First of all, let me say that the manner in which this Bill was first thrown to the Dáil without any explanation or indication of its purpose on the day it was circulated is something that deserves criticism. Some few days after its circulation, there was a blurb in the papers which I expect was an inspired attempt to rectify the crude manner in which a Bill, which purely is an operating Bill, was put out without any indication or explanation of its purpose.
The more I see of this Bill, the more I feel that it is an attempt to cover up in a clumsy and crude way a few ghastly mistakes. The Bill, I had thought first of all, was an attempt to do something that I have been saying for a long time should be done. I believed and I had hoped when I saw the introduction of the Bill on First Reading here that it was designed to provide that the attempt that had been made to hide ghastly failures under the shadow of commercial viability service given by the Industrial Credit Company would end.
I have spoken on many occasions in this House on the desirability that something should have been done at the time in relation to the situation in the Great Northern Railway Works, Dundalk, when the Great Northern Railway folded up. I made it clear then, and I make it clear again now, that I accepted wholeheartedly that there was an obligation on the Government to take some steps to provide alternative employment for those concerned. Deputy Dillon on the Control of Imports Bill today made our view clear in relation to those employed in industry where industry is forced to fold up because of the wind of change now blowing across the world in relation to free trade. So, too, was our view in relation to those employed in the Great Northern Railway. The manner in which more than one Minister of the Government came in here and told the House that the loans made by the Industrial Credit Company to Dundalk were purely commercial loans is something of which the Government cannot now be proud. The manner in which a Minister of the Government came in here on many occasions and indicated that the venture in Dundalk was an entirely private enterprise venture and he was therefore debarred from giving any details in relation to it when, in fact, it was all the time a State-operated concern, is also something of which the Government cannot now be proud.
Later, in some detail, I shall expose the fake behind this Bill and behind the Minister's speech when he talks of transferring £2½ million from Industrial Engineering in Dundalk to the new company; £2½ million perhaps in nominal value, but I doubt if that £2½ million is worth, for reasons I shall give later, as much as £250,000. What has happened is that at least £2¼ million of the taxpayer's money has been lost, lost by wrong handling in the early stages of that venture; and the Minister is producing this Bill now as a means of covering up the mess made because of the obstinacy of the Taoiseach in insisting that one particular man should be left in complete and absolute control, notwithstanding that that man had been found out earlier as being a person with feet of clay where industrial management is concerned.
Now, if it were only one instance, we might grumble, we might criticise, we might complain. It would not matter if it were only one instance. But the significant fact is that this Bill is drawn on the basis of the future and the future will be cut on this particular pattern. I have always felt that any commercially viable proposition put forward should be handled as a purely commercially viable proposition by the Industrial Credit Company. That is accepted now. I am glad that the Government have gone as far as accepting that, but, where it is not a commercially viable proposition, one that cannot reach proper commercial standards, it is entirely wrong and improper for the Government to bring pressure on the Industrial Credit Company to make finances available. That the Government did that can be shown without question in relation to Dundalk. In fact, it has been admitted by the Minister in the speech he has just made. Where the Government feel it essential in the national interest that money should be invested in a concern which is not economically viable, there is an obligation on the Government honestly and honourably to say so, to state that they are doing this because they believe it is desirable in the national interest and not try to hide behind any cloak of commercial viability. The Government should state "We are doing this because we think the national interest demands that it should be done for reasons (a), (b), (c) and (d)."
In relation to Dundalk, having regard to the hardship involved on those employed there, there was undoubtedly a case for the Government coming out openly and saying they were going to take certain steps and they were taking them in the national interest. They did not do that. They said that this was a commercial proposition and it was being handled by the Industrial Credit Company as a commercial proposition. We know now that it was not a commercial proposition.
What are the Government doing in this Bill? They are providing through the medium of the definition of a State-assisted company a back door which will not be open to the glare of public opinion and, relying on anonymity and secrecy, they can take certain steps to deal with particular concerns. I, of course, accept the Minister's word when he says, as Minister for Finance, that it is the intention to restrict the operations of this Bill to those companies given grants of more than £250,000 by An Foras Tionscal. If that is the intention, then why was the Bill not drawn on that basis?
We are here setting up a statutory corporation. We are here giving a company that will operate within the four walls of this Bill power to say that it is operating within the provisions of this Bill. A State-assisted industry means an industry that has received at any time any grant from An Foras Tionscal. That will be the position under the Bill as drafted. If the Bill were drafted in such a way that its operation would be restricted to companies with grants in excess of £250,000, that should have been stated in the Bill. To bring the Bill to the House, without including that provision, is sloppy drafting and not the type of drafting one would expect from the Minister and the Department of Finance. I accept the Minister's word that that is his intention, but I suspect that the intention really is to leave the door open for a change at a later date, a change that can be made without the knowledge of the general public.
If the intention is—I accept the Minister's word—that the Bill will be restricted to companies with grants in excess of £250,000, then the Minister should have told us today what companies have so far got, or been promised, grants in excess of £250,000. He did not do that. We are apparently expected to pass this Bill blindfold. It is easy for a Minister introducing a measure such as this to say that anybody who criticises it is preventing employment, that anybody who criticises it is preventing expansion. I fully understand the ease with which such criticism can be made but when sums of taxpayers' money as large as are involved here are being expended and the means for their expenditure is being provided, somebody has a duty, no matter how unpopular it may be or no matter how much the Minister may be able to point a finger in relation to it, to come out and to state boldly the results of the mistakes of the past and how those mistakes of the past can influence the future.
I want to know what companies other than the companies named here have got grants in excess of £250,000. I want to know why there is no restriction in this Bill on the company giving the facilities where the amount is under £250,000 in grant and I want to know why there is no provision in this Bill prohibiting facilities where it can happen that there will be unfair competition with existing concerns.
I can see that there might have been a case for coming in here in relation to stated industries, naming them, putting them down bravely and bluntly on the face of this Bill, putting down on the face of this Bill, for example, Verolme Dockyard which already has, I understand, got facilities of over £2.3 million contractually and I suspect that one of the reasons behind this is that they will be given additional facilities by the Minister under this legislation. It is well known that they have applied for them. It is well known that some of the work they have done has been done by them in competition with another Irish similar concern, that it has been done at a loss and that it was taken at a loss by contract because the other concerns were contracting at realistic figures at which they knew it could be done. It was done by the concern in the South at a loss, and, having regard to the existing contractual arrangements that were made, it means losing taxpayers' money. Losing taxpayers' money is bad enough but when, as well as losing taxpayers' money, business is taken away from another private enterprise concern, it is worse.
I have had discussions here across the House in relation to Dundalk with the Minister for Industry and Commerce in regard to the fact that work was taken and staff were enticed from my constituency up to Dundalk with the assistance of the taxpayers' money. It will not improve our economy as a whole if work that was formerly done in one part of the country is merely transferred to another part, particularly when it means that it is being done at a very heavy loss of the taxpayers' money.
I do not know whether the Minister has ever personally examined the affairs and the balance sheets of the Industrial Engineering Company in Dundalk because there is in relation to his speech in reference to it a naivete or simplicity, and whatever other criticisms any of us may have about Deputy Dr. Ryan as Minister for Finance nobody could accuse him of being naive or simple. What is the position about this £2½ million it is alleged will be transferred to the Industrial Credit Company in respect of Dundalk? The Minister, I am quite sure, has later accounts than I have been able to get in the Companies Office in this respect but in relation to Dundalk, the pattern on which we were asked to pass this Bill is that the Industrial Engineering Company had had an authorised share capital of £1 million and an issued share capital of £500,000, of which all but some 502 shares are held by the Industrial Credit Company Limited. The 502 shares are held as qualifying shares by the directors and I suspect are held by them only as nominees of the Minister for Finance, but that is a matter on which anybody inspecting the documents in the Companies Office records is not able to judge.
Let me take the liabilities first. Capital of £500,000 was put in. There is a capital reserve of £19,262 in respect of the proceeds of the sale of assets taken over from the Great Northern Railway Board. There is a loss on profit and loss appropriation account of £49,966—call it £50,000. The Industrial Credit Company have lent £1½ million. When one adds that to the £500,000 in shares, one finds a figure of £2 million. I got those figures out of the Companies Office and the Minister himself acknowledges that this concern which is to be taken over under Section 3 of the Bill had £2½ million advanced by the Industrial Credit Company. Of that figure of £2 million at the date of the balance sheet I have in my hand, £143,000 had been given as an unsecured loan to the subsidiary associated companies; £470,943 had been given for shares in the subsidiary companies at cost; and there were sums due by those associated companies of £112,280.
When one examines the accounts of the subsidiary companies, whether it is the Dundalk Engineering Works, which has an operating loss of £278,854, whether it is Frank Bonser and Co. Ltd., which has an adverse balance on the profit and loss account of £4,479; whether it is Dealgan Steel Founders, Limited which also has a deficit balance on the profit and loss account of £105,963; or whether it is in respect of Commercial Road Vehicles, I defy any accountant to produce any real or tangible assets for the £2 million invested in that department by the Industrial Credit Company other than, perhaps, about £350,000 to £400,000. The same assets still remain but another £500,000 has gone in and it is true beyond doubt that the Dundalk operation has meant that the Government have lost £2 million of the taxpayers' money. In spite of the £2 million that has gone, the amount of employment given was something without any comparative value because the £500,000 that was not lost would have, adequately and properly, if it had been invested in a sensible manner, provided for the employment that is given in the works.
We all know of the almost-scandal that arose in respect of the Heinkel motor cars. The manner in which funds provided by the State were lost in that venture was common gossip. I believe that Commercial Road Vehicles, the subsidiary company in Dundalk, will prove a success and it is the only one that will. The others have meant the loss of £2 million of taxpayers' money and the tragedy is that it has been wasted in such a way that it has given no real permanent employment in return for the investment made. If the amount spent were going to mean permanent employment for those whose employment was jeopardised by the closing of the works, I am quite certain everybody on all sides of the House would have said: "That is worth doing."
Instead of doing it like that, the Government chose the backhanded way of pretending this was a commercial proposition, when in no circumstances could anyone have believed it to be such if he examined the matter in any detail. I urge the Minister when replying to this debate to tell us how much money has been lost in that venture and to provide by way of Estimate for the amount that has been lost to be paid back to the ICC, money that it should never, as a judge of commercial viable concerns, have been asked to pay, an amount that should have been provided by the Government in the ordinary way by Vote of this House. He should provide now to wipe out the loss and to give this new company at least a chance of starting off in that respect on the right foot, without being told that they are taking over an asset of £2½ million that I think would be generously valued at £500,000. That would be a better proposition and would make for better accounting in the future in the strict sense of the term in relation to the taxpayers' money.
Turning to the Bill itself, we are told frankly by the Minister—I commend him for his frankness in this respect—that the purpose, to a large extent, is the provision of £1½ million for Aviation Development Limited. I know nothing about that concern but I read in the papers that a man who has been able to make a great success of his own business and who with his own private enterprise, investment, drive and money has been able to further the company very largely that he controls, operates and directs, said in public—and was not afraid to say— that this particular industry had been hawked all around Europe. I should like to know, before this House concedes £1½ million to such an investment, whether that is true or not. I should like to know the exact terms on which those funds are being made available.
Some people say that when a person comes in with any investment here, he should not be asked, and Ministers should not be asked, to disclose the terms on which facilities are given by the State. I have never held that view, whether on this side of the House or the other. If a person wants to come in and start a business here, we should encourage him as far as possible. They are all welcome and nobody should pry into their private business but the day they ask to make their private business a matter of cashing in on the taxpayers' money for assistance, there is an entirely different standard to be used in judging the operation. Such people by their own act, in asking that taxpayers' money be handed to them as a grant, are themselves saying that they wish their arrangements to be open to the daylight of criticism. It is not then a matter of a Minister or a Government disclosing private affairs; it is the person who comes along and says: "I may be able to go into this on my own or privately but I want some of the general taxpayers' money as well as the money I am putting into it." Once a person says that, there is an obligation on the Minister concerned to say: "Certainly, but I am the guardian of public funds and as such I must be in a position to ensure that the light of public opinion is let into this operation involving the spending of public funds."
This does not do that; it provides by a veiled definition that State funds can be passed on, State interests taken over in other concerns without proper public examination. The very least that should be done in relation to Section 3 of this Bill is to provide that companies who are already named should be named and in addition, that any other companies who want to get help through the operation of this Bill should be named by ministerial Order tabled in the House. Short of that, there will be no way in which the public will know of what happens here. We will be faced perhaps in a few years time with the same story of heavy loss to which I have already referred and faced with it on the basis of: "Oh, well; it is done under the cloak of commercial viability."
The whole method of disbursement of public funds through State companies of one sort or another has now reached such a proportion of our total capital resources as to require new thinking as to its method of control. The Minister complained on Budget day that buoyancy of revenue was not sufficient to match the increased charge arising for the public debt. Why? Because the investments that had been made did not produce their returns. Is that of itself not a criticism of the selection of those investments.
Investments by the State can, of course, produce a return in two different ways. They can be self-financing, that is to say, they contain within themselves the seeds that will provide for the repayment of interest on the moneys lent and of the sinking fund. Therefore, in the method of financing provided by the Government it is little more than a loan in the true sense of the term. Apart from that, they can provide their desirability in the additional revenue or expansion they are likely to generate, not merely in the public sector alone but in the whole economy. That type of investment is, of course, sometimes a difficult one for a Minister for Finance to handle, but, nevertheless, can be an excellent one from the point of view of the national interest.
When we get a position, as the Minister said in his Budget Statement, in which the cost of financing an investment had not been met by the revenue coming in directly, on the one hand, or by buoyancy of general revenue, on the other, surely it is time for us to sit back and to think, criticise and see whether the manner in which those investments had been selected was one over which we would all desire to stand? Therefore, I would suggest to the House that at present, when investment of public moneys to State-sponsored companies of one sort or another has reached such fantastic proportions in relation to the national availability of capital assets, a case is now to be made for something equivalent to the Committee of Public Accounts for voted moneys. That Committee and the Comptroller and Auditor General operate in relation to the moneys voted by this Dáil to ensure that the instructions of the Dáil in relation to such payments are truthfully and faithfully carried out. It is not for the Comptroller and Auditor General to challenge in any way the policy of any payment. It is not for the Committee of Public Accounts to challenge in any way the policy of any payment. All the Comptroller and Auditor General, in fact, does is to see by his detailed accounting procedure that the instructions given by this House are not exceeded and that the funds paid out are paid out by the authority of this House.
In relation to the disbursement of ordinary governmental expenditure, be it on the Supply Estimates or in relation to the Central Funds, that procedure is perfectly adequate. It ensures that the Minister concerned must come to the Dáil and seek proper and adequate authority before he disburses public funds by way of Supply Estimates or otherwise. The Central Fund payments are, of course, made under statutory direction in the various acts. We have now arrived at a situation in which the role of the State-sponsored body takes up such a very large sector of the whole economy and such a large proportion of the available capital, that something must be done to ensure that the State-sponsored bodies operate within a system of proper and adequate control.
Let me not be in any way misunderstood when I say I know that the Minister for Finance and other Ministers do through their Departments keep some tag on the expenditure of those companies. But I do not think that is sufficient. We will have to provide something that is, if you like, a committee of this House dealing with State-sponsored bodies, whose task and function is to supervise their working, and further to have an equivalent to the Comptroller and Auditor General who will be able to ensure that the policy adopted in relation to those is the same as the policy indicated when the enabling Bill was going through the House.
I put it that way deliberately because the State-sponsored body always has its functions in relation to direct year to year policy laid down in this House but within the terms of an enabling Bill, enabling, perhaps, as in this case, the inauguration of a company under the Companies Acts or in other cases, a specific board to be set up. Once it has been set up, it does not come back again for review or it is never considered for public review unless further or additional funds are required. On the other hand, if there were some means of assessment, some means of criticism, without danger of preventing day to day administration, we would not be faced with the same problems as those with which we have been faced in relation to a couple of those concerns.
I believe it was wrong to get the Industrial Credit Company to deal with cases that were not commercially viable. That was prostituting the functions of the Industrial Credit Company. I believe it is right to provide that where something requires it to be done in the national interest the Minister and the Government should have appropriate power to direct such would be done, but it should be done properly, clearly, cleanly and above board by the Minister concerned. It should be done by naming the concern, scheduling it perhaps in an Order and putting that Order on the Table of the House so that if any Deputy, in relation to the disposal of taxpayers' money, believes something is not right, he can come in here and, by putting down the normal annulling motion, openly ventilate what has come to his ears.
We all hear from time to time rumours about one concern or another and we endeavour, in so far as we can, to see whether those rumours are with or without foundation. Nothing can do a company more harm than that rumours without foundation would float around about it day after day, week after week, perhaps month after month. The Minister must know as well as I do that, in respect to those companies who are assisted by Government directive and by an estimate of public viability by the Industrial Credit Company, those rumours will continue unless there is some method of ensuring a proper, competent and clear examination.
Any company worth its salt has nothing to fear from such an examination. On the contrary, any company worth its salt knows that the result of such an examination would be to put an end to rumours without foundation which might otherwise damage it. The Minister should know that far from harming our industrial structure in so far as the State sponsored bodies are concerned, it would give a sound basis to industry generally and would achieve public respect as well.