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Ceisteanna—Questions. Oral Answers. - Government Borrowings.

Tuesday, 27 September 1966

Dáil Éireann Debate
Vol. 224 No. 1

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16.

Mr. Sweetman: Information on Gerard Sweetman Zoom on Gerard Sweetman asked the Minister for Finance if he will state the full terms of (1) the loan by the Bank of Nova Scotia and (2) the recent loan in Great Britain.

Parliamentary Secretary to the Minister for Finance (Mr. J. Gibbons): Information on James M. Gibbons Zoom on James M. Gibbons The loan from the Bank of Nova Scotia amounted to £5 million and is repayable in equal annual instalments of £500,000 each over a period of ten years. Interest at the rate of 7 per cent per annum is payable half-yearly on the amount of principal outstanding from time to time.

A stock issue amounting to £5 million was made on the London market [16] on 4th August, 1966. The rate of interest was 7½ per cent and the issue price £97 per cent. The stock, if not previously redeemed or cancelled by purchase in the open market, will be redeemed at par not later than 10th July, 1983 and may be redeemed at any time after 10th July, 1981.

17.

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins asked the Minister for Finance (a) the total amount raised by the London loan; (b) the advice he acted upon in seeking the loan; and (c) whether it is intended to seek other such loans abroad and, if so, where.

Mr. J. Gibbons: Information on James M. Gibbons Zoom on James M. Gibbons The proceeds of the London loan amount to £4,850,000.

The timing and terms of the loan were in accordance with suggestions of the Bank of England and the British Government Stockbroker, given on the basis that the public capital programme could not be reduced so as to postpone for an indefinite period the need for the money. The amount of the issue was the maximum which the British Treasury were prepared to allow.

It would not be prudent for me to say when or where any further foreign borrowings may be sought but as I intimated in my Budget Speech on 9th March, 1966, I hope to keep direct foreign borrowing over the next few years within a moderate annual limit both for balance of payments reasons and because such borrowing, owing to the world shortage of capital, is both difficult and dear.

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins Can the Parliamentary Secretary say whether the advice the Minister and the Government received related to the timing of the loan?

Mr. J. Gibbons: Information on James M. Gibbons Zoom on James M. Gibbons The advice the Minister received could hardly have been bettered.

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange The results could hardly be worse.

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins Was the advice related to the timing of the loan?

The Taoiseach: Information on Seán F. Lemass Zoom on Seán F. Lemass Yes.

[17]Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins Perhaps the Taoiseach could now say whether, in fact, the advice was faulty?

The Taoiseach: Information on Seán F. Lemass Zoom on Seán F. Lemass I think all the evidence is that it was not.

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins It was bad advice? Is the Taoiseach satisfied the advice was unsound?

The Taoiseach: Information on Seán F. Lemass Zoom on Seán F. Lemass No.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan You got only 12 per cent.

The Taoiseach: Information on Seán F. Lemass Zoom on Seán F. Lemass We got the money we set out to raise; that is all we wanted.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan The underwriters provided the rest.

The Taoiseach: Information on Seán F. Lemass Zoom on Seán F. Lemass There were underwriters.

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins Is it the position that in the case of future loans [18] the Government propose to act on the same kind of advice?

The Taoiseach: Information on Seán F. Lemass Zoom on Seán F. Lemass Yes.

Mr. T.F. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins God help Ireland.


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