Seanad Éireann díospóireacht -
Thursday, 19 Jul 1990

Vol. 126 No. 5

Insurance Bill, 1990: Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Foreign Affairs (Mr. Calleary)

The primary purpose of the Bill is to enable the restructuring of Irish Life Assurance plc to take place and to empower the Minister for Finance to become and act as a shareholder in the successor holding company. The Bill is necessary to give effect to the Government's decision that Irish Life should be restructured into an Irish-based international financial services company in the insurance field and that there should be a reduction in the State holding in the company. The Bill does not provide for the carrying out of the restructuring. The mechanics of this process are already provided for in company and insurance law.

The Minister for Industry and Commerce has a general responsibility for insurance matters. In the normal course one would expect that an insurance Bill would be introduced by him. However, given the nature and purpose of the Bill, it is more appropriate that the Minister for Finance should do so. The Minister for Industry and Commerce of course, will have an important role to play in the process, because of his functions as supervisor of the insurance industry.

The proposed restructuring envisages the creation of a holding company for Irish Life, which I shall refer to as Holdco. The Minister, and the other shareholders in Irish Life, will exchange their shares in Irish Life for an equivalent holding in Holdco. Holdco, as the new owners of Irish Life, will arrange for the transfer of the business of Irish Life to a new operating company "Newco". There will be provisions in the articles of association of both new companies allowing for a more realistic dividend payment to shareholders. This will enable Holdco to raise additional capital for the expansion and extension of their group business.

The transfer of business from Irish Life to Newco will require the approval of the courts in Ireland and the United Kingdom under the Assurance Companies Act, 1909. The courts will be presented with a detailed scheme for the transfer of the business, which will be drawn up by the actuary of Irish Life and reported on by an independent actuary. The purpose of this scheme is to establish that the rights of existing policyholders are not diminished under the transfer. The insurance regulatory authorities in the United Kingdom and Ireland must also be consulted beforehand. Details of the scheme will be made available to policyholders. The whole process will be open and all relevant interests will be consulted.

Much of the focus of the debate on this Bill, however, concerns the role of the State as the shareholder. The origins of the company and its current position are, of course, important when considering the future of the State holding. The present ownership structure of Irish Life arises from the insolvency of several small life companies in the 1930s. Those companies came together by agreement and in 1938 the Minister for Finance, on behalf of the Government, contributed £1 million to making good the deficit in the funds. The Minister acquired a substantial minority interest in the resultant company. In 1947 he bought out the other UK shareholders in the company and acquired his controlling interest. The State now holds 90.25 per cent of the shares in the company, and the remainder is held by Irish Life's own staff pension fund 5 per cent and a variety of private shareholders.

The obvious implication from the history of the company is that majority ownership of the company did not come about as a result of a policy decision to nationalise life assurance in the State. It is necessary to say this as we must approach this matter on a practical and pragmatic basis and not on the ideological grounds of the benefits or otherwise of State ownership.

Despite the State's majority holding, Irish Life has been run with the minimum of State involvement. The company has operated in the same way as other life assurance companies. Apart from the initial capital injection in 1938, the company has never received State funding or subsidies, nor has the State provided a guarantee in respect of policyholders' funds.

Irish Life has grown at a very rapid rate in the past 20 years, and is now the main life assurance company in the State with almost 40 per cent of the market. The company has also extended into the UK and US markets, and is actively examining other opportunities for expansion. The premium income of Irish Life in 1989 was £598 million, 83 per cent of this arose from business in the State, 13 per cent from the UK and 4 per cent from the USA. Assets were £4.6 billion of which 30 per cent were invested in gilts and other securities, 41 per cent in equities, 10 per cent in property and 14 per cent in cash and deposits. There were 1,914 employees of the ILAC group, 1,612 in Ireland, 205 in the UK and 97 in the USA. The corresponding figure in 1988 was 1,853. The company's investment income in 1989 was £207 million and its investment reserve £528 million. Both investment income and reserves grew substantially in 1989 by 23 per cent and 40 per cent, respectively.

The future security of policyholders' funds will continue to depend on the company's ability to invest those funds profitably, and its ability to maintain a satisfactory level of reserves in excess of its statutory solvency margin. These solvency requirements are applicable to all life assurance companies and are prescribed by regulations based on EC directives. Irish Life looks to its own reserves to meet the solvency rules.

To date, Irish Life has managed to finance its expansion from its own resources. However, the company cannot continue to rely indefinitely on this mechanism for future expansion and development. The exploitation of new markets takes careful planning and considerable financial commitment. When a company proposes to establish a new business or subsidiary it must have sufficient resources to cushion its liability to its present and future policyholders and to establish a new entity on a similar prudential basis. These resources have to come from somewhere other than policyholders. The obvious sources are investors and retained profits. If the company is to undertake this expansion it must be secure in the knowledge that it can raise the capital necessary when required.

At present, there is a major impediment to the raising of share capital by the company. Under the current corporate arrangements, profits are largely locked in and cannot be distributed to shareholders. The removal of this inhibition is, therefore, critical to the expansion and development of the company. The options in this regard were considered by the company and proposals were put forward by Irish Life for restructuring which would make it more attractive for investors to provide additional capital. These proposals also allowed for the sale at a realistic price of part of the State's shareholding. In July 1988 the Government agreed that Irish Life should be restructured to enable it to develop into an Irish based international financial services firm. It was also decided to appoint consultants to examine the proposals for restructuring put forward by the company. The consultants were asked to examine the options for the State's shareholding after restructuring.

The consultants carried out a detailed examination of the operations of Irish Life, the strategic options available to it, and the restructuring scheme put forward by the company. They found that Irish Life is competing across a broad range of financial markets with a variety of major insurance and other financial companies. Many of its competitors have access to very substantial resources throughout the entire range of debt and equity markets, either directly or through their parent companies. The consultants found that Irish Life's capacity to compete effectively in various markets is restricted by its present capital structure and State ownership. Access to equity markets for new capital would be a key element in any viable competitive strategy. They agreed that the scheme put forward by Irish Life offered the best practical solution to this problem.

The consultants also examined a range of options for the future of the State holding in the company. It was clear from this examination that the optimum benefit to the company and the State under the proposed restructuring would accrue if there was a reduction in the State shareholding in the company. A number of options for the sale of that shareholding were considered. The State's broader strategic interests, arising from the importance of the company as an employer, investor and repository of savings were taken fully into account.

The Government considered the consultants' reports. The main union representing the staff of Irish Life and the Irish Congress of Trade Unions set forth their views and concerns, particularly as regards employment. The Government listened carefully to these and the chairman and the managing director of the company gave clear assurances on employment. Irish Life has consistently expanded its workforce in the past ten years and there is every reason to believe that with restructuring it can continue to do so.

Having examined the options for the development of the company, the Government announced last March that it had decided that the restructuring should proceed and that the State's holding should be reduced from 90 per cent to 34 per cent through a sale involving a public flotation of the company's shares. This will mean that the State will no longer have majority holding, but will retain a substantial shareholder interest in the development of the company. This holding will be maintained for the foreseeable future but it will always be open to the Government to consider the size of its holding from time to time in the interests of the company and the wider public interest generally.

The decision to reduce the State holding represents a fundamental change in the status of the company. From a general viewpoint, there is no overriding reason that the State should own a life assurance company. The arguments which are normally used to justify State involvement — i.e. the existence of a natural monopoly, the absence of potential private investment capital, and overriding social and strategic interests — do not apply in this case.

The returns which the State has earned by way of dividends from the company are very small — £440,000 in 1989 and £2 million in all in the last five years. A sale of the Minister's shareholding following a capital restructuring will yield a significant sum which can be used in an appropriate way to help ease the burden of the national debt and, therefore, of debt servicing costs. Furthermore, the retention of even a small share of the restructured company can be expected to yield an annual return in dividends which will easily exceed those received from the 90 per cent holding in the present company. There has been much talk about the benefit to the State of its 90 per cent holding. The plain facts are that the financial return has been small and that the capacity to expand the dividend yield under present structures is very limited indeed. Disposal of part of the Minister's shareholding and the consequential freeing of the company to raise aditional private sector share capital will provide the Irish public with an opportunity to invest directly in a successful Irish company.

The Government acknowledge the importance of Irish Life and the investments it controls. It is essential that Irish Life should retain its Irish character and its local base. To maintain this and to avoid unwelcome takeover of the company, provisions will be included in the memorandum and articles of the new holding company to limit the percentage of shares to be held by any one private shareholder, or consortium of shareholders, to not more than 15 per cent of the total share capital.

A special share will be held by the Minister for Finance to enforce this limitation. The arrangement is of indefinite duration but will continue in place for at least five years after flotation. The company are in favour of this arrangement which I believe will be generally welcomed. This special, or golden, share arrangement will reinforce the interest being retained through the 34 per cent holding. As Senators will know, such special shares are a common feature of sales of State assets in other countries and do not breach EC obligations. We can go into this further during the debate on the Bill.

The Government's decision in relation to Irish Life is a balanced and reasoned response to the needs of the company. We must build on the strengths of the successful firms in this country in developing the economy. The plans now being made by Irish Life will not only protect the company's position and that of their staff, but will lay the foundations of continued success and expansion. We will need to rely on the skills and expertise of companies such as Irish Life to ensure that the fullest advantage can be taken of 1992 and the opening up of financial markets in the Community.

I am very conscious that a considerable part of Irish Life's success to date has been due to the efforts of their staff. In recognition of this, the question of employee share participation in the flotation will be carefully examined. I know that Senators will welcome such a development.

Hopefully, 1991 will see Irish Life successfully launched on this new and dynamic phase of their commercial life. It is also hoped that the flotation will yield a significant return to the Exchequer. It would be inappropriate to speculate on the value that will be realised. The value of the shares will be ultimately determined by the market conditions at the time of flotation. Advice has, of course, been taken on the likely value of the State holding but I know that the House will appreciate the difficulty in any discussion of avoiding financial speculation on this issue. One must, of necessity, be unusually reticent in this matter and I ask Senators to bear with me in this.

I now turn to the particular provisions of the Bill. While the essential element of the Bill is to enable the Minister to acquire shares in Holdco, the opportunity is also being taken to clarify certain other matters of direct bearing on the restructuring of the company.

Section 1 is the usual definitions section. In case there is concern over the names of Holdco and Newco, which I have referred to earlier, let me be clear that there is nothing in this Bill to prevent more appropriate titles being used in the actual business names of the Holding Company or the New Company. I have no doubt that there will be a desire to use the name "Irish Life" which is a valuable asset in itself.

Section 2 allows the Minister to exchange his shares in Irish Life for shares in the new holding company and to acquire by purchase, capitalisation, issue or otherwise any further share or shares in the holding company. The Minister may hold the shares or dispose of these by sale, exchange or otherwise as he sees fit. If it is necessary to acquire shares at any stage the moneys will be advanced out of the Central Fund. Any dividends and other moneys and the proceeds of the sale of shares of the holding company must be paid into or disposed of for the benefit of the Exchequer.

Section 3 provides that the Minister may exercise all the rights attaching to his shares in the holding company including, where applicable, the exercise of those rights by attorney or proxy. The section also provides for the renunciation by the Minister of the rights of ordinary shares of the company to enable the flotation of the shares by this means, if desirable.

Section 4 deals with the allotment of shares and empowers the Minister to appoint nominees and to transfer shares to such nominees to act on his behalf. The section sets out the rights and duties of nominees and the power of the Minister to issue directions.

Sections 5 to 8 deal with matters arising from the transfer of Irish Life's business to their new sister company, Newco. The overall purpose of the sections is to ensure a smooth transition from one operating company to another once the insurance business is transferred by the court order. The new company must be able to continue the normal day-to-day operations of Irish Life without interruption.

Section 5 provides that the court order requiring or approving the transfer of property from Irish Life to Newco or any deed or agreement made under that order need not be registered under the Acts relating to the registration of deeds or title or under the Companies Acts. This will remove the need for the title to properties to be re-registered individually.

Section 6 provides that every person who was an employee of Irish Life immediately before the date of transfer of the business from Irish Life to Newco will become an employee of Newco on the same terms and conditions. The section also provides for the transfer of pension and superannuation rights and gives effect to certain changes in pension schemes introduced by Irish Life in 1979 as if those changes had been registered at the time under the Perpetual Funds (Registration) Act, 1933. Existing pensioners of Irish Life will transfer to the new scheme in Newco without any loss of benefits or rights.

Section 7 permits the new company to act in place of Irish Life as trustee, or in any other fiduciary capacity, in regard to any trust, settlement, covenant or agreement that empowers Irish Life Assurance plc to do so.

Section 8 grants relief from stamp duty on any agreement, transfer, conveyance, assignment or lease whereby the business is transferred to Newco and provides that stamp duty shall not be charged on the vesting of property in Newco by order of the court. This relief is a common feature of group reconstructions.

Section 9 is new and is of general application to life assurance companies. It will enable a life assurer to hold up to 10 per cent of the shares of their parent company on behalf of their policyholders, provided that the shares in question are listed on a recognised stock exchange. The Minister for Industry and Commerce may vary the percentage by order, and impose prudential requirements on life assurers covered by this section. The exercise of this power will also be subject to certain rules which will apply to companies generally by virtue of proposals in the Companies Bill.

Section 10 provides for the repeal by order of the Insurance Acts dealing with Irish Life Assurance plc. Once the restructuring is completed, Irish Life will be wound up and these Acts will no longer be applicable. Given that the full restructuring can only be put into effect after court approval, the repeals will take place on such dates and to such extent as may be specified in the orders.

Section 11 deals with the laying of orders before the Houses of the Oireachtas. The orders will come into effect immediately but may be annulled by either House within 21 sitting days.

Section 12 contains the usual citation and commencement provisions. The Act will come into operation on such day or days to be fixed by order of the Minister.

I know that the House will be eager to act in the best interest of the company and pass this legislation. I would hope that we could approach this important matter from a practical viewpoint. There are ideological differences in the approach to the role of the State, but what is more important is the future of Irish Life. I have taken some time to explain the background and need for the changes being proposed and I hope that Senators give this Bill a favourable reception.

Mr. Staunton

A Chathaoirligh, I welcome the opportunity to address this issue this morning on behalf of the Fine Gael Party. It is a very pleasant task addressing myself to positive and non contentious legislation in contrast to the debacle we had yesterday on another issue. My party have no problem whatever with this proposed legislation in relation to Irish Life, indeed what we are putting to bed today has been signalled for two, three or four years.

In the last general election, for example, we in Fine Gael had a specific policy document entitled Election '89, Putting The Country First and under a section on institutional reform we outlined our attitude as a party to sales of shares in semi-State bodies and I would like, a Chathaoirligh, to let you know briefly the view we expressed then and how it relates positively to what is being proposed here today. I quote:

Fine Gael believes that the sale of shares in semi-State bodies would be beneficial once proper groundwork for such a move has been laid. It could be beneficial in the following ways:

It can strengthen the capital base of the company, thereby facilitating investment and expansion.

It can involve employees directly in the success of the company through share ownership——

I understand from the Minister that this is part of the plan for Irish Life.

It can sharpen the commercial management of the company.

It can open up the opportunity of joint ventures in new commercial fields.

The document referred specifically to Irish Life and the advantages to the company of the legislation.

Other signals were also given. For example on 1 March 1988 in the Dáil the Fine Gael spokesman on Finance, Deputy Michael Noonan, put down a Private Members' motion which called on the Government to make an early decision to privatise Irish Life plc. This issue has been discussed in some detail by the Oireachtas Joint Committee on State-Sponsored Bodies. They reached a consensus on the steps now being taken by the Government and recommended that they should make an early decision on restructuring the capital base of Irish Life in a manner which would effectively lead to privatisation. Because of the consensus on this Bill I will not speak at any great length on it. It is enabling legislation and I should like to comment on the philosophical background to it.

I should first like to compliment Irish Life on their success. This company was started accidentally as a result of the collapse of some insurance companies around 1938. The Government made a pragmatic decision at that time that they had no alternative but to get involved in the insurance business. Irish Life, who are an amalgamation of some failed companies, have reached the position today of being a giant not just in Ireland but internationally. The company employ almost 2,000 people, and 83 per cent of their income is in this country, 13 per cent in the United Kingdom and 4 per cent in the United States. I believe that with the advent of 1992, European Community directives and the assistance which this Bill will give them, Irish Life will get involved in the European insurance markets and will pick up a fair proportion of that business. It is absolutely vital that they get involved in that market. Post-1992 there will be intense competition in the insurance and assurance markets in Europe from world giants. This enabling legislation will give them a freer hand: there will be less dominance by the Government and they will have a better opportunity to build up a stronger capital base in the financial markets.

Irish Life hold about 40 per cent of the Irish market, a huge proportion and I hope they will become an Irish-based international financial services company. As the Minister pointed out, because of the unique structure of the company, profits are locked into the company, which means they cannot be distributed for the benefit of the shareholders and growth is constrained to the level of retained profits and reserves. While the Government may not think there is anything wrong with having profits locked in and not paying dividends, the company will not be able to attract investment from the private financial sector on that basis. Consequently these arrangements must be changed to the more conventional financial format where dividends can be paid on profits.

If this legislation is not enacted, Irish Life will not have access to the amount of capital they require and they will be confined completely, as they are at present, to retained profits. It will be impossible for Irish Life to expand and change their structures from retained profits and reserves if they do not have access to capital and world financial markets. This Bill will bring the company into the 21st century by changing their antediluvian structures. The consultants appointed by the Government to examine Irish Life responded positively and supported the view of the Irish Life senior management that access to equity markets was the key element in expansion. The company have to deal with competitors and quoted companies who have vast reserves and if they do not have access to these equity markets they will be faced with major problems.

I am glad to note that the Minister has had a series of successful meetings with the management and employees of Irish Life. It is proposed, under the new structure, to give the employees share benefits in the company. I agree with the Minister that the State need not necessarily own an insurance company. As I pointed out the Government got involved in the business in the first instance because it was necessary in the national interest. However times and conditions change which make it unnecessary for the State to be involved. The State holding in the company will be reduced from 90 per cent to 34 per cent. This will be of immense benefit to the State; for example, the public flotation will put a value on the shares so that the State will get a good return on them. In addition the payment of dividends under the modern financial structure will mean the State will be getting a far better yield on their 34 per cent holding than they got on their 90 per cent holding.

This leads me to the related issue of our national philosophy. This country is far too small for "isms", whether it is capitalism, socialism or communism. We have to look at cases on their merits, and be pragmatic about them. I am an enthusiast of private sector rather than State investment and of the State investing only when the private sector will not take up the cudgels. If State resources — Irish Life is a classic example — are used to successfully prime the pump in certain sectors, I do not think the State should insist on maintaining stakes in these companies. These issues should be considered from an entirely commercial point of view. There is a great deal of merit in the approach articulated by Deputy John Bruton on a number of occasions that the State should get involved in the equity sector in the way they got involved in Irish Life so that when they leave, it will unlock vast amounts of State funds which can be invested in other ventures as seed capital to engender activity that the private sector might be reluctant to engage in. The private sector, both in this country and abroad, would be only too delighted to take up the stake in Irish Life at this point. I believe it makes great pragmatic sense for the State to get out of Irish Life, get a yield on their assets and re-invest that yield in some other sectors.

Given the Irish dimension of the company, the Government are correct to retain a 34 per cent shareholding in it. Given though it will be a minority stake it will be larger than the Stake of any other group within the company and give them a great deal of control over what will happen in that area. Fine Gael have no problem in supporting it, even though there are a few aspects of the Bill which require to be dealt with on Committee Stage. I welcome this enabling legislation.

Mr. O'Keeffe

I should like to welcome the Minister to the House. This Bill proposes to restructure Irish Life. It is necessary to look at Irish Life to see how they are performing and to estimate the return to the State. The annual accounts of Irish Life for 1989 show a total dividend payment of £521,000 on the basis that the State owns just over 90 per cent of their shares; therefore, we can presume that the Exchequer received £470,000 in dividends from Irish Life in 1989.

The Minister rightly warned against speculation as to what the shares might be worth when the restructuring is completed. The proper figure will be assessed by the experts and we should leave it to them. We can discuss the exact figure at a later stage but, for the purposes of my speech, I am sure the Minister will forgive me if I assume that the company might then be worth something of the order of £500 million. As public comment seems to indicate, this is a reasonable figure for the purpose of the debate. This valuation seems to be supported by the investment reserves of £539 million disclosed by the accounts of Irish Life, some of which I understand are attributable to the policyholders and some of which will be attributable to shareholders when the court hearings are successfully concluded.

The suggested order of magnitude is extremely important. If we examine exactly what the State is getting from Irish Life by way of dividend at the moment, we will see that it is less than £500,000 a year, and on the basis of the valuation that I suggested here this morning, the 30 per cent of State holding would yield up to £280 million. How could anyone rationalise the raising of £280 million from something that is currently contributing less than £500,000 every year to the State? Surely simple arithmetic shows the sense of what is proposed here?

Let us say the company are worth £400 million or £600 million — we will hear the exact figure when the price is set. It does not make sense to oppose this measure. Perhaps some of those who oppose it have not looked at it on a rational basis and are basing their rejection on a social philosophy which has dwindled over the last year or so.

It is well known that the articles of Irish Life are outdated and that in their present form they hold little value for their own shareholders. Obviously the new restructuring would enhance that value considerably. On the basis of current dividends it would be over 500 years before the State could get back as much from Irish Life as they can raise by restructuring and partial sale, as is proposed in this enabling legislation.

It is sensible for the State to take this opportunity, which is very much to the benefit of the taxpayer and would also ease the tax burden. Half a million a year does not go very far, but a once-off payment of £280 million to the State is an extremely significant figure which any Government could not overlook.

Although I have not seen it mentioned in any report, the Minister might confirm that the State will benefit in some other major way from the initiative now proposed and justify it to the shareholders. In their new form, Irish Life will have to provide a much higher dividend to shareholders than at present. Indeed, the primary purpose of the restructuring is to allow this to happen, as it is impossible under the present articles of association.

To justify the price tag and the level generally talked about, dividends of perhaps £25 million to £30 million a year might have to be paid to shareholders. Presumably, Irish Life provide such profits at present but the important thing here is that those profits are put into the reserve fund because of the peculiarities of the articles of association. The State will continue to own 34 per cent of the new Irish Life and, therefore, will be entitled to 34 per cent of the increased dividends.

On my figures, which I do not expect the Minister to confirm, this might suggest that £500 million per year will become something of the order of £10 million a year to the Government. Without confirming the figure, the Minister might indicate how dividends to the State from Irish Life will increase as a significant multiple rather than putting a particular figure on it.

The Minister might also confirm another significant physical benefit, that 66 per cent of the shares will be owned by shareholders other than the State itself. There will be a tax liability on those shareholders which will be significantly in excess of what is raised at present on the dividends of Irish Life. Under this new restructuring, the State will get (a) a large cash sum; (b) an extremely significant increase in dividends and (c) there will be a significantly increased tax contribution to the State from those benefits.

Yet in the Dáil certain Opposition spokesmen suggested on narrow ideological grounds that we should not proceed with this initiative. It is clearly difficult to understand this type of financial blinkered thinking. Of course, some of these people draw their role models from other nations and hanker after their political system, even though the events of the past two years have indicated they have been a total failure. They have resisted this obviously beneficial measure because it does not fit in with the tired thirties dogma or the failed left wing rhetoric.

The Minister has made it clear that this is not the start of a wave of selling State assets. He confirmed that this is a pragmatic and financially compelling move and it stands to reason that where the State has a role of a social nature Members of this House should be involved. Where we have no role, apart from providing a legislative framework, we should not be involved, except to set the parameters for the proper ordering of business.

What credentials have Members of this House to assess what is happening at the moment? We have an absolute confidence in the ability of Irish Life, as demonstrated through the years by their actuaries, accountants and all their staff members. Apart from owning 90 per cent of the shares of Irish Life, what role has the State played in the success of this company to date? It has not directed its investment policy, this has been done very successfully by the board and management of Irish Life. Perhaps that is just as well, because if certain politicians had their way Irish Life might have been directed to pour policyholders' money down the drain. Then, of course, we would not have had to cope with the success of Irish Life. To their credit, the Government have not directed the marketing policies of the company. Irish Life have always recruited our brightest and best from schools and colleges. They have trained their own accountants, investment analysts, actuaries, computer experts etc. It is they who have developed the product and achieved the investment return which made Irish Life such a success story. Irish Life is not a textbook case of a successful State enterprise. They cannot be. If the State has not sought to manage them, or rather misdirect their investment policy, and did not interfere with their day to day running, it did the correct thing, that is, to stand apart and leave the management of Irish Life to competent professional people operating in a competitive market.

Not to undermine the pride we all have in the success of Irish Life but to rebut the assertion that Irish Life will be any different when our State shareholding is reduced, I emphasise that they will be no differently managed. They will have the same staffing structures and the same management, all of whom have brought them to their present profitable position. Why then should there be any fears about their future? On this point I am particularly pleased with the presentation from Senator Staunton and the views expressed on the Fine Gael side of the House that concur with ours on this occasion.

There are two reasons that Irish Life may even go on to greater things. First, they will now be answerable to a wider audience with an interest in their performance. With such readers of their accounts who have a better understanding of their success, failures, strengths and weaknesses, plans and strategies, much more may be demanded of Irish Life in the future than we have seen in the past. We could not have been very demanding because of the restrictive access to profit in the articles of association under which Irish Life are governed. I make no pretence to the fullest understanding of Irish Life, but the Minister is always well briefed and totally in control of his portfolio. Irish Life being accountable to a more demanding set of shareholders will act as a catalyst for a far greater performance which will enhance further the State's residual 34 per cent shareholding. That is very important.

Irish Life will be different also in that they will now have access to outside capital to finance new activities. It has to be admitted that they have investment reserves of £500 million which they can use, but their use must be extremely limited. Since it is probably already used for existing investment, it is not really available for substantial new ventures.

Irish Life's American company cost £30 million. Could they have purchased a company for £300 million without overstretching their existing resources? I would not think so. If they had access to outside capital then at least they could contemplate much larger acquisitions.

If Irish Life wished to raise more capital at present, would the Minister be prepared to subscribe? I doubt that very much. Under the articles as they stand he would not get a penny more in dividends as a result. Imagine the Minister being asked to invest £100 million and at the same time being told his dividend is going to stay at the same level. It does not make sense and in such circumstances it would be unlikely that the Minister would make such investments. Irish Life should not get capital from the State. If they need capital they should go to the natural source of share capital, the capital market. This restructuring is necessary and the ability to raise capital will make them a much more successful enterprise.

There has been some scaremongering about a foreign takeover of Irish Life. One TD asserted that a French company were already primed for this takeover. This would be to blithely ignore the safeguards the Minister has set in place for the new restructured Irish Life. These barriers are the golden share, to which the Minister adverted in his speech, the Minister's residual 34 per cent holding and the limitation on any individual shareholding exceeding 15 per cent, the fact that the company are allowed a certain amount of self-investment and the position of the pension fund. All these matters go to show that the fears expressed are not well founded. Categorical assurances were received from the commission on the efficacy of the golden share and the 15 per cent limit on the basis that it does not discriminate on grounds of nationality. With these protections and the ability of Irish Life to grow through raising capital there is no danger of a foreign takeover; in fact the reverse is true and Irish Life will be in a position to expand by acquisition.

I fail to understand why people peddle this foreign takeover notion. Why do they assume that Irish people cannot be successful internationally? I fail to understand why they would ignore the examples of GPA, Smurfits and the many others who are competing very successfully internationally. Maybe it is implicit in their attitude that they have a sense of national inferiority. I wonder if it springs from the inferiority of their own politics or their own socialist ideas?

I welcome the provision in this Bill to protect the employment and pension rights of the staff of Irish Life and the company's pensioners. Irish Life are and will continue to be, an excellent employer. They have consistently created jobs every year for decades. Through their investment policies they have helped others to create jobs as well. They have played a major role in the development of the pension industry in Ireland, providing pensions for a large proportion of employees in the private sector. Indeed, two of their senior executives gave considerably of their time and expertise in serving on the National Pensions Board leading to the Bill which we passed here last week. Many other senior executives have provided expertise on other State boards.

The word "privatisation" is used as if it is spelled with four letters rather than with 13 but if we look at Irish Life in their present format we see they are almost totally privatised already. They had funds of £4.4 million last year but almost all of that was private, it belonged to policyholders. Shareholder funds at £3 million represents something like £0.1 per cent of the total, and even some of that is private. Irish Life are already 99.9 per cent privatised. I can see no major ideological question in raising this to 99.95 per cent. It is common sense clearly if the State gets a significant finance benefit from them.

It is also asserted that the Government propose to give their shares away. I say that rather smugly because it was mentioned in the other House. That is absolute nonsense and I am sure that a very full assessment of the value of Irish Life will be carried out before setting the share price. The Minister will be pressing for as high a price as can be justified. If we look at his past performance, we will see what has already been achieved in relation to the PMPA and the Insurance Corporation of Ireland. I have no doubt that the Minister, and his team, will be equally successful with Irish Life.

Of course, the price of the shares may fluctuate afterwards but that is in the nature of the stock market. A key point is that the State will get fair value at the point of sale and that the Minister's advisors will ensure that this is so. The value cannot be determined now. It will reflect the stock market conditions at the time of sale. It will reflect the outcome of the court proceedings and it will reflect how Irish Life perform in the intervening period. It will reflect the efficiency of the marketing of the shares. For all of those reasons it is better not to speculate on a value except to say that it is going to be substantial, much more substantial than the £500,000 the State receives at present on its investment.

I congratulate the Minister on his initiative. He worked on this long before the Government were formed. It is a most pragmatic and sensible step. In this House most of us have been pragmatic and reasonable most of the time. I am very pleased that on the Fine Gael side this pragmatism is coming to the fore on this occasion.

The proposal is good for the State because of the financial benefits it will bring. It is good for the taxpayer, it is good for the policy holders of Irish Life, particularly those with profit policies. I am sure the board and the actuaries of Irish Life will treat all their pensioners very generously. It is good for the staff of Irish Life who can grasp the new opportunities that will be provided. They may even have a benefit under the share option scheme; something that was not open to them up to now. It is good for Irish Life who will be in a position to develop further with the potential of fresh capital and a more suitable structure. It is good for the many Irish institutions who can look to continued support from the strength in Irish Life. I commend the Bill to the House.

Mr. Manning

I do not know if it is the end of session feeling or the warm weather but there was not a word in the contribution of Senator O'Keeffe with which I could disagree. The Senator made an excellent contribution and many of the detailed points he made were ones to which I can fully subscribe. It was a very researched and thoughful speech, and I commend the Senator on it.

I also commend the Minister on the legislation and the clarity of the Government brief. We welcome the Bill. Our only reservation is that it has taken so long to get to this Stage. This process had been on the books for a long time now, but at least the Bill is before us and it will go through all Stages this morning.

I am also very pleased with the process of consultation which preceded this Bill, especially within Irish Life. One thing is very clear and that is that within that company there is virtually total agreement about the need for this legislation and the positive effects it will have at all levels in the company. Like other speakers, we can all be very proud of the achievement of Irish Life over the years. Irish Life did not come into existence for any great ideological reason back in the thirties. It came into existence for a very pragmatic reason. The companies were going broke and in order to safeguard the people concerned the Government of the day, under Mr. de Valera who could hardly be decribed as doctrinaire socialist, decided on this formula. From that Irish Life have grown to be one of the better companies here. They have a top rate management team of young competitive highly skilled people and they have been well led and well managed over the years. It is that which has put them into this position of strength they are in today.

The Bill is a very detailed and complex measure. What would worry me slightly about the time scale envisaged in the Bill, is that there will be a number of visits to the courts here and in the UK and when the courts become involved there is no certainty or guarantee that all things will move smoothly. I hope there will not be any unforeseen or untoward impediments on the way to the implementation of the Bill.

The approach in the Bill is broadly in line with the policy of the Fine Gael Party. In the 1989 election we put forward our view on this question. The legislation fits in broadly with the principles Fine Gael outlined in the following statement:

Fine Gael believes that the sale of shares in semi-State bodies would be beneficial once proper groundwork for such a move has been laid. It could be beneficial in the following ways:

It can strengthen the capital base of the company, thereby facilitating investment and expansion.

It can involve employees directly in the success of the company through share ownership.

It can sharpen the commercial management of the company.

It can open up the opportunity of joint ventures in new commercial fields.

Those criteria are met by the legislation. Senators O'Keeffe and Staunton dealt with some of the detail of the Bill and we will look at some of the points when the Bill reaches Committee Stage.

The Bill is essentially an enabling Bill but the principle behind it is extremely important. I regret that the Government have not seen fit to produce a White Paper or a discussion document on the whole question of the privatisation of some of the State companies. As Senator O'Keeffe pointed out, the knee-jerk reaction to any mention of privatisation is loud and sustained. One would think that our State companies came into existence as a result of some ideological position taken up by previous Governments. Nothing could be further from the truth. Every one of our State companies came into existence as a pragmatic response to an immediate situation. Just as they came into existence because the Governments of the day thought that the semi-State model was the one which best served the needs of the day, it would be totally logical, if the perceived view of the common good at this time is that certain of these be sold off in controlled situations, to privatise them. That again would be entirely consistent with the way in which they came into existence.

There are two issues which have become sacred cows in recent times. One is privatisation, the other is neutrality. We are told that neutrality has always been a principle of our foreign policy. That is rubbish. Neutrality was a pragmatic response adopted for the first time at the outbreak of the Second World War. It corresponded totally to the views of the vast majority of the people but it was a practical response. It was not a question of principle. It may now be a question of principle but it is important to get our history right on these matters. Privatisation has now become the——

Professor Conroy

On a point of order, a Chathaoirligh, are we discussing the very important issue of neutrality under a Bill which relates to Irish Life?

Mr. Manning

If the professor listened more carefully he would realise that I am discussing the questions of privatisation and neutrality and I am linking the two issues——

Professor Conroy

I look forward with interest to hear the relationship between privatisation, neutrality and Irish Life.

An Cathaoirleach

It may be that Senator Manning will be in a position to substantiate his case.

Mr. Manning

I am at a loss. We had lectures last night from the far side of the House about the unruly element and the empty benches. Today, the unruly element has got a free transfer across the House to the Government side.

A Senator

The disease is contagious, that is the trouble.

Professor Conroy

The red cards will have to be produced——

An Cathaoirleach

Senator Manning without interruption.

Mr. Manning

Thank you, a Chathaoirligh, for your protection. I am sure I will enjoy the same protection from the Leas-Chathoirleach. I had concluded my remarks on neutrality and I will move now to the question of privatisation.

It is important, in the context of this debate, to examine the whole principle of the privatisation of State assets because this is the first Bill which affords us such an opportunity. Undoubtedly, it is something of which we will see a great deal more in the future. I am making the point that there is nothing ideological, or is there any principle underlying the question of either nationalisation or privatisation in this country. This country has made a contribution to the world at large in terms of the State body. We, in effect, invented the whole concept of a State body. We have learned a great deal over the years. We have improved that concept greatly.

I am not digressing but perhaps I may go back because it is important to examine the reasons we did that in the first place. If we did it in one direction in 1927, there is no reason we cannot move in a similar direction, for the same reasons, in 1990. The ESB was our first ever State company. It came into existence in 1927 for one very simple reason, the country needed energy if it was to be industrialised. Clearly, the private sector would not, and could not, provide that source of energy. The Government of the day looked very carefully at all of the possible options. They went to the United States to try to ascertain whether some major American companies would provide the service. They tried Irish private enterprise and were met with a deafening silence. They tried various other ideas but, at the end of the day, they realised that, if a service was to be run in the public interest, to be dependable, responsive and serve all parts of the country, then the State itself would have to intervene. They decided that they did not want a new Department of Stage. They had little faith in the entrepreneurial zeal of the Civil Service at the time and they came up with the idea of the State board. It is important to make that point clearly.

My friend, Senator Upton, has different views on the role of the State sector in all of this. It is important to go back to first principles on this and say that we here invented the State company. It was invented as a pragmatic response to immediate needs, taken in the public interest, of the various safeguards were built in but it was a pragmatic response to the time. Just as this Bill today is equally a pragmatic response to particular needs seen to be in the public interest today, there is no betrayal of principle on the part of the Government. This is not contrary to the public interest and, for that reason, we should, at this stage in the debate, lay to rest that particular shibboleth.

For the interest of Senator Conroy, if he would like further edification and enlightenment on this whole question, I can recommend a splended book "The Official History of the ESB". I have to declare my interest in that as I was its joint author.

Professor Conroy

I am very happy to be edified in that manner.

Mr. Manning

I want to put this on the record. The main problem with State boards over the years has been that they were given a brief by Government when they were set up. Then Government began to use State boards as an instrument of social policy. Again, the ESB is the classic example here of where the Government set up a State board and then begin to use it as an instrument of social policy. Very briefly, the Government decided in the thirties that the ESB would be obliged to burn turf whether or not they could get it. In the forties, the Government said the ESB must set up stations in far away areas where there was no supply. In the seventies the Government of the day decided that the ESB must become an instrument of employment. I am using this as an example because we have to be clear when we are judging State companies. The main culprit over the years has been Government, all Governments, who change the terms of reference of State companies in such a way that the companies were being judged by one set of criteria where as in fact it would have been fairer to judge them by others.

Governments have not always played fair in relation to State companies. For instance — there is nobody from the midWest here so I can say it — the whole question of the Shannon stop-over is perhaps another example of Government policy forcing State companies to do things which they regard as not being in their best interests. Beginning in the early eighties we have seen a major shake-up in our State companies. Former Minister, Deputy Jim Mitchell, must be given credit for having initiated the moves which did tighten up the criteria by which State companies operated and were judged. Most of them have responded very well to the challenge. I know our State sector is thriving now; in terms of management it is frequently ahead of many companies in the public sector. Irish Life is, perhaps, one of the jewels in the crown, one of the best examples of this. For that reason it would be useful to have some set of guidelines or principles from the Government as to their general attitude to the whole question of the State sector.

Having said that, I will revert to this Bill. This is a Bill which my party warmly welcome. I congratulate the Minister on its introduction. I hope it will produce the desired results.

Mr. Fallon

I too welcome this Bill and support its intent. Over the past 35 years I have known many of the people in Irish Life, particularly the field staff. I had the pleasure and honour at one stage of working with a general branch insurance company. As was the norm in those days the life assurance agents of both the New Ireland Assurance Company and the Irish Assurance — as it was known in those days — had agencies with general branch companies. I always found them very keen and active in business. I have retained my acquaintance with the Irish Life. I am at present transacting business with Irish Life and find them to be an excellent company.

Probably it is true to say that many an Irish person was buried from the proceeds of one of the Irish Assurance penny policies, as they were known in those days. It is no harm to mention that fact and then to move on to the fact — as the Minister informed us here this morning and which we all knew — that they had made such progress over the past 20, 25 or 30 years. They are now the main life assurance company in the State with almost 40 per cent of the market, with a premium income in 1989 of £598 million. The Minister informed us that they also have a staff of almost 2,000 people.

We must pay tribute to the company for the dynamism they have shown over the years in terms of performance and of staff participation. Knowing many of their field staff and administrators, I would like to pay tribute to them for their work. Of course for many of them it was not just a job, it was a way of life; it was an institution, something about which they felt very strongly. Irish Life for them was very important indeed.

It is true to say that we are living in different times now. It is right that this Irish based company be allowed to develop in the international financial services and to specialise in the overall area of insurance and savings. The dividend the State has earned from the company was small. The Minister mentioned a figure of £0.44 million for last year or £2 million for the past five years.

In view of the flotation the Minister has been wise not to give any figures, even though many figures have been bandied about. It is true to say that the flotation will yield a very significant return to the Exchequer.

This Insurance Bill has been talked about for quite some time. It is designed to facilitate the restructuring of Irish Life so that an application can be made to the courts for the equitable allocation of resources between policyholders and shareholders in respect of capital and revenue reserves. I see this as an essential step in unlocking the considerable reserves of Irish Life for the benefit of the shareholders and the policyholders. This legislation, in my opinion, marks a unique occasion for the Seanad as it considers legislation the financial implications of which are positive for the Exchequer and for all the others involved, the staff and the policyholders of the Irish Life company and indeed for the Irish economy.

Whatever view is taken on privatisation as a general principle, there should be general agreement in this House and among those who have thought through the circumstances of Irish Life, that the time has come for reducing the State's shareholding in the company for many reasons. Without restructuring along the lines provided for in this Bill the State's 90 per cent holding has little value, yielding a mere £0.44 million per annum in dividends because its entitlement to profits is restricted to 1.8 per cent. The international trend towards mutualisation of life assurance companies in the sixties extended to Irish Life. Fortunately in this case the shareholders were left with sufficient rights to enable the proposed restructuring to take place. Because of other developments in the life assurance sector, mutual ownership no longer offers a market that would be to the advantage of a policyholder.

We have spoken about the trend in financial services. Certainly there is a growing trend towards the inter-nationalisation of financial services. The establishment of the Financial Services Centre is a response to demands of companies like the Irish Life that they become international in character to maintain their edge against major international companies competing with them for the Irish market. Of course we know that Irish Life are competing successfully in the UK. Obviously they would like to break into it in a greater way. Some 4 per cent of their business comes from the American market. I have no doubt they will hit that hard and be successful there. For these reasons this legislation paves the way for a process whose time has come. Just as privatisation should not be embraced as an ideology and applied regardless of circumstances, neither should the restructuring of Irish Life be imposed on ideological grounds. Those who oppose what is happening stand in the way of a change which will benefit all concerned.

I could talk at length about Irish Life and what it has meant to the Irish nation. There is one aspect I would like to refer to and which happened some years ago in this House and perhaps the Minister would respond to this. A Bill some years ago in this House allowed Irish Life to purchase 63 per cent of a Church & General interest. At that time I can recall making the point that it was a marriage of State and Church and I can remember Senator Whitaker who was sitting on this side at the time wondering about the fruits of the marriage. I hoped the result would mean cheap insurance for all the young drivers of Ireland and almost nominal premiums for the Senators and the TDs with the Church and General but, unfortunately, it did not work out that way. Nonetheless, Church and General have continued to be a first-class general insurance company and are performing excellently. Unfortunately, they are not offering the cheap premium we would all love but they are competing as well as any of the companies. I would like to know what is the position now of Church and General in the new set-up and perhaps the Minister when replying could comment on that.

I think the Government decision in relation to Irish Life is a proper balanced and reasoned response to the needs of the company. They have been very successful and they must be allowed to develop further. I am convinced that the plans now in place for Irish Life will not only protect the company's position but the position of the staff. We must remember that Irish Life is part of an Irish ethos and part of a local community base. Provision has been made for that to be maintained. It will lay the foundations for a continued success story and expansion of Irish Life. I have no doubt about the skills and the great expertise of the company. They have a great track record; there is no question about that. I have absolutely no doubt that all of these factors will being Irish Life continued success in the international insurance world of the future.

Dr. Upton

We have had a wonderful collection of points put forward from both sides of the House as justification for the proposals to sell off Irish Life. We heard Senator Manning who is very well informed of these matters. At least his information derived from his own excellent book on the ESB. We also heard Senator Fallon.

If I remember properly, Senator Manning in discussing the selling off of Irish Life spoke about consistency. He has argued it was consistent, pragmatic, a notion very much echoed by Senator Fallon. In regard to consistency — and I say it with some deference to Senator Manning, who as well as being a practitioner of the business of politics like myself is also a political scientist — I am sure Senator Manning would agree with me that consistency is not everything in politics. One might say that inconsistency in politics might be as useful a tool for political survival as consistency. I suppose the whole thing is to use them at the appropriate times.

Senator Fallon suggested the selling off should be done on a pragmatic basis, as indeed did Senator Manning. I suggest that not selling off should be on grounds of pragmatism because I believe that selling off Irish Life is not in the public interest, and certainly is not in the public interest in the long-term. We have heard talk in recent days in this Chamber about ideology and the general tone of the comments was that ideology was somehow an undesirable thing in politics.

Mr. Calleary

No.

Dr. Upton

That is the tone that is coming across to me. We all have our own ideology. I suggest that the people on both sides of the House who surround me cherish their own ideology with the same vigour as we do on the left of Irish politics. I make no apology about holding to an ideology; it is very important. Essentially, what we are seeing is the selling off of Irish Life, it is really a selling off of the family silver, as Harold Macmillan said in relation to what happened in Britain. Not only are we selling off the family silver, but we seem to be selling it without going to the trouble of having it valued. As far as I am aware there has been no proper valuation of Irish Life, yet we are prepared to sell off the company without having done that. That is very foolish, indeed reckleses. We are very much opposed to the idea of the sale for many reasons, including the fact that we see it as a betrayal of republicanism. Irish Life are held in trust by the Minister for Finance for the Irish people and it is very important that that be retained. The company in due course will fall into the hands of people whose concerns will not be primarily derived from concern for the welfare of the Irish people. The concerns of the people who will purchase Irish Life will be primarily profit for themselves and their companies.

We would also be concerned about selling off Irish Life because once the company is sold the whole business will not be easily reversed. They will not easily be put back together again if they are sold off. For all those reasons we find that the arguments put forward in favour of the sale are unconvincing. In addition, Irish Life have been one of the great successes of the semi-State companies, they have expanded greatly over the 50 years since their foundation. They now employ about 2,000 people, have made a lot of profit and have been a wonderful example of the best in Irish State industry. Irish Life have adequate reserves to allow them to expand, the figure of £500 million is being quoted, and in the past Irish Life were able to manage their business and were not constricted, so I do not see why they should not be able to do that at this stage.

What is happening is derived from many of the ideas which are coming into this country from Britain, from people who surround Mrs. Thatcher and have generated the British "revolution" we have seen with the rise of Thatcherism over the past ten years. In effect, we are imitating the British and we seem to be imitating them after the value of these ideas has peaked and is now in decline. We seem to be copying them as they begin to become old fashioned. That is a pity and it is a reflection on the way we do business here. It is a reflection on the way that we seem to be absolutely dependent in many respects on the British for ideas. Ideas start in Britain, in due course they drift over to Ireland and lo and behold our own enthusiasts start pushing them with the vigour of new converts without steadying themselves down for a few minutes to think of the effect these ideas will have on a country whose values and interests are still radically different from Britain, despite the fact that we are in the European Community.

I often feel there are elements in this city who have been setting the pace for the past ten years in terms of generating ideas and so on. They have been essentially copying what has been going on in Britain without having the wit to make the modifications that are so necessary if they are to benefit the Irish people. If we must copy ideas from other countries, I strongly suggest that we overfly London and make our way to Brussels, Paris or other European centres. We would be much better served if we derived our ideas from those countries and cultures rather than from Britain.

We have had a love-hate relationship with the British. We are opposed to them in many ways and at many times and yet we derive many of our ideas from them. That is a great pity and I suggest that we make our way to Europe to gather up ideas in the future.

The selling off of Irish Life seems to be in considerable contrast to some of the ideas expressed by Deputy Haughey when he spoke about the rescue of ICI towards the end of the previous Coalition Government — the one which our party and Fine Gael were in as distinct from the present one. I also noted that in the Programme for National Recovery — The Next Phase, as published by Fianna Fáil prior to the last election, Fianna Fáil were to engage in the development and expansion of State companies. They were to remain committed to the State sector. Selling off Irish Life, one of the most successful of all the Irish State companies, is a funny kind of commitment. The Programme for National Recovery talks in terms of being committed to the maintenance of a viable and profitable State sector. I would have thought that the maintenance and development of Irish Life within the State sector would be very much part and parcel of that sort of idea.

We have had very little mention of the consultants reports and so on and, perhaps, that is just as well. I am very sceptical of consultants' reports, at least I am sceptical of the value of the objectivity of them. I am sceptical of consultants' reports because a man who lectured me at one time used to say: "Give me the answer that you want and I will get you the consultant that will give it to you". Within certain restrictions that is true. The reports of consultants have to be taken with a grain of salt, perhaps ideally with a bottle of stout coming up to closing time. That is the way these reports should be taken. They should not be taken too seriously, particularly their conclusions. They can be useful if one wants to have the figures collected. One can look through the figures and it is easier than looking them up for oneself. When one comes to the conclusions, one must ask oneself, "What does the person paying these men think?" Lo and behold one will find wonderful levels of agreement. As the old saying goes, "he who pays the piper calls the tune". I am not impressed by recommendations in consultants' reports. I believe there were four recommendations made in the consultants' report on Irish Life. This would be derived to some extent from a worry on the part of the consultants that they could possibly get it wrong. If one tosses up four variations of the same idea, one provides something for everybody.

The Labour Party would also be opposed to the sale of Irish Life in the context of what is likely to happen in 1992. If Irish companies are going to be able to adequately face up to the competition which can be expected in 1992 then it is very important that Irish companies be large and strong. It is for that reason I would be very anxious that Irish Life would remain in State control. They are a very successful Irish company and it is very important that they be maintained there so that they can compete and allow this country to have a stake in the insurance market in Europe which I expect will become a good deal more competitive than it has been over the past number of years.

The Labour Party are opposed to this Bill primarily for fundamental reasons. We believe that it is not in the national interest and not in the interest of the average Irish person that this State company should be sold off. We believe that out there in the wings there are some smart boys waiting in pin-striped suits to fill up their pockets from the proceeds of the sale. I do not begrudge people any of their successes but our job is to protect the interests of the average person and I do not believe that they will be served by what is proposed.

Mr. Hussey

I, too, welcome this Bill which I consider to be a reasoned response to the present needs of Irish Life. Like Senator Fallon, I have been associated for a number of years with Irish Life. I would say that Irish Life and the New Ireland Assurance Company, the two main Irish insurance companies operating in the Irish market, were responsible for encouraging many boys and girls to contribute a few shillings per week to an insurance policy and by so doing save their money. These policies were operated very successfully throughout rural Ireland. The Irish Life Assurance Company were to the forefront in promoting these policies.

Irish Life came into existence by chance in the thirties because of the insolvency of a number of small insurance companies. The investment of £1 million made at that time by the then Minister for Finance has proved to be very successful. It was a good investment for Irish Life and a very good investment for the Government. I believe the money secured from the privatisation of Irish Life will help to reduce our national debt and ease the burden on Irish taxpayers.

The Minister said that the transfer of business from Irish Life to Newco will require the approval of the courts in Ireland and the United Kingdom under the Assurance Companies Act, 1909. Why do the Government have to get the consent of the courts in England? I am sure the Minister will respond to this question when he is replying. He also said that the insurance regulatory authority in the United Kingdom and Ireland must also be consulted beforehand and details of the scheme will have to be made available to policyholders. I understood that the shares owned by English people had been bought out by the Minister for Finance some years ago. Why does permission have to be got from the regulatory authorities in the United Kingdom? What will happen if this consent is not forthcoming? Perhaps the Minister will respond to those points when he is replying.

Irish Life have grown very rapidly over the past 20 years and control 40 per cent of the Irish market. This is an indication of how successful the company have been. They have employed the right personnel and trained them to go out and sell insurance on behalf of an Irish company. They have shown that an Irish company can compete successfully in the market. As we all know, after 1992, great changes will take place in the insurance industry when foreign insurance companies will be able to compete in the Irish market. For that reason, it is very important that our companies should be ready to take them on and compete successfully with them. I believe this legislation will enable the restructured Irish life or Newco, as it will be called to compete successfully with them.

In 1989 the company employed 1,612 people in Ireland, 205 in the United Kingdom and 97 in the United States. I believe that the number of young people coming into the company can be increased and we will see further success in that area. It is important for the Government to retain a 34 per cent shareholding in the company. This will be seen as an advantage in future years.

I wish the new company every success, and I am sure that they will be successful. This Bill has been under consideration for a long time and is not being rushed through for any reason. I am sure the Minister and the Government have gone into every aspect of it in detail. It is a great step forward and I look forward to seeing how the new company compete with European insurance companies after 1992 when the system will be changed and the barriers broken down. After 1992 many companies we have never heard of up to now will be able to compete in the Irish market. The legislation we are discussing here today will enable the new company to compete successfully with those foreign companies.

Mr. Neville

I, too, welcome the Minister to the House. I support this Bill which raises the broader issue of the level of State involvement in the economy. The sale of shares in semi-State bodies is acceptable provided proper steps are taken to safeguard the future viability of those organisations. The sale of shares will provide capital for investment and expansion and will give the company a sound capital base. The necessity for this can be seen in the case of Bord na Móna. While that company are trading very successfully, and have the potential to be even more successful, they are suffering and may die due to the heavy debts incurred at different times and the policies implemented by various Governments. The debt of Bord na Móna of £75 million will cripple the development of the organisation by soaking up their trading profits to service the growing debt. The management of Bord na Móna propose that the State should take out capital investment in the organisation to help them overcome their difficulties. That is a debate for another day.

The sale of shares to employees can be used as a medium of job participation. Ownership brings responsibility, gives employees a greater interest in the company and creates greater commitment. We debated this issue at length some weeks ago when we discussed employee membership on the board of Rehabilitation Institute. That was a very informative debate. Exposure to the hard realities of trading in the private sector can motivate management and workers to perform better, thereby leading to a more successful organisation. A good management team will rise to the challenge of competition in the open market. The sale of shares in semi-State bodies will create the opportunity for diversification through involvement in both joint ventures and new commercial areas. It is important when selling off part of a semi-State company that the social objectives are clearly identified and the mechanisms installed to insure that there objectives are met in the future.

Irish Life are one of the largest assurance companies in the country. They are owned by the State for historical reasons. They were established in 1939 to protect the policyholders of companies which were in serious financial difficulties at the time. This is why those companies were taken into State ownership. This decision is not dissimilar to the decision taken when the PMPA were in trouble. The objective is the same and it is only the method used to achieve that objective which is different. There is now no real social or ideological reason for the State being involved in the insurance business. Irish Life have operated as a private company, with no funding from the State and have been commercially viable in a very competitive field.

For an organisation to survive they must be developmental in their approach and look for new opportunities. They must have the same opportunities, the same playing field as their competitors. Some countries, including the USA, will not allow foreign State-owned companies to take over native organisations and Irish Life are inhibited in their expansionary route in these countries. The removal of this inhibition will create a scenario where Irish Life can become a successful multinational organisation and carry the Irish name with distinction throughout the world. To expand, Irish Life must improve their capital base. The taxpayer should not be asked to do this. Capital must be obtained elsewhere and the company must be restructured to facilitate this.

The State will not be at a loss due to the changes introduced in the Bill. The State has not had any benefit from its ownership of Irish Life for almost 20 years. The Minister, by selling his intended 56 per cent, will realise in the region of up to £300 million. This should be used to reduce the national debt and it would mean a continuous benefit to the Exchequer of amounts between £25 million and £30 million in future years. By a reduction in the debt servicing requirements, that money should be applied to other areas, including alleviating the hardship caused by the health cuts.

The level of success in Irish Life could not be achieved without an efficient and committed workforce. I would like to pay tribute to the management and the workforce who must be credited with the success of the organisation; it is important that such a workforce share in the success; this Bill gives them the opportunity to do so and I welcome it.

Éamon Ó Cuív

This is a fundamental and very important Bill. Many of us feel an attachment to Irish Life because of their history and the central role they play in society. I can understand — it is a basic dilemma I faced years ago — the gut reaction to what is proposed. However, we have to look at the whole question of the use of money and ownership in a cold and analytical light. The reason for State companies could be summarised as follows: they provide strategically important services to the community; they generate profits for the State and it is legitimate for the State to get involved in enterprises that will yield a profit on their investment; they provide services and development for the community; they maintain national control of important sectors of the economy and, they provide employment. We have to look at Irish Life in relation to these criteria.

Before I come to that, when we discuss privatisation and use of money, we must look at a few fundamental questions. Only a limited amount of money is available to the State which, basically, raises money in two ways, through taxation and borrowing. It is agreed that there is a limit to the amount of money we can raise through taxation. Raising money perpetually through borrowing is privatisation of another type. One thing we should never forget, and those of us who run a business either privately or co-operatively, realise that whereas the lender might not have a seat on the board he can often exercise, through his lending, control over the policy of a company far in excess of that of the shareholder. As a co-op manager I speak with some authority on this subject; the inability of the co-operatives, like that of the State sector, to raise finance in the form of share capital, has meant that in many cases co-operatives, big and small, have had their policies determined by lending agencies rather than by shareholders.

In the case of Irish Life it is quite obvious that the profits are being generated but that there is no yield from them to the State; a figure of £2 million in the type of operation we are talking about — in the last five years that averages £400,000 a year — is derisory. If the generation of profits for the State is an important reason for holding control of State companies, then this Bill makes very good sense. In this way we will be freeing profits to the State which are not available to it now. I agree that it would be very serious for this country if the people, through the Government and those they nominate on the board, lost control of this company. Therefore, the provision in the Bill for the golden share is of the utmost importance. It needs to be understood that, because of the particular structure outlined here and the nature of the funds available to State companies, 34 per cent shareholding gives effective control to the holder of that share in perpetua as long as they maintain that as a minimum.

I would be concerned if steps were taken in the future which would leave this company open to a situation where they would be taken over by foreign interests. One of the important roles the company play in Irish society is their investment within the society. However, we have to point out that there are vast sums of Irish money available on the market. We discussed the Pensions Bill two days ago and the type of money that Irish workers pay in pension policies every year which are controlled by fund managers. It seems a pity that none of this pension money can be invested in Irish Life at the moment in the form of shares. It would be Irish money from Irish pension schemes which would be a great source of finance for a liberalised company.

However, the experience of the last number of years shows that we have to be very prudent in the type of expansion undertaken in the reformed company. We would have to ensure — and for this reason it is important that the State maintains the controlling interest — that we do not have rapid expansion abroad which would lead to potential problems. We have seen enough of this type of problem with the ICC and PMPA and, therefore — as I have always preached — it is very important that whatever expansion takes place is at a steady pace to ensure wise and proper investment. I would also assume, in response to Senator Upton, that before the company would be floated, as is provided for, that a full valuation would take place and this valuation would be independent, to ensure a proper return on investment. We have to thank those far-sighted people who invested the original £1 million in 1938 and who have now left, instead of a big debt, as we have left to a future generation, a very valuable asset.

I go back to my original point, that we have limited resources. It is quite obvious that Irish Life will continue to prosper and to provide under the new structure the employment and all the other services I mentioned. It is also obvious that there are many services crying out for development. Many State agencies need capital injections urgently to fulfil their role. We need to make investments in enterprises like Bord Telecom, Bord na Móna etc. There will be other investments to be made by the State. The kitty there is limited. Therefore, we must not see this issue as the State pulling out of State undertakings but as the State apportioning the amount of money it has for State enterprise into the areas of greatest need where funding otherwise would not be available and where losses are now being incurred because the share capital was not available in years gone by. There could be a revolving fund where by money realised by the State from one enterprise could be used to reduce the excessive borrowing or to provide new development in other State enterprises where this is needed. We all know about the huge requirement for cash in the modern world and the huge amount of money that our State enterprises need to ensure they are not dependent on banks for finance as they have been. Unless this money is available we will lose effective control because of a creeping privatisation through the banks of some of the most vital services that are available to us. I hope that the profits from this operation will be available to ensure that we in this House, and not unknown bankers make the decisions as to what happens to the money. Mar a dúirt me, a Leas-Chathaoirligh, tá an-áthas orm an Bille seo a mholadh don Teach.

Mr. Costello

First, I welcome the Minister to the House. I am glad to see him here but I would have preferred, with all due respect to him, to see the Minister for Finance here as this is his brief and we are discussing a matter of exceeding importance. It is the first legislation to come before the House seeking to privatise a semi-State body and for that reason I expected the Minister would be here himself. Indeed the legislation is not primarily the responsibility of the Minister for Finance but of the Minister for Industry and Commerce and there is an anomaly here. The insurance area is within the brief of the Minister for Industry and Commerce, yet the entire business is being taken over by the Minister for Finance. In the legislation extraordinary discretionary powers are given to the Minister for Finance. Does this reflect some Cabinet difference whereby Fianna Fáil could not trust this important business of privatisation to their Progressive Democrats colleague who has the responsibility——

Mr. Calleary

There might even be a Labour Minister at some stage in the future.

Mr. Costello

He might be?

Mr. Calleary

There might be.

Mr. Costello

Dessie O'Malley a Labour Minister?

Mr. Calleary

It is very unlikely, but still——

Mr. Costello

I would say it is unlikely. I heard him remarking on the radio the other day that in the context of society and economics, his ethos would be absolutely counter to that espoused by the Labour Party. I do not think we are going to find that here, especially in this type of legislation. I really raised the question why we do not have the Minister for Industry and Commerce whose brief this area is. I would appreciate a response later.

Mr. Calleary

It is early in the speech I made this morning.

Mr. Costello

What about the reason? Did the Minister divest himself of his responsibility in the area?

Mr. Calleary

No. He has most of the responsibility in the financial end.

Mr. Costello

And the entire discretionary powers were given to the Minister for Finance.

An Leas-Chathaoirleach

Senator, I suggest that you make your contribution and we can get down to details on Committee Stage.

Mr. Costello

I am doing that. It was the Minister who interrupted me.

Mr. Calleary

My apologies.

Mr. Costello

This legislation makes what on the surface looks like a modest proposal, to restructure Irish Life. "Restructure" is to my mind very much a euphemism for what has really been intended; it is really a smokescreen for privatisation, which is being done under the guise of restructuring Irish Life — whereas it involves the setting up of two new companies, almost like Mutt and Jeff — Holdco and Newco — to be the vehicles for the Minister to exercise enormous powers in relation to selling off the shares which are entrusted to him and which belong to the people as national assets.

Privatisation, to put it bluntly, is what is being done here, and let us not try to hide it or to camouflage it under any other description. It is the national assets that we are dealing with, part of what one might describe as the family silver; in this case it is almost gold. This has been one of the most successful companies in the State, and the Minister outlined that comprehensively in his introductory speech. The figures, facts and statistics the Minister gave constitute one of the finest arguments for not going down this road. He pointed out that the background to the establishment of Irish Life was the insolvency of a number of companies who were taken under the arm of the State where there was a small injection — perhaps considerable for that period, 1938 — of £1 million, and that was the only injection of capital that the State has ever had to put into Irish Life in that period of over 50 years. That speaks volumes. The entire enterprise was purchased in 1947 from the UK interests and at that stage Irish Life got the vast majority of the shares with over 90 per cent and the other shares being 5 per cent or thereabouts for pension funds and a small body of private shareholders. There has been minimum involvement, minimum interference by the State, minimum capitalisation and there has been maximum development, maximum expansion, maximum profit.

We are talking about expansion not just on the Irish market where now Irish Life is taking 40 per cent of insurance, but expansion into the United Kingdom and the United States. The figures are extraordinarily healthy. Any private company in this country or elsewhere would be very happy to be able to bring to their shareholders at their annual general meeting, the type of statistics presented to us for Irish Life. They have a very healthy portfolio. The premium income for 1989 is £598 million, and assets stand at £4.6 billion. This is no peanut company. This is a very substantial company in Irish terms. The number of employees is 1,914 and increasing rapidly. As the Minister mentioned, there has been a rapid increase in the last 20 years. The company have not been curtailed but have been expanding at an enormous degree. The investment income in 1989 at £207 million is a 23 per cent increase on the previous year. The investment reserves at £528 million represent a 40 per cent increase. What company would not be proud of that record? There is not a single company in the world that would not think highly of itself. That is not a picture of a company that is in trouble but a picture of a company in the full flush of health and strength and ready to expand. All the ingredients are there. The assets and the resources are there. There is a major question mark in relation to what has been said here and elsewhere in the media about under-capitalisation.

The expansion was not just here in Ireland where 40 per cent of the market has been taken, but into the British market and into the United States market. We are not talking about not being able to get into the international field. We can be an international mover there without any problem. Irish Life were in on the action already.

The Minister said in his speech that we must approach this matter on a practical and pragmatic basis and not on the ideological grounds of the benefits or otherwise of State ownership. The fact that the word ideological was used is a red herring. What we are talking about is whether Irish Life have been a successful company under their present management, and whether they have been a successful company and are providing benefits in terms of their success, their employment, their assets and in terms of what they have been doing for this country as a healthy expanding company. The company have been a success. We can take it the other way and bring it down to ideological grounds as a State company, and then for the most practical and pragmatic reasons we can say "let us go ahead with what has been a proven success." The Minister has tried to say that there are new grounds that are contrary to the present situation, which would give Irish Life a wonderful new future. I do not see that.

Last night we discussed the Broadcasting Bill and it was passed. I will not talk about the guillotining of that Bill or of this Bill or about the fact that, whether we like it or not, we have to dispose of it at a quarter to four this evening no matter what Stage we have reached.

I want to talk about the underlying principle and I would like the Minister to respond to this. The Broadcasting Bill is not a Bill in isolation, and neither do I see this Bill in isolation. Both Bills are part of a Government strategy in relation to privatisation. What happened in the Broadcasting Bill was that the measures introduced by the Minister were directed towards weakening what has been a very successful public sector enterprise namely, RTE. First of all 2FM was to be nobbled in that it was now going to have to change its product. It was no longer able to operate in the market as before. It was no longer going to be able to use the successful formula it had developed. That would weaken 2FM against the independent stations who wanted to get a chunk of that market. There is unfair competition because the Minister was going to specify that it had new public service requirements like dealing with education, agriculture and the Irish language and so on, so it was no longer going to be able to present its own formula. The Minister dropped that first proposal eventually. The second proposal related to the licence fee. Now we were going to disburse a section of the licence fee to the private independents putting public money into private hands and no strings attached. This is the marketplace where the public sector subsidises the private sector. What happens is that it weakens the successful public sector so that an advantage can be given to an ailing private sector, namely Century Radio, and others down the road.

In the advertising section capping was introduced, limiting the ability of RTE to raise revenue at the same time as their competitors were allowed a double length of transmission time per hour on the airwaves in advertising terms. We were limiting the competitiveness of the public service sector and allowing an unfair advantage to the private sector in doubling the length of time for advertising and so doubling the length of time for revenue to come in. That is an unfair way of doing business. The Minister pointed out that it was competition and that it was desirable to have competition and a choice.

Acting Chairman (Mr. Finneran)

Senator, we have disposed of the Broadcasting Bill.

Mr. Costello

It is the principle I wanted to elicit. I hope I have elicited the background principle to my perception of what the Minister has been doing in broadcasting which is precisely the same principle that is here. Here, we have Irish Life, a very successful public enterprise who have been doing exceedingly well. They have been facing competition on the other insurance fronts both here and abroad. British insurance companies have always been free to operate in this country. There has been a choice, so why sell off what has been successful against the competition? Why not give them the opportunity to compete? They have done well in the Irish sector and were in the business of starting off in America and the United Kingdom. Why not, with the onset of 1992, give them the opportunity to compete internationally on the EC front? That is the direction in which we should be going, rather than following the underlying principle coming from this Government which is to weaken the public sector and strengthen the private sector and where the public sector is strong they sell it off. It is nice and fat and ready for the market. I cannot accept that. I would like to hear the Minister's justification for it.

I cannot see any justification from the Fianna Fáil Party. If we go back to the founding father of that party, Mr. de Valera, we see that in 1926 and 1927 the social and economic commitment that party had was admirable, second to none. It was that party that provided semi-State bodies and State bodies. It was that party that saw the need for the State to have a strong industrial base and to provide a service industry as well for the people.

Professor Conroy

A bit of it still remains.

Mr. Costello

It remained up until these terrible three days we have had, starting with the Broadcasting Bill and, today, the demise of Irish Life——

Professor Conroy

The privatisation of Irish Life.

Mr. Costello

——the demise of Irish Life, an Irish public enterprise which has been enormously successful in the same way as we are witnessing the weakening of RTE, a public sector enterprise that has been enormously successful. For the life of me I do not see why we cannot allow equal and fair competition without damaging or changing the rules of the game. I am not satisfied with any of the arguments that have been advanced so far.

We should all have been afforded an opportunity here to debate the whole issue of privatisation. There is not a single mention in this Bill of the word "privatisation". One would believe that this was a nice little nondescript Bill going through the House, giving the Minister certain powers, setting up two new companies and everything was hunky-dory. Would the ordinary layman reading this Bill have guessed that we are going to have Irish Life — an asset worth in the region of £1 billion — ready for sale to the highest bidder? Nobody would have so suspected. A lot of this activity has taken place by way of camouflage and subterfuge. Probably it is the most controversial issue dealt with since I came into this House. It is most important that we be given an opportunity to give full weight and expression to our concerns about matters of this nature. We have not been afforded that opportunity. Certainly I would have welcomed it.

I do not like to see this debated in the context of a guillotine, by way of an allocation of time motion with the time of closure being specified in advance. This is contrary to the tenets and principles of the Fianna Fáil Party as I understood them as a student and teacher of history. I have the greatest respect for what Fianna Fáil achieved in the twenties and thirties although some developments in the sixties, seventies, eighties and the beginning of the nineties leave a lot to be desired. I am sure Eamon de Valera would turn in his grave were he to see what is taking place here in relation to principles he held dear in the twenties and thirties, and which contributed so much to building up the industrial and service base of this country.

Professor Conroy

I am sure Senator Costello would agree that the late Seán Lemass continued that policy.

Mr. Costello

I was referring to the founder of the Fianna Fáil Party. I can refer to their various leaders also, but I want to refer especially to the principles their founder espoused when he was establishing Fianna Fáil, the social and economic programme that he set out at that time which has been, and is still referred to every now and again by Fianna Fáil especially at the hustings.

The same type of approach is being adopted in relation to Bord Telecom, who have gained control of Cablelink; it is being fattened up for privatisation. The successful companies will go, there will be obstacles put in the way of the unsuccessful ones that will continue to be criticised. In recent times, we have witnessed some semi-State companies, having been unsuccessful trimming their sails, eliminating inefficiencies and reducing their workforce. But, having done that, what thanks did they get? Very little.

In our discussions a couple of days ago we noticed that Ryanair were allocated what amounted to a monopoly chunk of the market previously held by Aer Lingus; that market chunk was simply taken from Aer Lingus to facilitate a private company getting itself into financial trouble.

Professor Conroy

Thereby vastly improving the air services and greatly reducing fares so that people could afford to fly. I should have thought the Senator would have approved such action.

Mr. Costello

One could interpret it in that manner, but my interpretation is that this is all part of an overall plan under which the private sector is being given an unfair advantage over the public sector. When it comes to heavy competition, if the public sector is winning then the private sector is given the advantage. That is precisely what happened in relation to Ryanair and Aer Lingus. That would not have happened in the strict commercial world, where the cold winds of the marketplace blow continuously. In the commercial world one would not find a successful private company having a chunk of its business hived off to a competitor.

Professor Conroy

That was traditional in the airways industry and the licensing of air companies and so on.

Mr. Costello

That is an Irish solution to an Irish problem, or a Fianna Fáil solution to a problem. I do not see where the problem arises. Nonetheless they come up with solutions whereas the position could have been left unchanged. Therefore, a contradictory position is being developed. It is a case of the cold winds of the open market blowing on the public sector while the private sector is cosseted. That is not good enough on the part of this or any Government. The principles of the Progressive Democrats have been enunciated often enough but I would have expected something better from Fianna Fáil.

The reasons advanced for the introduction of this Bill are that Irish Life had been in a straitjacket, that it could not expand, that it was under-capitalised. It was contended that its profits were locked in and not being distributed, that the State was getting no worth-while dividend from Irish Life — it got £2 million only in the last five years — and that that was not good enough. It is hard to accept that contention. The Minister made great play of those arguments in his remarks on Second Stage.

First it must be acknowledged that Irish Life has been the great success story of the semi-State sector over the last 50 years. They have expanded their business, they have enormous assets and they have ploughed those profits back into their business — the sign of a healthy company. I am sure Senator Conroy would agree that it is important to the development of any company that they be able to plough back profits into the business. As a result they have developed and now employ 2,000 people. They are in a position to expand and have been expanding; it is a vibrant, productive enterprise.

The Minister — with 90 per cent plus of the shareholding of Irish Life — can turn the tap on or off in relation to dividends. If he wants more dividends he can demand more. There is no sense saying: the poor State has received £2 million only in the last five years. If the State wants more than £2 million; it is as simple as that. There is no point complaining about it when one can do something about it. The State has not been getting any more than £2 million, the State can get more than £2 million; because the State did not want any more. Obviously the State was delighted that we had such a fine, successful semi-State body.

Sitting suspended at 1 p.m. and resumed at 2 p.m.

Mr. Costello

I welcome the Minister to the House and I am glad to see him. I mentioned earlier that I wanted an explanation as to why the Bill is being dealt with by the Minister for Finance rather than the Minister for Industry and Commerce. I had always understood that it was the function of the latter. Perhaps the Minister will give me an explanation later in relation to that.

Before lunch I was addressing the reasons presented for going down the road or privatisation. One reason given was that Irish Life are unable to expand in present circumstances that they are under capitalised, that their profits are locked in and cannot be distributed and that the State was a beneficiary to the tune of only £2 million in the last five years. I want to question the raison d'être for this legislation. It has been stated by the chief executive, David Kingston, that Irish Life have reserves in the region of £500 million, and there has been enormous speculation as to what exactly is the value of the company. Various figures have been put on it but there has been no valuation as such and I would like the Minister to address that.

It is not appropriate for us to think in terms of disposing of a national asset that belongs to the people, that was set up for the people, without getting an independent evaluation of its reserves, resources, assets, portfolios and without putting what we would regard as a reasonable price in the marketplace on it. Some ludicrous figures, in the area of £200 million to £300 million, were suggested in the media. I think it is closer to the £1 billion mark considering the statistics that the Minister has given already. I am worried that what will happen here will be similar to what happened in Britain where a lot of public companies have been sold off under Mrs. Thatcher and her principle — or lack of it — in regard to public companies and privatisation. There have been many what I describe as fast buck speculators who got in on the action at an early stage when a healthy company was sold off at a value well below the threshold that it would achieve normally in the marketplace. The financial sharks were there for the killing. That has been shown by the short-term gains, in the region of between 70 per cent and 80 per, by those who got into the market for shares in public companies sold in Britain in recent years. Neither the Exchequer, or the people, would be well served if that happened here. The least we can do is to demand a full and proper evaluation of Irish Life in their present circumstances so that we can put a realistic price on that company.

There is nothing in the Bill to limit the selling of shares. The Minister said that he will retain 34 per cent of the shares but there is absolutely nothing in the Bill to suggest that. We have no guarantee. We would like to see the Minister accepting an amendment to guarantee that at least that shareholding, which is roughly one-third of the shares, is retained by him. It seems strange that the Minister has not specifically stated the limit that will be retained in the possession of the State especially when we consider the extent of the portfolio, the 40 per cent of the Irish insurance market, the huge property and the financial institutional shareholding that Irish Life have in various companies.

Finally, Irish Life are an ideal vehicle for competing in Europe. They are a strong healthy company. We are about to enter into Europe and suddenly the Minister states that it is his belief, and the Government's belief that Irish Life need privatisation to be successful in the international market. They have already built up strong reserves, a strong portfolio, strong assets and opened up international markets where they have been allowed to. This should be an opportunity to consider what else is required, if there is something else required, to give them that boost for European competition. The company are best placed to take on any European competition. Going down the road suggested by the Minister is an excuse for privatisation rather than a justification for the course being taken.

The second reason given for selling off Irish Life is to reduce the national debt and-or to reduce taxation. These are two very attractive propositions. Naturally, we would like to see the national debt reduced and we would also like to see a reduction in taxation.

It is only two weeks ago at most since the Minister presented a Bill in the House to set up the National Treasury Management Agency. I must give the Minister and the Government credit over the past couple of years for doing a successful job in limiting the increase in the national debt. At this point the annual rate of increase has fallen very significantly and, hopefully, we are in a position now to begin to manage the debt and to reduce it. Let us say the national debt is in hand, we are in the process of dealing with it and it will not be a problem for the future. I do not accept that reducing the national debt is adequate justification for selling off Irish Life.

Secondly, again there have been quite significant reductions in the level of taxation. The Minister has been responsible for that and deserves due credit. We have substantially embarked upon that course. Again, we should not think about selling off a national asset to reduce taxation. Steps are being taken in that direction.

To my mind the critical issue is employment. Will the selling off of Irish Life do anything for employment? My belief is that it will not. The jobs of the 2,000 people working in Irish Life are to be preserved and I am glad to see that in the legislation. The Programme for National Recovery was set up specifically as a partnership between the Government and the trade union movement to boost industry and to create jobs. It has boosted profits, the economy is booming. Our national product is satisfactory and our export surplus is running at an unprecedented high level. At present the country is £2 billion in surplus in terms of exports per annum, a very healthy situation. However, that has not been translated into employment. What has happened is that the private sector have been getting the benefit of the boom in the economy and the progress that has been made but they have not been translating that into the creation of jobs.

Unemployment continues to rise. I am a school teacher and I notice when my students complete their education what is left for them is a FÁS scheme, the emigration boat or third level. There are virtually no jobs available. The great scandal of the Programme for National Recovery is that we have all had to tighten our belts, sacrifices have been made in all of the public services——

Mr. McKenna

Are we talking about the Insurance Bill or the Programme for National Recovery?

Acting Chairman (Mr. R. Kiely)

I would advise the Senator to stay with the Bill.

Mr. Costello

This is central to my point on the Bill. This measure will be counter-productive because we are going to sell off an asset that is in the business of providing employment. The Taoiseach said that the semi-State sector should be out there providing jobs. I would say that the private sector should be out there creating jobs, but the private sector have shown they are not doing the job even in the context of the Programme for National Recovery. I would like the Minister to address how we are going to deal with the biggest scandal, the haemorrhage in our society, where a whole generation of youth is leaving this country. We are selling off a company to the private sector who have not been providing employment.

The sale of the company will provide a once-off source of funds. The Minister will be selling off 66 per cent of Irish Life which is a very substantial amount but once that is done what will be the further benefit to the economy? We will have got rid of this continuing source of income, of productivity and employment. The Minister will continue to retain 34 per cent of the shares; therefore, he will get the share value and he will get dividends on that. If what is being done here is to unlock the profits so that dividends can be paid, why is the Minister not taking a greater shareholding in the company? Let the Minister unlock the structure but let him preserve a greater chunk of Irish Life so that there is a continuous flow of dividend income to the State. He could at least go to 49 per cent. There would be no problem about that, but obviously we would prefer that the minimum be 51 per cent and the Minister would have a controlling shareholding.

Since the Reagan and Thatcher era we have been told that wealth and success lie in the marketplace as though that was the preserve of the private sector. Every public service company operates in the marketplace. It is amazing the way words are bandied around — that the marketplace is the only area where the private sector operate. Everybody who is operating in any industry or service operates in the marketplace. There is the further confusion in the context of privatisation with business practices, and good management. So much has been done by the State and semi-State companies in the area of good management, in improving management practices, business practices and so on. Irish Life have played a great part in this respect, as indeed have the Great Southern Hotels, Bord Na Móna, the Irish Sugar Company; all of them had to develop a greater degree of efficiency and have done so. These companies are very considerably streamlined. It is hardly the time to think of privatising them when they are working with such great efficiency.

I would like to ask the Minister who is being consulted about the sale of the company? Are the policyholders or the workers in Irish Life being consulted? Is it the managers who fancy themselves and hanker after the high-flying life in the private sector as it has been presented by the media? What has happened to the spirit of public service, to all the national spirit and patriotism that has been put in by the Civil Service and the semi-State sector into developing a national asset? That was a tradition in this country but where is this public service spirit now? Is that still not there? The provisions in section 4 give no guarantee that pensions will be transferred. They may or may not be transferred. Will this mean that shareholders who have pension money in Irish Life will be left high and dry?

Mr. A. Reynolds

No.

Mr. Costello

I look forward to hearing the Minister's response to that point.

It has been stated in the other House and in the media that the major bidder for Irish Life is a French State multi-national company. I hope the Minister can scotch this rumour, if it is a rumour. It would be very ironic if, after having been told that Irish Life cannot become a proper multi-national and cannot get involved in the international markets, a French State insurance company, which is a multi-national, is able to buy out an Irish State company. There does not seem to be any problem in this regard with the State company, AGF. This multi-national seem to be in the business of buying up other State companies.

Professor Conroy

They are a slightly larger company.

Mr. Costello

They are larger but that does not counter the argument put forward originally.

State companies are in a straitjacket in terms of international competition. The only times they are not in a straitjacket is when they have the right formula, the right ingredients, the right personnel and the capital. The Industrial Development Authority hand out hundreds of millions of pounds every year in attracting foreign industry here. If we are talking about the opening up of EC markets surely we should be injecting capital, if this is needed, into this major company. We are talking about billions of pounds and the IDA should put some capital into this company. If we go down the road of selling a big chunk of Irish Life to a State company from another EC country, which no doubt will compete for insurance in this country after 1992, it will give rise to anomalies in this area.

We were also told that if Irish Life want to operate in the United States they would have to have a licence and that privatisation was the only way they could get that licence. That is not true. Irish Life are already operating in the United States and, of course, in the United Kingdom. I find it difficult to accept many of the arguments which have been trotted out here. Some of those arguments were allowed fall by the wayside after they were shown to be invalid but many of them are still with us.

The Minister said that the golden share will ensure that there can be no take-over bid made for Irish Life for a period of five years. As I said before, the powers being given to the Minister in this Bill are exceedingly discretionary. I do not see anything in the Bill which will prevent Irish Life from being sold off entirely after a short period. The Bill does not give any guarantee that Irish Life will remain, in any substantial fashion, an asset of the Irish people. The very fact that there is no such guarantee in the Bill means it has been deliberately left out.

The Minister will have discretion in relation to how and when the holding company and the new company will be set up, what the articles of association should contain, the number of shares and who the shareholders will be. All of these decisions will be left in the hands of the Minister for Finance. I asked earlier why the Minister for Industry and Commerce will have no say in these matters. The Minister for Industry and Commerce has responsibility for all of these matters and I am concerned at the extraordinary discretion and scope being given to the Minister for Finance in this context. Once we pass this legislation, everything will be left in the hands of the Minister for Finance.

Mr. McKenna

It will be in good hands.

Mr. Costello

Is the Senator suggesting that it will be in better hands than those of the Minister for Industry and Commerce?

Mr. McKenna

It is a Finance Bill.

Mr. Costello

It deals with an insurance company.

Acting Chairman

Senator Costello, without interruption, please.

Mr. Costello

It comes within the brief of the Minister for Industry and Commerce, and I am sure the Minister for Finance knows that.

Fianna Fáil in their manifesto, the Programme for National Recovery stated that they would encourage the development and expansion of State companies if necessary in joint ventures so as to create wealth and sustain employment. Those wonderful words were soon forgotton and we are doing the exact opposite here. We are not encouraging or developing such expansion; we are doing the opposite. The Taoiseach is on record as exhorting the public sector to create jobs. That was the whole thrust of the Programme for National Recovery. The aim of the social partners over the last three years was the creation of employment but they have failed dismally in this regard.

Acting Chairman

The Senator has strayed from the Bill. I have allowed you some latitude and I would prefer you to confine your remarks to the Bill.

Mr. Costello

I want to show the connection between the Programme for National Recovery and the——

Acting Chairman

I do not think it needs to be elaborated on now.

Mr. Costello

I will be relatively brief. It is pertinent to the matter——

Acting Chairman

It is not.

Mr. Costello

When I was at the annual conference of the Irish Congress of Trade Unions in Tralee last week this was one of the major items discussed. The trade union movement have got a bearing on this——

Acting Chairman

It is irrelevant, Senator.

Mr. Costello

I do not understand how it is irrelevant when the trade union movement en masse condemned this legislation and put down several motions on it. Surely it is relevant for me to refer to that. The trade union movement are very concerned about the implications of this Bill. Indeed, Peter Cassells——

Acting Chairman

Will the Senator accept my ruling that it is not relevant?

Mr. Costello

I will not refer to any individual. The General Secretary of the Irish Congress of Trade Unions announced that they were withdrawing from the joint committee conducting a major review of State companies under the Programme for National Recovery because of the Broadcasting Bill and this legislation. What will happen to the new programme for national recovery if the Minister does not spell out his attitude towards semi-State and State bodies? What will happen in that context to the social partnership we are expecting to build up? This has been one of the reasons we have been able to stabilise the economy.

Acting Chairman

The Senator is repeating his remarks. He said all this earlier in the day.

Mr. Costello

I want to ask the Minister where and when the decisions will be taken? We are going to have to deal with these matters in the negotiations. In the context of this being the first Bill which has come before us in terms of privatisation, will the Minister negotiate with the trade union movement in relation to the multiplicity of semi-State bodies? will it be part and parcel of the deal for national recovery?

The Fianna Fáil-Progressive Democrats Programme for Government stated that they are committed to the maintenance of a viable and profitable semi-State sector and that changes will only take place if it is in the public interest, following consultation with the social partners. What consultation has taken place with the social partners on this item? I understand that the Congress of Trade Unions are in agreement with restructuring semi-State and State bodies, there is no problem about that, but they are not in agreement with them being sold. We are presented in this Bill, with restructuring which will not do what it proposes. It goes far beyond that; I should like the Minister to address, in the context of the Programme for National Recovery, how this fits in with the previous programme, with progress or negotiations for a future programme and, indeed, with expressions by the Taoiseach and in the joint programme between the Progressive Democrats and the Minister's party in relation to the State and semi-State sector, because it seems to be contrary to them.

Proposals as extensive and far-reaching as these require a White Paper. We have not had a decent debate here, the guillotine was imposed for the last three days, which is a matter of public knowledge. It is a controversial issue, but more than that, it is an issue of principle. What are the principles underlying our position in relation to the public sector, how they should conduct their business in relation to the assets that have been built up over the years in that sector?

If the Government wanted some level of return of efficiency from Irish Life, why did they not contemplate a joint venture with the private sector? Why must it be this measure which takes control from the State? The State is there in the interests of the people. Why will the Minister not retain 51 per cent to ensure that the national birthright is not sold or disposed of?

I believe the Bill will go through this House, there are not too many Members on the far side at present, but within a short space of time I have no doubt the vote will be called.

Professor Conroy

There are just as many Members here as on the Senator's side.

Acting Chairman (Mr. McKenna)

Senator Costello has been reminded on numerous occasions that it is not proper to refer to the absence of other Members of the House. The Senator knows that quite well and he continues to do it.

Mr. Costello

My apologies, I really did not mean it in those terms. I was making the point that assuredly this Bill will go through the House and will be implemented. There will be new negotiations in the autumn in the context of the Programme for National Recovery and I would like the Minister to give his views on how this is in line with any future social partnership. It seems to be contrary to the spirit and the details of the previous Programme for National Recovery and I cannot see how it will fit into any possible future programme, in the short-term at least.

The Labour Party and I are utterly opposed to this legislation. We see it as a dastardly attack on a successful public enterprise and we will be voting against it at every Stage.

Professor Conroy

Irish Life are a major company and this is a major and significant Bill. I agree with Senator Costello in regard to the importance of this Bill. I might draw somewhat different inferences and conclusions, but I certainly agree that it is very important. It is an historic Bill in many ways and the Minister is to be congratulated on bringing it in.

In some ways, perhaps, the objectives which Senator Costello professes and ours are not that different. He is talking, for example, about employment and employment is, of course, in relation to this Bill, not diminished in any sense. The people who are currently employed have their employment assured. What is offered is the potential for this company to grow further and to give more Irishmen and women the opportunity of employment. We should not forget this important aspect and impact of this Bill. It is giving an opportunity for Irish Life to expand, perhaps very considerably. However, in order to do that successfully restructuring is essential. Some of the reasons for that have already been mentioned and several speakers emphasised them. It would be a pity, indeed, if we were to stay in a sort of time-warp, in which the jobs about which Senator Costello is very genuinely concerned were endangered by the company because Irish Life would no longer be able to continue their successful progress, or to compete. Indeed, as he implied they could quite possibly be taken over by some major foreign company without necessarily — in fact, it would be highly unlikely — having nearly as much growth in employment as there could be under the present arrangements. Indeed, probably fewer people would be employed. I agree, therefore, with many of the sentiments and objectives which, I do not doubt for one moment, that Senator Costello genuinely outlines, but I am not sure it is good to keep Irish Life just as it is, frozen in a time frame in the very rapidly evolving financial markets of today. I understand the sentiments which underline such a view, but they are very outdated.

One aspect of Irish Life about which I am concerned — it has been touched on very briefly by Senator Costello and others — is, of course, their policyholders. It is essential that their interests are protected under the present proposed transitional arrangements and in future. The reason the Government became involved in the late thirties was to protect the policyholders. Important though many other aspects of this Bill are, protection of the policyholders should rightly continue to be the primary purpose of Government intervention.

The management and staff of Irish Life over the last 50 years have certainly shown tremendous expertise and ability. Indeed, former Members of the Seanad on both sides of the House were closely associated with them. The staff of Irish Life should be commended for their excellent work down through the years. It is a vote of confidence in management and in members of staff, men and women working there, that the Government are proposing this Bill which will enable Irish Life to expand into the very competitive and difficult international arena. It will not be at all easy for them, let us not be under any illusion about that. I have no doubt that they will succeed, but they will certainly be entering a very tough, competitive world. This may seem strange when Irish Life have enormous assets in Irish terms of £4.6 billion, but these assets in assurance terms are relatively small. A French semi-state body were mentioned whose assets, I understand, are several times that amount.

The German Alliance Company, probably the major EC company in this field, is bigger again. Even with such large assets it is quite difficult in terms of capital to compete in the international insurance field on any effective scale. I am sure the Senator does not seriously suggest that the Government should invest several billion pounds more in this company, excellent though they may be.

The Government are, rightly, retaining a share. There has been mention of a controlling share — a controlling share in a company may be as low as 15 per cent. That is often regarded as the key share in a company. When we talk of 51 per cent we are talking about absolute control in virtually every aspect or respect. A share of 34 per cent seems rather large and I wonder if a smaller share might not have been more appropriate. I am sure the Minister has been thinking of the golden share, and that would presumably be a major factor there. It is appropriate that a very substantial share be retained but if anything the Minister has erred on the generous side in retaining 34 per cent.

Irish Life is one of the major employers in this country, employing about 20 per cent of all insurance employees. They play a very big domestic role, and for a financial institution this is crucial even in our relatively limited market. It is said that if financial institutions do not have a firm domestic base it is very difficult and unsafe, for them to move into the international field. There have been many sad examples of companies which were basically involved in financial services outside their own domestic area coming to a sorry end.

I agree with Senator Costello, Senator Manning and many other speakers that our State bodies have a great record. Senator Manning in his excellent book on the ESB pays tribute to that company. I gladly acknowledge that one of the great achievements of the Cosgrave Government of the twenties was the establishment of the Shannon scheme, as it was popularly known at the time. It was a tremendous achievement, one that has continued right through to the present day, and I am very happy to acknowledge that people like Mr. McGilligan and others on the opposite side played a major role in initiating and developing the Electricity Supply Board, and in particular hydro-electricity. We are moving on now.

We are into a new era in so many respects, and one of the most important developments is the speed of communications. A few years ago almost on a personal basis, stockbrokers walked on to the floor of the market — in Dublin, Birmingham, London, New York or wherever — buying and selling shares. We are rapidly approaching the day when markets are trading almost continuously, and even a very slight change in the Tokyo Stock Market is being reflected within seconds on the financial scene. There is a total change in the communications area. There has been enormous changes in communications and modern financial methods over the last ten or 15 years. The role of the banks vis-a-vis other financial institutions has changed. We all know this from experience, this change is replicated on a huge scale throughout the world. It is essential that what is possibly our major financial institution — certainly it ranks in the top three — should be in a position to take its place and function efficiently. “Efficiently” is not only a matter of the people involved — they are crucial — but once you have good people you must give them the necessary tools, and one of the tools in financial circles, whether one likes it or not, is capital. This Bill is providing an opportunity for Irish Life to acquire sufficient capital to be able to compete in their particular market.

I will mention in passing the European Community. Both life assurance and non-life assurance companies are covered by European Community Directives in relation to authorisation and financial supervision. We signed the European Community's Life Assurance Account Statements and Valuations Regulations of 1986 and brought them into effect on 18 December 1986. These regulations govern a whole series of things, such as the valuation of assets and liabilities, the calculation of technical reserves and the actual use of implicit items for meeting solvency margins and so on. There are very serious connotations in relation to these reserve values and figures as to what particular financial and insurance undertakings a company can be engaged in. Here again, it is essential from the point of view of Irish Life that they be in a position to compete on an equal level with other European Community financial institutions. This Bill is very necessary for that purpose.

Irish Life are already one of the relatively few companies with their head office here who have undertakings under various headings, which means they are able to cover virtually all classes of insurance. They are a major undertaking and must be able to compete.

One of the great national achievements has occurred under this Government and they deserve credit for it — and we will all take credit for it. I have paid recognition to the ESB and to the opposite side; I am sure that in due course both sides of the House will regard the development of the Custom House Dock site and the Financial Services Centre as a development which was long overdue and that it will play a major role, not only in our financial life but in the financial services sector of the European Community generally and far outside that. This has been a tremendous success despite a great deal of competition and many difficulties. There is a long way to go yet but a good beginning has been made. I would say the same about the national debt. We have made a good beginning there but there is a long way to go yet.

There has been a certain amount of talk about the Department of Industry and Commerce and the Minister for Industry and Commerce and the Minister for Finance, and I have no doubt that the Minister for Finance will deal with these comments in his usual trenchant manner. Of course, the Minister for Industry and Commerce, primarily has a regulatory role in relation to insurance companies, particularly under the 1976 and 1984 Acts. It is his business to monitor and, where necessary, regulate the insurance companies. He has, rightly, very strong powers but they relate to all insurance companies, whereas the Minister for Finance is a shareholder. It is usually the Minister for Finance who is the shareholder when shares are held by the Government, and appropriately so. He has sweeping powers and so he should. It is our money he is investing when he is involved in holding stocks, shares or equities of some nature.

There has been, over the years, a lot of Government legislation in relation to insurance and a whole series of Acts from 1909 right down to 1989. That is a measure of how important it is for the individual policyholder, if I may again emphasise his importance. But it is important in other ways because a major financial company such as Irish Life have, of course, an extraordinarily important role in relation to virtually every other Irish company. They either hold shares in those companies or are in some way involved with the majority of our other major Irish companies. This is quite apart from and above their many other important roles.

At present perhaps 83 per cent of their business is within the State, 13 per cent or so in the United Kingdom, and 4 per cent in the United States. I hope, and I am sure it is the intention of the Minister and of the company, that they would retain, not so much 51 per cent as has been mentioned in a shareholding manner but at least 50 per cent or thereabouts of their business or certainly a very substantial proportion of their business here. They must have a solid base here. If not, one might feel somewhat unhappy. I know they will compete in the European Community where the markets are far bigger, but it is essential in terms of prudency, that Irish Life have a very significant proportion of their assets within this country.

It is a very competitive and difficult business. We have seen only in the last few months that the second largest British financial services institution, other than the domestic banks, has run into a lot of difficulty and, basically, is now being broken up. It appears to be a view that it unfortunately expanded too rapidly. Even though they were a huge company, they ran into very grave problems. I am quite sure that the staff and management of Irish Life will be extremely prudent in their expansion plans. Although the golden share is there primarily to ward off any opportunistic takeover bid, I am sure the Minister also will be concerned with the general overall strategic policy. I mean overall in the most general sense, not in any particular sense.

Presumably regulations on the London and international Stock Exchanges, of which Dublin is a part, and on the European Community exchanges, have been taken into account when organising this reconstruction and this golden share which is, of course, above the normal 29.9 per cent, but there are particular circumstances. One point on which I am not absolutely clear and would be glad of enlightenment from the Minister, is the executive situation within the company. Presumably, there will be a board now which will in some sense at least reflect the shareholdings. Presumably, the established management structure will report to this new enlarged or different board. It will, I take it, be the situation, that the chief executive in future will be appointed by that board. On the actual direction of the company it is, of course, of crucial importance who takes ultimate responsibility.

I am also interested in the idea that the company should have the possibility of purchasing 10 per cent of the shares of the parent company which, again, is a development in line with proposed company legislation.

All in all this is an overdue Bill. Irish Life have been a great success, are a great success and, hopefully, will continue to be a great success. It is essential that they evolve with the times. This legislation enables them to do so with prudence.

Mr. Norris

There are certain features of this Bill, and its passage through the House, that I regret, and perhaps I could put those on the record before I get into the substance of what will be rather a brief speech as I am quite conscious of my own inadequacy in this area, my lack of expertise. It is a pity that the guillotine is operating today particularly because of the Minister we have in the House. Our experience in this House with him is that he is particularly competent and illuminating in dealing with debate on amendments, and has also shown a remarkable capacity to take on board amendments if he is persuaded of them. Because of the quality of the Minister for Finance, I greatly regret that there is unlikely to be any real opportunity to argue the point with regard to the fairly substantial number of amendments that are down.

My second regret is that due to the circumstances of last night, I am now the only Independent Member on these benches. I am aware that two of my colleagues, Senator Ross and Senator O'Toole, who would have taken opposing views had done very extensive work on this issue. It would have been rather interesting to hear a kind of economic cat fight or dog fight breaking out on these benches. I am sure we would have learned a certain amount from that discussion. I acknowledge my lack of expertise in this area and I am afraid I will be asking some——

Acting Chairman

The Senator is being quite modest.

Mr. Norris

I do my best to be modest. On occasion it becomes me. I am not always quite so modest. It is also very good protection in case I make a complete ass of myself, which is possible.

There are a number of questions I would like to ask the Minister. He is very delicate in his speech with regard to the question of the flotation of the shares and the possible price. This is a matter of concern to me. Perhaps the Minister will continue to be delicate in this matter for what he perceives to be good financial reasons but the people of Ireland have an interest in this company. We are, in a sense, all shareholders in Irish Life through the Minister. The Minister is accountable to us, the people of Ireland, in whose interest he holds this portfolio of shares. I am very concerned when I look at what has happened in England where there has been a consistent policy of privatisation of public companies. If one looks not just at the instant of privatisation but if one looks at what happens to the shares, my understanding is that there is quite a strong appetite in the market for these shares precisely because the private investor who takes out these shares makes a very substantial profit almost immediately. In fact, they are often oversubscribed. That would indicate that there is quite a distinct possibility of the State's investment being undervalued.

I wonder if the Minister feels able to give the House any further information with regard to the valuation levels. Perhaps he will not, but it is already in the public domain, because it is a matter of discussion and speculation in the newspapers. There are suggestions that a report of some kind is being prepared which puts a value of £250 million to £300 million on the company. My information is that £750 million to £800 million would be a more realistic assessment. This company will be sold off and there is nothing whatever that we can do about that as the Government have all the cards. We all realise that this is going to happen. It is inevitable now. Accepting this inevitability it is important that we should at least get the very best price possible for the company.

I may well be displaying my naivety but perhaps it would be useful if the Minister placed on the record of the House a reply to this question because the golden share is something I became aware of only in the last while. It is quite a technical area. I am interested because it appears it will only last statutorily for five years and may then evaporate. That is my understanding but I may be incorrect. Is it possible to dilute the golden share in any way? As someone who has received no professional training it struck me that the launching of a successive series of rights issues, for example, could dilute the impact of the golden share down to a point where it becomes negligible and impotent. Is this possible? I do not know, and I ask the Minister to address himself to that point.

Senator Conroy touched on the possibility of a too rapid expansion by this new company. This is a danger but I would like to think it is one the Minister could guard against. Many taxpayers have bitter memories of the bucaneering approach adopted by Allied Irish Bank who went into the insurance business in the free and open market and got their fingers burned. They then turned around and dipped their other hand into the tax-payer's pocket to bail them out. I would not like to think that we will now float a successful State company on the open market with great hurrahs and soon find that it goes to their heads, that they expand too rapidly, under partially foreign management, and we then have to bail them out again. We ought to take this matter quite seriously and worry about it and try to protect ourselves. Perhaps the Minister would give an indication that if they do go down the tube he will wash his hands of them and let the market operate fully and to the last extent. He pretends he does not want to be ideological about it. It is rather interesting he introduced that word and perhaps I will say a little more about that later but I hope this absence of ideology will allow him to watch with equanimity if the company get themselves into difficulty.

I also noticed Senator Conroy expressed the hope — a very wise hope — that about 50 per cent of the business base will be retained in this country; in other words, a solid foundation should continue to exist in the Irish market. I think he is right. If one extends the argument one is led to wonder why we do not look for a 51 per cent shareholding to be retained. I have some doubts about the efficacy of the golden share as envisaged in the legislation and a far more satisfactory way of looking at it would be for the Government to retain 51 per cent.

It is remarkable that this is already a successful company; this is an intervention by Government not in an ailing company, as was the case with the Insurance Corporation of Ireland, but in a very healthy, well managed and well run company. I listened with great interest to what Senator Conroy had to say when he interrupted Senator Costello who was referring to the business practices of the various airlines. At first I was persuaded by him, given the changes in eastern Europe, for example, where we have the extraordinary sight of the introduction of market economies in what previously were totalitarian regimes. A persuasive human argument can be made that the market is an important element in motivating people.

When Senator Costello was making reference to the practices of the different airlines and the way in which the Government intervened to alter the balance as between Ryanair and Aer Lingus, Senator Conroy made a very effective and telling intervention and said we should look at the benefits because after Ryanair were introduced and assisted we got the real operation of competition. People have been told that because of the action taken by the Government fares have come down, flights are more frequent and accessible and there have been very few strikes in the airlines. Of course that is true and an absolutely effective point but it only glanced at the point Senator Costello was really trying to make.

Competition would be very widely welcomed but it should, to use that devastating cliché, be on a level playing field. What Senator Costello was referring to was not the establishment of Ryanair in the open market but the fact that having been established and successful initially — this is the kind of model which would worry me with regard to Irish Life — they then got into difficulties for reasons which are obscure to me. They experienced some financial turbulence at which point there was an intervention by the Government to remove certain routes from the State company and hand them over, as a monopoly, exclusively to Ryanair. That is not the open market or the free market; it is State intervention, it is statism. I am afraid, therefore, that Senator Conroy's point which originally persuaded me had less substance when I looked into the specific point Senator Costello was trying to make.

Professor Conroy

I will come back on it.

Mr. Norris

I would be interested because there may very well be further——

Acting Chairman

We are not going to get involved in a discussion across the Floor of the House.

Mr. Norris

I accept that; I will take Senator Conroy's advice in perhaps a more congenial atmosphere in another part of the House. As I said, there are reasons to be concerned about this Bill and I have attempted, in the absence of my more professionally based colleagues, to express them. I understand what the Minister is doing. He wants to facilitate the restructuring of Irish Life and he appears to wish to continue some form of shareholding in the company although I have raised some doubts about it.

Again, it is almost like a circular movement because in giving an interesting short history of the company he indicated it was not an ideological stance to take over, to nationalise, that it occurred accidentally as a result of the collapse of some small insurance companies and that the Government then got in with £1 million to shore them up. That is fine but he also made reference to another stage and that is in 1947 the Government deliberately took the decision to acquire a majority shareholding of over 90 per cent by buying out the small United Kingdom investors, partners. At that point I suggest there was clearly a deliberate governmental intention to create a semi-State company. Therefore, there is, in fact, some degree of reversal.

Let me make a brief comment on this business of ideology. The Minister stated: "It is necessary to say this as we must approach this matter on a practical and pragmatic basis and not on the ideological grounds of the benefits or otherwise of State ownership". That is a rather interesting sentence especially if we remove the word "ideological" because it seems the "grounds of the benefits or otherwise of State ownership" are germane to the Bill as the Minister is acting on behalf of the people. If there are particular benefits or disadvantages to State ownership, they ought to be right out in the centre of the debate as they are really crucial to an understanding of what are the best interests of the company.

It would be malicious to delay the House when I explained I was speaking purely from a layman's point of view but I hope the Minister will be able to answer some of the points I have made. I noted with interest the following sentence in his speech: "under the current corporate arrangements, profits are largely locked in and cannot be distributed to shareholders". That sentence indicates what a minefield this legislation can be for the layman and I speak as someone who is a company director. The company of which I am chairman and managing director, although it technically makes a profit, is intended for charitable purposes. To my horror I discovered that although we have always honourably tried to pay our taxes and this sort of thing and then done work which, I am sorry to say, some of the Minister's colleagues have found themselves unable to do, and for which we therefore provide the finance to do, we are in the process of being surcharged because we do not distribute the profits to the directors. There are times when my mind, puny as it may be, boggles at the notion of being surcharged for not going home with the loot and instead devoting it to worthy causes. I simply do not know, so I am afraid I have to give up. I am glad that we have such a competent Minister. I am not sure if I quite agree with this Bill and I shall possibly vote against it, but he might be able to reassure me. I may be completely wrong on the issue of the golden share for example but I think it is something in which the average intelligent layman might be interested.

Mr. Harte

There is no question of having an ideological hang-up about the privatisation of Irish Life, but it is a major step for a State company and obviously it can be a cause for concern. Our opposition to it is not just attitudinal but conditional. Much good can result from the State sector being involved in the whole process of the mixed economy; on the other hand, when trying to put the question of involving State enterprises in the whole area of market economies, etc, each case has to be considered on its merits, and they differ. You just cannot have a block attitude to it.

The trade union policy on public enterprise is determined by the key role which these companies play in the economy and on their ability or their potential to generate substantial wealth and employment. We have always expressed the view that the State companies have a crucial role to play in economic development. If tackling unemployment is still the top priority of Government policy, then the development and expansion of public enterprise must be part of its job creation strategy. The State companies must be taken seriously as a means of creating viable jobs. At present they account for approximately 10 per cent of GDP. Four of the largest employers in the country are State companies. They constitute six out of the ten largest employers. Eight of the 18 companies employed more than 2,000 people in 1987. State companies have contributed substantially to wealth creation and employment in the past.

As far as we are concerned a strategy must be adopted to ensure that the State companies continue to play an important role. That is why there is opposition to the selling off of State companies to private businesses without stringent controls or conditions. It is not based on ideological grounds. If they do not recognise or understand the stringent controls or the conditions, it will be very difficult to gain acceptance. The arguments for control are based on sound economic sense. They identify the very important role that the State sector, at its most efficient, has played in generating wealth and creating jobs in the economy, particularly where the private sector remains relatively small and is unable to fill the major gap which exists in our economic development.

In recent discussions about public enterprise, the two most important issues have been almost totally ignored. These issues are the potential of public enterprises to create viable jobs and their role in developing the Irish economy. The obsession of many politicians, commentators and interest groups with privatisation has restricted the debate within very narrow parameters. There is, whether we like it or not, a naive belief in a short-sighted policy of selling off public assets — that was the public demand at the beginning but perhaps the situation has changed a little — to pay off the national debt. That is a restriction on the potential of public enterprise. That is not the way it should be approached. I am not suggesting for one moment that that is how it is being approached; that was the mentality and that is what built up the opposition and made it impossible to understand that every State company has got to be looked at individually because the criteria that is applied to one cannot always be applied to another. We get into these difficult situations because of some hype or other unfavourable presentation of the case.

We all know that Irish Life was a very successful company, that would be the general consensus and nobody would argue about that. Equally, we are aware that RTE was a successful company. We all know that Aer Rianta and Aer Lingus were successful companies. Under the terms of the Programme for National Recovery the companies were asked to submit projects for job creation, and 30 of those companies did in fact submit such projects, and RTE was one of them. On the other hand legislation is being introduced which can nullify that particular effort on the part of RTE in trying to create jobs. In the public perception these are contradictions.

That is a passing reference and I am not getting away from Irish Life, but we are talking about amending the Insurance Acts from 1909 to 1989. It is not easy to understand the Ryanair situation referred to by Senator Costello for example, why is something not taken off the private sector and given to the State sector. Some people are wearing crowns of thorns now about the press not getting a fair shake. Why doesn't somebody say that The Independent newspapers which constitute 50 per cent of the press should share that with their competitors. They are all contradictions. What are we doing? This is what confuses the public and makes it very difficult for them to understand. We all act on the basis that every one of us went to third level college or that we were fortunate enough to get a secondary education. We forget there is a mass of people out there who do not even remember whether they passed the Primary Examination. Yet we use this highfaluting legal jargon, very complicated wording of Bills, and expect the ordinary punter to react favourably. These are the problems they encounter. I do not think a so-called ideology really exists. Always in the final analysis people have favoured a mixed economy. We cannot adopt a blanket-type approach contending that all companies must be privatised because that is the way the world is developing. Let us examine them all individually and ascertain the story.

I am tired saying this but it is better said here than elsewhere because someone here may just listen. I question whether anybody could prove to me that the private enterprise system, on its own, could generate sufficient jobs or create full employment. Full employment has become something of a myth but, relatively speaking, full employment because, in my lifetime — I am almost 70 years now — I cannot remember it. I have listened to this myth being propagated since Parnell was a child but it has never happened. The public sector have a crucial role to play in creating new viable jobs. That fact must be acknowledged. People should not get carried away with the idea that — if there are a few bob to be made — it might be better if we deployed the professionals, people who are versed in the financial market, but that is not always the case. We should examine each company and/or case individually.

I contend there is plenty of scope for State companies to set up efficient subsidiaries along the lines of the Aer Lingus subsidiaries. There is also ample scope for joint ventures between public enterprise and others similar to the joint ESB Aer Lingus venture — Toptech — and there is scope for public enterprise entering into the joint ventures with private companies. There is no ideological hang-up there in that respect. That is what I contend should be investigated but outright privatisation of State companies would present a serious threat to their potential. If we were to adopt that attitude it might render it difficult for us to take advantage of the Single Market and contribute to our economic development.

In the national interest it is better that companies remain under Irish control, with a commitment to contributing to the development of our economy, particularly in the lead-up to 1992. For example, there has been a significant increase in the number of take-overs and mergers as companies prepare for 1992. Any company that is profitable and has potential for growth is liable to be taken over or acquired by shareholders whose sole interest is not the Irish economy but strictly in company profits. Selling off the majority of shares in State companies leave them open to foreign take-overs. That presents the problem that one may shift the focus away from these companies with the attendant possibility of their shifting their operations abroad which would not yield anything for our economy.

I spoke earlier about the merits or otherwise of different forms of privatisation. We cannot afford to allow any discussion on State enterprise to be confined, even to the relatively marginal issue of privatisation. As the chief executive of the ESB said privatisation has more to do with political dogma than with economics; it is time we dropped the dogma, and opened our minds to the full potential of public enterprise in our economy. I would put that the other way round. The trade union movement cannot have it both ways. They cannot say that about the so-called "privateers" and, at the same time, contend that the companies themselves cannot be scrutinised. It is a question of how one looks at them, what measures and controls exist to give protection, ensuring that the concept of a mixed economy is not put into decline as a result. That is where we fall down on job creation.

The trade unions have laid down the following criteria in regard to privatisation: (i) the type of privatisation proposed and the reasons put forward to justify its implementation; (ii) the impact of privatisation on job security and conditions of employment within the enterprise; (iii) its impact on the potential of the enterprise to create new jobs and generate extra wealth; (iv) the attitude of the workers in the enterprise to the form of privatisation proposed; (v) the extent to which the public's interests would be protected during the privatisation process, for example, the steps to be taken to ensure that the price at which shares are issued will match their market value; (vi) the level of openness, consultation and public discussion involved in the formulation of specific privatisation proposals, for example, secret discussions with private consultants and financiers who would benefit from the proposed transaction are not acceptable; and (vii) the measures taken to ensure that the opportunities to purchase shares are extended to the maximum number of citizens, including workers in the enterprise.

That is the trade union approach to the question of privatisation. At this point I do not want to go down the road of privatisation; I have already commented on that, nonetheless it has to be said that there are different reasons for privatisation. They can be summarised under a few headings: (1) for financial reasons to allow public enterprises access to capital especially when the Government, as shareholders, do not have the money; or (2) to use the money from the sale of Government shares to pay off the national debt. The economic reasons are (1) to improve the efficiency and commercial performance of individual enterprises and (2) to end monopolies enjoyed by public enterprises. Then there is the ideological reason to reduce the role of the State, extend the influence of the market and move towards a share-owning democracy. As far as we can see, the motivation for privatisation may be based on a mixture of the reasons outlined or on a combination of all.

In the case of Irish Life at least one of those is the reason they are embarking on their current privatisation proposals. With regard to large concerns, it is not a question of whether one moves from circumstances in which the State retains its shares, rather it is a question of how it is done; whether you can sufficiently protect the public at large, not merely the trade union movement. This is where we do not perceive the so-called golden share option as a guarantee. We do not envisage its preventing foreign take-overs; that has been amply demonstrated by the experiences of Britoil and Jaguar in the UK; at best it enables a Government respond to circumstances prevailing as they see fit. For example, as happened in the UK, the Government decided not to exercise its right to block a take-over. Therefore it will be seen that the golden share option is very unreliable as a mechanism for protecting the public interest in such companies. It has also been examined by the European Commission and may be deemed to be contrary to EC competition law. Given the strategic role which many of these companies play in the Irish economy it is clearly not in the public interest to move them out of Irish control.

This is the concern that Senators Upton, Costello and Norris expressed earlier. I must confess that I did not hear all the contributions so I am, therefore, not in a position to comment on them.

My real concern is that in my lifetime I have never seen the private sector being able to create jobs on its own; I have no experience of the private sector being called to rescue the State sector to help create jobs. I am certainly a bit cynical about privatisation but not ideologically totally opposed to it. I want to see controls there and I want to see them put there one by one. I want to see protections there in the interests of the economy and the public.

We oppose the selling of Government shares in State companies. That would be totally unacceptable to Congress. We oppose the selling all of the shares in some of the public enterprises. There may be exceptions to this general principle in special cases. For example, the Joint Hospitals Services Board were sold because there was no alternative and a similar situation exists in relation to Irish Steel. We are not ideologically opposed to the selling off of Government shares in State companies as a matter of principle. It is not a case of saying we do not mind change so long as it affects the other fellow. We are too long in the tooth for that. We have, however, had bad experiences of the private sector either not being facilitated to do its job or just being unable to do it. I take Senator Conroy's point that the rate of change in the economic world has caused us certain problems and that we must now look at issues in a new way. I am not opposed to that but we must ensure that there is protection. Those of us who represent workers have to be conservative because we have to protect not only workers but consumers who are the workers. We are talking about protecting the general public because 500,000 people, plus their families, is a sizeable proportion of the population.

We need to judge every issue on its merits. We are concerned about Irish Life. We do not think they can escape market forces. Senator Conroy said that there was a very difficult world out there, that they were going to have to compete and that they deserve credit for their performance. I do not envy them having to go out into the scrambling, selfish system. The one thing that neither Senator Conroy, or the Minister, could guarantee was that some problem would not arise whereby they would go to the wall. It is not a question that we are bellyaching. We are genuinely concerned about whether the courses of action we are taking are the right ones to protect the Irish public. That is the business we are in.

Mr. Mooney

Perhaps I am out of order, but may I ask the Senator if he will afford me the opportunity, before we conclude, of contributing a few words on this Bill, and also to get the Minister involved?

Mr. Manning

On this point, at this stage with ten minutes to go clearly we will not have a Committee Stage. I appeal to Senator Harte to let the Minister in straight away for ten minutes to respond to the debate. In the interests of fair play, or some semblance of fair play, I ask that we let the Minister in for ten minutes.

Mr. Mooney

It was in that spirit that I raised it, because I have been waiting since this debate commenced this morning.

Mr. Staunton

On a point of order, I would like to strongly support Senator Manning's point. In essence it relates to the Government having a guillotine motion in play on this Bill.

Acting Chairman

Senator Harte is in possession.

Mr. Staunton

The control of this is a matter for the Government. The point is that we should hear the Minister respond to this debate and the Government side have the power to order that.

Mr. Harte

Will somebody tell that Senator there that I cannot sit down until I finish, and I am finishing now.

Mr. Staunton

My apologies; my comments did not relate to Senator Harte.

Mr. Harte

I accept that. I would like to hear the Minister, please.

Mr. Mooney

I should like to thank Senator Harte.

Mr. Staunton

I thought it was the Minister we were having when Senator Harte sat down.

Mr. Manning

I object. Senator Harte sat down to let the Minister in. We have eight minutes left and we are wasting time. The Government side cannot have it both ways.

An Cathaoirleach

I do not govern the decisions of individual Members to stand up and address the House at this stage.

Mr. Manning

Senator Harte sat down to let the Minister in.

An Cathaoirleach

I am calling Senator Mooney.

Mr. Staunton

We appreciate that, but we are requesting that Senator Mooney allow the Minister to come in as a reasonable concession.

Mr. Manning

Senator Mooney is being selfish. There are now eight minutes left.

Mr. Staunton

It is common sense to allow us to hear a reasonable response from the Minister. It is the Government's guillotine, not ours.

An Cathaoirleach

I called Senator Mooney. Senators please resume your seats.

Mr. Mooney

I wish to accommodate all sides of the House and——

An Cathaoirleach

Senator Mooney, proceed.

Mr. Costello

Senator Harte has accommodated the House.

Mr. Mooney

Please, I will be happy to accede to the request from the Leader of the Opposition, unusual and all as it is in order to accommodate the other side of the House and allow the Minister some time. I would like to put it on record, however, that I have been waiting to get in on this debate since 10.30 this morning——

Mr. Costello

We did not impose the guillotine.

Mr. Mooney

It had nothing to do with me.

Mr. Costello

The Senator's party imposed the guillotine.

Mr. Manning

The Senator voted for the guillotine. He cannot have it both ways.

An Cathaoirleach

Will you speak to the Bill, Senator Mooney.

Mr. Mooney

I will withdraw my accommodation to the Opposition if they are going to be petty about it. I bow to the wishes of Members.

Mr. Manning

It is a question of principle.

Mr. Mooney

It is not.

Mr. Manning

The Senator would not know what it is.

An Cathaoirleach

Senator Mooney, I am not going to allow this to continue. If you are going to bow, as you have said, to the wishes of Members of the House and allow the Minister in, we will call the Minister.

Mr. Staunton

Thank you very much.

Mr. Costello

We could have had the Minister for the last five minutes.

A Senator

On a point of order——

An Cathaoirleach

I am not going to allow points of order. The Minister is on his feet and surely we will give him the courtesy of an opportunity to address the House.

Minister for Finance (Mr. A. Reynolds)

Thank you very much, a Chathaoirligh. I want to thank all the Senators who contributed to the debate. In general terms I will respond to a few of the points. Senator Harte finished on a note that Senator Manning started off on, that the approach to this Bill should be one based on pragmatism and realism and not on any ideological road. Neither I or the Government are going down an ideological road on this. I take Senator Harte's point that the philosophy of privatisation should not be the determining factor in what is done with any specific State company. What should be done is what is best for the company, their employees and their future. This has been the Government's approach in relation to Irish Life.

Irish Life are the largest State life assurance company in the country. They have 40 per cent of the market and employ a couple of thousand people. Their future is what is at stake and that is what is important to all of us. When we talk about their future, we talk about their employees the policyholders and those who will benefit from the company.

What is the best future for Irish Life? Clearly, it is not a short-term decision. It is a decision that was embarked upon two years ago when the Government initiated debate on this. It was also debated by the Oireachtas Joint Committee on Commercial State-sponsored Bodies to see what was the best future for them. The Government appointed advisers and the recommendations in every option put forward by them was to follow the road we are now embarking on. Some of the options pointed towards a total sale, others to less than what we have decided but this is the decision the Government have taken on Irish Life. The decision was not based on an ideological approach but purely on the basis of what is the best future for the company. We believe this is the best future because the profits are locked in, the taxpayer is getting something in the region of about £400,000 a year from an asset that is valued at whatever figure? I am not able to put a figure on it because I would be pointing to the possibility for speculators to say: "here is the value of an Irish Life share". All I can do is assure the House — and Senator Norris and other Members who raised the point — that the Government have employed advisers to look into the proper valuation of the company. We will be retaining advisers; we have tendered for them on the normal tender basis. The company will be retaining their own advisers and stockbrokers. The House can be assured that the full valuation in so far as it can be got at the time of flotation — which is really what the valuation of any company is all about will be sought. Various newspapers and commentators have given their views as to what the value is, what I often say in circumstances like this, is that everybody knows the price but nobody knows the value. That is the way I am going to leave it.

Questions were asked about the golden share — and I will touch on the main points raised here — the golden share is not a 34 per cent shareholding. It is a special share, one share. The rules and regulations governing the conduct of any company's business is the memorandum and articles of that company. Into that will be inserted the provision for the golden share which is an effective mechanism to ensure that no policy is pursued or no hostile takeover can take place in relation to that company. The golden share which is only one share which is held in my name and it cannot be diluted by rights issues or anything else. The company cannot be sold or wound up without the approval of that golden shareholder, which is the Minister for Finance of the day. That is the reality. It is not against EC legislation because our total advice is that under all the EC regulations, directives and legislation at present, there is nothing to prevent us operating the golden share as we now have it. It may well be that in the future the EC may change the law or introduce new Directives but it is not in conflict with the present legislation.

The question of dividends was raised also. We have a 90.25 per cent shareholding in the company and Members asked why do we not send in directors to vote us a larger dividend? It simply cannot be done within the structure of the company, as it stands. The total reserves of the company are about £3 million. That is the maximum that could be given out in dividends to the shareholders, and I, on behalf of the State, hold 90.25 per cent of the shares so the profits are locked in. What is going to happen to the reserves of the company? What is going to happen to the policyholders who hold with profits policies? The courts will decide what the equity involved is and that is why we have to present it to courts both in Ireland and in the United Kingdom. A percentage of the business of Irish Life is in the United Kingdom and consequently the United Kingdom courts have to adjudicate on the fairness, equity or otherwise of the flotation presentation that has to be made to them. The same applies to the Irish courts. The reserves are bound up and the courts will decide on them. It is not for me to anticipate what the courts may or may not say in that particular instance. That deals with the points raised on the reserves and the profits, and there was no other way to get dividends. The profits are locked into the company. What is best for the future of the company? Everybody poses the question, why do you do this? The question remains to be answered. It was not answered in either the other House or this House. How does Irish Life get access to the capital they will require to expand their business in the future? They do not need it today but any good corporate strategy plan for a period ahead would make provision for where they are going to get capital in the future. They are the biggest life assurance company. They have 40 per cent of the Irish market. We are into a new situation with the approach of 1992 with new rules and regulations and laws in relation to banking directives and probably insurance as well.

Irish Life asked the Government to consider taking this road because they knew — and if anybody has any doubt I will repeat it here now — that we are not in the business of providing the equity that would be required by the company. They have to have the same access to capital as everybody else to preserve and to expand employment. They have given full assurances on employment. The House can also take it that in principle, I accepted this in the other House and I repeat it here, the Government are in favour of the workers and the management of Irish Life having a share in the future profits of the company.

An Cathaoirleach

It is now 3.45 p.m. and in accordance with the resolution of the House I am required to put the question on the Insurance Bill, 1990. "That the Bill be now read a Second Time, that Committee Stage is hereby completed, that the Bill is reported to the House without amendment, that Report Stage is hereby completed and that the Bill is hereby passed."

Question put.

Senators

Vótáil.

An Cathaoirleach

The question is: "That the Bill be now read a Second Time, that Committee Stage is hereby completed, that the Bill is reported to the House without amendment, that Report Stage is hereby completed and that the Bill is hereby passed." On that question a division has been challenged. Will Senators claiming a division please rise in their places?

Senators Costello, Harte, Norris and Upton stood.

An Cathaoirleach

As fewer than five Senators rose in their places I declare the question carried.

Question declared carried.

An Cathaoirleach

The names of the Senators who stood will be recorded in the Journal of the Proceedings of the Seanad.