Amendments Nos. 1 and 2 cannot be moved as they are out of order.
ACC Bank Bill, 2001: Report and Final Stages.
Amendments Nos. 1 and 2 not moved.
On amendments Nos. 1 and 2, I ask that this section be recommitted under Standing Order 120 so that we can discuss it.
Amendments Nos. 1 and 2 have been disallowed so they are not before the House.
I ask that sections 4 and 5 be recommitted for discussion under Standing Order 120.
Is the recommittal of the sections to Committee Stage opposed?
I understood that these amendments were ruled out of order on Committee Stage.
They are not before the House. What is before the House now is a proposal from Deputy McGrath to recommit sections 4 and 5 so that they can be discussed as if they were in committee.
For what purpose?
By way of clarification for the Minister, we are saying that any money that arises from the sale of ACC Bank will not go into Exchequer funding but rather will go into the pension fund. I am at a loss to know how that is a cost to the Exchequer because the budget has been set for 2001. There are no moneys included from the sale of ACC Bank. In any future sale of ACC Bank the Minister would have to decide what to do with it so the Minister cannot say that this is a cost to the Exchequer this year.
I am not saying that. The amendments have been ruled out of order. There is nothing we can do about it.
We should not proceed with a discussion unless there is agreement on the proposal to recommit sections 4 and 5.
I understand what the Deputy is saying. I will respond to it but I do not intend to spend the morning talking about something we have already discussed. I will take a brief recom mittal, if that is in order, but it is up to you, a Cheann Comhairle. I will accept that we can have a brief discussion on it.
If the House agrees to recommit sections 4 and 5, there will be a Committee Stage debate on those sections.
I cannot agree to that. I have gone through this matter at length on Second and Committee Stages and there is nothing further to say on it. The question the Deputy is posing is in respect of the funding which goes to the Exchequer, and the Exchequer will decide where the funding is allocated.
That is not good enough from our point of view. We believe this money should be ring-fenced and invested in the pension fund – the only way to ensure this will happen is to make provision for it in the legislation – otherwise it will be used for day to day purposes. I intend to press this matter to a vote.
Question put: "That the Bill be recommitted in respect of sections 4 and 5."
Tá
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Allen, Bernard.Barnes, Monica.Bell, Michael.Bradford, Paul.Broughan, Thomas P.Bruton, Richard.Burke, Liam.Carey, Donal.Clune, Deirdre.Cosgrave, Michael.Crawford, Seymour.Creed, Michael.Currie, Austin.Deenihan, Jimmy.Durkan, Bernard.Enright, Thomas.Farrelly, John.Finucane, Michael.Fitzgerald, Frances.Flanagan, Charles.Gilmore, Éamon.Gormley, John.Gregory, Tony.Hayes, Brian.Healy, Seamus.Higgins, Jim.Higgins, Joe.Higgins, Michael. |
Hogan, Philip.Howlin, Brendan.McDowell, Derek.McGahon, Brendan.McGinley, Dinny.McGrath, Paul.McManus, Liz.Mitchell, Gay.Mitchell, Jim.Mitchell, Olivia.Moynihan-Cronin, Breeda.Naughten, Denis.Neville, Dan.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Owen, Nora.Perry, John.Rabbitte, Pat.Reynolds, Gerard.Ring, Michael.Ryan, Seán.Sargent, Trevor.Shatter, Alan.Shortall, Róisín.Stagg, Emmet.Upton, Mary.Wall, Jack. |
Níl
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Ahern, Bertie.Ahern, Dermot.Ahern, Michael.Ahern, Noel.Andrews, David.Ardagh, Seán.Blaney, Harry.Brady, Johnny.Brady, Martin.Brennan, Matt.Brennan, Séamus.Briscoe, Ben.Browne, John (Wexford). |
Byrne, Hugh.Carey, Pat.Collins, Michael.Cooper-Flynn, Beverley.Coughlan, Mary.Cullen, Martin.Daly, Brendan.Dempsey, Noel.Dennehy, John.Doherty, Seán.Ellis, John.Fleming, Seán. Flood, Chris. |
Níl–continued
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Foley, Denis.Fox, Mildred.Hanafin, Mary.Harney, Mary.Haughey, Seán.Healy-Rae, Jackie.Keaveney, Cecilia.Kelleher, Billy.Kenneally, Brendan.Killeen, Tony.Kirk, Séamus.Kitt, Michael P.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McCreevy, Charlie.McGennis, Marian.McGuinness, John J.Martin, Micheál. |
Moffatt, Thomas.Molloy, Robert.Moloney, John.Moynihan, Donal.Moynihan, Michael.Ó Cuív, Éamon.O'Donnell, Liz.O'Flynn, Noel.O'Hanlon, Rory.O'Keeffe, Ned.O'Kennedy, Michael.Power, Seán.Roche, Dick.Treacy, Noel.Wade, Eddie.Wallace, Dan.Wallace, Mary.Walsh, Joe.Wright, G. V. |
Tellers: Tá, Deputies Bradford and Stagg; Níl, Deputies S. Brennan and Power.
Question declared lost.
As regards ruling amendments out of order because they would be a potential charge on the Exchequer, perhaps the Ceann Comhairle's office could look at the ease with which amendments are ruled out of order.
Ruling amendments out of order is a well travelled area.
Since they are not included in any budget, it could not possibly be said they are a charge on the Exchequer.
The discussion has been pulverised from time to time. We move on to amendment No. 3.
I move amendment No. 3:
In page 6, lines 11 to 13, to delete all words from and including "the" in line 11 down to and including "Oireachtas" in line 13 and substitute "ACC shares equal in value to 110 per cent of the value of the amount remaining outstanding shall be issued to the Minister".
We hope to sell ACC Bank to a potential customer. All of us in this House would like to see the day when a potential customer would pay £200 million or the expected amount for this valuable asset. There is a possibility the Government, the taxpayer and the Exchequer will have to carry the can for any outstanding debts. We are anxious to tie that down as far as possible. This amendment seeks to ensure that the taxpayer's exposure is minimised in that regard.
The existing State guarantees cannot be unilaterally withdrawn by legislation or by the repeal of the legislation under which they were given. The purpose of section 6, therefore, is to make provision for the continuation of existing State guarantees issued by the Minister under section 14 of the Agricultural Credit Act, 1978, after the bank is sold, to stipulate the circumstances under which they cease to apply, to require the company to repay the Minister any sums expended by him in honouring the guarantee and to provide that any such sums not paid back to the Minister are contract debts recoverable in any court of competent jurisdiction. Section 6 will only be commenced when the bank is sold and it will be a condition of the sale that the purchaser will provide the Minister with an acceptable counter-indemnity. The exposure is nil in terms of the guarantee in that a full counter-indemnity would be in place in respect of all State guarantees in force on the day of the sale of the bank. The interests of the Minister are therefore protected by both the legislation and the counter-indemnity. This is the regime that applied in the sale of ICC Bank where the legislation and state guarantees are identical, and Bank of Scotland provided the Minister with a counter-indemnity in respect of the outstanding guarantees provided for in the legislation. There is no sound basis for the Deputy's proposal as it is more than adequately covered.
Amendment, by leave, withdrawn.
I move amendment No. 4:
In page 6, line 24, to delete "unsecured" and substitute "secured".
This amendment is centred on the exposure of the Exchequer to possible costs they may incur after ACC is purchased. By substituting "secured" for "unsecured", that possible exposure is lessened. The Minister says this is built into the legislation and that the exposure will be underwritten by the purchaser, but it is possible that the purchaser may go into liquidation. What would happen then? A bank such as the Bank of Scotland is reputable but it is not unknown for major institutions to go under. If the purchasers of the ACC went under, is the Exchequer exposed to further liabilities? The liability could be potentially enormous if all debts are unsecured. This amendment is aimed at a situation where the purchasers are unable to continue. It is best if debts are controlled as secured rather than unsecured debts.
The amendment proposed by Deputy Jim Mitchell and introduced by Deputy McGrath seeks to upgrade the status of debts owed to the Minister in a winding up of ACC Bank which would arise from the payment of moneys in respect of funds under State guarantees. The status of these debts would be raised from unsecured to secured. Under section 14(3) of the Agricultural Credit Act, 1978, the Minister may require ACC Bank to give such security as he may specify in relation to a guarantee. Most such securities have been sought in relation to guarantees given by the Minister. Therefore, the effect of the proposed amendment would be to put the Minister into a preferential position vis à vis unsecured creditors and to improve his position in relation to secured creditors, including secured creditors already in place before the commencement of this section.
It would not be appropriate to retrospectively alter the priority of debtors in this way. In any event, it will be a condition of the sale of ACC Bank that the purchaser provide the Minister with a counter-indemnity in respect of the outstanding funds guaranteed by the State under section 6, which will only be commenced following the sale of the bank. This was the position in the case of ICC Bank. Consequently, the Minister would be paid by the new owner of ACC Bank in respect of guarantees he was required to honour.
We do not know who may purchase ACC Bank. The Deputy infers that perhaps the purchaser may go under. If there was any question mark over the institution, or if it was a small institution, the Department might have concerns about it. They would then have to get a third party indemnity which would be satisfactory to complete the sale process. There is no doubt, from the Minister's and the Government's point of view, with regard to the State guarantees and their security.
Amendment, by leave, withdrawn.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
I thank Deputies for their contribution to the Bill and for their assistance in bringing the Bill through the House. It was a most interesting and helpful debate. I also thank the officials for their efforts on my behalf and on behalf of the Government.
I too welcome the fact that the ACC Bank Bill, 2001, will now pass. I hope that it will facilitate the easy sale of ACC Bank to some body that might bring it forward into the next generation, and improve the services delivered by it. It is a valuable asset and I hope a potential suitor will be found soon.
I am conscious of the amount of work undertaken, in the Department of Finance in particular, over recent years in an effort to clear the decks of the State banks. Two of the three targets have now been achieved. I hope the officials and the Minister will give ACC Bank time to get its act sufficiently in order, so as to realise good value for the State.
Question put and agreed to.