: When we adjourned this debate I was explaining that para graph 7 in the motion was inserted as a result of a decision by the previous committee but that it will be for the new committee to decide whether they wish to operate that paragraph which relates to the printing and publication of evidence taken by the committee.
Joint Committee on State-Sponsored Bodies: Motion (Resumed) .
Debate resumed on the following motion:
(1) That it is expedient that a Joint Committee (which shall be called the Joint Committee on State-Sponsored Bodies) consisting of 7 members of the Dáil and 4 members of the Seanad (none of whom shall be a member of the Government or a Minister of State) be appointed to examine the Reports and Accounts and overall operational results of State-sponsored bodies engaged in trading or commercial activities referred to in Schedule A hereto and the trading and/or commercial aspects of the Reports and Accounts and overall operational results of the State-sponsored body referred to in Schedule B hereto and to report thereon to both Houses of the Oireachtas and make recommendations where appropriate.
(2) That, after consultation with the Joint Committee, the Minister for the Public Service with the agreement of the Minister for Finance may include from time to time the names of further State-sponsored bodies engaged in trading or commercial activities in the Schedules and, with the consent of the Joint Committee and the Minister for Finance, may delete from the Schedules the names of any bodies which he considers no longer to be State-sponsored bodies engaged in trading or commercial activities.
(3) That, if so requested by a State-sponsored body, the Joint Committee shall refrain from publishing confidential information regarding the body's activities and plans.
(4) That the Joint Committee shall have power to send for persons, papers and records and, subject to the consent of the Minister for the Public Service, to engage the services of persons with specialist or technical knowledge to assist it for the purpose of particular inquiries.
(5) That the Joint Committee, previous to the commencement of business, shall elect one of its members to be Chairman, who shall have only one vote.
(6) That all questions in the Joint Committee shall be determined by a majority of votes of the members present and voting and in the event of there being an equality of votes the question shall be decided in the negative.
(7) That the Joint Committee shall have power to print and publish from time to time minutes of evidence taken before it together with such related documents as it thinks fit.
(8) That every report which the Joint Committee proposes to make under this Order shall on adoption by the Joint Committee be laid before both Houses of the Oireachtas forthwith whereupon the Joint Committee shall be empowered to print and publish such report together with such related documents as it thinks fit.
(9) That 4 members of the Committee shall form a Quorum of whom at least 1 shall be a member of Dáil Éireann and at least 1 shall be a member of Seanad Éireann.
Schedule A
Aer Lingus, Teoranta
Aerlínte Éireann, Teoranta
Aer Rianta, Teoranta
The Agricultural Credit Corporation Limited
Arramara Teoranta
Bord na Móna
British & Irish Steam Packet Company Limited
Ceimicí, Teoranta
Cómhlucht Siúicre Éireann, Teoranta
Córas Iompair Éireann
Electricity Supply Board
Fóir Teoranta
Industrial Credit Company, Limited
The Irish Gas Board
Irish Life Assurance Company Limited
The Irish National Stud Company, Limited
Irish Shipping Limited
Irish Steel Holdings Limited
Mín Fhéir (1959) Teoranta
National Building Agency Limited
Nítrigin Éireann Teoranta
Óstlanna Iompair Éireann Teoranta
Pigs and Bacon Commission
Radio Telefís Éireann
Voluntary Health Insurance Board
Schedule B
Gaeltarra Éireann."
—(Minister for the Public Service.)
: I should like some idea of the thinking behind this. Is it so that they could produce a report relating to one company rather than an annual report relating to several companies?
: Not necessarily. I think it was related to matters which might be discussed by the committee. Some members of the committee felt that as a regular feature the normal proceedings of the committee should be circulated in the usual form of these reports and it would be an exceptional matter involving a confidential issue where this would not happen.
The reason for the further amendment which is involved in paragraph (8) is that under the previous resolution the committee could publish only documents received by them, but it was felt that it might be necessary on some occasions to publish other documents, for instance, a letter from the committee to a State-sponsored body. Under the previous resolution that could not be done.
: I did not understand the reason for putting in new sections but I presume that this was done at the request of the committee.
: That is so, but if the new committee take a different view they do not have to operate this.
Deputy Barry Desmond, among others, referred to the amount of time of Deputies and Senators which will be taken up by this committee and he was perfectly right in what he said. The work of this committee will be very demanding for those involved. Almost by definition, a number of them, if not all will be Deputies and Senators who are already very busy. This is so particularly in the case of the Opposition. I have some experience of this. Front bench Members who are already very busy in other directions will have to give time to this committee. Nobody should have any illusions about the demands on the time of Deputies.
Deputy Desmond also used the occasion to say something which he has said before. I wish he would not say these things. He criticised some Members of the House for not making a sufficient contribution to the working of the House. It is easy enough to say a thing like this but if one has to go into detail it is not easy to justify it. Deputy Desmond should be one of the slowest people in the House to say this because his own record in regard to attendance and performance at committees is not the best in the House and I do not think he ought to denigrate other Members in that way.
I feel that when this and other committees really get under way the House may have to reconsider its whole attitude to the question of the committee system. We frequently hear references to the value of the committee system and comparisons with what happens in other parliaments, particularly in continental Europe. A fact that is frequently overlooked in this regard is that under the general system of operation in those countries the committees meet when the full House is not meeting and matters are prepared in a preliminary way and finalised in the main House. In this House what happens in practice is that Members who are serving on committees must serve while the business of either or both Houses is going on and this presents considerable physical difficulty in being present in two places and concentrating on the business of the House and the business of the committee at the same time.
I do not think we should glibly comment on the value of the committee system and the fact that this House is not using it because I do not think that the arrangements of the workings of this House are really geared to the committee system. I say that as a general comment, but it is particularly true in relation to this committee, whose work will be very important and demanding. I throw it out merely as a thought which all of us might have to consider and I should not be at all surprised if we were to have in due course suggestions, particularly from Members of the Opposition, in this regard. It is especially hard on them. Members on the Government side cannot, of course, be Ministers of the Government or Ministers of State.
Deputy Woods referred to the role of Comhlucht Siúicre Éireann in regard to the development of agricultural machinery and the possibilities arising out of this. That is perfectly true and Bord na Móna, as was pointed out subsequently, have a particular expertise in this area. Some time ago I asked that the possibility be examined of Comhlucht Siúicre Éireann and Bord na Móna joining together or joining together with private enterprise in this field. I do not care who does it but it is clear that there is an important job to be done, having regard to the amount of imports of agricultural machinery. When I was Minister for Industry and Commerce quite a few years ago I convened a meeting of Comhlucht Siúicre Éireann and various people in the private sector— most, if not all, of whom might be described as distributors rather than manufacturers of agricultural machinery—in an effort to make some impact on this problem. Apparently it was not very successful, judging by current figures. No doubt the committee will, in dealing with these State-sponsored bodies, have some regard to the possibilities involved in this.
Deputy Enright referred to cut-away bogs and I presume he is aware of the fact that An Foras Talúntais, in conjunction with Bord na Móna, have been carrying out detailed research during the past few years on the use to which bogs can be put and we now have a great deal of information on this matter. It is certainly possible to envisage major developments in this regard through Bord na Móna in particular, but perhaps in conjunction with other State companies and possibly in conjunction with private enterprise. The important thing is not who does the work but that it should be done.
: The debate will have to be broader than that because there is a very real problem on which decisions must be made. What is to happen to the cut-away bogs? Are they to be developed by Bord na Móna? Is the turf to be cut down to a level where what is underneath is of no use? If it is to be developed as agricultural land, is this to be done by Bord na Móna or is it to be passed back to the farmers? It is a very important question.
: I agree, but Bord na Móna have now sufficient information available.
: As to the possibility?
: Yes, and to determine the depth beyond which they should not go. The possibilities of development differ depending on the soil in different bogs. Some are suitable for cattle, some for vegetables and some for bulbs. What is clear is that to develop it on an economic scale one has to talk of a huge farm and the question of how it should be operated. It seems to me it cannot be done economically if it is simply handed back to the people who originally had the land. One has to think in terms of co-ops or State companies in conjunction with them. Doing it on a large scale is obviously a key to the development in most of the areas concerned. Of course this is not a matter for the committee to decide but I think they could play a considerable role in teasing out the issues involved with the representatives of the State bodies concerned.
The question of the terms of reference of these State bodies was raised by a number of Deputies. One Deputy went too far when he suggested that there should be no restrictions whatever on State bodies. Obviously that would simply lead to uncontrolled developments of various kinds and to wasteful competition. There must be some kind of order in the areas to be tackled by the State companies but that is not to say—and I should like to stress this— that where the terms of reference of a State company require to be changed they will not be changed. On the contrary, I should like to stress that where there is a case for changing the terms of reference the Government would be more than anxious to change them. Indeed, we may take the initiative in that regard but in this context I am speaking simply about the role of the committee. If it appears to the committee, as a result of their investigations, and if they so recommend in a report that the terms of reference of a State company should be changed in a particular way, the House can be quite sure that the Government will give serious consideration to any such recommendation.
Deputy Enright said it seemed a little strange we were setting up a committee to look into the accounts of companies that are reasonably up-to-date when our own accounts were not up-to-date; apparently he was referring to the Estimates. All I can say to the Deputy in that regard is that there has been as much discussion of Estimates in this Dáil so far as there was in the whole of the previous Dáil. The position may not be satisfactory but it is improving.
Deputy Enright also referred to the level of fees paid to directors of State companies. These are reviewed from time to time but there has never been, and I do not think there will be, a suggestion that the level of these fees should be comparable with fees that may be paid in a private enterprise company of somewhat similar standing as the State company. I believe that most of the people who serve as directors on State boards do so out of a sense of public service. There is prestige attached to it and that does them no great harm, but to think that we could or should set the level of fees at a comparable figure to that paid in the private sector is a mistake. There is no evidence that worth-while people are refusing to serve on State companies because of the level of fees. Having said that, I want to repeat that they are and will be reviewed from time to time but not with a view of arriving at what might be described as the going rate in relation to the private sector.
Deputy Enright and others referred to the question of State companies making a profit. He said that some, if not all, were prohibited from making a profit and in response to a question from me he mentioned the ESB. It may be true that, taking one year with another and allowing for the remuneration of capital, the ESB are not allowed to make a profit over a long period. However, in practice, having regard to the requirement to remunerate capital, of course they make profits.
That brings me to the two other points in this regard. I have never been entirely happy with the concept of an operating profit. It is misleading and it has led to certain difficulties in some areas. I am referring to a set of accounts that show a figure purporting to be a profit made by a State company but which takes no account whatever of remunerating capital. If a State body does not remunerate capital, to speak of that company making a profit and to use that in the context in which one would use it in respect of the private sector is misleading. This matter will have to be looked at.
On the other hand, the point was made by Deputy Enright that the accounts should show in a case such as CIE—there are many other cases but that is the most obvious—a distinction between the results of their commercial operations and the services they provide as a social service. That is a concept with which I am in full agreement. I think the argument was being made on the grounds that to represent what is a social service as a loss is very bad for the morale of those working in a State company and there is substance in that argument. However, there is another side to the argument, namely, that because of this arrangement some activities that are said to be commercial activities making a profit are, in fact, being run at a loss but the loss is covered up in the total figure, the bulk of it being a loss as reported but being due to the provision of a social service. It can work both ways.
It is in the interests of all concerned, those engaged in the undertaking, the general public who may be in receipt of the services or paying for them and the taxpayer, that we should know what is involved. In fact, the first speech I made in this House advocated that course, but we have not yet done it. I know there are many difficulties involved in determining with any degree of accuracy what is correctly attributable to the social service and what is correctly attributable to the commercial operations. Nevertheless it would be well worth while to make the effort to establish these criteria. If the deliberations of the committee can help in arriving at generally acceptable criteria to make that distinction, even if they did nothing else they would have done a very good job by doing that.
The question of examination of policy was raised. I should like to make it clear that there is no change in this motion from the one passed by the previous Dáil so far as policy is concerned. I do not want to do an injustice to my predecessor by paraphrasing his words. I hope I am not paraphrasing them inaccurately, but I think it is fair to say that he argued that the portion of paragraph (1) of the resolution, which refers to the overall operational results, extended the terms of reference very substantially into the policy area. My view is that it would be desirable that the committee should be able to ascertain what is the policy of a particular State company in relation to a particular activity they are engaged in, what is the policy direction that they deem themselves to be operating under, whether given by the current Minister or by some predecessor of his. I am not quite sure, to be frank with the House, that the terms of reference here will allow that. I believe it was argued on the last occasion that it would. As I have already indicated, my attitude and that of the Government to this is that those terms of reference have not had an opportunity of being tried out because of the course of events, that we should give them an opportunity to work and that we will be prepared to change them if experience shows that this is necessary.
It seemed to me, from something Deputy Enright said, that he may be under a misapprehension in regard to the role of the committee. I would like to make it clear that the committee cannot formulate policy for State-sponsored bodies. That is the responsibility of the Government and of the particular Minister concerned. The committee should be able, in my view, to ascertain what is the existing policy of State-sponsored bodies and to recommend changes in policy if the committee are of the opinion that that should be done.
I agree with what Deputy Callanan said: that, if the committee issue reports, for instance, recommending a change in policy and if nothing happens, that it is open of course to Deputies to ask parliamentary questions. There are other steps open to Deputies to highlight the failure, if that is the case, of the Government to make the changes in policy recommended. If the Government decide that they should not accept the recommendations they will have to explain why. It is not true to say that the committee can merely make recommendations and that is the end of the matter. Deputy Callanan was quite right in saying that there are plenty of opportunities for the committee and the members of the committee individually to take action to ensure that those matters are brought out into the open and argued out where necessary.
A few Deputies commented on the absence from the list of Bord Fáilte and wanted to know why they were omitted. The reason is quite simple. As I said, this motion is, subject to the minor technical changes I mentioned at the outset, precisely the same as the one passed by the previous Dáil. On that occasion, my predecessor argued that this committee should relate only to the commercial activities of State companies. Bord Fáilte do not engage in commercial activities. Similarly, Córas Tráchtála, who do not engage in commercial activities, are not in this list either. It may well be, as I said on the last occasion, that one could argue that there is an even stronger case for a committee such as this to deal with the non-commercial activities, but certainly this committee could not take on the job of dealing with the commercial and non-commercial bodies. We would need another committee, and maybe even two more committees, to do that. The door is not closed on that. It is obvious that we have to get this committee working, see how it works and then consider, if necessary, an extension of this kind of activity, having regard all the time to what I said earlier about the physical difficulty of operating the committee system in this House in the way we operate at present at any rate.
Deputy Horgan wanted a commitment that, if any State body abused their power to ask that matters would not be published, we would do something about changing the relative part of this motion. The Deputy rightly said that there is no evidence that any State body would abuse their position. If there were evidence of this, as far as I am concerned, the question of changing the terms of reference would have to be considered. Deputy Barry will remember that I said there are a number of things in this motion with which I am not fully satisfied but I wanted to let it work and see how it goes. I said I would mention some of these and this is one of them. I am inclined to the view which I expressed on the last occasion that the decision on whether a matter should be published rests with the committee. If we are prepared to give to the committee the very serious responsibilities we are giving here, we should be prepared to trust their discretion in a matter such as this. I am inclined to the view that where a State company request that for reasons of preserving necessary confidentiality certain information should not be published the committee should decide yes or no in response to that request.
That is not what is in the motion at the moment. It is the same as it was before and where the request is made by a State company the committee must abide by it. All we can do in that regard is to see how it works. If there is any evidence of abuse I assure Deputy Horgan and the House generally that we will want to remedy that matter.
Deputy Horgan also referred to my attitude when I was a member of the committee to the question of the provision of staff being a frugal one. I know what he means. At least it cannot be said that my attitude was dictated by my being in the Minister's seat. I was in Opposition at that time and I thought that a mistake was being made in regard to certain approaches in relation to the provision of the staff for this committee. In case there is any misunderstanding I would like to make it clear what I have in mind. The administrative staff of this committee does not have to be very large. I also think, if it is to be effective, that what we might call the specialist staff may well have to be more substantial. Deputy O'Brien touched on this when he spoke about the necessity to adjust the staff to the requirements of the committee. He did not spell out if this is what he had in mind, but I visualise that there would be specialist staff engaged on perhaps short-term contracts for particular jobs that have to be done.
The committee should have the flexibility to do this. It could be that, on certain occasions, the committee would have a number of specialist staff working for them on a short-term basis. On other occasions they might have none, or one. It would relate to whatever the particular work was that the committee were doing. It is important the committee have this flexibility and that they should not rely on a permanent, administrative staff being built up because, if that happened, they would not be able to do the kind of job we want them to do. It was basically that attitude I was expressing, as a member of the committee, which Deputy Horgan described as frugal. There is a little more to it than frugality. I would hope the members of the new committee would view their approach to the staffing problem in that light.
There is one other issue to which I want to refer. It was referred to by Deputy P. Barry and some others in the course of the discussion. I think it was Deputy P. Barry who asked why, when introducing this resolution, I did not refer to the salaries of chief executives or the controversy which has arisen in that regard. The reason I did not was that it seemed to me it would not be relevant having regard to the terms of the motion. However, since it has been raised, there are a few things I want to say about it. There may have been some misunderstanding judging by what was said in the House in regard to the fixing of the level of salary of the chief executives in particular the chief executive of the Agricultural Credit Corporation referred to. I should like to make it clear that I do not fix the level of salary of chief executives. What is involved here is having an orderly method by which this can be done. That is something with which I am concerned. Basically the method by which it is done at present is that the Devlin Group recommendation, which was made in 1972, acts as the basic salary and, from that date on, successive national agreements were applied to the basic salaries.
It is important to understand that the Devlin recommendation was made by people broadly representative of society. It contained a representative of business, on the one hand, agriculture, on the other, and two members of the Labour Court. If anybody can suggest a better method by which we can do this I shall be very interested to hear his suggestions. I have said publicly, and I will say again, that I am fully aware that the Devlin Group recommended that there should be a review carried out of their recommendations every four years. That meant there should have been a review in 1976. Of course, such review would take account of substantial changes in the volume of work and responsibilities of chief executives in the intervening four years; in some cases they would have increased; in others they might have been reduced. I understand that the review which should have taken place in 1976 did not take place because the Government at that time took the view that, having regard to the economic situation and the incomes scene—if I might put it that way—it would be inappropriate. I am not commenting on that decision. I am merely trying to establish factually what happened. The result of that is that the review which should have taken place in 1976 did not, is now considerably overdue and anomalies, if I may call them that which may have arisen, have been exacerbated as a result of that delay.
It seemed to me that some Deputies suggested that we should not be trying to devise some method of assessing independently the salaries of chief executives, that the matter should be left to the boards of State-sponsored companies who are charged with the responsibility of directing their activities. It is true that one of the matters with which any board would be concerned would be the level of remuneration of their chief executive. However, I suggest that that is to take too narrow a view of the situation. It is inevitable that the board of a particular company will have what I might describe as tunnel vision in relation to their activities and the role of their chief executive. I do not fault them for this; it is inevitable and would happen to any one of us in that position. But whatever argument there may be on that ground, which might be regarded as theoretical, what is not theoretical is that we have had experience of this situation in the sixties and we know what happened. What happened was something that led directly to enormous difficulty on the incomes front, not merely affecting the chief executives but right across the board in the public sector and ultimately, in the private sector. That is the reality of the situation. It may not be very satisfactory that it should be so but it is so. Faced with that situation we have to decide whether we will revert to the situation of the sixties or try to have an orderly and independent method of determining the appropriate level of remuneration of chief executives.
The previous Fianna Fáil Government, the Coalition Government and the present Fianna Fáil Government all have taken the view that we simply cannot afford to revert to the situation that obtained in the sixties and that we must have some orderly method of determining the appropriate level of remuneration of chief executives of State companies. If somebody can suggest a better method of determining the appropriate level of remuneration of chief executives of State bodies than the one we have used I will be very glad to hear of any such suggestion. But I cannot accept the proposition that we should not try to determine it and that we should simply, in effect, go for a free-for-all and revert to the situation of the sixties.
There is one other matter I want to mention in this regard because it is an argument which has been used by Deputies in this debate and outside and it is that it is said that these companies, particularly, when they are engaged in commercial activities, are in competition with private enterprise and that unless we pay their chief executives a comparable salary—that is, comparable to what they would obtain in the private sector—we will lose the undoubted expertise we have in a number of State companies. In any individual case it is absolutely impossible for the State to compete on the level of salaries with the private sector.
The reason for this is that, whether they like it or not, State companies are part of the public sector. The level of remuneration paid in State companies affects the whole public sector and so any private sector company, particularly those in any big way of business, can always outbid the State from the point of view of what the State can pay without undue consequences through the whole public sector and, in consequence, it spreads into the private sector. A classic example of what happens here is the situation with which the Revenue Commissioners have had to live for many years. When inspectors of taxes are fully trained many of them are enticed into the private sector, to firms of accountants particularly, and are paid far more than they would earn with the Revenue Commissioners. They are, of course, invaluable to many of these firms and the firms can afford to pay them the kind of money they do because they more than earn their keep. That is unfortunate and it leads to all sorts of difficulties, but it is a fact we have to live with. The same has always been true of CTT. They recognise, that having trained people, it is inevitable that many of them will be taken on by the private sector and paid considerably more than they would earn in CTT. Maybe it is a form of rationalising the situation. I know CTT have always regarded this as a contribution it was making to Irish industry in that it was providing a training ground for people who could make a valuable contribution in the private sector.
I would pose this question : what evidence is there that we have lost people from the public sector to the private sector—I am speaking now specifically of chief executives of State companies—and have been unable to replace them with people of the level of expertise and knowledge required for the job? There may be an example of it but I am not aware of it and it is not enough to assert that this will happen, or has been happening, if one does not produce evidence of it. Even if there were evidence, unless it were overwhelming. I do not think it would invalidate the general proposition I have put forward. I would suggest there is no such evidence and consequently the argument is based on a fallacy.
One final point arising out of that Deputy Barry objected to my having given a warning to boards of State companies in this context. I want to assure Deputy Barry that the attention of the boards of State companies was drawn to the Government attitude and guidelines in this matter and in the case of some boards— cannot be certain if it true of all— their attention was drawn also to statement I made in this House sometime ago with regard to the possibility of paying people at second or third level higher than the chiefexecutive with a view to pressurising the Minister concerned into breaking the guidelines. There was no board of a State company unaware of the Government guidelines. What I said was in the context of a question put to me: If there is a breach will the Minister take action? I would suggest that Deputy Barry could not deny from his experience as a Minister that in such circumstances there is only one answer possible if we mean anything at all by the guidelines or if we mean to make any effort at some kind of overall control in relation to incomes, a control vitally important to our whole economy, and so I would suggest that, as far as I am concerned, I have no choice in this matter. I repeat if anybody has a better suggestion I will be very glad to hear it, and I will be glad to hear it soon, because in the absence of a better suggestion we will be proceeding almost certainly in the near future with a further review by the Devlin group. If there is a better suggestion, I would like to hear soon but, in the absence of a better suggestion, we must proceed as we have done in the past, as our predecessors proceeded.
This motion has been generally acceptable to all Members who spoke and I thank them for their contributions.
Question put and agreed to.