Question again proposed: "That section 112 stand part of the Bill."

May I put the question?

I just want to welcome the Minister here today. I am sorry he was not here for the discussion of the amendments to this section. One of those was to implement a policy promise made by the Progressive Democrats, namely, to provide that the Revenue Commissioners would no longer have preference to the disadvantage of ordinary trade creditors and other creditors or, indeed, preference over others who might, for instance, have a cause of action against a company for some wrong that the company did it — involuntary creditors, in other words; that the Revenue preference should be limited to only those cases where the Revenue are collecting as an agent, that is to say, PAYE, PRSI and VAT, that they should have the same status as other creditors in regard to ordinary debts owed to the Revenue, that is to say, for corporation tax basically.

We are aware of many cases where when the bank has got their share out of the insolvency of a company and then the Revenue have got theirs, there is absolutely nothing left at all for the ordinary trade creditor. Frequently this ordinary trade creditor, as a result of not being paid, finds, in turn, completely by virtue of events beyond his control, that he is no longer able to pay his own debts, and there can be a knock-on effect of this kind.

I believe and have argued that the Revenue have a much better ability to monitor the credit position of a company than do ordinary trade creditors. Regular monthly or bi-monthly returns are made to the Revenue for PRSI, VAT, and so forth. If any company falls behind in those payments, it is a clear sign that the company is getting into difficulty and the Revenue have the power to intervene at that stage to collect their money, a power which ordinary trade creditors do not have. Ordinary trade creditors do not enjoy all the powers that are being conferred on the Revenue in recent Finance Bills, powers to pass debts on to a sheriff and various other penal powers, to collect their money. Given that Revenue have all of these powers it seems to us in the Fine Gael Party to be wrong that the Revenue should enjoy such advantages over ordinary trade creditors who do not have access either to the regular credit information that the Revenue have, or to the powers that the Revenue have to collect their money in time before the company gets into any difficulty.

For that reason I am particularly disappointed, although the Progressive Democrat Party made this a specific issue in their very well-prepared policy document, Emploment, Taxation and Jobs, published in November 1988, that the Minister has not seen fit to obtain the agreement of the Government to make this change. I should say that the change giving the Revenue equal status with other creditors in regard to ordinary debts, is something that has been recommended also by the Commission on Taxation, by the Institute of Credit Management, by the Cork Committee in Great Britain, who examined company law and by virtually every other respectable and well-regarded body that has looked at this subject objectively. Indeed, as is obvious, this persuaded the Progressive Democrats, when in Opposition, to go along that same line. It is a wise line, in my view, and it is regrettable that the Minister has failed to follow it. I must express my unhappiness with this procedure and the fact that the Minister has not been here to ensure that that amendment which Deputy Barrett and I put down would be accepted in line with his own party’s policy.

In supporting all that has been said by Deputy Bruton in the Minister's absence, we also express disappointment that there was no attempt even to consider any possible changes other than the ones suggested by the Fine Gael Party. During the course of the last meeting I asked that consideration be given to changing the whole system altogether in relation to the collection of taxes by an employer or by a company on an agency basis. As I understand it, this has been done in other countries. In line with that if money is collected by an employer such as PAYE or PRSI or, indeed, VAT that money should not form any part of a company's assets, but should be lodged in a separate account which requires two signatures, one being the Revenue Commissioners and the other being the employer, and that money, which does not belong to anybody other than the State, because it is being collected on behalf of the State cannot be used for any other purpose.

If we are going to pass over the Companies Bill without making any reference to such points the position becomes quite ridiculous. Before he deals with this section would the Minister give us a commitment that he will consider this point with a view to tabling an amendment on Report Stage? If that happened we could then deal with this whole issue of preferential treatment for different individuals or bodies when it comes to the liquidation of a company. If PAYE, PRSI and VAT were in a separate account then those moneys would be paid to the Revenue Commissioners in the period they are supposed to be paid. If this were the case, I do not think we would face the sort of difficulties to which Deputy Bruton and myself referred.

It has been said that that suggestion is impractical because it is a known fact that some employers have, from time to time, to use that money to keep their company afloat. If a company is trading and needs to use money belonging to the Revenue Commissioners, such as PAYE or PRSI collected from their employees, surely the warning bells are ringing loud and clear.

Today in the Dáil it has been decided to move the Bill abolishing Fóir Teoranta, so we are now going to be left in a situation where there are no rescue agencies in place. Also, nothing will be done to deal with situations where companies get into difficulties and people have to go cap in hand to the Revenue Commissioners seeking some sort of an agreement to keep such companies in business. I would be totally in favour of making every effort to keep a company in business if it is at all possible. I have always felt that the Revenue Commissioners should not be put in the position of acting as a rescue agency. I always felt that we should have in place an agency that could pay to the Revenue Commissioners the outstanding taxes due, so that the Revenue Commissioners would be left to do their job as collecting agents and a rescue agency would step in and possibly provide a rescue package which would include the immediate payment of outstanding taxes.

I do not think that it would be credible for this Committee or the Dáil to allow a Companies Bill to go through without dealing with the issues of liquidation and preferential treatment. Irrespective of the fact that Deputy O'Malley as Minister and as leader of the Progressive Democrats, is going back on a commitment given to the electorate by him on behalf of his party, and that he stood for election on that manifesto, it would be wrong to allow this opportunity pass without doing something in this whole area. At the end of the day, if other creditors fail to get anything from a liquidation, it can ultimately mean more and more smaller companies going into liquidation as a result of the failure to deal with this issue. I ask the Minister, in all sincerity to approach this issue on Report Stage and come up with an alternative to what we have proposed, because our proposal has been defeated by a vote of this committee. I do not think the opportunity should be lost.

The first point I would like to make is in relation to the references to my absence from the committee. This is the twelfth meeting of this committee. I have been present at seven of them, which is more than half. I have two Ministers of State among whose duties is to appear in the Dáil or Seanad or in committee of either. In so far as I have made any error in regard to these matters, it is that I have not allowed the Ministers of State to appear as frequently as they should, in my view, and as frequently as they are entitled to under their appointments. I do not know whether it is an error on my part therefore to have been present as often as I have at this committee. I have endeavoured to do it because I regard the matter as very important. I am aware from my general duties as Minister for Industry and Commerce that there is an overwhelming need in the public interest for the passage of this legislation. One of the reasons why I have attended here on this abnormally large number of occasions is to try to do what I could to expedite the passage of the legislation. I greatly regret that three weeks ago when I left it was at section 110 and it is now at section 112.

I have just signed in the last five minutes a letter to a member of this committee who is complaining quite legitimately on behalf of a constituent about the manner in which that constituent has been left high and dry by one of the phoenix directors who has gone out of business owing the constituent a large amount of money and has set up in business again the following day under the same name. I think this is entirely wrong and borders on the fraudulent. This Bill, among many other abuses that it tries to stop, is trying to stop that particular type of abuse. I earnestly beseech this committee to try to enable us to make progress in regard to it. We are now on section 112 which is a very minor section which makes a small, almost trivial procedural amendment to section 285 of the Principal Act. There have not been any amendments down to this section.

It shows you have not been dealing with the Bill. You are unaware of what has been happening. There are two amendments down.

They are there to insert sections before section 112. There are no amendments to section 112 nor have there been.

Amendments to the subject matter of section 112.

There are amendments down to insert a section before section 112.

In regard to the subject matter of section 112, if the Minister cares to check.

I have them in front of me. I am looking at them. There are no amendments to section 112.

This is the reason why this committee — after 12 meetings, which must be one of the longest times that any committee have sat on any Bill, no matter how long or complicated, in this House — is in such difficulty. We still have, I am advised, in excess of 140 sections to deal with. We are still not halfway. Out there, there are people being ripped off every day of the week while we argue about matters that were decided, I understand, at the second last meeting of this committee and would appear therefore to have been disposed of. If some members feel that they were disposed of wrongly, the place to raise that is on Report Stage not on Committee Stage at meeting after meeting.

I appeal to the committee to enable us today to make progress on this because of the huge need there is to reform company law in this country. So far as I am aware, no member — even though there has been prolonged debate on these matters — has expressed any opposition whatever to the minor procedural change that is proposed in section 112. I have read the debates on the earlier sections and on the earlier amendments before the committee came to section 112 and I will certainly bear them in mind for Report Stage and see if there is a way in which the various points of view that were expressed can be taken into account without doing too much damage to the public revenue and without putting the public interest, as opposed to optional private interests, at too much of a disadvantage.

I do not want to repeat the arguments that have been made here but I think that the arguments that were made by the Minister of State here at two previous meetings are worthy of every consideration, and should not be just brushed aside. I know that there is a matter where there are different points of view and I am most certainly prepared to take them into account. If some change in that direction can be made on Report Stage, I will certainly be glad to do that.

May I just explain why I referred to the Minister's presence. I do not think any of us have any wish to prolong this debate unnecessarily but the fact is that any change in regard to revenue preference would have to be made by the Cabinet because it would involve the Minister for Finance. Therefore, it is particularly important that if amendments of this kind are being considered, the Minister who is at the Cabinet and is thereby in a position to do something about raising these issues at Cabinet, should be present to hear the arguments and, as it would appear in the Minister's case now, is actually quite sympathetic to those arguments. It would have been far better if he had been here to be able to respond in that fashion. We might not have got into the difficulties we did.

First of all, I would like to apologise to the meeting for being inadvertently missing for the last two meetings and to thank those who stood in despite the difficulties that seem to have arisen.

Question put and agreed to.