The debate on this Bill has ranged quite far and quite wide, as was to be expected in the case of a debate on a Bill of such wide scope and implications. One of the points raised, and raised repeatedly, is not directly relevant to the Bill, strictly speaking, I suppose, but may be by implication, that is, the long bank closure which we had, the causes of it and the messages to be got from it.
Perhaps I may be allowed to make a few comments in reply to what has been said about that. First, I should like to say again, and categorically, that the Government did not desire a continuation of this dispute for the reason that the absence of banking facilities might damp down inflation, or for any other reason. This allegation has been made from time to time and I should like to refute it categorically. In fact, during the closure in 1966, credit expanded and this experience alone provided a good reason for not relying on the bank closure last year to do the opposite.
We do not yet know precisely what happened in 1970 because the necessary details of statistical information have not come to hand. There are some preliminary indications that credit also expanded on this occasion. Those who claim that the Government took no action to settle this dispute appear to forget that there was negotiating machinery in operation over the many months of the dispute, trying to bring about a settlement and that, in fact, the settlement which was eventually effected came about through that negotiating machinery.
However, if the normal negotiating machinery which is provided for the settlement of disputes is to be set aside in one case, there is every likelihood that a similar solution will be sought in other cases, with the ultimate result that the normal machinery would simply disappear. Deputies on all sides of the House recognise that fact. If what they meant to say was that the implications of this dispute for the whole economy were so great that it was not to be regarded as a normal dispute, they should have said so, and they should have gone further when they did say that the Government should have stepped in, and should have spelled out what they had in mind that the Government should have done, having regard to the fact that for most of the time during the dispute, the machinery available through the Labour Court was in operation and that conciliation was actively in operation in this dispute.
What did they have in mind if the Government had stepped in? Is it that the Government should have stepped in and forced the banks to concede in full the claims made against them? If that is what anybody had in mind, I think he should have said so and accepted its implications. If that is not what was in mind, we are entitled to know what Deputies did think the Government should have done if we had swept the Labour Court aside and stepped in. What different approach should the Government have made in that regard? I do not think the implications of what has been said in this regard have been fully realised, or perhaps accepted, by some of the people who made these claims and these allegations. It has been said that the Minister for Education has stepped in in the teachers' dispute. However, this is really irrelevant. There is no comparison because the Minister for Education is one of the prime parties involved in that dispute.
At no time did I pretend that the long bank closure in 1970 did not give rise to hardship or inconvenience to the community. I am well aware of that hardship and that inconvenience. I am also aware of the valuable contribution made by shopkeepers, and traders, and businesses generally, by cashing cheques and providing other facilities for customers. Indeed, I am also aware of the valuable contribution made by the non-associated banks. I should like to thank them for it and to place our gratitude to them on record. However, I am sure that none of those people would object if I also say—and I do not mean this in any derogatory sense —that there was, of necessity, a measure of enlightened self-interest in their attitude during the closure.
A very important contribution was also made by the special arrangements which were introduced to maintain and increase the supply of currency, both notes and coin, in circulation. This involved action by all the Government Departments in conjunction with the Central Bank which played a key role in these arrangements. Incidentally, I think there has been some misunderstanding of these arrangements in some quarters, on the ground that it was felt that Government Departments, and those employed by them, were placed in a privileged position. It is true that wages and salaries were paid in cash in State Departments, but this cash circulated to pay, in turn, the wages and salaries of many others who would have been badly affected if this had not been done.
The arrangements also included provision for paying social welfare benefits and cashing pension warrants. In the case of the building industry special arrangements were made for payment in cash of the wages of workers employed on State and local authority building contracts where hardship would otherwise have resulted. Further, the number of post office remittance transactions increased enormously during the period of the dispute. Special arrangements were made to cope with the demand for the services and to facilitate those using them.
I do not think it would profit us very much at this point to continue turning over the dead leaves of a past dispute. Detailed inquiries into its causes and effects are at present in train, as I indicated when introducing the Second Stage. When the reports are available it will be possible to make a more informed approach to the whole subject. Our concern should be with the future because this is what really matters in this whole question of the banking system in this country.
As the dispute lasted for the greater part of 1970 and a vast accumulation of work arose it was only reasonable to expect that difficulties would arise when the banks reopened. I do not accept that thousands and thousands of persons and businesses have been pushed by the banks into a state of insolvency while they are, in fact, creditworthy, as has been implied by remarks made in this House during the course of the debate. This is a gross exaggeration.
Virtually all the cases of difficulty that have come to my notice have been cases of what I might call "credit holidays" where the persons concerned had exceeded the permitted limit of their overdrafts. The few cases which I have seen where the banks appeared to have acted rather harshly were settled satisfactorily on representations being made by the customer to the bank.
I am not in a position to comment on directives that some banks may have issued to their local managers. Any such directives would be private documents to which I would not have access. Nevertheless, as I have told the House before, the Banks Standing Committee had indicated to me that the banks are prepared to examine all bona fide cases of difficulty sympathetically on representations being made to them. I have no reason to suppose, whatever mistakes they may have made in the first instance, that they are not now doing so. Indeed, it would be very foolish of them not to do so because common sense would seem to dictate that it should be a first priority of the banks to win back and retain the goodwill of their customers. There are, in fact, many indications that matters are gradually returning to normal. Persons who awarded themselves extended credit during the closure cannot of course expect the situation to be allowed to continue indefinitely.
There seems to be some misapprehension regarding the purpose of Part III of the Bill which deals with bank mergers. I want to make it clear that there is no question of the ground being prepared by this Bill for the merger of the two big banking groups. The main purpose in view is to facilitate the separate internal integration of the Bank of Ireland and the Allied Irish Bank groups respectively. At present each of these groups consists of three separate banking companies. Each group has announced its intention to weld its constituent banks into a single bank and plans to this end are in train at present. The relevant provisions of the Bill are designed to protect the rights of staff and the rights of customers and to overcome the various legal and technical difficulties associated with these plans. I believe what is proposed will in time contribute to greater efficiency, to better use of resources and to better services to the public. Perhaps I might add that the Minister for Finance under the provisions of this Bill will not be obliged to approve any rationalisation or merger scheme if he sees objection on the grounds that a monopoly would be created or for any other reason.
Divergent views have been expressed here as to lack of competition, on the one hand, and excessive competition, on the other hand, between banks. There are two aspects of this: first, there is the question of a choice of banks being available. There is, I think, a not unreasonable choice of banks available to the public at present. Real competition, of course, involves more than a choice of banks for the customer. It is not intended that the Bill should restrict competition. In fact, the reverse is intended.
In relation to the clearing system, for example, the Bill contains provisions which are designed to place all banks on a similar footing and to prevent the emergence of practices which could defeat this. There is already considerable competition for business between the different groups of banks. Deputy Coughlan spoke about this and obviously he did not like the recent sample of competition which he had experienced, but I do not think he can deny that the banks did compete for business on that occasion.
The general commercial banks are also facing growing competition from other banks. Many new deposit-taking institutions and new savings media are now operating including, of course, the non-associated banks. I should like to make it clear that it is not my intention that the associated banks should be protected from fair and reasonable competition from the non-associated banks. A question would arise in my mind regarding extensive take-overs of Irish banking business by non-associated banks which are controlled from abroad and hence the note of warning which I sounded in my opening statement.
I should perhaps mention that a number of references have been made in regard to the associated banks and the question of the disclosure of their true profit and loss accounts and balance sheets in future in a form showing their actual profits and total reserves. As the House will know, the associated banks announced that they intended to do this at the end of 1970 but they had to postpone doing so because of the banks closure. It is now intended that the new arrangement will come into effect next year.
The question of Government borrowing was raised by Deputy O'Donovan and referred to by other Deputies. Deputy O'Donovan suggested that our recent borrowing operations were unsuccessful. In fact, the National Loans taken together, and this is how they should be looked at, raised a total of £45 million between new money and the re-investment of redemption money. This amount is the highest ever raised at one time and, given the upset caused by the long suspension of normal banking services, must be regarded as very satisfactory.
Deputy O'Donovan complained that the Government were taking too much of the credit resources of the country. He said that out of a total of £75 million available from the associated banks the Government were to get £50 million, leaving only £25 million available for everybody else. Whether the Deputy intended it or not this gave the impression that the Government were getting twice as much credit as all other sectors. The Deputy must know that this is not so. The £75 million, £50 million, and £25 million referred to relate to new or additional credit. The total amount of advances outstanding during 1969 in the case of the associated banks varied from £532 million to £613 million.