Finance Bill, 1957—Report and Final Stages.

Mr. Sweetman

I move the following amendment:—

In page 4, line 36, to delete "the passing of the Act" and substitute "1st May, 1923."

We had a fairly considerable discussion on the subject of this amendment on the Committee Stage on Wednesday. I indicated then that I was proposing to repeat the amendment on this stage, partly for the purpose of giving the Minister an opportunity of providing a better excuse than he had the other day for the rejection of it, if he is still of that mind. I hope that the 48 hours' interval has persuaded the Minister that there is no case whatsoever to be made on any fair basis against this amendment.

I do not know whether the Minister has considered what he said the other day about the confidential nature of the report on capital for industry, but having read it again myself, I cannot see anything the least bit confidential in it at this stage. The Minister, in his reply, suggested that the proposal by the Industrial Credit Company that issues of securities to an underwriting house, and then for subsequent sale to the public, should be covered by this section, and that was one of the reasons why he was introducing the section. I agree with him entirely that they should be covered in legislation but it has been done administratively all along. While it is desirable that there should be provisions of this sort included in the legislation per se it is no reason to advance for the rejection of this amendment bringing the benefit of this section back to the financial inception of the State.

It is not necessary to go over the ground that we covered the other day. This is not an incentive section. It is a section that will not improve marketability in any shape or form. No specific reason is advanced by the Industrial Credit Company for its inclusion. It will have the effect of giving an uncovenanted benefit to certain Irish securities. There is a case for doing that but the case is for doing it for all Irish securities and not only for a selection of them.

Dr. Ryan

I am afraid I cannot add very much to what I said the last day, that the clause put into the 1932 Act was an incentive measure to try and influence people to invest their money in Irish industrial shares, but there were certain restrictions, and it has been found from experience that these restrictions were to a great extent doing away with the benefit that was given in some cases. Last year, the then Minister removed some of those disabilities—in particular, the disability in regard to the bonus and rights shares. I am going further now and clearing the way for all shares issued since 1932, with certain exceptions which I shall mention.

I am not asking the Dáil to approve of including all shares which are quoted on the stock exchange. As an instance, a company sometimes, when starting business, may get a small group of people to take up shares to start off. The company succeeds. They get a quotation in respect of those shares on the stock exchange and they become marketable. If this clause were not put in, those shares could not get the benefit of the 1932 Act. We are not going the whole way because it might happen that four or five people would go into a private company with no intention whatever of selling their shares, but might get a stock exchange quotation in order to benefit by this provision. We are, therefore, putting in the proviso that there must be at least 50 shareholders in the company as well as having the shares quoted on the stock exchange.

With regard to the amendment, the point is that it was inserted as an incentive measure in 1932. In 1956, certain restrictions were removed from the section. Now I am proposing to remove further restrictions. Therefore, the clause inserted in 1932 would give the benefit that, generally speaking, we intended to give at that time. For that reason, I think the Deputy's amendment is not in the spirit of the clause inserted in 1932 because it is not an incentive amendment. It is, if you like, to reward people for putting their money into Irish industries between 1923 and 1932. That was not the intention at any time.

Mr. Sweetman

Is this section not to reward people who put their money into Irish industry between 1932 and the present time?

Dr. Ryan

It is removing some restrictions that were there in 1932. It will have this benefit: For future issues, it will have the incentive——

Mr. Sweetman

There is no arguing about that.

Dr. Ryan

The Deputy might say: "Confine it to future issues."

Mr. Sweetman

Would the Minister tell the House what restrictions he is removing? He mentioned one about the stock exchange, but none other.

Dr. Ryan

The only restriction of any importance which we are removing is that where shares were issued by a company. Sometimes, when a company was starting, shares were issued at a meeting. One person might say: "I will take a thousand shares," and so on, and the company would be started. Then, afterwards, they would like to have their shares quoted on the stock exchange. They could not reap the benefit of the 1932 Act, as the law stands—but now they would. If they get a stock exchange quotation, then the particular lot of shares covered by that stock exchange quotation will reap the benefit of the 1932 Act. That is a very big change.

Deputy Sweetman brought in the rights and bonus shares, which was a very big item. However, it was not an incentive either last year, but for the purpose of removing certain anomalies that existed since 1932.

Mr. Sweetman

The marketability.

Dr. Ryan

We are removing others. I cannot see that it will be necessary to go further in this direction, although some future Minister may think it desirable to do so.

The only other point covered here is the holding company. I think that is a fairly obvious case. A holding company might have a big share capital and might start a subsidiary company in line with their business. In that case, the shares of the holding company would not be disqualified from the benefit.

The other change to which I referred already, and of which the Deputy approved, is that these shares will be certified by the Revenue Commissioners and not by the Minister for Finance. As the Deputy knows, the Minister for Finance was not able to question the recommendation of the commissioners in the past. Therefore, it was only a matter of form that the Minister should sign it. It would be better to put the onus completely on the Revenue Commissioners in the future.

Mr. Sweetman

I am completely flabbergasted by the Minister. This is the first time in the history of this State, to my knowledge, that a Minister has come here and made the brazen case that public moneys should be given purely on political grounds— public concessions. There is not any other case at all. The Minister has stripped himself of any shred of respectability for this clause. He talks of the removal of restrictions. He is removing no restrictions in respect of any genuine issue made since 1932. We all know that shares were alloted on the basis of offers for sale, that that was dealt with administratively and that the section does not in any way affect it.

The Minister purported to refer to the holding companies, sub-section (5). That sub-section is not in the same position as sub-section (1). It is not being written into the Act because this Act is for the future. It is an excellent amendment for the future. There is no incentive whatsoever in this section as it is at present. The reason it is being done is to make a certain section of Irish securities more valuable. If any Irish securities are to be made more valuable, it is monstrous that the Minister should frame his Bill on the political basis that the beginning and end of the world, so far as we are concerned, happened in 1932 when Fianna Fáil came into office. I think this is the first time that that type of political approach has been introduced into a Finance Bill. I sincerely hope it will be the last.

Amendment put and negatived.

Question—"That the Bill be received for final consideration"—put and agreed to.

Agreed to take Final Stage to-day.

Question proposed: "That the Bill do now pass."

Dáil Éireann díospóireacht -
Friday, 28 Jun 1957