Noonan says compensate for Eircom share losses

The Fine Gael leader, Mr Michael Noonan, took to the airwaves yesterday to defend his proposal to compensate Eircom shareholders…

The Fine Gael leader, Mr Michael Noonan, took to the airwaves yesterday to defend his proposal to compensate Eircom shareholders for their losses.

He joined a debate on the issue on RTÉ's Liveline programme after his proposal had been dismissed as "an election stunt".

Mr Noonan said he hoped the proposal would "right the wrong" perpetrated on small Eircom shareholders so they would not be discouraged from buying shares in Irish flotations again.

His plan is to allow small investors offset their Eircom losses against taxable income. What then of those, especially pensioners, outside the tax net?

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He conceded if people did not pay tax, his proposal did not apply to them, "but many pensioners pay income tax. As a matter of fact the bulk of non social welfare pensioners pay income tax and those that are on combined pensions pay income tax as well," he said.

The proposal would compensate people "conned" into buying shares by the Government, which had hyped the share offer "through a very expensive public relations campaign", he said.

"I don't think a single shareholder who got burned in Eircom will buy a share in a State company again unless something is done, so as a matter of national policy as well as compensation, I think it's very important to restore confidence," he said.

The compensation would be once-off and had been costed at up to €82 million (£65 million). He said the money people lost was "inside in the Irish exchequer".

He was "not surprised the captains and the kings are against this. This proposal is brought forward in the interests of the small men, the small person, some of whom borrowed money to buy shares.

"What's sauce for the goose is sauce for the gander and if the big men can offset it against capital gains at 20 per cent I can't see why the small man and woman can't offset it against tax," he said.

Mr Noonan added: "Of course it's a proposal with which we hope to influence voters but it's a fair, honest, equitable way of treating people."

The Fine Gael leader also undertook to review company law which resulted in the compulsory purchase recently of Eircom shares from those who did not want to sell.