Committee Reports > List of Committees > Dáil > 1970 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1967 - 1968

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 19 Márta, 1970.

Thursday, 19th March, 1970.

The Committee met at 11 a.m.

DEPUTY HOGAN in the chair.

Mr. E. F. Suttle (An tÁrd-Reachtaire Cuntas agus Ciste) and Mr. J. Whelan and Mr. M. O’Reilly (An Roinn Airgeadais) called and examined.

VOTE 7—OFFICE OF THE REVENUE COMMISSIONERS.

Mr. S. Réamonn called and examined.

Mr. Suttle.—I understand the Accounting Officer has some additional information on matters raised by the Committee in its report on the 1967-68 Accounts.

977. Chairman.—The Comptroller and Auditor General would like to discuss something first.

Mr. Suttle.—In last year’s Report there were comments on certain items in regard to the Revenue Vote. The Department of Finance in their minute* on the report referred to them at paragraph 16, 17 and 18. The first item dealt with the question of delay in dealing with estate duty cases. The Department of Finance minute states that additional staff has been provided and the departmental regulations, together with the new financial control procedures, are now fully in operation with satisfactory results. I feel it would be somewhat premature to give an opinion at this stage. The new procedures have been in operation for a little over twelve months. However in the course of a recent interim inspection it was noted that there has been an improvement. The numbers of unassessed cases have dropped considerably and it appeared that the new procedures and the departmental regulations are being effectively enforced. There still appears to be some delay in correspondence and whilst additional staff has been provided—six assistant examiners were appointed in the last three months—I understand that it takes three to four years for new staff to be fully effective. However if the progress over the past twelve months is maintained I feel a satisfactory position will be achieved.

978. Chairman.—Have you any comment on this matter, Mr. Réamonn?

Mr. Réamonn.—I spoke on this previously in some detail when I was examined by you on 13th February, 1969, in connection with the accounts for 1967-68. The Minister for Finance sanctioned a re-organisation scheme on 4th July, 1968. This re-organisation will, of course, bear fruit but it will be some time before it is completely fruitful. The chief reason is the excessive proportion of junior staff. The reason for the excessive proportion of junior staff is that it has happened in the past that when vacancies occurred there was a long delay in recruitment. I need not stress that the inevitable result is an undue proportion of staff who are not trained. I can make this vivid by speaking of the examiner grade and the assistant examiner grade. The authorised strength of the examiner grade, that is, the number of posts sanctioned by the Minister for Finance, is 15. We have only been able to fill seven of these posts with examiners and in the case of the remaining posts we have tried to have recourse to a method adopted fairly generally in the Civil Service, that is, to have posts blocked by officers of the lower grade who are given allowances. Therefore, of the 15 examiner posts authorised only seven are filled by actual examiners and three posts are blocked by assistant examiners with allowances. These have less than seven years’ service so they could not be promoted to the examiner grade. There is a regulation that one must have at least seven years’ service before being promoted to examiner. There is reason behind this because an officer must get experience and knowledge of this very complicated work before he is fit for promotion. Of the eight posts remaining, therefore, three are blocked by assistant examiners with allowances. The remaining posts are unfilled because there was no qualified staff to appoint even on a blocking basis. There is an authorised strength of ten assistant examiners but at present we have 14 and one vacancy. The reason is that we have to keep a technical establishment up to the authorised level and, therefore, we have brought in and appointed five supernumeraries. The senior of those has three year’s service. Six of the others were recruited in the past six months and, of the whole 14, nine are girls which means that we may not have them for that long. They will all, of course, do the law course which we require. As the Committee knows, we require our assistant examiners, when they come in, to qualify as barristers-at-law. Therefore, as well as being junior, and most of them girls, they are away from the office for some time during the day pursuing their studies in law. I hope that will make somewhat vivid the staffing difficulty. At the present time it is not so much shortage of staff as a preponderance of untrained staff. In the inland revenue affidavit section there has been a notable improvement. As the Committee are aware, this section is concerned with a deceased’s free estate. When the affidavit has been lodged and appropriate duty has been paid the person concerned can take out a grant of probate or a grant of administration. In this sphere there has been a noticeable improvement. I might mention that in recent years we have considerably simplified and reduced the size of the form of the inland revenue affidavit. We have gone further. We have introduced a specially simplified form for small estates. I am speaking once again of free estates. We advertised this some years ago in the Solicitor’s Journal. Perhaps, members of the Committee might like to have copies of this simplified form to see what it is like. There has been, as regards inland revenue affidavits, a substantial improvement in expedition. As regards what we call the large cases, that is to say, cases over £30,000 in capital value, the number of senior examiners assessing those has been doubled and that should cut down considerably the delay in that regard. We give special attention to big cases. The position is not so good in areas in which there are arrears in connection with non-free property. We are not at all satisfied with the existing position and we hope to improve it particularly if we can retain the staff for such time as is necessary for them to become expert in their work. Free property is known as property which the deceased is competent to dispose of by his will or passes on his intestacy. In connection with non-free property there are arrears and there are arrears also in connection with the assessment and collection of legacy duty and succession duty. Furthermore, it will be quite a while before we will be able to establish a fully efficient review section. It is a long term project. The purpose of this section is to bring pressure on accountable parties or their agents to cause them to comply with our demands for the delivery of accounts for assessment or for the provision of necessary information or to cause them to pay duty which has been assessed. I hope I have given the Committee some picture of how things stand at the moment. I might repeat what I said at the beginning that we expect the re-organisation which the Minister has sanctioned to bear good fruit in future provided, of course, we can retain the staff.

979. Chairman.—You also have a comment, Mr. Suttle on paragraph 17 of the Department of Finance minute referring to arithmetical errors in calculation of wholesale tax?

Mr. Suttle.—Paragraph 17 of the minute of the Minister for Finance—this is a question of errors being thrown up by the computer which were not being followed up. I have not had an opportunity of having a detailed check carried out in this area but it would appear from a recent inspection that the present position is satisfactory.

980. Chairman.—Again this is a question of staff, Mr. Réamonn?

—Yes, and it is due to the fact that the efficient carrying on of this work had to wait the more extended use of electronic installations. The historical point in this connection is April, 1968. Prior to April, 1968 these arithmetical errors in the wholesale tax returns were not spotted, but from April, 1968, all arithmetical errors made by taxpayers in the calculation of their tax are now thrown up by the computer. The returns are punched into the computer which automatically shows up significant errors and these are followed up systematically by the Collector General. We have no worries about errors as from April, 1968, but even errors which up till then went undetected, are being brought to light and followed up. The wholesale tax and the turnover tax are monthly taxes, but we use the information and the returns we get from those imposts to check income tax returns. We send out 12 monthly summaries of the wholesale tax and turnover tax returns to inspectors of taxes so that they can effect this check. We consider the accounting period of a particular concern and then we make up a 12 monthly period to fit in with their accounting period. As from April, 1968, errors are automatically signalled and they are followed up, except where the amounts are trival, by inspectors of taxes. I do not know when the work will be completed because accounts have been coming in late. We have accounts coming in up to December, 1969 so that it will be some time after June, 1970, before the correction of errors is completed.

981. Have you any further information, Mr. Suttle, on paragraph 18 of the Finance Minute which refers to cross-check on accuracy of wholesale tax returns?

Mr. Suttle.—Paragraph 18 deals with the comparison of tax returns with traders’ audited accounts. With the 12 monthly returns for wholesale tax and turnover tax we consider this an essential check and, as Mr. Réamonn has said, it is being followed up automatically. At the time we reported this matter it was very much in arrears and we considered it one of the most essential checks on this aspect of tax revenue.

982. Have you any comment, Mr. Réamonn?

—I would like to add that we are now sending summaries and returns for wholesale tax and turnover tax to all income tax districts. When I reported last they were being sent to some, but they are now being sent to all districts. In fact, the issue of summaries is a little bit in arrears because of the shortage of staff and the lack of accommodation but there is a flow going out to all districts and the summaries are being compared with the audited accounts. This is a continuous process and the comparison has been completed for about 10 per cent of the persons registered for turnover tax or wholesale tax. There are 25,000 people registered for turnover tax only and 5,000 for both wholesale tax and turnover tax which brings the total to 30,000 persons. To bring the picture fully up to date I should point out that during the year 1968-69 we had successful proceedings in the courts in 21 cases of evasion.

983. Deputy Dr. Gibbons.—Is the computer guilty of error on many occasions?

—It is not infallible but at the same time I think errors are rare. We are constantly reviewing the work done by the computer. We must bear in mind that it is doing an immense amount of work. The net annual gain to the Exchequer from using the computer is about £200,000 but that does not represent the position adequately at all because there is an immense amount of work being done on the computer which could not be done at all without it. But it is no more infallible than any other machine or human being is.

Mr. Suttle.—The machine only deals with what is fed into it. If the operator makes a mistake in the initial information the machine will produce wrong returns on that basis. There is a system of checking the information before it goes into the machine.

984. Deputy FitzGerald.—I thought the question related to the machine making an error in relation to the information fed into it as distinct from a human error. Have there been computer errors?

Mr. Réamonn.—There have been computer errors.

985. Deputy FitzGerald.—Mr. Réamonn referred to five supernumerary assistant examiners to keep up the technical strength, but I am afraid that did not convey anything to me.

Mr. Suttle.—The position is that estate duty involves a highly complicated legal process. I think I said in my note that it takes three or four years for staff to be fully effective, and even after three or four years they are effective only on straight-forward cases. It would take a man with ten years’ experience to unravel the complicated cases. I know from my own experience of attempting to check the actual assessment of duty in the estate duty office that one would want to be a very experienced lawyer.

986. Deputy FitzGerald.—That seems to me to be a reason for having experienced staff there, but it does not explain to me why you have supernumerary staff over the authorised strength. I do not understand what is meant by “to keep up the technical strength”.

Mr. Suttle.—These are men in training to fill technical posts already available, but they are not sufficiently trained to be promoted to these posts. It is a question of building up junior staff and training them —getting work out of them at the present time but training them to qualify them for senior posts.

987. For the post of examiner—that is what is meant?

Mr. Suttle.—Yes.

Mr. Réamonn.—With your permission, Mr. Chairman, I should like to say that what the Comptroller and Auditor General has said is, of course, perfectly correct. I just do not know whether or not I could make it clearer by simply going back to the examiner grades. There are 15 authorised examiners; there are only seven there.

988. Deputy FitzGerald.—I did not understand—to keep up technical staff strength in order to provide ultimately replacements to complete the examiner strength?

—That is precisely what it is.

989. Then the question arises as to why you do not increase the number of authorised posts. If you need 15 why do you authorise only ten?

Mr. Suttle.—There are 15 authorised but there are not sufficiently qualified people to fill them.

990. Only ten authorised but 14 filled and one vacancy going to be advertised. If you need 15 why do you not authorise 15?

Mr. Suttle.—This is the assistant examiner grade. It is only providing temporary trainee posts until the people occupying these posts are sufficiently trained to promote them to examiner. Then you get to the strength of ten, which is authorised.

991. To keep it on the basis of some very long term plan?

Suttle—On the basis of what are the needs of the particular office. There are 15 examiners and 10 assistant examiners. They cannot fill 15 examiner posts so they take 15 assistant examiners on the basis that five of those posts will automatically become examiner.

992. You do not change the authorised strength in relation to the current demand, only in relation to what you conceive as the ultimate demand?

Mr. Réamonn.—That is so. If we were to recruit only ten assistant examiners we would hope in a very short space of time that five of these would be moved up to become examiners and then we would have a void of five and delay in recruitment and training and so on. Perhaps, I used a mysterious phrase when I spoke of keeping the technical strength of the authorised staff up. I think the Comptroller and Auditor General has explained it to your satisfaction.

993. Come back to the question of how we got into the position that only five authorised posts of examiner have been filled. Presumably you know when people will retire and, subject to sudden deaths while at work, one can plan ahead. How did we get into the position that so many vacancies are unfilled? When did this first arise? At what point did you first find you did not have enough examiners and were short one or two? When did that happen?

—I think this is, perhaps, in an aggravated form a manifestation of something that is happening throughout the Public Service. We all know that in recent years recruitment has not been good. It has been a continuous process, not altogether a process of non-recruitment but in part a process of recruiting people who very quickly left. The problem is not completely one of recruitment. It is a problem of recruitment and retention. You cannot read people’s minds. When somebody comes in you really cannot know whether he has his eye on something else or not. That is the awkward situation in which we are placed.

994. When did it first arise, was my question. When did you first find either as a result of sudden deaths or people leaving for other jobs that you were short of examiners and could not fill the posts because there were not experienced people to promote?

—It would be difficult to say that. It has been a process of accumulation. It is not as if suddenly we found ourselves short five or some particular number. It has been a build-up.

995. That is my point. This has built up over a long period?

—Yes.

996. What action was taken when it started to build up? You have explained you have now seven—six recruited in the last few months. So, apparently, emergency action has been taken but as it takes four years for people to be able to deal adequately with relatively routine cases, according to what you and the Comptroller and Auditor General said, clearly a long time lag has existed. I am wondering at what point the difficulty arose and what steps were taken prior to this exceptional recruitment in the last six months, which will not solve the problem for four to six years?

—One of the major steps was the re-organisation which improved the ratio of senior posts. This is a departmental grade. In other words, if you come in by examination to this branch, by and large, your prospects will lie within the branch and one of the major steps, or the major step, we took was to introduce, with the sanction of the Minister for Finance, the re-organisation which took place in 1968 and which effected some improvement in the ratio of senior posts.

997. What are senior posts?

—I mean promotional posts.

998. What are these posts? Does it mean there are people above the rank of examiner?

Mr. Suttle.—Senior examiner.

999. How many of these were there and how many are there?

Mr. Réamonn.—The position is this: the head of the branch is an assistant secretary and prior to re-organisation there were two chief examiners and now there are four one of whom is on a temporary basis for a particular job but who might in due course become permanent. You have four chief examiners now as compared with two. To come to the senior examiner grade, we used to have six and now there are nine. To come to the examiner grade, there are now 15 where there used to be 14 and then the entrance grade has remained as before at ten.

1000. So that in the posts senior to examiner there has been an increase of five posts, one of them temporary, and that occurred in 1968?

—Yes. As I say, it is temporary but you never know. With the growth of the work and so on, it might, as is liable to happen in these cases, become permanent in due course. I cannot say. It is there and it is temporary for a considerable stretch of future time.

1001. The thing is that obviously very long term planning is required in this case because the time taken to get people experienced means that you must foresee needs four to six years ahead, at least. How long a time elapsed between the emergence of this problem through failure to fill some examiner posts and the decision to meet it by creation of more promotional outlets?

—That is a very difficult historical question, a very difficult thing to answer.

1002. If we knew when the first occasion arose when you could not fill one of your 14 examiner posts, we could subtract that year from 1968 and get an approximate answer unless there were fluctuations in the meantime?

—There were and as I think I have already said it was not as if it burst upon us suddenly.

1003. That is my point You had an opportunity to plan ahead?

—It is a kind of accumulation and we had people coming in and leaving. It is very difficult for me to pinpoint a particular year which should be subtracted from 1968. It would require fairly considerable research to pinpoint such a year.

1004. As there are so few posts it is only a question of looking back over 14 posts and over ten years. It would not require much research. Perhaps we could have a note on this? I do not want to waste the time of the committee on it. Could we have a historical note on the development of this problem so that we can see whether it was tackled in time or not?*

1005. Deputy Briscoe.—It seems to me that the problems in this Department are the problems that have confronted the whole of the Civil Service, competition with outside industry et cetera?

1006. Chairman.—That has been evident all along. I take it that the training of these examiners must be undertaken within the Civil Service, that there is no outside agency?

—We require anybody coming in to the Estate Duty Branch to qualify as a barrister-at-law. This means a course of three years at UCD and one at the Inns.

1007. Deputy FitzGerald.—Do you not recruit barristers?

—Not normally.

1008. Why not? That would save four years as regards the legal training aspect?

—That is if they would come in.

1009. You can only find out if they will come in if you advertise a post at an appropriate level that would attract them. Has that not been done and if not, why not?

—The assistant examiner grade has been taken from the executive officer grade.

1010. Good Heavens! You recruit at that level for this kind of job? I think that is the answer to many of the questions I have been asking.

Mr. Suttle.—It is a question of salary scales. No barrister would come in at the point which an assistant examiner has reached by the time he has obtained his BL.

1011. I did not understand this. It seems to me inconceivable that in view of the senior posts you are trying to fill you recruit at that level. I assumed that you recruited at a much higher level. I should have checked.

Mr. Suttle.—No, executive level.

1012. I think that is the answer to the whole thing. Recruiting at executive officer level for this kind of job, going into the 1970s, seems extraordinary.

Mr. Suttle.—An executive officer who has had four years’ experience in the Estate Duty Office and has obtained a BL degree is in quite a good position to walk out at any time and get a job elsewhere.

1013. Deputy Dr. Gibbons.—If you took in a qualified BL how long would it take him to make up for the four years the other people had?

Mr. Réamonn.—First of all, you might wonder why we do not provide the training in the office. The reason is that if we had normal recruitment functioning, which unhappily we have not, we would have one recruit every two or three years and to maintain in the branch a training staff for this purpose would be utterly uneconomic.

1014. Deputy FitzGerald.—I do not think we suggested that?

—No, but I am coming around to the question, if I may. Death duty law is grafted on to the general law governing the devolution of property. That is why we require our entrants to become barristers-at-law. Over and above the qualification they get in that manner there is this specific training in death duty law. The branch provides its own training in death duty law. The answer to the question is that a barrister-at-law coming in would, in a comparatively short time, be trained in death duty law in the branch if he had this background of the general law.

1015. Why do you not recruit barristers as examiners because while the salary may not be enormously attractive you might have some chance of getting them at a starting salary of £1,740?

—May I refer to what happened in regard to inspectors of taxes which is a higher grade. We have great difficulty in recruiting and retaining inspectors of taxes. With the growing complexity of tax law, accountancy firms have had their own staffing difficulties and the result has been that we have had two kinds of inspectors of taxes leaving the Revenue Department—(1) the up and coming young men who are fully trained in tax law and (2) inspectors of taxes who have reached 60 years of age and are still hale and hearty. Numbers of these people have left the public service to join outside firms. We used to require an honours degree in the open competition for inspectors of Taxes. In 1969 we made a big effort. We held an open competition and we raised the upper age limit from 28 to 30 years. The Minister sanctioned a revision of the salary scale to make it equal to the salary scale of administrative officers, which has always been the highest entrance grade in the Civil Service. We went further and said that we would accept a pass degree if a candidate had an acceptable qualification in accountancy. The competition was open also to established civil servants with not less than three years’ service who had passed an examination of a standard not less than leaving certificate. Nineteen candidates qualified including thirteen who were serving civil servants. Six were from outside. Thirteen have already taken up duty. You can see that the intake of serving civil servants was greater than that of people with qualifications from outside, in spite of improvements made in the conditions of service. Recently, a representative of Revenue attended at UCD, Trinity College and UCC to meet graduates who might be interested in future appointments. We hope some results will follow from this but it is a difficult problem.

1016. That is interesting and illuminating on a different issue but it has nothing to do with the question I asked at all, I am afraid, because all that was in connection with a post which, if I understand correctly, starts at £1,045 and you have suggested that you have succeeded in getting that to £1,145 as an extra incentive. The question I asked was why you do not recruit barristers as examiners. The normal starting salary now for a solicitor, accountant or architect seems to be in the region of £1,500 to £1,750. I do not think posts advertised at £1,045 have any relevance to attracting professional people and if your only way of getting examiners is to recruit people as executive officers and get them to do the Bar examination, which takes four years, and if that whole process is only initiated and pushed quite a long time after the problems have arisen you are bound to have a lag of 8 or 10 years of a serious problem which could have been met by appointing people, as they are appointed in other walks of life, qualified professional people at the ordinary starting salary for a professional person to the post, which apparently requires professional persons to be appointed as examiners. I asked the question why you do not recruit to the post of examiner qualified barristers because the salary seems to me to be the kind of salary which a starting professional man gets, such as a solicitor. That is really the issue I was raising. The whole question of the failure to get university graduates at £1,045 with general degrees and honours degrees is a separate issue which we can discuss again but it was not the one we were raising here.

Mr. Suttle.—The position is the same all over the Service. Mr. Réamonn referred to assistant inspectors of taxes but you can take any qualified position in the Service and you have the same difficulty. The salaries offered in outside employment are far ahead of anything the Civil Service could offer. You cannot bring in people in a particular grade—the Deputy mentioned the question of bringing in barristers at examiner grade—and give them a salary of £1,500 to £2,000 when you already have examiners who are on far lower salaries.

1017. The examiner starts at £1,740?

Mr. Suttle.—Even at £1,740 you will have that anomaly. If you offer a sufficient salary to an outsider to come into the service it will be generally far higher than the existing men in those grades get.

1018. We are talking about a particular case and we are told the opposite. We have been told the examiner is somebody who has to have at least four years’ experience during which he is doing his degree, but if he has a legal qualification he does not require much more experience as examiner. Therefore, there is here a grade which has a starting salary of the kind which would attract a professional man starting. The logical solution seems to be to recruit barristers. Perhaps you may want them with a year’s experience at £1,740. I believe you will get them because that is the normal starting salary with legal qualifications. Nothing which has been said suggests any reason for not doing that other than that it has not been done before which is the worst of all possible reasons.

Mr. Suttle.—There is another aspect to that you have to take into account. You will not get sufficient barristers to come in and you must bring in junior people to train.

1019. I am all for bringing in junior people too. You obviously want all channels of recruitment to meet the situation but I do not see any reason why somebody should not be brought in and appointed examiner at £1,740 the same as somebody who has had also four years experience and doing a law degree within the service at £1,740.

Mr. Suttle.—In effect, the man coming in at the examiner grade will block the vacancies for the men in the junior grade. The junior people will not come in at all if there are no opportunities for them to be promoted.

1020. We have been told that we have not been able to get the people at junior level.

Mr. Suttle.—That was at a particular period. Once this three or four years are passed by this problem will disappear.

1021. I am sorry. We have been told this is true throughout the public service. The figures in the Devlin Report show the incredible deterioration in this respect, the unfilled posts there are. There are 40 per cent of unfilled posts year after year. To be at this stage thinking in some mysterious way that we are going to solve the problem by recruiting executive officers and that you must hold everything open and prevent anybody being recruited at professional level in the Civil Service in case some day you might get enough executive officers to come in and stay seems to me to be an absolute contradiction of any kind of planning?

Mr. Suttle.—It is not a simple problem.

1022. I did not suggest it is a simple problem but I suggested a possible, partial solution and I wanted to know why it was not adopted?

Mr. Réamonn.—Might I say what has been suggested would involve I think a radical reconsideration of fundamental Civil Service regulations such as the necessity for a qualification in the Irish language. It might not be so easy to recruit barristers and find them passing the Irish test.

1023. First of all, barristers pass an Irish test. Secondly, is it not the case that professional people are recruited to posts in the Civil Service in many cases without a knowledge of the Irish language? Am I wrong in that? The test is certainly much less stringent in the case of professional people. Is it a barrier?

Mr. Suttle.—It is.

1024. What happens a professional person? What has he to do?

Chairman.—One goes before the appointments commissioners and is examined.

1025. Deputy FitzGerald.—Every barrister has been through that already. There is no difficulty about that?

Mr. Suttle.—It is a question of standards. Is the standard in the Civil Service higher than the standard expected from the man who is just doing his BL and nothing else?

1026. It is not for professional people. We all know the position as regards recruiting professional people. This particular obstacle has in practice been removed. This is a red herring which has been introduced.

Mr. Suttle.—I think it has been removed in relation to temporary professional posts chiefly. I am not absolutely clear in relation to permanent professional people.

1027. I said in practice. I realise there are theoretical grounds for it. From what I know, it is less stringent than the one required for barristers. This does not seem to be relevant. It is a red herring. At any rate, the assumption is that barristers do not know Irish which is an over-simplification?

1028. Deputy Treacy.—Drafting in of qualified barristers at the top into positions of this kind would in my opinion have a very disincentive effect on existing staff and would probably stifle promotional opportunities and could cause a certain amount of uneasiness or unrest. It would probably have an adverse effect on recruitment altogether if people felt they could not attain the highest position in the Civil Service and the feeling somebody would be drafted in over them at any given time would in my opinion be a great disincentive?

1029. Deputy FitzGerald.—The difficulty here is that through following this policy absolutely and not attempting to announce what you require, the Civil Service have now failed to recruit. The Devlin Report shows the figures. They had to go down to 600 to get 56 executive officers, that is to say, of the top 600 over 90 per cent rejected the offer when they got it and 40 per cent of professional posts are unfilled and to do this in pursuance of a policy of ensuring all posts are open the whole way up is suicidal.

1030. Deputy Treacy.—Could we have some idea as to the incidence of wastage in the Department, of people leaving for alternative employment or that kind of thing? What is it like?

Mr. Réamonn.—At the clerical level it is very considerable indeed. We have it at the higher levels also where the numerical strength is not so great and, therefore, the people who leave for alternative employment are not so many. I am told that at the clerical level the turnover is, so to speak, very considerable.

Deputy Briscoe.—It seems to me that the Civil Service is caught in a sort of straitjacket based on the salary scales which are set.

Chairman.—And the promotional patterns in the past.

Deputy Briscoe.—I think what is required possibly is a freeing of certain of those categories in which recruitment is falling down in order to compete with outside opportunities. This really in a nutshell is what is required. It is difficult to know how to approach it but that is the answer.

Deputy FitzGerald.—The proportion of people at assistant principal level with professional qualifications is less than the proportion of people in Ireland getting a professional qualification.

Chairman.—In the officer class in the Army there is recruitment from two sides— there is recruitment from the ranks and recruitment from those with more polish.

1031. Deputy Treacy.—How long does it take to process the average case; have we been able to cut down on the time?

—We have been able to reduce the delay in assessing affidavits but there are arrears in non-free property because we have so many untrained staff. There is no real immediate hope of an improvement there.

1032. How long does it take on average?

—We were asked that question by the Incorporated Law Society a few years ago and we were unable to give an average figure, because the cases vary so much. Some cases are straighforward. If it were possible to refer to the remarks I made on 13th February, 1969, Deputies would find the figures I gave then showing the rate of speed in processing cases. I do not think I can give any more information than I did last year about this.

Chairman.—That can be found at page 91 of the last Report of the Committee.

1033. Deputy Treacy.—May I take it that the computer will speed up the process?

—Hardly in the Estate Duty Branch because the computer is used more for mechanical or repetitive processes. The work of the Estate Duty Branch involves examination of cases where reference to a vast background of law is required and the computer does not help that much at present although it is hoped it will in the future. There was a lecture in Dublin last year entitled “Computers and the Law” in which an attempt was made to show how future development of computerisation of law could help but of necessity there is an essential restriction to the extent to which the computer could help the law.

1034. Deputy FitzGerald.—Returning to the other point, Deputy Treacy suggested that if you recruited direct you would have a promotional blockage, but in this case we have been told that six people were recruited in the last few months and that there were only eight examiners a few months ago. We have been told that nine out of the 14 are girls, half of them must have been girls, which probably accounts for the high turnover and the appointment of a couple of examiners could not have blocked anybody’s promotion. Therefore, the point is not relevant in this instance.

Deputy Treacy.—While I feel every effort should be made to recruit additional staff, I think the drafting in of trained staff is a highly undesirable step.

Deputy FitzGerald.—But Deputy Treacy will agree that that argument is not relevant in this instance?

Deputy Treacy.—I think it is relevant.

Deputy FitzGerald.—Deputy Treacy’s arithmetic must be different from mine.

1035. Chairman.—Paragraph 12 of the Report of the Comptroller and Auditor General reads as follows:

“Revenue Account

A test examination of the Revenue Account has been carried out with generally satisfactory results.”

1036. Have you anything to add, Mr. Suttle?

Mr. Suttle.—Just to say that the Revenue account has been the subject of a test examination.

1037. What is a test examination?

Mr. Suttle.—The original Act of 1866, setting up the Comptroller and Auditor General in England, required him to examine every transaction whether of receipt or payment. The 1921 Act amended the earlier Act and permitted a test examination to be carried out. In other words, it reduced the detailed examination which had to be carried out under the 1866 Act. This is a variable figure which can be anything from .001 per cent of the transactions to 50 per cent depending on the particular circumstances of the case. In the particular case of the Revenue Commissioners we only examined about .1 per cent of the actual transactions.

—A spot check?

Mr. Suttle.—It is a spot check pure and simple.

1038. Paragraph 13 of the Report of the Comptroller and Auditor General reads as follows:

“13. The net yield of revenue for the years 1968-69 and 1967-68 under its main heads, is shown in the following statement:—

£282,297,000 was paid into the Exchequer during the year leaving a balance of £176,696 as compared with £109,392 at the end of the previous financial year.”

1039. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The net yield of revenue for the main heads was over £282 million. Ten years ago the total amount of revenue collected by the Revenue Commissioners was £98 million and for the year under review it is £282 million. The Minister for Finance estimated that the yield of revenue for 1968-69 would be £270 million but he actually got £282 million.

1040. Deputy Dr. Gibbons.—There is a balance of £176,000. Is that held by the Revenue Commissioners?

Mr. Suttle.—The Revenue Commissioners hold that; it does not go into the Exchequer.

Mr. Réamonn.—What happens is that on the 31st March, which is the end of the financial year, we close our books of account around noon and we have to estimate the aggregate sums we expect to gather in on that day, but it very often happens that a greater sum comes in and the balance is paid to the Exchequer in the ordinary way in the following financial year.

1041. Chairman.—Paragraph 14 of the Report of the Comptroller and Auditor General reads as follows:

“14. I have been furnished with the following analysis of amounts of income tax, sur-tax and corporation profits tax outstanding:—

Comparative totals for the previous year are—Income tax, £11,789,584; Surtax, £2,569,204; Corporation Profits tax, £2,050,102.”

1042. Is there any reason why corporation profits tax has deteriorated?

Mr. Suttle.—Yes, The higher the amount you are set to collect the higher the arrears are likely to be. What happened was that section 21 of the Finance Act, 1966, increased corporation profits tax with effect from the 1st April, 1966, from 5 per cent and 15 per cent to 7½ per cent and 23 per cent respectively. The increase in the figure of arrears really reflects this increase in the charge. The legislative increase was not fully reflected in the charge figures until 1967-68, so that it is not so much a worsening of the arrear position as the fact that a higher target had been set, or a higher charge had to be collected.

1043. Paragraph 15 of the Report of the Comptroller and Auditor General is as follows:—

“Extra-statutory Repayments of Customs and other Duties

15. Extra-statutory repayments of Customs duties, £20,764, Excise duties, £27.809, Turnover tax, £19 and Stamp duties, £385, were made during the year.”

1044. These repayments are diplomatic concessions, Mr. Réamonn?

Mr. Réamonn.—Chiefly the extra-statutory repayments on the ground of diplomatic privilege for 1968-69, counting customs and excise, was £32,345. The committee might be interested to get a rough breakdown of that figure. Wines and spirits accounted for £18,489—this was relevant to customs and excise. Tobacco accounted for £4,354, which is in the region of customs; and petrol, which is chiefly excise, accounted for £8,792. Then there is the miscellaneous item of £710. The figure of extra-statutory repayments is really chiefly but not exclusively in the diplomatic privilege field.

1045. And what other fields?

—I will give you an example from the customs. It is a case where a company applied for a refund of duty paid in respect of imports of what was called animal liquid feed supplement. They had, to my mind, an excellent case for applying for a refund. The company declared, first of all, the amount of duty paid had not been added to the price of their product. I should explain, they had paid duty at the rate of 2½d per lb. What was in question here was duty paid before 1st January, 1968. Before 1st January, 1968, there had been no licensing provision attached to the duty but a licensing provision came in as from 1st January, 1968. The provision is an instrument known as the Imposition of Duties (No. 166) (Customs Duties and Form of Customs Tariff) Order, 1967. So, as I say, although they imported this animal liquid feed supplement before 1st January, 1968, when there was no licensing provision, if they had imported it afterwards such provision would have been availed of. Furthermore, if the components of the feed had been imported separately they would have been classified under free tariff headings. This particular company regarded the duty as prohibitive and as rendering importation uneconomical. The best note of all is struck by the fact that since January, 1968, the company have been manufacturing the product at its own premises. The Department of Agriculture and Fisheries supported the application for a refund and when we went to the Minister for Finance he sanctioned this extra-statutory repayment of the duty amounting to £1,790. That is an example from customs but there were examples from the excise and in stamp duty too. There is an old concession where a document has been executed and stamped and then lost, there can be an application made for a refund of the duty under certain stipulations and we refunded £385 in 1968-69 under this heading.

1046. Is there any regulation procedure as regards the extra-statutory repayments or are they merely ad hoc repayments made now and again with the sanction of the Minister for Finance?

—I will tell you the position exactly. First of all, no draftsman, no matter how experienced or skilful he is, can anticipate all the cases that may arise under the legislation that he is preparing and especially in the case of Finance Bill legislation we find it is going to apply to a tremendous multiplicity of varied cases and, therefore, in the Revenue Department when you are administering the law you will come upon cases where to apply the full rigor of the statute would cause hardship. We could, of course, apply the full rigor of the law but it has never been considered right to do that and therefore, the procedure is, we apply to the Minister for Finance to sanction extra-statutory repayment. All these extra-statutory repayments are, of course, fully exposed to the Comptroller and Auditor General for inspection and he reports upon them and if there is anything in them which he thought was in any way improper he would, of course, report it to you and to this committee and the Accounting Officer would have to explain it. This arises not merely in customs and excise but it may occur also under income tax and other duties. You may recollect that a Commission on Income Taxation reported a number of years ago and referred to this matter of extra-statutory concessions in their report and the Government issued a White Paper on the report known as the Second White Paper on Direct Taxation, Reference Pr 7024. What the Government had to say about this question of extra-statutory concessions was as follows: They said that extra-statutory concessions of a general nature are put on a statutory basis as opportunity offers. In other words, that if there is an extra-statutory concession which is liable to apply to a wide field, to be a general matter, the Government will sponsor legislation when it gets the opportunity. Another factor in the situation is that Finance Bills are very long and it is not possible to pack everything into a given Finance Bill. It is true, as stated in this White Paper, that where an opportunity offers extra-statutory concessions are put on a statutory basis. A recent example will be found in the Finance Act, 1969, section 44. There was a question of a rebate to brewers. Some companies had been unable to comply with the terms of the existing legislation. It was legislation of 1932. In fact, it was a question of roasted or malted barley or wheat and some of these brewers had not been roasting it but flaking it. In two successive years the Minister sanctioned an extra-statutory refund and then in 1969 he had the law amended so that the relief will not be extra-statutory in future.

1047. Paragraph 16 of the Report of the Comptroller and Auditor General is as follows:—

“Remissions and Amounts irrecoverable

16. I have been furnished with schedules of the cases involving a loss of £50 or upwards in which claims for duty under the Revenue Acts were remitted without statutory authority or passed as irrecoverable during the year ended 31 March 1969.

The total amount of the items included in the schedules, £193,791, is made up as follows:—

The distribution according to the grounds of remission or write-off is:—

I have made a test examination of the items included in the schedules with satisfactory results.”

1048. Paragraph 17 of the Report of the Comptroller and Auditor General reads:

“Cash Office Receipts

In the course of a surprise inspection of the Cash office at Headquarters my officers discovered that five remittances of a total value of £11,736 which had been held for varying periods had not been lodged in the bank. I was subsequently informed that in three of the cases lodgment had been omitted, through an oversight and that in the remaining two cases the remittances had been held by the cashier on the instructions of the branch dealing with them. One remittance of £4,000 had been incorrectly held for a period of fifteen months and I was informed that it would not be unusual for a remittance in an investigation branch case to remain unappropriated for such a length of time. In view of the importance of strict control over moneys received in the Offices of the Commissioners I have asked whether there is any legal obstacle to their prompt lodgment in the appropriate bank account, and for the views of the Accounting Officer generally.”

1049. Have you anything to add, Mr. Suttle?

Mr. Suttle.—Regarding the follow up of errors referred to in the paragraph, I have not had the opportunity to have a detailed check carried out on this area but it appears from a recent inspection that the present position is satisfactory.

1050. I wonder if the Accounting Office could explain how the taking of payment on account would prejudice the revenue officers legal case?

—It is a difficult and dangerous field. Perhaps I could illustrate it by recalling that in the late 1930s we had obtained a decree of the district court for recovering income tax, the full amount of tax outstanding. Where the defaulter pleaded the difficulty of discharging the full sum we used to accept instalments. We then found that by accepting instalments we were forfeiting our right under the decree which meant that we were being led into an impossible position. The problem was so severe that the Minister had to introduce legislation and the legislation is section 28 of the Finance Act, 1940, which is now in the Income Tax Act at section 492. This legislation had to be introduced to provide specifically that where we had a court decree for a sum of tax outstanding our rights would not be prejudiced by accepting instalments. This is not the precise point we have here but it will serve to show that this is a difficult and a dangerous field and that we can prejudice our rights by accepting payments on account. Apart from that, we are not at all keen on accepting payments on account because it subtracts from the urgency of the matter. At one time people were inclined to the practice of slipping in payments on account occasionally and that is not the way to collect tax.

1051. On the other hand, a Bill has recently been introduced giving people the right to pay rates, that other form of taxation, by instalments?

—A large part of the income tax now is PAYE and this does not arise at all. This arises now mainly in relation to business profits. The Comptroller and Auditor General will support me when I say that he is interested in the balancing of accounts and unless the tax due is tendered with the appropriate documents, which will lead to the prompt lodgment of the remittances, the task of balancing the accounts becomes very difficult. Our policy has been to insist on people, so far as we can without imposing hardship, paying the amount due and submitting the relevant documents with the remittances so that the money can be appropriated immediately.

1052. Deputy FitzGerald.—You, yourselves, seek payment on account when accounts are held up?

—If there is an appeal we seek payment of the amount of tax which will not be affected by the appeal. You will find the precise language in section 10 of the Finance Act 1927.

1053. On what principle do you determine the amount that you seek payment of on account? When the provision of accounts is held up for one reason or another you seek payment on account pending the settlement of arguments about expenses or things of this kind. On what principle do you determine the amount that you seek by payment on account?

—It would depend on the circumstances of individual cases. An inspector of taxes would handle that and he would know, in his district, the general level of profits. As regards a particular concern——

1054. Or individual?

—Or individual. He would know the general run of the profits. In fact, the figure is not arbitrarily imposed. It is generally agreed between the inspector of taxes and the firm’s or individual’s accounts.

1055. It is agreed under great pressure. It is agreed on the basis that if one does not agree to a payment on account of this amount the thing will be put down for hearing straight away. I am not clear as to how the figure is fixed. In some instances it seems to exceed the maximum possible amount liable by the due date?

—It would depend on an examination of a particular case. There is the tendency of people to delay the delivery of accounts. Perhaps they are not delivered at all until the inspector is forced to make an estimated assessment. Then there is one adjournment after another. The result is that whereas the salary or wage earner must pay his tax immediately this particular concern—be it an individual or an incorporated company can delay payment of tax. I have seen cases where there was a delay of a period of years and this is not good.

1056. I understand why the method is employed but when one sees that the amount demanded for payment on account is in excess of the amount due by the 31st March it seems odd. It does not seem right to assess somebody with an amount far beyond anything he has earned previously so that he must appeal. You then say you will proceed with this unless he agrees to pay on account a sum in excess of the amount that would be due on the due date. This seems to be an abuse of power. What redress has the taxpayer in such an instance?

—I have 10 or 15 years experience of complaints and I do not think I have ever seen a complaint on that score.

1057. You will get one tomorrow, from me. I raised the point seriously because it struck me, having had experience of it myself, as an abuse of power to extract from the taxpayer more than the amount due by a certain date on the strength that otherwise you will proceed with an assessment of an arbitrary sum beyond anything he has earned before. It seems an improper procedure. I am speaking from personal feeling but I wonder what kind of redress the taxpayer has in such a case. What can he do?

—There might be a particular case—— There is?

—We have recently been looking in this connection at corporation profits tax where there is a marked tendency towards payment on account.

1058. I am thinking of income tax?

—Yes, but I should like to offer this general observation. As a result of the survey we have recently made in connection with corporation profits tax we have found a marked tendency for payments on account but we found that in almost all the cases the payments on account have been significantly less than the amount of the final assessment.

1059. Do you also suggest what procedure taxpayers should adopt when put in the position I mentioned?

—I would be glad to hear about this particular case.

1060. Chairman.—Paragraph 18 of the Report of the Comptroller and Auditor General reads:

“18. A limited examination at the Collector General’s Cash Office also disclosed delays in making lodgments. I asked for an explanation in a selected number of cases in which cheques had been held for periods in excess of three weeks.”

1061. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The Accounting Officer has since informed me that approximately 55,000 remittances per month are received in the Collector General’s office in respect of income tax, surtax, corporation profits tax, turnover tax and wholesale tax. Many of the remittances cover liability under one or more of these tax headings. Large payments are dealt with specially and are lodged on date of receipt. The vast bulk of other remittances are lodged on the following day. A very small percentage of remittances cannot be lodged immediately for various reasons. Every effort is made to keep to the minimum the number of remittances which cannot be lodged immediately. My officers carried out a surprise inspection recently and found that the position had very much improved and that the lodgment procedures as outlined by the Accounting Officer in his reply were being enforced.

1062. Deputy FitzGerald.—On subhead E—Motor Vehicles—the note which explains this says that the excess was due partly to increased expenditure on radio telephone equipment. Is this in connection with border controls?

Mr. Réamonn.—Yes, there is an excess on radio telephones to the tune of £3,628. What happened really was that 23 walkie-talkie sets and nine car radio telephones had been ordered in the preceding year and were paid for in 1968-69.

1063.—Are you satisfied with the adequacy of the provisions made under this heading for motor vehicles in regard to radio equipment to control smuggling?

—The land frontier is about 300 miles long and it has no natural configuration in the terrain to mark it. There are no rivers so it is really an unnatural task and we can only do the best we can.

1064. Given that problem were you satisfied with the adequacy of the motor vehicles as regards number and speed?

—Yes. We have 22 motor-cars engaged in patrol duties and we have four base stations, as it were transmitting stations along the land frontier. In fact, we now have five in all. We are about to erect aerial masts to boost the stations. As well as the motor cars we had 17 motor-cycles in 1968-69 so we are doing the best we can.

1065. You are doing the best you can, which is something one accepts but it is not quite the point I was making. In view of the considerable evidence of large-scale smuggling in the past year in one particular product one wonders whether you have, in fact, enough equipment?

—I presume the Deputy is referring to pig smuggling.

1066. —Yes?

—In order to be able to establish pig smuggling we must observe the pig crossing the land frontier. Nothing else is any use and naturally that is very difficult. It is rendered more difficult now by the fact that at one time the people in the Six Counties used to put on their pigs what are called slap marks which helped to identify pigs from the Six Counties but those slap marks on pigs have been discontinued. Now, if we do not observe the pig actually crossing the land frontier we are in trouble. We really cannot prove the pig has been smuggled.

1067. Even by circumstantial evidence? Is there some particular law which imposes an exceptional burden of proof?

—Even circumstantial evidence is not easy to get because you can always find people on our sides of the frontier, if I might use the phrase who are willing to stand for the Pig.

Deputy FitzGerald.—Like godparents? There was a case suggested on television of a long line of pigs coming out of a tunnel, one end of which was on this side of the Border. I would have thought the courts would accept circumstantial evidence of the emergence of big numbers of pigs coming out of a tunnel, one end of which was in Northern Ireland.

Deputy Dr. Gibbons.—Anybody who knows the mountains around that area would not need a tunnel.

Deputy FitzGerald.—I only raise the issue with regard to motor vehicles to know whether the number was adequate.

1068. Chairman.—On subhead F.—Law Charges, Fees and Rewards—could we have a breakdown on it?

—Certainly. The figure you have is £12,937 and the excess is mainly due to costs against the Department. Under the component of legal costs there was an excess of £11,000 and that was mainly due to two cases, one an income tax case and the other a customs case which we lost in the Supreme Court on points on which we had been successful in the High Court. Now, to come to your specific inquiry. The various components are as follows: first of all, counsel’s fees which there was a slight saving of £156. The next item is detective allowances, as we call them, for customs and excise personnel in the special inquiry branch. These detective allowances are to cover out of pocket expenses and in this connection there was a saving of £250. Then we have travelling in connection with the special inquiry branch and there was an excess of £719 here because many cases arose which necessitated travelling to the Six Counties and to Great Britain. Expenses incurred by Garda Síochána travelling in connection with the detection of illicit distillation are paid by the Department of Justice but we recoup that Department and there was a saving in that instance of £827. Then there is travelling by our own people in connection with certain legal proceedings, not all, because some fall under other subheads, such as the detecting of people improperly using marked hydrocarbon oil, and travelling in connection with legal proceedings of that kind resulted in an excess of £170. Then we move on to rewards. What happens to rewards in the case of detection of illicit distillation is that the work is mainly done by the Garda Síochána and the Department of Justice simply sends us quarterly returns. We have nothing to do with individual members of the force; we simply pay the Department of Justice whatever sum it presents to us on its quarterly account. There are also rewards in respect of customs and excise seizures and here there was an excess of £519. We come now to the item which really makes the difference and that is the costs awarded against the Revenue Commissioners in two big cases, one is the case of J. D. Dolan, Inspector of Taxes v. Texaco (Ireland) Limited and the other is Dolan v. Neligan (Collector of Customs and Excise). The Revenue solicitor requisitions stamps for stamping his own legal documents, and this is another item. There was an excess of £845 on this and sheriff’s fees. When officers of customs and excise check the betting duty they make test bets and when other officers check the 10 per cent turnover tax on dances they also incur expenses, although they do not check that to any substantial extent because the yield is not very considerable. In any event, for test bets and admissions to dancehalls we have a component in subhead F. Then comes miscellaneous services, sundries and so on and under that component there was an excess of £1,684, but what really matters here was the two cases where costs were awarded against us.

1069. Deputy FitzGerald.—What happens if the test bet wins? Does it go to appropriation in aid?

—That goes to appropriation in aid. In fact, the yield from test bets for 1968-69 was £93.

1070. And how much was wagered?

—It was relatively small in that year.

1071. Chairman—Are rewards given to private citizens?

—They can be.

1072. Deputy FitzGerald.—On Appropriations in Aid—I note on item 7 that you receive scrivenery fees?

—Yes.

1073. Do you provide this service for other Government Departments?

—No, they are mainly fees paid by solicitors for copies of estate duty affidavits.

1074. What about the general lighthouse fund?

—These are light dues which are collected by customs and excise personnel and transmitted to the Department of Transport and Power who, in due course, sent them on to Trinity House, and the appropriation in aid which you see here are the fees charged for this service.

1075. Does this mean that all these fees come through you?

—Yes.

1076. What is the total sum collected?

—I do not know. I am not very much interested in that because we just pass it on.

1077. I was under the impression that it was a large sum, around £1 million, but, perhaps, I am confusing that with something else. If it were such a sum £275 is a very small fee for collecting it?

—I suppose like all civil servants we are under-paid here too.

1078. Chairman.—What about merchant shipping fees also listed at item 7 of the Appropriation in Aid?

—These are fees for the registering of ships and the transfer of ships. This goes back to 1898 although an up to date provision was introduced in 1963. These are fees for inspecting the registering of ships. In other words, customs and excise officers do all the work and the fees come in as appropriation in aid.

1079. Deputy FitzGerald.—Are you satisfied in the case of the lighthouse fund and, perhaps, the other that the fees you receive are adequate for the work you do?

—I should have made a distinction. The actual merchant shipping fees come in to us as an appropriation in aid.

1080. I am under the impression at times, when one is charged fees by the public service, and I am not wishing to encourage them to charge more, that the fees are extraordinarily low and give hardly any margin of profit. Are you satisfied that you are being adequately paid for providing such services?

—I have never investigated the question, but I would be very happy to look into it.

1081. On extra remuneration—I notice the payment for overtime is always very large for customs and excise. This is partly the nature of the job but have you looked into the question of whether if by having more staff you would, in fact, save more money? You must have one of the biggest overtime bills in the public services. What is the average per person now?

—I can only give you gross figures here. It is counter-balanced to some extent by fees that merchants pay for the attendance of our officers at special times.

1082. But that is only £48,000 out of £318,000, which is only 15 per cent?

—Overtime in customs and excise in the year 1968-69 was £193,692, but I think it was swollen somewhat by revised overtime rates which were paid retrospectively to the 1st October, 1967. In 1967-68 the figure was, in fact, £54,000 smaller.

1083. What would the current rate be, disregarding back payments—in the year now ending what kind of figure is it running at?

—If I may go back, in 1966-67 the figure for overtime in the customs and excise was £157,000; in 1967-68, it was £140,000 and then in 1968-69, for the reason I have mentioned, £193,000 or £194,000.

1084. It is £318,000?

Mr. Suttle.—That is the whole lot.

1085. Other than preventive staff?

Mr. Réamonn.—No; it includes the outdoor taxes and head office as well.

1086. The figure of £193,000 is the correct figure relevant to that year for preventive staff?

—Customs and excise generally.

1087. What would be the preventive staff?

—The preventive staff would be £140,000.

1088. For 433 people that is over £300 a head, on average.

Mr. Suttle.—The customs and excise staff would include customs officers and preventive staff.

1089. The figure given to me now relates to preventive staff?

Mr. Réamonn.—That is so—£140,000.

1090. That is over £300 a head for over 433 people an average. I assume some must be very much higher. Are you satisfied that with sums of that amount being paid in overtime an increase in staff would not be more economical?

—You have to analyse all these figures with great care. The cost of the preventive staff overtime in 1968-69 was undoubtedly £140,000. The figure in the previous year was £91,000. The increase was as a result of revised conditions of overtime pay granted in July, 1968, and made retrospective to 1st October, 1967.

1091. How much of that sum of £140,000 was retrospective and belonged really to the previous year?

—I suppose it would work out a proportionate sum. I imagine it would be a fairly big proportion of the £91,000. I could not give you the exact proportion. I suppose it could be worked out.

1092. If it was £91,000 the previous year and there was a big increase made retrospective it must be £120,000 or so relevant to the year in question—about £120,000-£125,000, perhaps. That is a figure of under £300 per head we are talking about, belonging to that year?

—Yes.

1093. Have you investigated the question of whether you could save money by employing more rather than paying such large sums on average in overtime to the staff?

—Our general view is that this is more economical because take the case of an officer who is specially mentioned in the report. The officer received——

1094. One got £969?

—Yes. He is in Drogheda and the position is that boats which he has to clear can enter only when the tide is in and it is more economical to have one person available than to have the station staffed around the clock.

1095. I can quite see that in that instance.

—I think generally in customs administration you have that kind of factor operating, that it is not like what is popularly called a nine to five matter. You have all sorts of odd hours necessarily involved.

1096. It is quite a different position where you have one person having to turn up at odd hours because of tides and where you have, as in most cases, a number of people who would be on a shift-work basis in which case would more staff not be more economical?

—We have shift work too but nevertheless our general experience is that it is more economical to work it in this particular fashion.

1097. Has any special study been made of this to see how economical it would be?

—It is under constant review.

Mr. Suttle.—This question of overtime was raised with regard to Revenue some years ago. Mr. Réamonn gave a long explanation of the whole position. It would be about three or four years ago. Revenue is the one place where there is a tremendous amount of overtime constantly worked.

Mr. Réamonn.—It is chiefly in the Customs and Excise. During 1968-69, which is the year under review at the moment, 236 officers received amounts in excess of £300 in overtime payments. If you break down the 236, 211 were customs and excise personnel.

1098. Deputy FitzGerald.—Mainly preventive staff, probably?

—I suppose mainly preventive staff but including officers as well to some extent.

1099. Chairman.—I understand that Mr. Réamonn will be retiring shortly, and I know that the Committee will want me to wish him happiness and prosperity in the years ahead of him in his retirement and thank him once again for the help he has given us and his unfailing courtesy since I have been here and in the years before that.

—I wish to thank you very warmly for your remarks and wishes which I appreciate very much. For my part, I should like to say how grateful I am to you, Mr. Chairman, and to the members of the Committee for the undeserved kindness and patience you have shown to me during my tenure of office.

The witness withdrew.

VOTE 42—POSTS AND TELEGRAPHS.

Mr. J. A. Scannell called and examined.

1100. Chairman.—Paragraph 76 of the report of the Comptroller and Auditor General reads:

“Subhead B.—Travelling and Incidental Expenses.

The charge to the subhead includes £480 being travelling and subsistence expenditure incurred by three officers of the Department in attending a course overseas. Travelling claims and supporting vouchers were duly submitted by the officers concerned but the documents were lost before the claims were passed. Despite searches, the documents could not be located and efforts to reconstruct the claims were found to be impracticable in the absence of the vouchers. The officers have now certified that their claims were slightly in excess of imprests of £160 advanced in each case and in the circumstances I have allowed the charge to the vote.”

1101. Paragraph 77 of the Report of the Comptroller and Auditor General reads:

“Subhead F.—Engineering Stores and Equipment.

In 1965 a contract for £70,000 for the supply and installation of certain telecommunication equipment was placed with an Irish manufacturer whose tender was not the lowest even after allowing for the normal limits of preference for home manufactured goods. The same firm was awarded a contract for £340,000 in 1966 without competition and in 1967 it obtained a further contract for £260,000 although its tender was again not the lowest. Payments made under these contracts amounted to £435,000 at 31 March, 1969, including £234,000 in the year under review. Further deliveries remain to be made under the second and third contracts.

This departure from normal departmental contract procedure was made at the direction of the Government as an emergency measure to protect employment in a comparatively new industry which was the sole home manufacturer of this equipment and appeared to depend to a large extent on Post Office contracts. I have deemed it my duty to draw attention to this matter.”

1102. Has this proved satisfactory since?

Mr. Scannell.—Yes, the equipment has proved satisfactory. Equipment we buy is tested beforehand. It is not accepted until it has been tested.

1103. Is there a good employment content in it?

—Fairly good. There are fair numbers in the factory.

1104. Deputy FitzGerald.—It seems an odd position that because it is a monopoly, the only home manufacturer, it can, therefore, charge more than even the normal limits of preference. Would it not be more appropriate in a case like this—perhaps this goes right against tendering procedures —that the firm should be told that if it is prepared to do the work at the limits of preference it will be given the job instead of being in the position to know, as it now knows, that even if it charges a price beyond the limits of preference, it still gets the job? It seems to be a terrible disincentive to charge reasonable rates?

Mr. Suttle.—I do not think that is the position. I think another firm has been set up. Certainly there was a proposal at one stage that another firm should go into competition with them here. The Department certainly discuss their rates with them and the possibility of refusing them. My view of this is that this company is being subsidised and I feel that the Post Office should not be asked to bear this additional cost, that it should go in under Industry and Commerce and the promotion of industry.

1105. Do you think that in a case like this it would be improper to go back to firm and say: “You have quoted outside the normal limits of preference. We will give you the contract if you come within it.”?

Mr. Suttle.—The firm are quite aware of the position.

1106. What they are aware of now is that if they stand their ground and say they will not come down they get the money. This is the whole trouble. They are much too aware of the position?

Mr. Scannell.—The Government decision was in relation to a particular order or orders. It is not a blank cheque. It does not mean we are to keep on buying from this firm.

1107. I appreciate that but the firm knows that in a case like this they are liable to get the contract simply because they are the only Irish firm. This gives them every disincentive to reduce the price?

Mr. Suttle.—It is a question, to a certain extent, of policy in that there are two Departments involved in this. The Post Office were actually placing the contract and the Department of Industry and Commerce were interested in the maintenance of this particular factory. It was, to a certain extent, a conflict of interests. From the point of view of the Post Office it would have been more economic for them to go outside the country and get equipment cheaper but the Minister for Industry and Commerce felt that it was better, from the point of view of the country, that the contract should remain in the country.

1108. Chairman.—Of course we have dwelt here in the past on the fact that there was practically no equipment being manufactured for the Department of Posts and Telegraphs within the country. We have adverted to that on several occasions.

1109. Deputy FitzGerald.—The whole purpose of having this limit of preference for home-manufactured goods is to ensure that, although they will have to compete with goods from other countries when we become members of the EEC, preference is given to Irish firms. However, if a decision has been taken that this is the limit of preference, to depart from it undermines the whole system of limits of preference. That is what bothers me. It means that firms in future will have an incentive not to come down in their rates because they will get the contract anyway. I am not concerned with the particular case but with the implications for the future.

Chairman.—Apparently this is not an established practice.

Deputy FitzGerald.—I wonder can we disestablish it before it takes hold and before people begin to rely on it?

1110. Chairman.—I think this is the first case of this nature that has come before us.

Mr. Suttle.—It is the only case I have met.

Deputy FitzGerald.—And perhaps it is something we might go back to in our Report and comment on it then?

1111. Chairman.—Paragraph 78 of the Report of the Comptroller and Auditor General reads:

“Subhead T.—Appropriations in Aid.

78. The rates of payment for agency services performed for the British Post Office were increased in April 1964 on a provisional basis. I inquired whether a firm decision had been reached on this matter and was informed that a series of tests had been carried our with a view to determining an accurate method of costing. Arrangements are now being made for a definitive costing of postal and agency services in respect of the year 1969-70 and should a material revision of the present arrangement be justified the matter will be raised with the British authorities.”

1112. Would the Accounting Officer like to make any observation on this matter?

—In general these arrangements made with other administrations work out reasonably well. We must review them now and again. Perhaps it is a pity we did not review them earlier.

1113. They are being reviewed at the moment. Is that right?

—Yes.

1114. Will they be retrospective?

—I cannot say. It depends on whether we can convince the other parties.

1115. Deputy FitzGerald.—These are agency services which do not cover such things as payment for postage, telephone calls and things of this kind?

—No, it is merely where we pay foreign orders here or Britain pays our postal orders.

1116. Where in the accounts do we see the receipts as a result of payments from foreign postal administrations for postal or telephone services?——

Mr. Suttle.—It goes in as postal revenue to the Exchequer. I think you have a copy of the commercial accounts.*

1117. There must be some system between ourselves and postal and telephone administrations abroad under which the money collected from the different countries is shared between them?

Mr. Suttle.—That is under an international arrangement but this is directly between England and Ireland.

1118. Where in the accounts will we find the net payments made by the postal and telephone administration?

Chairman.—You mean a contra-entry from the British side?

Deputy FitzGerald.—Yes. I presume they offset against each other and that eventually some kind of payment is made. Where does it come in?

Mr. Scannell.—Page 133, item 9.

1119. That in fact is the receipt in respect of agency services. As between the two postal adminstrations in Ireland and Britain and between Ireland and France with regard to telephone trunk calls made between the two countries and postage between the two countries, I presume each country collects the money in respect of this. There must be some system between them. Where does the sum involved appear?

—I am afraid it is not possible to give a simple answer to that because the arrangements with different countries vary.

1120. I realise that but where would the receipts of expenditure in respect of this appear in the accounts? I want to know where I could raise a query on it?

—It would come in under Postal Revenue or Telephone Revenue.

1121. Deputy FitzGerald.—Or expenditure?

Mr. Suttle.—The expenditure is just the salaries. The income for foreign telephone calls is shown here. The expenditure side would be the ordinary salaries and travelling expenses of the staff and the provision of the instrumentation for the work here. The revenue would then be split by international agreement.

1122. I see in the accounts payments to foreign administrations. They are featured under telegraphs, under postage and under telephones, but I do not see receipts from foreign administrations. Do we always pay?

Mr. Suttle.—It is a question of balancing If England put through ten telephone calls here and we only put through five the other way in effect the service is costing about half and half each way and we would collect in that particular case from the British Post Office because they had collected more revenue.

1123. I appreciate that but my point is that in the accounts we get under each head, postal, telegraph and telephone, payments to various foreign administrations, does the absence of any similar item on the incomes side mean that we do nothing but pay, that we never get money from anybody?

Mr. Suttle.—No.

1124. If there are receipts from other administrations under what heading are they in the accounts? Where can one raise a point on this issue?

Mr. Scannell.—We would not identify them separately.

1125. They just come under mail services or private wire rentals or trunk call fees?

—Yes.

I see. I will come back to that later.

1126. Chairman.—Paragraph 79 of the Report of the Comptroller and Auditor General reads:

“79. The commission rates applicable to money orders and postal orders exchanged between Ireland and Great Britain have applied for a considerable number of years and it appeared that in recent years the balance of traffic has been unfavourable to the Department of Posts and Telegraphs. The Accounting Officer has informed me that it is proposed to investigate the rates in the light of the costing referred to in the previous paragraph.”

1127. Have you anything to add Mr. Suttle?

Mr. Suttle.—Again, this is a somewhat similar position where the rates have not been reviewed for a period and they are now being reviewed to bring them up to date.

1128. Chairman.—They have not been reviewed since 1964?

Mr. Suttle.—Actually in the particular case of paragraph 79 the rate was fixed in 1922 and has been updated from time to time based if you like on cost of living figures. It is a question then of balancing traffic both ways as well to get the increased cost. That whole question is being investigated at the moment.

1129. Chairman.—What precisely is meant by the statement that appeared in recent years that the balance of traffic has not been in favour of the Department of Posts and Telegraphs? Does that mean that we have been charging lower rates than the contra charges?

Mr. Suttle.—No, it is a question of traffic in this particular case, the number of British orders we cash here as against the number of Irish orders cashed by the British.

1130. Chairman.—Emigrants’ remittances?

Mr. Scannell.—It is fairly substantial.

1131. Chairman.—Paragraph 80 of the Report of the Comptroller and Auditor General reads:

“Stores

80. A test examination of the store accounts was carried out with satisfactory results.

In addition to the engineering stores shown in Appendix II as valued at £2,929,098 on 31 March 1969 engineering stores to the value of £47,527 were held on behalf of other government departments. Stores other than engineering stores were valued at £500,245 including £164,064 in respect of stores held for other government departments.

Including works in progress on 31 March 1969, the expenditure on manufacturing jobs in the factory during the year amounted to £53,116, expenditure on repair work (other than repairs to mechanical transport) to £124,609 and expenditure on mechanical transport repairs to £20,917.”

1132. Deputy FitzGerald.—There is a reference to the factory in the second paragraph. Where are the factory accounts in the commercial accounts? What heading do they come under?

Mr. Suttle.—They are shown separately in the accounts.

1133. Under what heading?

Mr. Suttle.—You could have them under postal or telephone, depending on the work. The factory is just a general one doing repair work or manufacturing articles to suit any service of the post office. The costs would be split in the commercial accounts between postal, telephone, or telegraph services.

1134. Those are commercial accounts. The commercial accounts for the factory would have to be shown separately. They would not be mixed up in other services?

Mr. Suttle.—There is a separate factory account which is not published or furnished to anybody. It is maintained internally in the Post Office for their own information to ensure they are running on an economic basis.

1135. Surely that should come to this Committee?

Mr. Suttle.—It has never done so up to this.

1136. We want to know whether or not the factory is being run on a economic basis. Is that not part of our function?

Mr. Suttle.—It is a question of whether the Accounting Officer would be willing to supply it to the Committee.

Mr. Scannell.—If the request is made by the Committee I do not see any reason for not complying with it.

Deputy FitzGerald.—We would like to see the accounts.*

1137. Chairman.—Paragraph 81 of the Report of the Comptroller and Auditor General reads:

“Revenue

81. A test examination of the accounts of postal, telegraph and telephone services was carried out with generally satisfactory results.

The net yield of revenue for the years 1968-69 and 1967-68 is shown in the following statement:—

£21,700,000 was paid into the Exchequer during the year leaving a balance of £582,593 at 31 March 1969 as compared with £1,494,195 at the end of the previous financial year.

Sums amounting to £3,498 due for telephone services provided in previous years were written off during the year as irrecoverable.”

1138. Chairman.—Paragraph 82 of the Report of the Comptroller and Auditor General reads:

“82. In the course of audit it was noted that a number of telephone and telex accounts had been outstanding for considerable periods. The Accounting Officer has informed me that the Telephone Accounts Section has been under heavy pressure in recent years due mainly to staff difficulties and this has been the cause of some work falling into arrear. Priority had been given to collecting current telephone revenue and to cases in which there were better prospects of recovering the amounts due. He stated that the position had recently improved but that there is still a back log of arrears which will take some time to clear. He added that the procedures for reviewing outstanding telex accounts have recently been revised in view of the rapid development of this service.”

1139. Deputy FitzGerald.—What are the staff difficulties? In what particular grade is there difficulty in recruiting?

—In practically every grade in the Post Office as in the case of the whole Civil Service there are difficulties in recruitment, either inability to get them at all or inability to get them at the time we want them. Even if we get them they may resign after a short period of service.

1140. What procedure do you adopt in cases where you have not got staff, work is being held up and there are financial losses accruing through not collecting money from arrears?

—First somebody in the Department presumably has got to make the decision about what they can afford to let go and what they must do.

1141. My point is what do you do to remedy the staff difficulty when you are not able to recruit staff? Presumably when that difficulty arises you are alert to it and some proposals must be made for changing the recruitment system, the salaries at level of recruitment or something like that. What proposals have you made in respect to this? Is it within your own competence to make changes or do you have to get the approval of the Department of Finance in this?

—Recruitment of permanent staff is done through the Civil Service Commission and therefore in general as far as we are concerned we have discussions both with the Civil Service Commission and with the Department of Finance.

1142. Do you have to get the approval of the Department of Finance to change the conditions of service in order to get over this?

—Yes.

1143. Have you made proposals designed to remedy your staff difficulties? If so, have they been turned down?

—We have made various proposals, some of which have been satisfactory and some of which have not. I do not think it is within my competence. We have no magic wand with which we can improve recruitment to get over difficulties.

1144. Given there is a problem of staff shortage there must be some proposals as to how this could be remedied as in any ordinary outside undertaking and that proposal is either accepted or not accepted. If it is not accepted the difficulty continues but if it is accepted that may remedy the difficulty or it may not. I am concerned with whether in proposing remedies to this you would involve change in recruitment conditions. Have you put forward proposals which, in your view, would resolve the difficulty and have they been turned down? If so what action can you take to remedy the financial losses which may accrue as a result?

—If I may take the last point first, we operate under collective responsibility, so we do not regard this as being turned down by Finance. If Finance disagrees with our view we accept it. I think that is inherent in our position.

1145. It is an interesting definition of collective responsibility. I have not heard that definition before. You put a proposal to somebody who turns it down and you accept that; but I see the point. The fact is that you put forward a proposal which you believe may remedy the situation, but the proposal may be turned down and you accept that and carry on?

—I want to emphasise that nothing is ever just black or white. There are many things in your statement which I would like to qualify. I believe that some of the proposals put forward might have improved matters, but I am afraid I have never been that sanguine about things. You try to find the best way to deal with it.

1146. Surely if you have staff difficulties in any organisation there must be some way you believe they can be resolved, given that there is a supply of labour in the country and a demand for jobs. It may require special training arrangements; it may require changes at recruitment level; it may require higher remuneration, but there must be a method by which difficulties can be resolved in a country with a labour surplus?

—We may have a labour surplus but it may not be a surplus of the kind of people we want. We want people to do clerical work whereas a large number of the surplus labour is elsewhere.

1147. This country has probably the largest surplus of clerical workers in the world in relation to its population. We produce three times as many such people as Britain, for example, because of our education system so that the one thing we cannot be short of is clerical workers. They may not, of course, have the training you require. You may feel their standard is not high enough, and they may require further training. But I do not think we, in our situation, can sit down and say the whole problem cannot be resolved in view of the number of people who emigrate, many of whom have clerical training. One of the biggest surpluses are males with the leaving certificates?

—The leaving certificate is probably too high.

1148. So the problem is that your requirement level is too low?

—I would not like to pontificate on that.

1149. If you face staff difficulties do you not feel that this is something which you should look into and then put forward proposals to change it?

—We have an adequate training section which provides training. Recruitment improves and then disimproves; we are never in a static position. We are fairly well off for clerical officers at the moment, but we cannot guarantee that that will be the position next year.

1150. What are the staff difficulties you have which are holding up the arrears?

—Clerical officers and clerical assistants.

1151. But clerical officers are reasonably all right at the moment. What are you short of?

—We are short of clerical assistants.

1152. What level are they recruited at?

—About the same level as typists.

Mr. Suttle.—A little bit more than primary certificate.

1153. Deputy FitzGerald.—But due to the Government’s education policy only a tiny minority of people are now leaving school at primary certificate level, it is hardly surprising if you do not recruit people at that level when the population has passed on beyond that level. Would you not raise the recruitment level?

Mr. Scannell.—Primary certificate is the minimum level. It does not prevent one from recruiting people above that level.

1154. I appreciate that, but presumably if remuneration is appropriate to people with primary certificate it is consequently unattractive to anyone of a higher standard, and you are not, therefore, likely to recruit people of a higher standard because the remuneration is appropriate to a group which practically no longer exists. Are you not adjusting your sight in the light of the Government’s policy?

—The Department of Posts and Telegraph has to accept the general pay level which applies to other Departments such as the Department of Industry and Commerce and the Department of Agriculture.

1155. If you cannot recruit people at the bottom of the scale would you not recruit people higher up? This is normal practice?

Mr. Suttle.—The type of work these people are doing is not of a very high intellectual standard. You also have to equate the economics of the staff employed as against the revenue you are getting. There is not a great loss of revenue involved even in arrear cases and if you were to pay increased salaries you would increase costs and in effect create a loss.

1156. But you are paying overtime and you are paying interest on the money that you have not recovered. It should be costed out whether it is better to have arrears or whether it is better to recruit people. The problem looks like one that cannot be resolved if this work can only be paid at the level of primary certificate qualification, and as nobody is leaving schoool with a primary certificate it looks as though the whole system will collapse unless you mechanise it?

Mr. Suttle.—There is a fair amount of mechanisation of this side of the work.

1157. There seem to be no plans to resolve these problems or quantify them for a time with recruitment or training. We have drifted for the last ten years and now the position has got suddenly worse because of the raising of educational standards and yet there are no concrete proposals for remedying the situation?

Mr. Suttle.—That is not really a question for Mr. Scannell. It is a question for the Minister for Finance and the Department of Finance because they establish salary scales for the service generally. If you increase the salary scale of the clerical assistant you automatically increase the scale of clerical officers and other officers all the way up because the whole standard is geared on that basis. The general question is not an individual question for a single Department.

1158. The only way to resolve the problem is for each Department to explain how bad the situation is, put forward proposals as to what needs to be done and then have a conference of Departments from which a policy will emerge but I see no evidence of this happening?

Mr. Suttle.—There is nothing like a general council of Departments. The Department of Finance knows the whole position in the service generally and it is up to them to decide.

1159. The individual Departments are powerless then?

Mr. Suttle.—From the point of view of general service grades the Department cannot interfere with them in any way.

Mr. Scannell.—A large part of these arrears of telephone accounts are uncollectable because the people have either gone bankrupt or fled from the country. It is really not anything like £80,000 or £100,000.

1160. It is more a tying up of loose ends?

—The Department decided to go after accounts which it knew it would get.

Deputy FitzGerald.—I am sure that is right.

1161. Chairman.—Paragraph 83 of the Report of the Comptroller and Auditor General reads as follows:

“Post Office Savings Bank

83. The accounts of the Post Office Savings Bank for the year ended 31 December 1968 were submitted to a test examination with satisfactory results. The balance due to depositors, inclusive of interest, amounted to £140,802,036 (including £22,549,329 in respect of liability to Trustee Savings Banks) on 31 December 1968 as compared with £137,509,300 at the close of the previous year. Interest accrued during the year on securities standing to the credit of the Post Office Savings Bank Fund amounted to £8,633,408. Of this sum £4,838,058 was applied as interest paid and credited to depositors, management expenses absorbed £434,076 and the balance, £3,361,274, was set aside towards provision against depreciation in the value of securities.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—The paragraph gives the usual information on the operation of the savings bank.

1162. Deputy FitzGerald.—Looking at the securities held they are entirely Government securities, ESB stock and things like that, is it a requirement that the savings bank may not invest in anything else?

Mr. Scannell.—The management of the security is carried out by the Department of Finance; we only act as their agent in running the service.

1163. Deputy FitzGerald.—Could we ask the Finance representative here a question on that?

Mr. M. O’Reilly (An Roinn Airgeadais).— You can invest only in a certain list of securities set out in a Finance Act. It is limited to Government securities, State guaranteed securities, and British Government securities, in the main.

Deputy FitzGerald.—A statutory limitation.

1164. Chairman.—As a consequence there has been a capital depreciation year per year. The gilt-edged securities do not stand up to depreciation of moneys. Are you satisfied in general with the savings banks? Has our position improved.?

Mr. Scannell—It provides an avenue for the small saver. It is a necessary part of the set-up. We fulfil a function even by having it even if people do not patronise it as much as others think it should be patronised. As far as the service is concerned, we are satisfied that we provide enough facilities for people to save. The publicity and so on are matters for the Savings Committee. The Savings bank as such is effected by any competing forms of investment, such as prize bonds, which are much more attractive from certain angles.

1165. Deputy Dr. Gibbons.—In regard to subhead A.—Salaries, Wages and Allowances—you pay social welfare contributions for temporary staff. When they become permanent you cease to do so. When those people become ill they are deprived of social welfare payments. Are they entitled to any assistance?

—Any established civil servant gets very considerable sick leave benefits. If he goes sick he gets full pay for six months and a year after that he gets pension rate. There is more generous treatment for tuberculosis cases where I think they get full pay for nine months and half pay for a further nine months. Those benefits are regarded as a good deal better than the social welfare benefits.

1166. In the final analysis when a person becomes permanently ill the final payment may be much less than the social welfare payment. I am thinking of rural postmen?

—I could not answer that question off the cuff except to say that if a person is permanently ill, an established person would retire on grounds of ill-health and would get a pension. What particular case had the Deputy in mind?

1167. I am thinking of a case of a postman who found himself in this position and lost his contributory old age pension?

—Anyone who makes a contribution to social welfare can continue as a voluntary contributor if he wants to. It is not a matter for the Department to say that he should or should not.

1168. Deputy Dr. Gibbons.—It strikes me now that this perhaps is a question for Social Welfare because in fact this man was returned his social welfare voluntary contribution. In the case of another man who had become permanently ill his final pension from the Post Office is much less that what his social welfare contribution would be.

Mr. Suttle.—Is this disability pension?

Deputy Dr. Gibbons.—Yes, disability pension for himself and his wife.

Mr. Suttle.—It is an unusual case.

Mr. Scannell.—If I could get details of the case I will look into it and see if I can give the Deputy what information we have.

1169. Deputy Dr. Gibbons.—In regard to Extra Receipts Payable to Exchequer, are the broadcasting licence fees paid over to Radio Telefís Éireann?

Mr. Suttle.—Yes.

1170. In regard to the Appropriations in Aid, item No. 1—Recovery in respect of Telephone Capital expenditure—what exactly is Telephone Expenditure?

Mr. Scannell.—All development work on the telephone system is regarded as capital work, that is, where we put a new exchange in an area that has not had a telephone service before, or instal telephones, that is, under the Telephone Capital Acts, financed and treated separately as telephone capital. In effect, we borrow from the Department of Finance and then pay it back by means of terminal annuities over a period of 25 years.

1171. Another point that strikes me is that people now looking for telephones must pay a deposit. Where is this shown in the accounts?

—The commercial accounts telephone revenue.

1172. I just wonder what the total amount would be?

—I do not think we show it separately.

Mr. Suttle.—You have a figure for deposits in the balance sheet, have you not?

Chairman.—£431,000.

Mr. Scannell.—I should like to make clear one point: that is deposits and there are two types: payment of rental in advance; there is a connection charge which we hold. When you pay the connection charge you do not get it back and there is also a deposit in respect of money you will owe for making calls.

1173. Deputy Dr. Gibbons.—On the Notes I suppose you deal with cases of drivers held to be guilty of negligence, where there is damage to official vehicles, on a personal basis?

—Yes.

1174. On Appendix No. 3 relating to superannuation what do compensation allowances under Article 10 of the Treaty of 6th December, 1921, refer to?

—When the transfer took place in 1922 there were a number of civil servants who retired in consequence of the change of Government.

Mr. Suttle.—It extended away beyond 1922. Anyone who was transferred from British service, if he felt that his conditions were worsened as a result of the setting up of the State here, could retire with additional compensation due to early retirement. That is the amount in the Post Office arising from that. It also applies to the Civil Service generally. These people are dying out now and the amount going down year by year.

1175. Chairman.—This will be Mr. Scannell’s last time coming before us. I understand he is retiring. I would like to wish him many years of happiness. I am sure the Committee would like to join with me and also to thank him for all the help he has given us in the years he has been coming before us.

—I am very grateful.

The witness withdrew.

The Committee adjourned.

*See Appendix 2.

* See Appendix 29.

*See Appendix 30.

*See Appendix 31.