Vol. 226 No. 2
There is also a Supplementary Estimate and an Excess Vote here. I move:
That a sum not exceeding £725,650 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1967, for the Salaries and Expenses of the Office of the Minister for Finance, including the Paymaster-General's Office.
I should like to know if any further consideration has been given to certain matters. Reference has repeatedly been made to the desirability of establishing some procedure analogous to the Public Accounts Committee for investigating the activities of State bodies. This has been discussed on a number of occasions and many references have been made to it outside the House. At times it has been suggested that because the accounts of most statutory or semi-State bodies are presented to the Dáil under the particular Act by which they are established, or because the procedure is adopted whereby these accounts are laid on the Table of the House either in accordance with the provision of the relevant Acts or possibly on a few occasions for the information of Deputies, Deputies have the right—as they have on a few occasions when discussions have taken place here—to discuss the accounts as presented.
On the other hand, it is generally recognised that that type of procedure is unsatisfactory, that, with the very wide ramifications of the activities of most State bodies, the technical procedure whereby the statutory undertaking concerned is liable under the provisions of the parent statute establishing the body, to present its accounts to the Dáil, while fulfilling and complying with the actual terms of legislation, is one which Deputies and anyone familiar with the problem appreciate would not make it suitable for discussing in detail the matters affected by the activities of the various statutory bodies.
This question has been the subject of consideration in Britain as well as here. Certainly when we were in office, this matter was the subject of consideration from time to time. Possibly one reason for the failure of Governments to take action is based on two considerations. First, there is the fact that any suggested procedure of a committee comparable with the Committee of Public Accounts would not and could not of its nature deal with all the questions involved in it, and, while there would be a general anxiety to have the accounts of State bodies considered and examined by a special Committee of the Dáil, that because of the particular activities carried on by these various State companies, so far it has not been found possible to devise an entirely satisfactory system of examination.
The other reason is that because of the size of the Dáil and the various duties which Deputies have to perform, it is not easy readily to find a sufficient number of Deputies available for a number of Committees. That argument, however, must be considered in the light of the importance of the problem. In view of the magnitude of these statutory undertakings, the financial commitments involved, the amount of capital expenditure annually incurred by them and the extent to which they affect so many aspects of economic life in the country, the fact that a great deal of the activities carried on by them is not generally available for public review is a question which for long has agitated the minds of Deputies and many others outside who have given some thought and consideration to the matter. Until recent years the number of statutory bodies was relatively few, but in modern times, the growth of statutory organisations and the extent to which their activities impinge on people's affairs makes the question of much greater importance than it was hitherto.
One of the arguments often put forward for rejecting any proposal for a Committee is that the day-to-day activities of these bodies should not be the subject of inquiry or examination, or open to the scrutiny of a Parliamentary Committee. I do not think any reasonable person suggests that or would wish to do that. In fact, it might well be that certain limitations might be imposed on that type of investigation. On the other hand, the multiplicity of activities of these bodies and the amount of work which the Dáil has to do—the ordinary financial business on Estimates of Government Departments and the legislation which is passed each year— leaves little time for extra activities such as statutory bodies would involve.
It is notable that the ordinary activities of a Government Department are subject to much closer scrutiny and examination by means of Parliamentary Question, by discussion on Estimates and periodic discussions on legislation, and then finally each year the Committee of Public Accounts examines the expenditure and investigates whether the moneys voted have been spent in the manner authorised by the Dáil. Since Government Departments are subject to such close scrutiny, it seems to me that the extent of the capital expenditure and the ramifications involved in the activities of these statutory bodies make it imperative that in a modern democracy some system should be evolved.
The mere fact that we cannot evolve a perfect system or that so far there is no entirely satisfactory system is not a reason why we should not endeavour to evolve a system under which the activities of statutory bodies would be subject to a periodic review by a Select Committee or a Special Committee on somewhat similar lines to the Committee of Public Accounts. It might well be that because of the number of bodies now involved, the Committee could not examine each year each statutory or semi-statutory company. However, that would be a question of procedure which could be arranged by the Committee when established.
There is a volume of opinion which expresses concern from time to time both in the Dáil and in certain bodies and gatherings outside that no system of review or check is operated in respect of these organisations. This matter, as I say, has been the subject of a great deal of consideration in the British Parliament. After the election of the first Labour Government after the War, when the late Lord Morrison was President of the Council, the matter was discussed on a number of occasions and he had certain responsibilities in connection with it. Since then a certain procedure has been adopted.
I believe the time has come when we ought seriously to consider adopting some system whereby a Committee of the Dáil would have powers and responsibilities to investigate the activities of statutory bodies and to present a report somewhat similar to the report presented by the chairman of the Public Accounts Committee. I readily accept the view that once a statutory body is established, the duty and responsibility of running that particular undertaking devolves on the board established under the legislation and, because the board comes up for review from time to time, the matter can then be discussed. However, for many reasons that is unsatisfactory. Many of these boards are established for a particular period. Once a board is established, short of an actual vote of censure being passed on the board or on the Minister who appoints them, nothing can be done. I think that is the wrong procedure in any event. In many cases nobody wants to remove the board, but we are entitled to an explanation and an indication why certain action is taken or why particular decisions are taken.
There is also the other important consideration of the extent to which so many of these activities nowadays impinge on the interests of private citizens and on the business interests of individuals. These are all matters that might well be the subject of consideration by a Committee appointed by the House. I raise this matter now because I believe it is one that requires to be kept under constant review. I would like to hear from the Minister whether the matter has recently been the subject of any further consideration and, if so, what action is contemplated.
The other matter I wish to refer to is a matter I dealt with last year. It is the extent to which the Minister's Department keeps under review the creditworthiness of certain financial institutions. As I understand from his predecessor, this matter was the subject of some concern to the Department and an investigation or a check was kept on the activities of some of these bodies. I do not know whether any development has taken place in respect of contemplated legislation. If so, I would be interested to hear from the Minister whether such legislation is intended.
Leaving aside the actual extent of operations of new financial institutions here, some concern was expressed some time ago at the extent to which some of these bodies offered substantially more attractive interest rates than were generally available. I have the impression that recently these offers are not quite as numerous as they were. Nevertheless, some people of limited means and people without the resources which are available to others in getting an accurate picture of the activities of these bodies— indeed, people not in a position to check on the veracity or creditworthiness of these institutions—were induced to invest in them. I believe there is an obligation on the Department of Finance and on the State to ensure that if persons hold themselves out as offering excessively attractive terms to small investors, a check should be kept on their activities to ensure that people are not misled by these claims. Some action should be available to ensure that where such terms are offered, or where suggestions are made that a particular institution can grant more attractive terms or inducements to investors, the creditworthiness of these institutions is assured.
The matter was, I understand, the subject of some consideration by the Department of Finance. As far as I am aware, it was intended at some stage, possibly in connection with other aspects of banking matters, to introduce legislation on it. I would be interested to hear from the Minister whether any developments have occurred in that regard and if such legislation is proposed.
I should like to raise a question in connection with the Minister's responsibility in respect of employees of his Department and employees of other State Departments. We have a peculiar set of values in this country. At present when local authorities, even a county council, employ staff, they have an arrangement that after 12 months these people go on the regular roll of employment and can qualify for sick pay and, subject to certain qualifications, for superannuation and retirement allowances in due course. In general employment, such fringe benefits are also provided by what we term good employers—those with at least some regard for the people they employ beyond paying them the rates of wages negotiated by their trade unions. Quite a large number of firms recognise that it is not sufficient to pay wages alone but also make provision for fringe benefits, particularly the benefit of sick pay.
The Deputy is getting away from the Vote. The Deputy is now discussing private employment.
I am dealing with a question which has been referred to on numerous occasions when this matter was raised, that, before any consideration can be given to the introduction of sick pay and superannuation schemes, the Minister for Finance, as the responsible Minister——
These matters cannot be discussed on the Vote for the Department of Finance.
Perhaps the Chair might advise me as to when I can raise the matter of the plight of thousands of people who are not treated fairly by this Government in respect of sick pay and superannuation?
The Deputy would be in order in raising those points on the Estimates for the Departments of the appropriate Ministers. The Minister for Finance has no responsibility.
The Minister responsible for these matters have repeatedly indicated that sick pay and superannuation are matters of general concern and are matters for general action and that the Minister for Finance is the responsible Minister.
The Minister is not responsible for these matters. The Deputy should come back to the discussion of the Vote.
The Chair will understand that, repeatedly, negotiations have taken place with the Department of Defence, with the Office of Public Works, and so on, and that, on each occasion of representation by people who have given long service in public employment, in the employment of the Government, when they attempted to make the case that they are entitled to the same consideration as that given by local authorities, semi-State bodies and——
These matters are not relevant. The Deputy will have to confine his remarks to the various sub-headings of the Estimate.
With all due respect, if the Minister in question says, when the matter is raised, that it is one with which he cannot deal because it is a matter for general decision, then, on that basis, can it not now be raised in this House? That matter has been raised in this House in recent weeks. Various Ministers have replied to that effect.
The Deputy may not argue the point on this Estimate because it is not relevant. It has nothing to do with the Estimate for the Department of Finance. Other Ministers are responsible for the matters the Deputy now raises and he might raise them on the Estimates for these Departments.
With respect, the the other Ministers have replied that they have no power to introduce sick pay or superannuation legislation as it is a matter for general decision. If those other Ministers have not such power, somebody must have it.
If the Deputy does not wish to obey the Chair, I shall ask him to resume his seat.
Very well; I shall resume my seat.
It struck me, while Deputy Larkin was careering along, that the Establishment Officer for the whole Civil Service is a servant of the Minister for Finance.
Deputy Dillon will now be told off.
If I wanted to raise a question about the establishment or non-establishment of any officer of any Department, I used to apply to Mr. Louis FitzGerald of the Minister's Department who was recognised as the head of establishment in the Civil Service.
The Chair feels that the Minister responsible for that particular Department would be the right source to go to for that information, not the Minister for Finance.
I am drawing the attention of the Leas-Cheann Comhairle to the fact that, so far as I am aware, the head of establishment in the Civil Service is an officer of the Department of Finance.
To follow up what the Leader of the Opposition has to say on the subject of semi-State bodies, I must say that I could never make out what the great difficulty was about this, though I admit, as he says, that it was discussed in the Governments of which he and I were members. I could never make out why we could not appoint a committee of this House, separate and distinct from the Committee of Public Accounts, to take the place of shareholders at the annual general meeting. I think that what is wrong at present is that, where you have a semi-State corporation, the auditors have no body of shareholders to whom to report. As I understand company law, the auditors are the servants of the shareholders. The function of the auditors is to inform the shareholders—not the directors—of their findings as to the administration and general progress of the concern they are commissioned to audit. At present, the only person to whom the auditors can address themselves is the Minister for Finance who is usually the principal shareholder. Usually, a representative of the Minister for Finance attends a meeting and speaks on his behalf. I believe the Oireachtas, particularly the Dáil which votes the money, could appropriately be represented there without any embarrassment to the board of directors.
Any ordinary company operating in this country has to hold an annual general meeting at which any shareholder may turn up. It is notorious in the city of London that there are certain public nuisances who go around from meeting to meeting and kick up a row but directors accept that as part of the burden of being a director of a large company. They frequently make a jovial reference to "the lady in the green hat" or "the man with the red whiskers" who is well known to attend every company meeting in London. They may have one share in ICI, one share in Vickers, one share in various companies, but such persons make a business of these attendances.
The burden involved on the directors of a semi-State company would be that they would meet a presumably responsible body of Deputies who would be there at the annual general meeting in the capacity of representative shareholders. One of the favourite arguments against this procedure is that if you expose directors of semi-State bodies to any degree of inquisition at all, you will not get the best man to take the job. I am not so sure that the directors of semi-State bodies are such pure patriots that they are all acting on them for the love of Cathleen Ní Houlihán. I see a good many directors willing to take jobs on semi-State bodies. I do not think it would be any burden on them to ask them to discharge the same responsibility as the director of any commercial enterprise would be expected to discharge.
I suggest to the Minister one solution to the problem which affects not only the Government of this country but the Government of Great Britain, and that is to take the bull by the horns and simply to say, in effect: "These companies were set up to function more or less on the lines of public companies, free from day-to-day supervision by Dáil Éireann. However, if they are to have all the prerogatives of an ordinary public company, then they should have the liabilities as well and one of these is an annual general meeting of their shareholders who, in the case of a semi-State corporation, shall be a committee appointed by Dáil Éireann to discharge the function of shareholders."
The all-important thing is that on that decision being taken by Dáil Éireann, the auditors to that company will become the servants of those shareholders. It will be the duty of the auditors as members of their professional organisation to direct the attention of the chairman and shareholders to any matter which requires review or examination at the annual general meeting. I take it the intentions of the members of the Committee will be to ask the board at the annual general meeting the appropriate questions and in due course furnish a report which will lie on the Table of this House, and indicate whether there is anything untoward to which the attention of the House should be directed or whether they are satisfied with the report of the chairman and directors as submitted at the annual general meeting. In the ordinary circumstances, that report would simply lie on the Table of the House and there would be no further comment on it. It would, however, be open to any Deputy to ask that the report be considered or rejected by the House, and if there was any statement in the report of an adverse or critical character, it would be up to the House to discuss it and up to the Minister to explain to the House why he proposed to leave the company as it was then constituted. I suggest to the Minister that that is a matter which he might consider.
Deputy Cosgrave has mentioned that previous Ministers for Finance considered adopting some system of protecting people from taking advantage of rates of interest offered by companies of doubtful solvency. People are entitled to make their own bargains. Somebody may want to go out and invest money at 15 per cent in a tin mine on Muckish Mountain. We may all rush to save his money for him, only to find out that the whole of Muckish Mountain is solid tin.
I remember a stockbroker saying to me in connection with a certain enterprise inaugurated in this country that he persuaded some of his clients not to touch it with a 40-foot pole. He was feeling rather sorry when he told me this because since he gave that advice, the value of the investment had increased twentyfold. He still thought that the enterprise was fundamentally unsound but that it was very difficult to explain to his clients, who could now sell an investment of £100 for £2,000, that his advice was good. We ought to walk warily in the matter of restricting people in making improper investments. Some will do it, but some of them will make investments which appear to us to be highly improper but which will turn them into millionaires while we are still ploughing our lonely furrows on a modest income.
I suggest to the Minister that offering the assistance of insurance similar to that which was provided by President Roosevelt through the Federal Reserve System in America in the great crash of 1929 is worth considering. He used the small local banks which were a very prominent feature of American rural life. A lot of people lost their life savings when these banks closed during the 1929-31 financial crisis of the United States. The new system of the Federal Reserve insurance system left it open to all financial institutions who wished to do so to insure their deposits with the Federal Reserve, up to a limit of something like £1,000.
If we are concerned to protect the small investor, the unsophisticated investor, it would not be a bad thing to provide a system of Central Bank insurance which would be available to any financial institution which wanted to set up. Then you could serve notice on unsophisticated investors: "If you want to lend your money at an attractive rate of interest, you could inquire whether your deposit will be insured under the Central Bank insurance scheme." If it were, well and good, but if it were not, you would have notice that "you are putting your money into a place which has attendant on it a risk which would appear to be inappropriate to a person in your financial circumstances."
I do not understand, Sir, and perhaps the Minister will be kind enough to explain, the note on page 12 of the Book of Estimates which sets out that the sum under Subhead J relating to the Economic Research Institute is transferred from Subhead C which is that for travel and incidental expenses. The transfer amounts to no less a sum than £17,500 in last year's account. The corresponding appropriation for this year is £1,500. Probably this is a purely technical provision which I do not understand. I should be obliged to the Minister if he can explain it to me. I cannot find in the note any readily understandable explanation of this account. I take it the Economic Research Institute referred to is the Institute in Baggot Street, which heretofore has been functioning largely under a grant from the Ford Foundation. Perhaps the Minister will tell us today whether that draft is to be renewed from the Ford Foundation and, if not, what his intentions are in regard to the future administrative expenses of the institute in question.
I should like to make a few comments with regard to the question of semi-State bodies. We have been very lucky in this country in that semi-State bodies have been well run up to a point. They have been run honestly, at least, but if there were a big scandal at any time in the functioning of a semi-State bady, no doubt we would call for an investigation. It would be a very sound idea if arrangements could be made to have the activities of the semi-State bodies investigated in the way suggested. People who run the semi-State bodies would welcome this so that the general public, as well as we, will know that everything is above board.
I do not propose to challenge your ruling, Sir, with regard to Deputy Larkin's comments. I should, however, like to make one statement. Last February 12 months a Department of State agreed with my trade union that the sick pay scheme would be recommended to the Department of Finance. The Department of Finance have not so far made a decision on the application. This proves that to a certain extent the Department of Finance have a responsibility. In respect of this matter, which should be touched on here, because it cannot be dealt with anywhere else, but, on the Estimate, I was told that nothing could be done about it, that it is purely a matter for Finance. That being so, the Department of Finance must face up to their responsibility and say why they have not dealt with this matter. When these people were considering a pension scheme, the same applied. They told us that Finance are responsible for this matter and that nothing can be done about it unless the Department of Finance agree. Therefore, the Minister must examine that particular aspect and let us know what exactly it is proposed to do in these cases.
On last year's Estimate, I raised a question with the Minister's predecessor, with the former Taoiseach and with the Department of Labour, and I am now repeating the question to the Minister. It is the question of having some type of conciliation machinery for State employees. This is a matter which is dependent on the goodwill of the Department of Finance. If the Department of Finance are prepared to have it set up then it will be set up but if the Department of Finance are not so prepared then the machinery cannot be established.
There seems to be something basically wrong with a situation which allows a system of arbitration and conciliation to operate in respect of every State employee except those at the bottom of the ladder. I would ask the Minister who has just taken over as Minister for Finance to see to it that, without further delay, there will be extended to those at the bottom of the ladder the type of conciliation machinery which is applicable in outside employment and for State employees above the rank of ordinary labourer. Machinery should be set up for the purpose of allowing State employees some right of appeal against the arbitrary decision of a State officer.
I referred to another matter in detail last year and do not propose to do so now except to say that a few weeks ago the former Taoiseach agreed with me that we have reached the stage when something would have to be done to remedy the situation wherein, when trade unions go to negotiate with the State, the officer representing the Department, whether it is the Department of Finance or any other Department, may say: "This is what we are offering and this is what we have cleared with the Department of Finance. Take it or leave it." They did not use those words but that is what they mean. When we realise that that applies only to those at the bottom of the ladder, it must be appreciated that that attitude should be changed.
I would appeal to the Minister to see to it, as his first act in the Department of Finance, that conciliation machinery be set up without further delay for these employees because all sorts of unrest that has occurred in State employment can be dealt with only in this way.
I want to assure the Minister that we are not saying this for the purpose of raising a hare. We are saying it because we know that it is not just to allow the position to continue as it is. It is no answer to say that there has not been any big strike because of the lack of this machinery. The Minister knows why there has not been such a strike. You can bring the pitcher to the well so often that eventually it gets broken. Before the pitcher gets broken, perhaps the Minister would take a hand in the matter.
Deputy Cosgrave and others raised the question of some form of control over State boards and companies. I think I will confine myself at this stage to saying that this is a very complex problem and the next motion which is to be taken in Private Members' Time is a motion in the names of Deputy Sweetman and Deputy Dockrell which is concerned with this very matter. I hope to avail of that occasion to outline the policy of the Government in regard to this aspect.
With regard to the question of the supervision or control of financial institutions the position is that legislation to govern the licensing of banking institutions is in contemplation and in preparing that legislation we will certainly consider how wide the licensing net should be spread. I think I can say no more about the control or supervision of financial institutions other than banking institutions than that we are keeping the situation under review but that it does not at this point of time appear that there is any urgent need for action. Of course, Deputies will realise that all these institutions are subject to the normal provisions of the Companies Acts with regard to audit and so on.
With regard to Deputy Tully's point about staff matters, relations and negotiations, I shall consider what he said and see what can be done to improve the situation.
Thank you. It is the motion following the Fine Gael motion.
I asked a question in regard to Subhead J.
This matter of the Economic and Social Research Institute is dealt with in a Supplementary Estimate. The explanation is that in the beginning we paid only the rent of the accommodation for this Institute and it was principally financed by a grant from the Ford Foundation. The situation developed, however, that the Institute began to incur other expenditure and had to rely on bank overdrafts for this. When we came to clear off these bank overdrafts on behalf of the Institute it was necessary to create a new subhead. It was in order from the accountancy point of view when there was only about £1,500 involved in respect of rent and accommodation leased to the Institute by the Office of Public Works to include that under the existing subheads. When the amount became substantial, and was provided for by way of grant-in-aid, it was necessary to create a new subhead for it. I understand that the position with regard to the grant is that an application is being made by the Institute for renewal. That application is still under consideration by the Foundation.
I am puzzled by this. It is a most unusual procedure here. We have transferred for the purpose of comparison the figures for 1965-66 from a subhead described as "Travelling and Incidental Expenses" the sum of £17,500 to match an appropriation this year of £1,500 in a new subhead. J is the new subhead. Yet, we have transferred to the new subhead this year, from the old subhead C, £17,500 for the purpose of comparison. I do not understand what that procedure is.
I think the Economic and Social Research Institute is a most valuable body. I gather that the Minister is not in a position to say at this stage whether the Ford Foundation grant is to be renewed or not. May I be reassured that if the Ford Foundation grant is not renewed the money can be found to enable the Institute to carry on its very valuable work?
The whole purpose of this Supplementary Estimate of £58,000 is to ensure that it does carry on its work. The position, as I have said, is that this Institute made an application for renewal of grant from the Ford Foundation. Pending a decision on that application it was decided that the simplest way of enabling the Institute to carry on its activities was to do so by way of overdraft. When the decision was still not forthcoming, £17,500 was used to clear an existing overdraft and then the Institute incurred a further overdraft. We have now decided to introduce this Supplementary Estimate to clear away this further overdraft and to provide funds for the Institute to carry on until March, 1967. One way or another, there is no question whatever that this very valuable body will continue its activities. In fact, Deputies should know that recently the scope of its activities has been extended and its name changed to cover its new range of activities. We have changed its name from the Economic Research Institute to the Economic and Social Research Institute and this change of name heralds a considerable extension in the activities of the Institute.
