Vol. 2 No. 7
It is proposed to group the following amendments for the purpose of debate: amendments Nos. 1, 2, 6 and 7, amendments Nos. 3 and 5 and amendments Nos. 8 and 9. All other amendments in order, which are not group, will be discussed individually. I welcome the Minister of State and his officials.
We will proceed with consideration of the Bill until we have concluded Committee Stage. Is that agreed? Agreed.
SECTION 1.
Amendments Nos. 1 and 7 form a composite proposal and amendments Nos. 2 and 6 form an alternative composite proposal. Amendments Nos. 1, 2, 6 and 7 may be taken together by agreement.
I move amendment No. 1:
In page 3, subsection (1), to delete lines 21 to 23.
Section 1 is a standard interpretation provision and describes certain terms used in the Bill. The terms "shares" and "trusts" are defined in section 2(7) because they are referred to only in section 2. The definition of the terms "holding company" and "subsidiary" are also referred to only in section 2. To be consistent, therefore, the latter definitions should also be defined in section 2(7) and not in section 1. That is the basis of this amendment which deletes the definition of the terms "holding company" and "subsidiary" from section 1. I thank Deputy Noonan for drawing my attention to this matter on foot of his amendments and suggestions and I am happy to move them.
I hold a different view. One of the problems non legal people have with legislation is the antiquity of the language used on some occasions, and people frequently find it difficult to come to terms with a Bill. One of the features of legislation which makes it inaccessible to laypersons is that definition sections are frequently scattered throughout the Bill. Rather than having one definition section at the start of a Bill which is easy to find, definitions are inserted subsequently where they refer to sections. It would be better if we adopted the principle - whether a term occurs generally throughout the Bill or in one section - of defining all terms that need to be defined in the definition section. In that way, when section 1 of the legislation is passed, people would know what they were talking about and understand the terms. The Minister's amendment, which was prompted by my amendment, only makes matters worse because definitions will be given only when one reaches the section to which they apply. One will have to read the section before reaching the definition of the terms contained in it. Perhaps this is a minor point in respect of this legislation. However, as a general principle of draftsmanship, definitions should be located in the definitions section and there should not be subsidiary definition sections later in the Bill. The Minister has moved to solve the problem by magnifying it rather than by reducing it.
I understand Deputy Noonan's point, and I tried to respond to it directly. I also understand his point about using a more simplified version of the English language in legislation. I am not sure if it is possible at this stage to move all definitions to section 1, but I will consider that. I will be innovative on Report Stage if there is no difficulty with it. I have no difficulty with the point made.
On the basis of that commitment, I will withdraw my amendments.
Amendments Nos. 3 and 5 are related and may be taken together by agreement.
I move amendment No. 3:
In page 4, between lines 5 and 6, to insert the following subsection:
"(2) The Minister may not dispose of any shares in the Company without the general principles of the sale being laid before and approved by Dáil Éireann.".
My amendment is a substantial one. It is informed to some degree by the fact that I am opposed to the principle of the Bill, as I articulated on Second Stage in the Dáil last week. The amendment as it stands simply requires that the Minister should return to the House when the general terms of the sale of the ICC have been agreed, assuming they are. The section as currently framed gives extraordinary power to the Minister. It allows him to dispose of shares for whatever price to whomsoever he wishes or not to dispose of them if he does not want to. We are giving unfettered power to the Minister. If the Department of Finance or the Office of Public Works wants to buy a property it has to come before this committee. It must also get an estimate and it would normally be required to put the details of what it seeks to acquire before the committee if we ask for it. If a local authority wishes to sell property it normally has to go before the local authority and outline the details of the sale before it is allowed to sell. Yet we are being asked here, in respect of a State asset and a publicly owned company valued at almost £250 million, to give unfettered discretion to the Minister to go ahead and sell it. He is not being asked to come back to this committee at any stage in the future, even after the sale has gone through, to report the details of the sale.
We are constantly told, in respect of not just the ICC but of other State assets, that this is all commercially sensitive information and that it would be dangerous to put any information into the public arena. I do not accept that. This asset is owned by taxpayers and they are entitled, through the House, to know on what terms the Government intends to dispose of it. That is the purpose of the amendment I put before the committee.
Deputy McDowell's amendment proposes that the Minister for Finance may not dispose of any shares in ICC Bank plc without the general principles of the sale being laid before, and approved by, Dáil Éireann.
This amendment would involve the Minister returning to the Dáil to make a statement of general principles governing the sale process. As the Deputy may be aware, on 26 May 1999 the Minister indicated to the Dáil the general lines along which he intended to proceed. The general principles governing the tender process were published in a comprehensive notice in the press on 12 July 1999. This notice set out the definition of a qualifying applicant, the facts concerning the information memorandum to be circulated, how tenders could be submitted and the process for the short-listing of applicants for gaining access to further information and for making final bids.
This process has been almost implemented. It was an open, transparent and non-discriminatory process and there have been no complaints from any party in that regard. It is also a process designed on the basis of advice given by the Minister's advisers. It would not to be appropriate at this stage of the process to raise any question marks over the remaining stages of that process.
I would say the same regarding the terms of the ESOP transaction or employee share ownership plan. This was agreed as a result of long and detailed negotiations with the staff. The terms of the ESOP transaction are that 5% of the shares of ICC Bank plc are to be made available to staff in return for their agreement to a transformation agreement. The agreement sets out a wide range of changes in work practices and procedures which have been agreed by the staff. These changes include productivity and caseloads, along with co-operation with the implementation of all new information technology systems, the introduction of new products, extended opening hours and agreement to all other required changes in operation and management of the bank so as to enhance its competitive position. It also commits the staff to co-operation with the sale process and, subject to normal consultation, such post-sale integration and merger of operations and functions as may be proposed by the new owner.
A further 9.9% of shares is being made available to staff under terms and conditions which have already been agreed. They are purchasing these shares on the basis of a capital contribution from the company and borrowings by the ESOP. The company is satisfied that the £8.3 million capital contribution it is making represents fair value for the 6.5% pension contribution to be made by staff. The final price for these shares will be between £20 million and £23.5 million, depending on the price paid by the purchaser and this will, in turn, determine the amount to be borrowed by the ESOP.
It is far too late in the process for the Deputy to raise this issue. Section 2 seeks to give the necessary power to the Minister so that he can complete the sale process which has been nearly implemented in full. It would create unnecessary uncertainty at this stage for the Dáil to go through an additional procedure of taking a motion in relation to general principles which have already been applied during the sale process, particularly as all relevant information is already available to Deputies. On that basis I regret that I cannot accept the amendment.
We are missing one essential detail. We know from press publicity and because the Minister implicitly accepted it last week that there is only one bidder, Bank of Ireland. We do not know the price, so we are being asked to sign off on a deal but we do not know the single most important detail - the price. There has to be some doubt as to whether we will get the best value for the simple reason that there is only one bidder. There were ten, it went down to three and there is now only one. It is not unreasonable for those of us in Opposition to express some doubt as to whether the Minister is getting the best value for money.
As it happens, the section does not even require the Minister to satisfy himself, much less the House, that he is getting the best value. It is not unreasonable of us to ask the Minister to come back, if and when a deal is done, as presumably it will be, and to lay before the House details which would obviously include the price. We could satisfy ourselves and could ask the Minister to satisfy the House he is getting the best value. I do not see why the Minister of State cannot accept an amendment to that effect.
Are we debating amendment No. 5 now or later?
Now. Amendments Nos. 3 and 5 are being taken together.
Can I debate it now? Is this the only opportunity I will have to debate it?
Yes. The Deputy may debate it now.
Is it "I may" or "I must"?
This is the Deputy's only opportunity. When we come to amendment No. 5 it will have been discussed.
My party is in favour of this sale, but there are disturbing aspects to it. While the procedure was transparent and it appeared that ICC was being put on the market and the market would decide the price, that is no longer the position. Of the ten initial inquiries, three expressed additional interest and probably went a considerable way towards making an offer for the company, but now there is only one institution, Bank of Ireland, which is willing to buy ICC. That is less than satisfactory.
The Minister's position was that while we might all have views as to the value of the company, a competitive market would decide its market value. However, the market is no longer competitive. It is not clear from the Minister's Second Stage speech whether the price has yet been decided. It appears from something he said that while the general parameters of the price being paid by Bank of Ireland were decided, the absolute price was not yet fixed. We need clarification on that, because it is less than satisfactory that in the sale of a company which is a State asset there is now only one willing buyer and, in effect, that buyer is the only price maker in the market. We do not have the competitive forces of the market deciding the value of the company and that is a problem.
The Minister may well argue that the issue has now gone beyond the point of no return and that if the Oireachtas, in seeking to make the Minister accountable, were to put any barrier in the way of the sale one might end up without a willing purchaser and the company might be damaged. I agree with what the Minister said on Second Stage, that if Bank of Ireland does not purchase ICC at this point, the company will not recover from that setback for several years and it would not be possible to bring it to market again for a considerable time. The company would be damaged rather than enhanced by the process.
An issue of accountability arises in this regard. There is a peculiar view of accountability in this House which differs from other parliaments. We have institutions such as the Central Bank, the planning board and other regulating bodies such as the telecommunications regulator. Others are envisaged by Ministers. However, Ministers seem to think that accountability to the Executive is the same as accountability to the people. They can say that a regulating body must be independent of the Government of the day, so they institute it as an independent authority; to do anything else would be to risk the possibility of political interference or raise the suspicion of same even if there was none. These are the arguments being used for the independence of the Central Bank - the Minister for Finance and his Department should not interfere with that body's workings as it was carrying out its policy. We all agree with that, but it is different from accountability to the people. The committee structure is now particularly well placed to make previously unaccountable bodies accountable to Parliament and, consequently, to the people.
There is a real issue here. Deputy McDowell has approached it one way and I have approached it another. This company, which is a State asset, is being sold to another company, but it is not clear what point of sale we are at, whether a price has been fixed or to what degree there is discretion to vary the price from the initial bid from Bank of Ireland to the concluding sale price. There must be some method of accountability. That is not to say that the Executive, through the Minister for Finance, has not got the power to take a body like ICC and conclude the sale of it in the interests of the Government and the people. There must be a mechanism where there is a reference back to those of us who represent the people's interest rather than the Government's interest.
I am not inclined to go as far as Deputy McDowell, although there is a lot of merit in the approach he is taking. A Minister can be made accountable to the Oireachtas without the Oireachtas sharing in the decision-making role of the Minister. It is probably sufficient that the Minister would report as soon as may be on his actions.
The Minister of State should reflect on this matter, as it is not satisfactory. He should accept my proposal - that the Minister, after taking action under this section, should lay a report before the Houses of the Oireachtas through this committee as soon as may be or alternatively, he should accept Deputy McDowell's proposal and state his intentions of action in detail to the Oireachtas before taking that action. Something is necessary, as the section is unprecedented in the range of powers it grants the Minister and the manner in which he can act. I do not want to upset a reasonable sale at a reasonable price and I do not want to upset the arrangements which have been entered into in fair and free negotiations with the employees and their representatives in terms of share options.
This section is necessary to enable share options to be given to employees and it may be necessary for the sale of the company to go through along the lines envisaged. I presume the participation of employees in a share option scheme is an essential component of the arrangements for sale and that consequently the State would not sell nor the bank buy unless a section like this was included. However, there is an accountability issue. The day is long since gone when a Government could make a decision in Cabinet to dispose of a State asset and act independently of the Oireachtas. There must be accountability.
The Deputies have raised important issues. Those issues were and have been considered by the Minister. Regarding the fact that there is one potential buyer, nobody is suggesting that is the fault of the Minister. There was an open, transparent process and neither we nor a Department can dictate to the market. The result of that very open process is that one major potential purchaser is in position.
Deputy Noonan rightly outlined a number of points on the difficulty we would face if we were to reopen the process in some way by having to report back to the House. As I mentioned last May, it is important to note that the Minister for Finance outlined the general principles to the House at that time. I am not trying to be smart but perhaps the committee should have raised the issue at that time before the process had begun. Perhaps all of us could learn from that.
The phrase "general principles" in the amendment refers to the terms of sale. I accept what the Minister of State said about the procedure, but the procedure has been followed in private and there has been no accountability.
We are also dealing with Deputy Noonan's amendment which adopts a different approach from Deputy McDowell's amendment, although there may be a meeting of minds on this issue. I will deal with the important point raised by Deputy Noonan and there is an effective way to deal with it.
Section 2 authorises the Minister for Finance to dispose of his shareholding in ICC Bank. Deputy Noonan's amendment proposes that the Bill should be amended to the effect that any action taken by the Minister under section 2 should be reported by the Minister in writing to the Joint Committee on Finance and the Public Service, which relates to the point raised by Deputy McDowell.
The committee has wide powers, including powers to take oral and written evidence in respect of any matter that comes within the remit of the committee. It appears, therefore, that the committee has the necessary powers to do what Deputy Noonan's amendment proposes. The Minister for Finance and I will be happy to co-operate fully with the committee on the point raised by Deputy Noonan. The committee has the powers to do what the Deputy proposes and I confirm that if the committee wants this matter reported back to the committee, the Minister for Finance and I would be happy to do that. On that basis, it is not necessary to amend the Bill in the way proposed in Deputy Noonan's amendment because the committee has the powers to do what he proposes.
Would if not be preferable if under the legislation there was an obligation on the Minister to report to the committee rather than the committee having to invoke its general powers to call on the Minister to report to it?
It is a matter of how one handles this matter. I am satisfied that the committee has authority in this regard. It is not up to me or to anyone else to insert provisions in Bills, which may force a committee or anybody else to do anything. As a matter of principle in the context of this and other legislation, if this committee considers it necessary to call the Minister for Finance, me or some other relevant person before it on a process such as the one we are discussing, it has the powers to do that. I confirm we are happy to co-operate with those powers. If we were to insert a provision such as this in all legislation, it would create a doubt as to whether the committee has such powers. It either has or has not the necessary powers. I categorically confirm it has the necessary powers.
It has general powers, but it would like to pursue this matter further. If I had tabled an amendment to the effect that the Minister must report to the Houses of the Oireachtas and I made no reference to the committee, while the Dáil has general powers to hold a Minister accountable, especially on the disposal of an asset, it would not advance the case very far if the Minister of State said that the Dáil has powers in relation to Question Time or by way of motion to ensure that a Minister can be made report to the House on what he has done. Compared to an amendment that would require a Minister to report to the Houses of the Oireachtas, the Minister of State will realise why it would be preferable to insert an explicit provision in the Bill, such as that proposed in my amendment, rather than rely on an implicit provision that holds Ministers accountable under the general powers of the Houses of the Oireachtas.
While the committee has powers to request or even to require a Minister to attend one of its hearings, it has no power to cause the Minister to report in a particular way. While a Minister could come before this committee to discuss the ICC Bank Bill, we do not have compelling powers to require him to report on all the actions he has taken under section 2. I want an amendment inserted, which would oblige the Minister to account for his actions under section 2 and compel him under law to report in writing to us on the actions he has taken arising from the powers that we are about to vest in him under section 2. Having done that, if we want to discuss the matter further, we can invoke our general powers and require the Minister to attend a meeting of the committee to have a discussion on section 2, but stating that we have general powers of consultation with the Minister that in effect would make him accountable does not address my point. I cannot see the difficulty in accepting this amendment, given that the Minster of State said he has no difficulty reporting to the committee on this matter.
I do not agree precisely with everything the Deputy said and the way he has interpreted the powers of the committee. I did not say the committee has general powers, I said it has wide powers. I am not trying to split hairs on that with the Deputy, but there is a subtle difference between the two.
Regarding the Deputy's analogy between the Dáil as the Houses of the Oireachtas and the committee, the manner in which committees operate is relatively new territory and the picture has changed quite dramatically. When there was a move by us collectively to strengthen the powers of committees, the work of committees was frustrated because they could not get to the nub of many matters as they did not have the authority to compel Ministers or other people to appear before them, but that position has changed. Committees have become much more important and much more powerful. They are the proper fora where Ministers should report. If the Minister for Finance or I was requested to come before the committee to discuss this sale, it would be strange if we were not willing to come before it to discuss it in an open and proper way. I cannot confirm what the final price will be as it has not been agreed. We are close to agreeing that and it is hoped the terms of the final price will be concluded before Christmas. Deputy Noonan's amendment underestimates the importance and the role of this committee.
I do not know of a requirement under law that a Minister must report to a committee about any matter, apart from under the general powers of a committee. I appreciate the Minister of State might be reluctant to accept this amendment because that would establish a precedent and it would strengthen the committee substantially. If it became the practice that under statute Ministers had to report on their actions to committees, committees would have fairly strong powers. I am conscious that I am raising the bar in terms of ministerial accountability, but in the context of the Minister of State refusing to accept Deputy McDowell's amendment, we need a provision that has more strength than merely stating that the Joint Committee on Finance and the Public Service can invite the Minister to come before it to report what has happened under section 2.
The difficulty in this instance, and this is not a general principle——
What is the difficulty?
I am just about to make the point. We are at the end of this process of the sale of the ICC Bank. Having regard to the wording of Deputy McDowell's amendment, if we were at the start of this process, the position would be different, but as members are aware, the process has been quite open. It has involved a strong partnership approach between the staff and all concerned. It is strongly supported by everybody involved in the process. I do not want to bring any doubt into the final possibility of concluding and agreeing the price on this matter, hopefully within the next few weeks.
I am aware of the Minister's difficulties and that is why I approached the matter this way rather than in the manner Deputy McDowell is approaching it. It is not enough for Deputy Cullen to say that there are general committee powers to invite a Minister in to explain something. I want a mechanism whereby, when the Minister has acted under this section, a report will be written up by his officials, the people who are involved in the negotiation, the Minister will sign it off, send it to the chairman of the committee and it will be circulated with the minutes. Then we can discuss it here and invite the Minister in to clarify it, or if it is written up in a clear and open fashion, we probably will not need to invite the Minister in. There must be some level of accountability to the Houses of Parliament or to this committee as a committee of the Dáil so that in circumstances in which there is only one buyer for a State asset, the matter can be concluded in a manner which is both transparent and accountable.
There is no question but that this project - if you like to use that word in the context of the sale of the ICC - will be concluded in a proper, transparent and open manner, and there has not been any suggestion that it will not be. I understand the point towards which the Deputy is striving but I still have to make that point. He is quite correct. I will not, and in the context of this Bill I am not in a position to, set up a whole new approach in terms of the powers of the committee in the way the Deputy has suggested. What I have tried to do is to meet him as much as I can in the context of this Bill. It may well become an issue to look for the powers he has sought as a general principle if the committee sees fit, but I cannot do so in the specific context of this Bill. The Minister for Finance and I are willing to come in, if the committee wishes, and that meets the point.
The Minister says there is no question but that this process is being carried on in a transparent and accountable fashion. Deputy Noonan may not be suggesting that it is otherwise but I certainly am - it has been neither transparent nor accountable. Let us take these issues one by one. In terms of transparency, Deputy Cullen is right. The Minister set out how he was going to proceed, but the entire process has been carried on in private. The little amount I know about this process comes from the fact that the Minister's officials briefed me last week and from what I have read in the newspapers. We know, for example, that there were ten initial bidders - I know that only because I read it in the newspapers. The Minister at no stage told us that in the House. There have been negotiations with MSF trade union which represents most of the staff in the ICC, but I do not accept, while there are good colleagues and friends, that just being accountable to and working with MSF is sufficient. It is not open to that trade union or to the workers in ICC to satisfy themselves that the company is being sold for good value or in good circumstances.
I put it to the Minister that the process has been, effectively, entirely in private and the advice given to the Minister is private to the Minister. Some time ago I put in an FOI request for information as to the advice being given to the Minister and the considerations that the Minister had taken into account, but it was rejected out of hand completely and no information was given. The process has been entirely lacking in transparency. All we know is that the process is taking place, we do not actually know what has happened.
In terms of accountability, we are in effect being asked to abdicate all responsibility for accountability in this Bill because it gives unfettered powers to the Minister. To introduce an extra requirement at this stage would in effect mess up the sale. All it might do is introduce an extra element of accountability. It might make the Minister a little less likely to come back to the House with terms of sale which are less than what they might be. The reality is, of course, that the Government has a majority in the House and, presuming the terms of sale are adequate, they will get the approval of the House. No doubt if they are adequate they will also get the approval of Deputy Noonan's party. There is no risk to the principal sale from merely laying the terms of sale before the House. I do not see that it puts an extra barrier in the way of sale. It merely ensures that the terms of sale are sufficient to the purpose and are acceptable to the House, and it ensures a measure of accountability.
I would go further. I would like to see the business plan of Bank of Ireland laid before the House, perhaps not in a legalistic fashion, perhaps before this committee would be adequate. I would like to have some idea as to what Bank of Ireland sees as the future for ICC before we actually approve it. Perhaps that could be more usefully done at a committee meeting.
I understand this in reference to Deputy McDowell's last point The staff have seen the business plan and are fully cognisant with it. It has often been the case in the past that the real bone of contention has been that people have not known precisely what is going to happen. The opposite is the position in this case. I do not accept——
I accept that point. I accept that the staff have been consulted all along, but this House and this committee have not been consulted. We are not being told of the business plans.
I do not accept that. The terms of the sale were laid out, even, as the Deputy knows, in the publication which I have in front of me, which I am sure the Deputy has seen and which is quite detailed. In response to the points made by the Deputy, he seems to suggest that somehow or other the Minister for Finance would be less than concerned to ensure that the best possible price and deal was done. I do not accept that. I have absolutely no doubt in my mind that both he and the Department will be ensuring that the best possible deal, without question, will be done and that people will be quite happy when that becomes public knowledge. I hope it will satisfy all members of the Oireachtas that a good deal has been done, taking into consideration all the facts involved. I am not prepared to accept that I or the Minister would abdicate responsibility in facilitating this committee to discuss the point the Deputy has raised. I will come back to this committee when the sale is completed to deal with any points raised.
I cannot answer for the commercial sensitivity of any plan that Bank of Ireland, or any company - Bank of Ireland is the only potential purchaser in this case - may want to put into the public domain. I imagine there might be quite an amount of commercially sensitive information in that. I understand that the staff, who are directly concerned with this, are fully aware of it and are very happy, satisfied and anxious to see this process completed. We have perhaps put the cart before the horse in that we have come in with this now at the end of the process rather than at the beginning of it.
I am anxious to meet the committee, particularly the Deputies' concerns, in a real fashion by coming back to the committee but I am not prepared, and I am not in a position, solely in the context of the ICC Bill, to do something which is fundamentally different by putting this amendment into this Bill. I cannot accept that.
Two amendments are being taken here. I need a little time to tease the issue out further. I advise Deputy Cullen that there are issues arising in the general policy of selling State assets. I remember when no State asset could be sold because the representatives of the employees would not wear it and it was too political a jump to take, but because of the model of 5% of shares free of charge and the possibilities of purchasing 9.9% that was put in place around the time, or prior to the time, of the flotation of Telecom, there is a different attitude among public service unions now. Deputy Cullen said, in respect of ICC - or was it ACC - that the suggestion came in the first instance from the representatives of the employees.
To satisfy the Government, the company and the employees is not a full deck because there is nobody representing the strategic public interest there. Everybody is taking a narrower view than the public view. There is no disinterested party. In all sales of State assets from now on, there certainly must be transparency but also accountability to the Houses of the Oireachtas. There are public interest considerations which are not taken into account by the Government, the trade union movement or the companies involved. Without departing too much from the principle, the announcement yesterday about Eircom and the disposal of the minority shareholdings in that company has left people feeling uneasy about the process.
There is only one buyer for ICC. Other privatisations are under consideration, such as Aer Rianta, Aer Lingus and perhaps Coillte. There are public and strategic interests which can only be best protected by the Parliament as distinct from the Cabinet. This also applies here. Could you advise, Sir, on the powers of the committee if it followed the course of action advised by the Minister of State and withdrew the amendment?
Will I respond, Sir, when you are getting that information?
Yes.
I have not closed my mind to the point made by Deputy Noonan in terms of the wider issues being raised. Deputy McDowell's point is different, although it reaches the same conclusion. However, I am not in a position to deal with the wider issues. It is wrong to suggest that the public interest is not being met. It is being met here and was met in the Dáil on Second Stage. It will be met again on Report Stage and in the Seanad. I do not accept that only the strategic interest is being represented. While that is important, it does not supersede the public interest. As politicians, our primary role is to serve the public interest.
I agree with the wider question raised by Deputy Noonan. We are in new territory in terms of the economy, the way we do business and what is happening in marketplaces. Perhaps there is a need to look at certain procedures that could and should be agreed on a broader scale and not confined to this Bill. However, as an experienced former Minister, the Deputy knows it is not possible for me to start doing this at the end of a process. If we were setting out on this course his arguments and those of Deputy McDowell would have a different impact.
I want to see this process concluded because I do not want to undermine or create any impression of doubt about the conclusion of this sale, in the Oireachtas or elsewhere. I believe it will be concluded on a satisfactory basis in financial terms and in respect of other considerations covering the position of staff and so on.
Deputy Noonan said he is in favour of the sale and he believes it would be dangerous to delay it. I see his point, although I am against it. That approach may be too simple because perhaps many people would favour a sale if the terms were right.
On Second Stage Deputy Flanagan expressed the view that the Minister should sell provided the price is right. That is a reasonable view, but the House is not being given that choice. We are being asked to sanction the sale regardless of the circumstances. We are being asked to take the Minister on trust. The Minster of State says the Minister will not sell if the terms are not right. He may not do so, but in framing legislation we are obliged to insert a provision requiring him to meet that condition. The legislation should not take the Minister on trust, especially given that this will set a precedent for potential future sales. For example, some may take the view that Aer Lingus should be privatised or part privatised in certain circumstances while others may disagree. We should not set a template which gives the Minister discretion to sell in whatever circumstances may arise.
Is Bank of Ireland committed to its offer? Are negotiations on the price still wide open or is it down to the last £500,000?
I understand a number of issues will affect the final price, but it is within certain parameters given certain circumstances. We are fairly close to concluding before Christmas. There is not a big variance in the price range. The parameters of the conclusion will dictate the final price. That is part of the negotiating process.
Does that mean the deal is done?
After a long process such as this it is important these matters are concluded. I agree with the views expressed by many Deputies, but I do not control the market. There were a number of interests but the result of this process means there is only one potential buyer. The staff, management and all involved understand what will happen. The deals on share options and the apportionment of shares to the employees has been agreed. I understand from the union representing them - it is also a union within Bank of Ireland, so there is no difficulty there - that there is much satisfaction about this. All the terms and conditions are satisfied. Much of this process was generated by the staff. In the context of the ICC it is a wise and important move. We are near the conclusion of the process.
I do not deny the wider issues raised here——
As regards precedent.
As regards the wider issues, which are important to the Members of the Houses of the Oireachtas. Perhaps these need to be looked at, but I cannot address them in the context of this Bill.
The Minister has approached this in a diligent manner and has taken account of the public interest, the strategic interest referred to by Deputy Noonan and the interest of the staff. Both criteria have happily been met in this instance.
In reply to the query raised by Deputy Noonan, the Oireachtas Joint Committee on Finance and the Public Service may consider such matters of policy for which the Taoiseach and the Minister for Finance are officially responsible, as it may select.
I understand and sympathise with the views expressed by Deputy Noonan and Deputy McDowell, but the Minister's hands cannot be tied too much. There is a negotiating situation where the price has not been determined. When we dealt with the sale of Telecom Éireann the sale price was not fixed by the Oireachtas. It was based on what the market could bear on the day the price was set. A public announcement was made by the Minister for Public Enterprise in consultation with the chairman of the company. Similarly, I am sure the Minister's hands were not tied to the extent that he had to report to an Oireachtas committee when Greencore was sold. The price for Greencore was based on what the market could bear.
Deputy Noonan's amendment refers to "Any action taken by the Minister" under section 2. There could be several actions between now and the ultimate sale and I would, therefore, have a problem with the words "any action". If the amendment only dealt with the final sale, it would be well and good, but a number of actions could be taken before that sale takes place. The amendment could be interpreted to mean that each time the Minister opens a file he would be obliged to lay a report before the Joint Committee.
I understand the impetus behind the amendment but the Minister must be given scope to conclude negotiations. I have no doubt that the contents of those negotiations will be made public at the earliest opportunity, at which point they can be discussed either by the committee or by the House.
Further to my earlier reply to Deputy Noonan the Joint Committee may also consider such public affairs administered by the Departments of the Taoiseach and Finance as it may select, including bodies under the aegis of those Departments, in respect of Government policy. Is the amendment being pressed?
Yes. Will the Minister of State give a commitment that he or the Minister will come before the committee once negotiations have been completed?
Yes, I made the position clear when I stated that either the Minister for Finance or I would be happy to reappear before the committee and co-operate with it, not before the final figure is agreed but when the sale is completed.
The commercial world is a tough arena in which to operate. However, there are a number of fine public and semi-State companies operating in this country. We do not want to place an undue burden on these companies by overly complicating the system. I intend no criticism of the comments made by Deputies this afternoon. However, perhaps what we are attempting to do needs to be done in a sharper, more focused way so that companies can be allowed to operate within a reasonable timeframe. Deals that can be concluded in a short time in the private sector seem to take much longer to conclude in the public sector, which is detrimental to the efforts of companies operating there. I am not being critical of the merit of the arguments put forward by Deputies but that general point should be borne in mind.
I am entirely in favour of giving a completely commercial mandate to State bodies. They should also be informed of their social mandate and provided with the money they need to implement it. I am not in favour of interference in the day to day affairs of commercial semi-State bodies. There is no reason they should take longer to conclude deals than companies operating in the private sector. I am pressing the amendment.
I move amendment No. 4:
In page 4, between lines 12 and 13, to insert the following subsection:
"(3) Without prejudice to the provisions of any other enactment, the terms and conditions of employment of any person who was a member of staff of the Company on the date of passing of this Act shall not be made less favourable by virtue of or subsequent to a transfer of ownership effected pursuant to this section; and in particular no such person may be made compulsorily redundant during the period of 2 years from the date of passing of this Act.".
When the Minister originally announced his intention to proceed with the sale of ICC, he issued a statement in which he confirmed that the terms and conditions of employees of ICC would be respected and that there would not be compulsory redundancies within the company for two years. My purpose in tabling this amendment is to tease out the meaning of that statement, the import the Minister for Finance attaches to it and to the assurance he gave to the employees of ICC.
In this regard I refer to the incipient merger of ACC and TSB, where ACC management moved in and effected a number of quite considerable changes which have dislocated certain members of staff. I understand this was done without the full agreement of the individuals concerned. Does the assurance given by the Minister mean that the terms and conditions of employees in ICC will exclude that sort of activity, at least for a certain period? If not, what is the meaning of that assurance? The only specific commitment which has been given is that there will not be any compulsory redundancies within two years. Assuming it goes ahead, will that be a term of the sale to Bank of Ireland?
The Deputy is seeking to have an amendment made to the Bill to protect the terms and conditions of the employees of the ICC Bank plc., after it is sold. It will be a condition, precedent to the sale of the bank, that the purchaser must guarantee the existing terms and conditions of ICC Bank staff and ensure, as Deputy McDowell pointed out, that there are not any compulsory redundancies. Each bidder must also confirm that he will give an undertaking that the terms of any pension plan for pensionable employees ofthe bank will be as good as the existingpension scheme for pensionable employees of ICC Bank.
Each tenderer was also asked, as part of the tender process, to set out his views on trade union recognition. The Bank of Ireland has confirmed that MSF, which represents the staff of ICC Bank, is one of the five unions it recognises. The sale process has already taken into account the need to protect the terms and conditions of the staff. It is against this background that the sale process is proceeding.
In the circumstances I consider the amendment suggested by the Deputy to be unnecessary and I cannot accept it. It is clear that the staff of ICC, in the context of their terms and conditions, are fully satisfied with the way things have worked out.
My primary purpose in tabling the amendment was to invite the Minister of State to place such a statement on record and I am pleased he has done so. Does the Minister expect Bank of Ireland to retain ICC as a separate entity within its organisation or will it seek to amalgamate it? The latter action would have implications for the employees of ICC.
I understand the reasoning behind the Deputy's question. I do not want to engage in interpreting future commercial possibilities but, as matters stand, the Bank of Ireland intends to retain ICC as a separate unit.
In view of the assurances given by the Minister of State I will withdraw the amendment.
I move amendment No. 5:
In page 4, between lines 40 and 41, to insert the following subsection:
"(7) Any action taken by the Minister pursuant to this section should be reported in writing by the Minister to the Joint Committee on Finance and the Public Service of the Houses of the Oireachtas.".
Before I decide whether to press this amendment, will the Minister of State clarify the nature of his commitment? Will he or the Minister for Finance automatically reappear before the committee to report or will they only reappear if requested to do so?
I am not sure it is open to me to suggest that I can simply come before the committee.
It is the responsibility of the committee to request the Minister or Minister of State to come before it.
I move amendment No. 7:
In page 4, subsection (7), between lines 41 and 42, to insert the following:
" 'holding company' and 'subsidiary' means holding company and subsidiary (within the meaning in each case of section 155 of the Companies Act, 1963) of the Company,".
Amendment No. 9 is an alternative to amendment No. 8 and the two may be taken together by agreement. If amendment No. 8 is agreed, amendment No. 9 cannot be moved.
I move amendment No. 8:
In page 7, to delete lines 23 to 33, and substitute the following:
"is hereby amended by the substitution for subsection (1) (inserted by section 9 of the Borrowing Powers of Certain Bodies Act, 1996) of the following subsection:
'(1) The Corporation may, subject to such conditions and limitations on amounts as the Minister, after consultation with the Central Bank of Ireland, may determine, raise or borrow money (including money in a currency other than the currency of the State) in any manner it thinks fit, but the amount of money raised or borrowed by it and outstanding at any time shall not exceed £3,000,000,000.'.".
On Second Stage, Deputy Noonan suggested that the proposed wording in this section was inappropriate because the disposal of ACC Bank is not as advanced as that of ICC Bank. In that context, he suggested that a figure should be inserted in the Bill. After careful consideration it has been decided to accept his suggestion and this amendment has resulted. The figure of £3 billion was selected after consultation with ACC Bank. In inserting a figure it is imperative that it should allow sufficient flexibility for the bank to plan its business activities and in the current buoyant market any figure lower than £3 billion would result in an early return to the Oireachtas for an increase. I am responding directly to what the Deputy said. It is a slightly higher figure but after consultation we believe it to be correct and Deputy Noonan was essentially correct on Second Stage.
The Bill is centred on the sale of ICC Bank. The Minister has used the Bill as a vehicle to increase the borrowing limit applicable to ACC. While it is reasonable that the Minister should give himself powers to decide the limit of the borrowing which would apply to ICC between now and the completion of the sale, the same considerations do not apply to ACC. He should not move from the practice which is well vested in several pieces of amending legislation to raise ACC's borrowing limit and a figure should be included. The Minister has moved to meet the points I made. It seems to be quite a jump from £2.4 billion to £3 billion; £600 million is a big discretion. It is probably bigger than the discretion taken in amending legislation in the past but at the end of the day I am not in a position to second guess the Minister of State and if he assures me that consultations have taken place with the authorities in ACC and this is the figure they require, he has met the principles of my position and I will not argue the detail.
I refer to the merger and flotation of ACC and TSB and I do not intend that we should have a long discussion because I am seeking a response to one question. I am in some difficulty, as is Deputy Noonan I suspect, with the rest of the Bill in as much as we have been given a thorough briefing by the Minister's officials - that is reasonable and proper and I am grateful for it - during which we were told quite a number of things in confidence because of commercial sensitivity. I am not sure just how sensitive much of it is, but nonetheless if I have been given the information on that basis, I must accept it and, therefore, I will not put it in the public arena.
However, there is one major point about which my information and that of others does not depend on a briefing by the Minister's officials. The dogs on the street say that the merger and flotation of ACC and TSB will not happen on the same day at the same time next June or at any other time and that there will be a gap of at least a number of months. This has been said by a number of people who are well placed to know. If a decision to that effect has already been made, I invite the Minister to place it on the record.
The Deputy raised an important point. The Government has agreed to the merger and flotation taking place simultaneously, but precise details are being worked out.
On the same day?
Yes. I am happy to confirm that again.
I wish to raise an issue which is not mentioned specifically in the Bill but it is my last opportunity to raise it on Committee Stage - I also referred to it on Second Stage. One of the conditions of the sale of ICC Bank will be an absolute confirmation from the chairman of the Revenue Commissioners that whoever is the purchaser has a tax clearance certificate. It is well established that most people in their dealings with the State, even for the smallest grant, must obtain a tax clearance certificate. Whoever purchases a large asset from the State should have one. Given various issues which I highlighted on Second Stage, particularly that the chairman of the Revenue Commissioners has stated in writing in the past month that as a result of 169 audits conducted by the Revenue into the banking and financial services sector last year it collected——
The Deputy has moved away from the content of the Bill.
I want a commitment that the purchaser must have a tax clearance certificate. That is a reasonable request. It can be dealt with on Report Stage if the Minister of State does not have an answer now.
That is not part of this Bill.
This section, on the face of it, looks simple. The expenses incurred by the Minister in the administration of this Act shall be paid out of moneys provided by the Oireachtas and that is normal enough. It appears in quite a number of Bills which come before the Oireachtas. However, if one looks at the implications of that in respect of section 2 under which the Minister is empowered to carry out many executive functions - the creation and disposal of shares being the primary ones - it seems that he will do that after taking the advice of the consultants who already have been retained to advise on the sale of the company. Any expenses that arise from selling the company should be a charge on the company, but there seems to be a possibility under this section of transferring charges to the taxpayer rather than the company. What are the Minister of State's views on this? Because certain provisions in the Bill, in particular those that extend from the powers granted to the Minister under section 2, will involve expenses in their execution, is the Minister of State telling us that they will involve a charge on the Exchequer and not the company?
The shares in the company are held by the Minister. The charge, therefore, in the context of the sale is on the shareholder, not the purchaser, and it may also be the case, although it is highly unlikely, that the sale would not proceed. The charge is on the Minister, who holds the shares.
The Minister of State misses the point. If I hold shares in the company, sell them and pay a commission, it will be offset against the amount I receive for the shares.
Yes.
It will not be taken out of my salary by some legal mechanism. It is not enough to say that the Minister is the owner of the company and no issue arises under this section because at the end of the day it is the Minister who is involved. There is a certain value as ICC is worth something. There will be costs involved in selling it. Will all the costs be within that particular circle? Are there extraneous costs arising from this Act which, under section 9, can now be a general charge on the Exchequer? If so, there is a problem.
I understand now the point Deputy Noonan is making. I will come back to this on Report Stage if he wishes me to do that. I can only answer his question in the way that I have answered it, because I do not know exactly what is the expectation of the general charge on the fund. I now understand the point the Deputy is making.
I wish to explore the question of the expenses of the sale a little further. The Estimates this year provided, I think, for £25 million for the cost of paying the consultants which is largely attributable to ICC, although it might include an Estimate for ACC. Can the Minister of State let us know exactly how much?
I will get that figure. I do not have it here.
The ultimate cost of disposing of the shares in Telecom Éireann was in the region of £40 million. That struck me at the time as being a great deal of money. Even in terms of percentages, if this is costing £25 million it will be proportionately more. I have no doubt the bulk of the work is being done by the officials who are present today and it is extraordinary that we are paying such an amount of money to advisers, particularly when they have managed to whittle the number of bidders down to one. I am not questioning the work they have done but, with the information we have, it does not look like £25 million worth. I will be interested to hear what the Minister of State has to say on this.
Before the Deputy proceeds I can assure him that the costs are expected to be a fraction of the figure mentioned.
Is £25 million provided for consultancy in the Estimates this year?
Mr. Cullen I would be very surprised if £25 is provided for the sale of ICC. It could not possibly be, based on what I think will be the outcome of the figures. That would seem to be ludicrous.
The cost of the shares to employees is already being spoken of as £23.5 million. That is not very far short of £25 million.
I was referring to the costs involved in the sale. That is not in the region of £25 million. It is a fraction of that.
The bulk of the Estimate, if it is £25 million, refers to the ACC/TSB merger and flotation rather than ICC.
Maybe the finance division of the Department should take itself into the private sector and get a few bankers on board. We might all be very rich very quickly.
Will the Minister come back to this point on Report Stage?
I will. I understand the point Deputy Noonan is making.
I intend to add some further repeals and revocations to the schedule on Report Stage. These amendments are not significant and are really only tidying up references to ICC in previous legislation and statutory instruments. If any Deputy wishes to ascertain the exact nature of these amendments before Report Stage I am happy to have officials provide them. They are purely technical.
