinserted, I would not have to make a legislative change. It is simply there to be done. I do not need to make an amendment to another Bill to do it, if it is needed.

Mr. Ryan

If the Equality Authority makes a formal complaint to the Government, saying that the exclusion of the 18-month clause is discriminatory under equality legislation, can the Government change its decision?

Mr. Cullen

The point I am making is that I do not need further legislation to apply the 18-month rule.

Mr. Ryan

Yes.

Mr. Cullen

I emphasise to Senators that this deal was done with the unions at their request. They were quite happy. It has been signed, and that is the end of the matter.

Mr. Ryan

The union leadership might be quite happy, but a considerable proportion of the union membership who raised the matter are not happy.

Mr. Cullen

They all voted on it.

Mr. Finneran

It proves that the unions are talking to the Labour Party and not to Fianna Fáil.

Mr. Cullen

They all voted on it.

Mr. Ryan

I apologise, a Chathaoirligh.

Mr. Costello

Just one last issue for clarification. If there has been a change in the union's thinking as regards the concerns of the membership, particularly elderly employees—

Mr. Ryan

Women.

Mr. Costello

—and married women who may have been forced out of the workplace because of family commitments, could the Finance Bill be amended to rectify the situation?

Mr. Cullen

I want to make clear that we are concluding the business with regard to the TSB. These are the final Stages of the Bill. I have been given no indication of a change of mind on this matter. We negotiated in great detail to ensure what was to be brought to the Oireachtas would be agreed, and that has happened. As I said, all the union members voted on this matter. Trust deeds are not a matter for the Government, but for the unions and the trustees of Irish Life and Permanent.

Mr. J. Doyle

Is it true that the Revenue Commissioners must approve of these documents?

Mr. Cullen

Yes.

Mr. J. Doyle

In this case they wrote back to the unions to say the 18 month clause had been left out. The Revenue Commissioners were trying to help, as they thought the unions had misunderstood. It is the first time, as far as I understand, that such a clause has been left out of an ESOP document. Does that not ring bells?

Mr. Cullen

I think we are talking at cross-purposes, or we are going in the wrong direction altogether. This matter is now between the trustees and the union, who have the power to change it if they so desire. It does not need to come back to Government. It is already in existence. This is what the union wanted. If it wants to change it, it can do so, but it is a matter for it.

NEW SECTION.

Mr. Costello

I move amendment No. 1:

In page 3, before section 1, to insert the following new section:

1.The Trustee Savings Banks Act, 1989, is hereby amended by the insertion of the following section after section 56:

56A.–In making an order pursuant to section 57 (as amended by the Trustee Savings Banks (Amendment) Act, 2001) the Minister shall have regard to the desirability of making provision in such order for persons who have for a substantial period been customers of a bank which is the subject of an order to receive a recognition of their loyalty to that bank.

This Bill effectively reorganises the Trustee Savings Bank into companies and provides for ESOPs so that employees of the TSB can get a reasonable deal, albeit with the exception we have just mentioned. Legislation relating to private sector institutions and companies being transferred to a private or limited company capacity has not taken the customer into consideration. This especially applies to the long-serving customer who has been loyal over the years. It is particularly true of financial institutions, which are notorious for milking the customer for all they can get. They apply charges to beat the band, many of which are given all sorts of descriptions. People learn about the charges in circuitous ways. The customer gets very little in return and is often jettisoned at the end of the process.

The Minister will remember a debate a few week ago when we tried to give the Central Bank some regulatory powers in relation to the closure of branches by financial institutions. The Bank of Ireland is closing over 20% of its Irish branches. Senators on the Government side, including Senator Finneran, mentioned that many branches of banks, and not just post offices, are being closed in rural areas without consideration for the customer.

It is time for customer loyalty to be recognised, as is the case with employee productivity and loyalty. Employees are given 15% shares, which are quite valuable. Unfortunately, they are only given to current employees. Clients and customers who have served an institution, in this case the TSB, for a lifetime are not rewarded in any way. The manner in which the bank operates may change dramatically and customers may have to conduct their business elsewhere, although some will remain. The Minister of State should consider remunerating these loyal people in some fashion.

The TSB, like all other banks, has been enormously profitable. When the Minister for Finance introduced this legislation, he mentioned an increase in profit of 75% in the past 12 months. The Bank of Ireland made profits of £750 million and the AIB's profits were almost £1 billion this year. All this money is made from customers and I think we should explore a mechanism of rewarding that. This amendment mentions "the desirability of making provision in such orders for persons who have for a substantial period been customers of a bank which is the subject of an order to receive a recognition of their loyalty to that bank".

The number of TSB customers would be much smaller than the equivalent number for one of the major national banks. The TSB is unique because of its nature, origins, history and the fact that it was effectively a mutual financial institution, not dissimilar to the credit union banking system. It contributed substantially to the well-being and development of the State. Its limited number of customers could be regarded as having helped to make the bank a success. The employees are being rewarded and now it is time to think about rewarding the customers in a similar fashion.

Mr. J. Doyle

I support this amendment. I said on Second Stage that there were winners and losers. The winners were the Government and the employees and the losers were the customers. This was dealt with on Second Stage when the Minister outlined the legal position. It appears the customers of the Trustee Savings Bank in Scotland brought a case about the ownership of the bank and the High Court in Scotland came to the view that the customers were shareholders in the bank. Unfortunately, that decision was overturned by the House of Lords. The Attorney General based his advice to the Minister on that judgment. There is a justifiable case for customers to get some reward for their loyalty to the bank for many years.

Mr. Cullen

I acknowledge the fact that Senators have raised this issue through an amendment and I understand the arguments made. The amendment proposed by Senators Costello, O'Meara and Ryan was also proposed by Deputy McDowell on Committee and Report Stages in the other House. It would require the Minister for Finance to consider the desirability of giving some of the proceeds from the sale of the TSB to its customers in recognition of their loyalty, provided they have been with the bank for "a substantial period".

As I stated in my Second Stage speech on 7 March, there is a legal issue to consider in terms of who owns the TSB Bank and a second issue of whether, irrespective of legal entitlements, the customers should receive a payment as a reward for being customers. The legal advice from the Attorney General on the ownership issue is that the Trustee Savings Banks do not have members. They are not owned by their depositors and the relationship between the TSB and its customers is the same as the relationship between any bank and its customers. The conclusion of this advice was that the Oireachtas had the power to dispose of the assets and this is the position under the Trustee Savings Banks Act, 1989. The customers of other State companies are not shareholders either and such public assets are held by the State on behalf of all the citizens. It is not open to the Minister to arbitrarily allocate generally publicly owned assets to a small group of citizens. The only way he can discharge his overall duty is to take the proceeds of disposals into general public ownership.

It is contradictory that the Labour Party's amendment, which is supported by Fine Gael, wants to favour a small group to the detriment of the overall value and holding of assets by the Government of the day or the State on behalf of all the citizens. It does not make sense why it would want to limit the proceeds from the sale of State assets to the group primarily responsible when it is acting on behalf of the State. I also pointed out on Second Stage that there are fundamental differences between the Trustee Savings Banks and building societies. Customers opening a share account in a building society are told that they will become an owner of the society with the right to vote at annual general meetings. It is the customers of a building society who run the society, who elect the board of directors and who decide to wind up the business and to demutualise.

Mr. Ryan

Does the Minister of State believe that?

Mr. Cullen

That is the reality. I was a customer of a building society and I had a vote.

Mr. Ryan

I was a customer of the Irish Permanent Building Society and I knew less about it than a shareholder in a public company.

Mr. Cullen

That is the Senator's problem, not mine. I cannot answer for his involvement.

An Cathaoirleach

The Minister of State must be allowed to reply without interruption.

Mr. Cullen

In the case of the TSB, the customers do not have an ownership stake. There are no annual general meetings of depositors. The customers do not elect the trustees and they do not have a role in the running of the bank or in deciding to sell it. It is the trustees who take the decision to request a reorganisation. Customers opening accounts in the TSB do so in accordance with the rules of the TSB which clearly state that they have the right to their deposit and the interest thereon but that is all. They are not given any indication or impression that their account confers any ownership interest on them.

The second issue is whether customers in the TSB should receive payment from the proceeds. The arguments put forward are that they have been loyal customers for many years and it was their loyalty which built up the bank which has a unique status. I previously pointed out to Senators that until 1989 the TSB kept at least 80% of their funds from customers on deposit with the Exchequer which paid both the interest on customers' accounts and an additional margin of 1.65% to the TSB to cover their administration costs. Under these arrangements customers benefited substantially from State support of their deposits while also receiving an attractive rate of interest. The TSB has operated on the same terms as any other bank since the enactment of the Trustee Savings Bank Act, 1989. Until 1992 it was exempted from corporation tax in recognition of the fact that the reserves of the TSB belong to the public generally. That is another benefit to the customers. It was only in 1993 that the TSB started to pay corporation tax at a reduced rate and only since 1996 that it has paid corporation tax at the full rate. Much of the value built up in the TSB over the years, therefore, has been built up because of its special relationship with the State.

Precedent has also been taken into account in reaching a conclusion. In the case of Irish Life, Telecom Éireann and ICC Bank, there were no free shares for customers. The proceeds received by the Minister and his predecessors were paid into the Exchequer. It would be extraordinary to take the route proposed by the amendment. I am, therefore, unable to accept the amendment. The customers do not have an ownership stake in the TSB and this is also the situation in all State companies. It would be extraordinary to deprive the State, which is the guardian of all State assets, of the proceeds and to divide them up among small groups of people. The proposition is extraordinary. The Minister must discharge his responsibilities to all citizens by putting the proceeds into State funds. On that basis, I cannot accept the amendment.

There are more than 300,000 customers in the TSB. They would get only a small amount if the proceeds were divided up. Perhaps the impression being given is that there would be great largesse, but that would not be the case given the customer base. It would also be expensive to deal with it. Are we talking about the customers in 1965 or those who have been customers since 1995? I do not have much faith in those arguments as they are separate issues. This would be an extraordinary step for the State to take. The Labour Party has made many sensible and sound arguments, but this one is almost contradictory. It is the type of argument another party I once knew might have put forward.

Mr. Ryan

This is progress. The Minister of State recognises we have something to say.

Mr. Finneran

The Labour Party has lost its way.

Mr. Costello

This is one of our more sound arguments and amendments. The Minister of State is trying to present Lord Denning's appalling vista in terms of what would happen if customers got their entitlements. Customers have not got their entitlements, particularly in relation to financial matters. I do not see the difference in principle between ESOP and customers getting some reward. The employee is getting it on the basis that he or she contributed to the financial well being of a company. However, they have done so on the back of the unions' muscle. This affects only current employees, not those who have retired, although that is discrimination. There is discrimination in terms of the categories of beneficiaries of ESOP.

This amendment refers to "persons who have for a substantial period been customers of a bank". We are not talking about people who have been customers for a year or two but about the loyalty of long-term customers. That is more equitable than the current cohort of employees who benefit under the employee share option scheme. If the trade unions can hammer out a deal which means current employees benefit by up to 15% with 4% or 5% contributions from employees in share purchases, surely it can hammer out a deal for the most loyal customers who have built up the bank as much as if not more than the current employees. Surely the principle is valid and if so, regardless of the appalling vista, we should get down to the business of seeing how the customer can be rewarded. It is time to open our minds to this mutuality view that there is no such thing as a financial institution that is an island. It is not simply the shareholders, directors and employees that make it a success; it is the totality, including the marketplace and employees.

From what the Minister has just said, I am not likely to make much progress. However, we should at least acknowledge that the principle has not been teased out because the customer has no muscle. The poor customers are left on the wayside, no matter who they are. It is the more elderly people and women who are being discriminated against and who will lose out on the 18 month waiver clause. The older employees will lose out. All of the customers will lose out because they do not have a body to fight their case.

Mr. Finneran

If the Bill had proposed that the dividend to the Government be allocated to the customers, the Labour Party would have put in an amendment suggesting that it should be changed and it should be for the common good. This amendment from the Labour Party seems to be against all of the founding principles and utterances of that party over the years. They are talking about giving out the State money of some £330 million to a few people. This is money that came into the State coffers for everybody, not for a few. It is there for the common good to support social welfare and other areas of need. I find it extraordinary that, of all groups, the Labour Party should make such a proposal. Senator Ryan's Fíanna Fáil influences must be having a big bearing in the Labour Party thinking. The unions are no longer talking to them. There is something serious happening over there.

Mr. Ryan

I love to be noticed.

Mr. D. Cregan

I support the motion. In 1991-92, I was very lucky to be Lord Mayor of Cork when the agreement was being made on the changes in the structure to allow the amalgamation of Dublin Savings Bank and Cork Savings Bank. The Cork Savings Bank was started in the early 1920s with the pennies from our grandmothers. It is unfortunate to give the impression that none of these people should get any recognition. Even Margaret Thatcher did not allow that when the TSBs were changing over. The proceeds of that sale went back into the structure of the TSB. That is not happening here. For the tie-up between the Irish Permanent and the TSB, the Government should consider giving something so that it can compete on an equal level with the major banks, which are making such profits.

With regard to the amendment, it is very unfortunate that we are giving no recognition to the people who started it. This was done with pennies and it started in the Cork Savings Bank with Bishop Cauldwell's involvement. Senator Ryan would have the history of that. When I was Lord Mayor, the people of Cork put up a very strong argument against tying up with the Dublin Savings Bank to form the TSB. Irrespective of who is in Government, recognition should be given to the people who started this.

Senator Finneran made a point about shareholders of AIB and Bank of Ireland. This is different. It started with the church and other strong people within the city of Cork. It was started with pennies to offer competition, in the same way that credit unions started in the 1960s with Bishop Lucey.

It is most unfortunate that even trade unionists do not recognise the work done by other workers who will not get the benefit of the shares. As a very strong trade unionist, I do not agree that people who dedicated so much of their lives and worked on a share basis in the TSB are not getting any benefits. Employees with two or three years' service there are now getting all the benefits and people with over 20 years service are getting none. That is a contradiction in terms.

I know the general manager of TSB and we had long discussions to make sure there would be no objections in Cork city when it was first mooted. Now we are giving no recognition even to long-term employees who, unfortunately, were working on a job share basis because of family commitments. The unions seem to want to take it all. For the first time I have to say in this House that I find it most unfortunate and wrong that trades unions give the impression the certain few should get it all. The Minister should look at that very seriously, irrespective of what the unions say or what the present employees say. We must give recognition to the people that created it and built it up.

This amendment gives recognition to the people who built it. It happened in the corner of the South Mall in Cork. As a representative from the city of Cork, it would be wrong for me to agree with the idea that the Government should take everything and not even put it back into the structure itself to compete against the other major banks. We must give some recognition to those who built it up. It was built with pennies and then with shillings. Senator Ryan remembers that it started very small, just as credit unions started. Yet we are saying that a certain few must get it all.

Because the unions agreed to it, people who unfortunately could not get back into work or who were only on part-time work are not getting the recognition they deserve. It is not fair and the Minister should look it.

Mr. Cullen

I have carefully listened to what the Senators have said and I understand the points being made, particularly by the final speaker. The reality is that this is a State asset and the State has been very much to the fore in supporting it over the years. We have given customers of the TSB great comfort from the beginning by, in effect, securing and guaranteeing the deposits and paying interest rates higher than what would have been obtainable elsewhere. They have benefited from that.

There is a wonderful customer base of 300,000. The move is very positive for those customers and the creation of this third banking force will benefit them in the future. The arguments have been made but, unfortunately, I do not accept the amendment.

Acting Chairman (Mr. Mooney): As this item has been extensively debated I am now putting the question that section 1 stand part of the Bill.

Mr. Ryan

We have not even disposed of the amendment. You cannot go on to section 1.

Acting Chairman

I am just asking the question and am acting on advice from my distinguished predecessor.

Mr. Ryan

Since we have not disposed of the amendment you cannot start disposing of the section.

Mr. D. Cregan

I understand what the Minister of State is saying. He answered me very politely when he readily admitted that it started with the customers and particularly the ones we knew. It was a very small matter at the start. What the Minister of State says is very unfortunate, the customers who created the bank are long gone and they are to be admired. They saved pennies when they had few of them and they did so in the interests of the less well off. All I am asking is that we make sure that the founders of this bank are recognised and, in particular, that they are recognised by the TSB itself. I see no reason the Minister of State cannot say – I understand it may be difficult – at some stage that recognition should be given to the people who gave their pennies. We should not be ashamed that that is how it started. These people gave their pennies when they were badly needed and recognition should be put into the structure.

I welcome the third banking force, and would welcome a fourth, because I do not want to see billions of pounds being made per year from the people when very little is given back except to the certain few. This is a golden opportunity to recognise those who gave their pennies at that time – my two grandmothers probably did so in Cork city and they deserve great credit for that, as do those whose initiative it was to create the bank. It is a sad reflection on us that people have to contact us constantly who gave so much of their time to the Cork Savings Bank and the Dublin Savings Bank and now they get no benefits from the shareholding. I refer not just to former employees but also to those who were sick and could not work and are now getting no benefit while people who are there only two or three years accrue all of it.

Mr. Ryan

Hear, hear.

Mr. Costello

Hear, hear.

Mr. D. Cregan

That is capitalism at its best, capitalism by trade unions. We should not allow that. I would not say that I allow it even though all belonging to me are members of trade unions.

Why can we not give recognition at such little cost? This would not cost millions. All the people are asking for is a relevant amount of the shares to which they are entitled as employees or former employees. Would it cost £100,000? It is only a share option and I hope that the shares do not drop. We should look at this matter seriously and the Minister of State should give some commitment to it. As the person pushing this through the Houses of the Oireachtas, he should not be afraid to say to the bank that sick employees, those who cannot work because of family commitments and so on, and those who were asked to go on a job share scheme, should get the same benefits as those who are new to the job and they should be looked after. The Minister of State should consider this matter.

Mr. J. Doyle

The Minister of State remarked that it was strange that Labour and Fine Gael should table such an amendment. By saying that he was indicating that no one in Fianna Fáil would support this kind of an amendment. I have a surprise for him because the minutes from the Select Committee on Finance and the Public Service show that Deputy O'Flynn supported the amendment. He supported it in the same manner as Senator Dino Cregan has, not as forcefully or as eloquently, but he did support it.

Mr. Cullen

The suggestion that the proceeds, or part of the proceeds, from the sale of the TSB be put back into its structure to enable it to compete more effectively is not acceptable for two obvious reasons. First, Irish Life and Permanent is a very large, well-funded institution and does not need help from the State, which could be doing much more important things with its money. Second, such a grant of free capital would be a clear State aid and not permissible under EU law.

Mr. D. Cregan

A plaque of recognition in the banks would be a recognition of the people who founded it. The current leadership in the TSB must not be left with the impression that they did it all because they did not. It is the founders who should get the recognition and a plaque would cost only £1,000.

Mr. Cullen

In my speech on Second Stage I recognised the points so eloquently put here this morning. The people involved were clearly a very large and forward-looking group who scrimped and saved to make this happen, there is no question about that. The Senator's points are well made and within the context of the new organisation there should be a recognition of that. Neither he nor I is in a position to do so from here but the Senator has certainly sent a powerful message from this House and I hope it will be listened to.

Mr. D. Cregan

It is sad when workers cannot get their rights.

Mr. Cullen

We have debated the substance of the matter at some length and I have made my position clear.

Amendment put and declared lost.

Question proposed: "That section 1 stand part of the Bill."

Mr. Ryan

The section deals with the principle of the Bill which is the transfer of assets. At the end of Second Stage the Minister of State quoted what I believed to be representative extracts from the speech of the Labour Party spokesman on finance but which were a profound distortion of the content and the spirit of what he said. They were unworthy of the Minister of State, they were highly selective and extremely misleading. They are of no great significance in any long-term debate and he should not be allowed to get away with that sort of silliness. Deputy McDowell said he was unhappy with the transfer of the TSB into private ownership and that the idea was driven more by ideology than pragmatism, which is the same as what I have said here.

The Minister of State is a very capable man, more than able to argue his point and it was a descent into silliness to use selective quotations. There is a phrase in one of the psalms which says that there is no God and that is how one can use selective quotations. It was great fun, he had fun, but it made me a little uncomfortable and I took the sensible action of reading my colleague's speeches. The Minister of State got it all wrong and he should learn that if he is going to quote from something he should read the whole thing and not leave himself open to looking silly.

Mr. Cullen

What I quoted was accurate.

Mr. Ryan

Yes, it was.

Mr. Cullen

The Deputy in question has spoken to me since and he accepted somewhat the difficult position in which he found himself. The Senator is quite correct in some of the other quotes he has attributed to the Deputy, in making his speech, which are equally accurate.

What I was trying to do was to sum up the recognition by the Labour Party spokesman on finance that, taking all things into consideration, the sale of the TSB was probably in its long-term interests. He would prefer that such a course of action might not have been taken but, having seen the reality, I think that he accepted it. I quoted him quite liberally throughout his speech and this was a theme he used.

Mr. Ryan

The Minister of State said that the Deputy was, with one exception, broadly happy, but he was not broadly happy, he was broadly unhappy. That is a big difference.

Mr. Cullen

I take the Senator's point.

Mr. Ryan

That is complete gibberish and it is silly. That is all I am saying.

Mr. Cullen

I do not like the Senator's suggestion that I was being frivolous or silly. I was not. I was trying to demonstrate something in a fair way. I have never before been accused in this House of adopting a minimalist approach to anything I have brought before it. I have tried to flesh out matters. I was trying to give a sense of the dilemma, the dichotomy that exists in certain instances. I recognise that.

Acting Chairman

We have strayed into an area that is not directly related to the Bill. I remind the House that there is a long-standing convention that matters pertaining to the other House are for the other House and not for this House, and that ruling has been assiduously followed by all my predecessors. I intend to apply it now to both the Minister of State and Senator Ryan because we are not dealing with the essence of the Bill. I am therefore putting the question on section 1.

Mr. Ryan

Unfortunately—

Acting Chairman

Unless it is relevant—

Mr. Ryan

A precedent was established last week and a Minister was permitted to quote from the other House.

Acting Chairman

Please allow me to finish. It is a convention of the House and it is the responsibility of the Chair to point that out. In fairness and considering how this debate has developed, I am sure everybody would agree that it is a good convention and one that should be adhered to.

Mr. Ryan

The Chair may well be right and I would be one of the last people to argue with him. The point, nevertheless, is that if a Minister comes here and quotes selectively from the Dáil record because he was a little annoyed with the tone of my speech – because that is the context in which it happened – it is a bit rich to tell me that I cannot respond to him because of the convention in the House which applies to me and not to him.

Acting Chairman

I allowed the Senator to respond and, in turn, I allowed the Minister of State to speak. My remarks are directed at both the Minister of State and Senator Ryan. The Chair is totally impartial in this matter.

Mr. Cullen

I accept it.

Mr. Ryan

I never suggested otherwise.

Acting Chairman

I am therefore putting the question.

Mr. D. Cregan

I have a few words to say on the section as I was not here for the first Stages of the Bill. I congratulate the bank. In future we must be seen to be broadening our ideas and making the most of the advantages that have been built up over the years by people saving their pennies. In wishing the bank every success in the future, I bear in mind the 700,000 deposi tors in the bank which has now been purchased for £339 million. In the past, when discussing other companies such as the ESB and Telecom Éireann, there was argument about the number of shares workers would get. I have always argued in favour of employees getting a share of the company for which they work. The first company in Ireland to give shares to its employees was a Cork company, Musgraves. That company is to be complimented. When I was Lord Mayor of Cork that is the only company I visited, and I loved to visit it because of the benefits it gave to its workforce.

Over the next 20 years £10,000 will be given in shares to each employee. That is a fair benefit.

Mr. Cullen

It is about £40,000 over that period.

Mr. D. Cregan

It would not cost much to give shares to the remaining few – by the time we are finished, many of those will have passed on. I am not suggesting that the shares should be passed on to somebody else. I do not want to know about the deal, but it is nice to see employees getting 14.9%. That is one of the main reasons we did not insist that there should be a tie-up in respect of the Irish Permanent or any bank that started up with Government help.

It is very unusual, given that there is a clause providing that employees will get 14.9%, that somebody else, irrespective of who it is, can decide they will not get it. Perhaps the Minister would look at that. We, as an Oireachtas, should have the right to say that all employees will get it. However, it is possible that not all employees will benefit because another organisation could prevent it. It is great to see employees getting 15% over a period, but not all employees will get it. Nobody, at national, local or Executive level, whether trade union or otherwise, should have the right to decide that an employee will not be eligible to get a share. This is the first time I have ever knocked a trade union, but I find this possibility very disturbing and upsetting. It should not be allowed to happen and we, as an Oireachtas, should ensure that it does not happen. I would like the regulations clarified because I am no wizard on legislation. I demand the right for all employees, and if all employees have it, we have no right to take it from an employee who is sick.

Acting Chairman

Does the Minister wish to reply?

Mr. Cullen

ESOPs are not a backward looking arrangement. That is the fundamental point about them. The 5% is transferred to the ESOT and it is the current employees who will live with the new arrangements. It is for the future rather than what has happened in the past. The 9.9% is being bought by the ESOT at a fair market price and is not a reward for past service, it is for change in the future. That is the principle.

Mr. D. Cregan

If it is for current employees, what is the definition of a current employee? What happens if an employee is out sick for more than 18 months? I understood this applied over an 18 month period, but I have been told that the 18 month period has been pushed aside.

Mr. Cullen

Perhaps I could clarify it in this way, notwithstanding the issue the Senator has raised. This was agreed with the unions and employees. We carried out the collective democratic decision which was voted on by them. It is not open to me as an individual to prejudge or alter that outcome. This was a democratic process entered into by the employees. The Senator has certain views on what they did or did not do, and he is entitled to express them. However, that is democracy.

Mr. D. Cregan

The Minister says there was agreement by the unions. However, the unions should not have the right to change the structure. They are one group and they are taking benefits away from the people they represent.

Mr. Cullen

It refers to all employees,

Mr. D. Cregan

It refers to employees at the time. However, there are employees who, unfortunately, cannot be at work and there are employees who have been absent from work for more than 18 months. There was a condition that has now been eliminated. A trade union or any other group should not have the right to do that with structures we set up as an Oireachtas. They should not be allowed take away the rights of very few people who are getting very little for all they put in. I am not looking for a reply from the Minister now, but he should consider this matter.

Question put and agreed to.

Sections 2 to 4, inclusive, agreed to.

Title agreed to.

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

Sitting suspended at 12 noon and resumed at 12.30 p.m.