Permission has been given to raise on the Adjournment the question of the closure, with consequent loss of jobs, of The Sunday Tribune and the Daily News. I understand that Deputy Gallagher (Waterford) is agreeable to share his time with Deputy O'Higgins.
Adjournment Debate. - Newspaper Closures.
(Waterford): I thank the Chair for having given me an opportunity of raising this question. As a former newspaper employee I have a personal interest in the operation of these newspapers. Indeed it is a fair comment to say that to anybody in the media and those of us connected with the printing business the loss of a newspaper, even a provincial one, no matter what the circumstances is a very traumatic matter as it is to the community at large and the individuals involved. But the loss of a weekly newspaper and a national daily constitutes something of real national concern. The loss of the Sunday Tribune and the Daily News and more particularly the circumstances surrounding their closure and the dismissal of 150 employees, print workers, reporters and so on, and the placing of other employees in the Sandyford Press in jeopardy is a matter of serious national concern.
What I want to highlight here this evening is the question raised about the adequacy of legislation governing the operation of private companies and the effectiveness of employee protection legislation. It would be in order for me to sketch briefly the background leading to the closure of these two newspapers. The Sunday Tribune and the Daily News were owned by a company called Sunday Tribune Limited. Over the holiday weekend it appears that the ownership of the two titles of these papers was transferred, indeed without the knowledge of or consultation with the employees concerned, to another firm called Daily News Limited. Both Sunday Tribune Limited and Daily News Limited are owned and controlled by a Mr. Hugh McLoughlin who, for obvious reasons, is well known in the publishing industry. On 27 October last, at the request of Mr. McLoughlin, the High Court appointed a liquidator to Sunday Tribune Limited. By transferring the ownership of the titles from Sunday Tribune Limited to Daily News Limited and liquidating the former it appears that Mr. McLoughlin hoped to be able to sell the titles to another concern outside the country, at the same time evading his legal and moral responsibilities to the employees concerned. Members will recollect that on Thursday last we sought an adjournment debate to raise this matter but, due to circumstances beyond our control, this did not take place. But up to Thursday last Daily News Limited, which now purports to own the two titles, had not even been registered at the Companies Office in Dublin Castle. It appears to me that the effect of this strategy will be to deny the workers the wages and salaries to which they are legally and morally entitled. For example, Daily News Limited operated for less than two weeks only and some staff have received no wages at all. Some of those people came to work on the paper from other parts of the country, indeed some from England. I do not need to outline for the Minister or anybody else in the House the inconvenience and expense involved in relation to setting up accommodation and so on. Such staff have suffered grievously in financial terms in addition to the loss of security of jobs, jobs they were given an absolute assurance would last at least 12 months, in particular to afford the Daily News an opportunity to make its circulation impact and then continue in operation.
Apart from fulltime staff there are also some 50 freelance journalists owed large amounts of money for work carried out for both newspapers in recent weeks. I recollect speaking to some of the staff involved. For example, last Thursday afternoon one of the people involved, who happens to be a female member of the NUJ, was left with no less than 2 pence in her pocket because substantial sums of money amounting to hundreds of pounds had not been paid to her. Some members of the staff of both papers received salary cheques on Friday, 22 October, after 3 o'clock when the banks had closed, cheques they endeavoured to cash. Like others of us, who are paid by cheque they have an arrangement with a supermarket or some other establishment for the encashment of their cheques; an understanding whereby cheques would be cashed and honoured. On the following Tuesday morning when attempts were made to redeem the cheques it was found that they had bounced. Indeed the print unions involved estimated that the money due to employees amounts to approximately £200,000. Apart from money losses to employees and the fact that their jobs have been lost it appears that as much as £300,000 is due to the Revenue Commissioners in respect of outstanding PAYE, PRSI and VAT payments.
It is as well to reflect that this is not the first occasion on which Mr. McLoughlin has been involved in a publishing venture which has failed in the most doubtful of circumstances. It might be of interest to remember that seven years ago the same individual was the owner of the Creation Publishing Group which closed, again with considerable job losses. On that occasion also employees were left without moneys due to them. On that occasion also moneys due to the Revenue Commissioners were not paid. It appears that no attempt was made in the intervening years to clear these debts, debts to the State of approximately £250,000. It is deplorable that Mr. McLoughlin should have been allowed to repeat the same exercise with the Daily News and The Sunday Tribune. Because of Mr. McLoughlin's track record I would have thought that the Government particularly — in relation to overseeing the operation of companies — would have looked very sceptically at this operation. Indeed before the Daily News commenced publication — again because of his track record — the trade unions involved sought certain guarantees from him to the effect that there would be sufficient funds available to operate both the Daily News and The Sunday Tribune over a reasonable period of time. A trade union representative was given to understand that a sum of £400,000 was available in cash from Northern Bank Finance Limited, through a mortgage on unit 10 of Sandyford Industrial Estate, and that property to the value of an additional £800,000 would be available also as collateral. Mr. McLoughlin also gave assurances that there would be a 21-month minimal trial of the new publication. As the Daily News lasted for 15 issues only it is clear to any objective outsider either that Mr. McLoughlin seriously misled the union representatives and personnel involved or changed his mind about the viability of the project and failed to inform the unions. Whatever may have been the motives Mr. McLoughlin has shown total disregard for the rights and interests of his employees and must be condemned without reservation by any right-minded person.
It appears at the time that Mr. McLoughlin was attempting unsuccessfully to sell the two titles to a Mr. Robert Maxwell, a British businessman. Those of us who take an interest in media matters are well aware of the pedigree of the same Mr. Maxwell. For example, in 1970 a British Board of Trade investigation into the relationship between two companies owned by Mr. Maxwell — Pergamon Press and Leasco Limited — described Mr. Maxwell, in cold hard print, as being not fit to run a public company. I understand that Mr. Maxwell has stated in the media recently that he is not prepared to pursue the question of acquisition of these two titles. I am very glad to hear that. I am sure the employees and unions involved — anxious though they may be to salvage jobs — would find it extremely difficult to accept somebody of the reputation of Mr. Maxwell.
The facts I have outlined here to the House merit urgent and serious investigation by the Minister. I would ask the Minister to instruct the Fraud Squad to investigate all the circumstances. The time is well overdue for the Government to take immediate measures to prevent the disposal of the two titles without absolute, copper fastened guarantees that the wages owed to staff will be paid, their jobs guaranteed and the debts to the Revenue Commissioners cleared. That is a prerequisite and I formally request that the Fraud Squad be brought in as a matter of urgency to investigate the operation and the collapse of the two newspapers.
I should like to congratulate the Minister of State on his appointment on this his first formal appearance in the House. I am indebted to Deputy Gallagher for sharing his time with me on this important topic. On behalf of the Labour Party I should like to state that we share his concern and the demands that have been made for an immediate investigation into the background of the situation with regard to the employees of the Daily News and The Sunday Tribune. In the brief time at my disposal I should like to put as succinctly as possible the feelings of the Labour Party with regard to what has happened. The individual at the root of this problem represents to me probably one of the most despicable of the new class in Ireland that has, unfortunately, been frequently granted the adulation of the public and, sometimes, the people working in the media, a new form of buccaneer capitalism who invests money for purely speculative return. In so doing that person pursues that speculative profit across the bodies of employees relentlessly and without feeling.
The first point I should like to make is that the actions that have created this problem are of a class of actions that have crushed families and workers previously. It is a reprehensible type of behaviour and I am glad that the focus is being turned on it tonight. I agree with Deputy Gallagher on what usually happens in a case like this. There are the bounced cheques and the unpaid revenues due to the State. They are all of a type that usually follow this kind of operation. I remember once when cheques were bouncing for employees of a closed firm and I asked a man who works in the State service why he did not pursue people more and his reply was that he could waste one whole day but the person would only get a small fine. In this respect the law clearly indicates what the preferences of the society have been, to protect the companies and money and not to protect individuals. It is interesting to contrast the breaches in relation to such things as shoplifting and the sanctions, if any, that will be brought to bear on the individual who has ruined the lives of people in this matter.
The second point I should like to make concerns the ethics of this type of operation, the idea that individuals without resources can set up paper corporations and on the basis of that issue contracts which have no meaning in fact. When I say that I mean that there is no material basis that those contracts will ever be fulfilled. Those contracts are given to individuals in good faith but they in turn are broken. That calls into question the whole nature of the law in this regard. I have no doubt that the editor of one of the newspapers — I read the interview with him — entered into contractual arrangements in good faith. I am equally in no doubt that the other side of that contract, the person who was providing the speculative money, had every intention if the venture worked of taking profit and if it did not work abandoning the implications which are usual in contractual relationships. It is in that sense that I think the ethics — the activities are those of a reprehensible form of buccaneer capitalism — are those of the sewer. They are an invitation to enter into contract and then to welsh on it.
Another point which is important and goes far beyond the matter of the unpaid salaries to which I have referred is the question of inviting people at a stage of their professional competence and practice to leave other jobs and occupations and enter contracts in good faith on what they feel to be the development of their means to make a livelihood and then suddenly, abandon over a weekend those people and tell them: "Now, resume where you were." It is indicative of what is happening in our economy. That has been a response which has been usual, unfortunately in a number of closures towards employees. I hope the investigative procedures go ahead. There is also the question as to the appropriateness of the people to run a newspaper.
There is the general principle about the weakness of company law in this respect and in relation to that there is no point in saying that yet again our hands are tied and there is only so much we can do. The fact of the matter is that the Vraderling Directive of the European Parliament emphasises the rights of employees to have access to full information about the ventures in which they find themselves seeking to make their livelihood.
Beyond all this there is the question of the two newspapers concerned. I have my own views about the aesthetic standards that seem to have been pursued in relation to the Daily News but they are minor by comparison with the rights of employees to have time to test the market for a new newspaper. I believe The Sunday Tribune was a quality newspaper that sought to achieve things in the newspaper world which were welcome in Irish journalism. I wonder when employees who work for a newspaper like The Sunday Tribune are abandoned — I hope that the purpose of raising this matter on the Adjournment is that it will not be abandoned — what type of space is left in the Irish newspaper world. We will see in the other newspapers people in the business for exactly the same reason in at least one for purely speculative purposes. It is tragic when we see speculative chancers playing havoc with the livelihoods of people who want to improve the standards of journalism in Ireland. The position of the Labour Party is that we condemn this behaviour in general and in the specific instance raised by Deputy Gallagher we condemn it in particular.
I should like to join with Deputy Higgins of the Labour Party and Deputy Gallagher in expressing solidarity with the journalists and workers involved in the newspapers concerned. They have been treated in a despicable and unprincipled manner. I am in a unique position in one sense in that when one of the newspapers was being launched one of the journalists asked me to make a small contribution that might in some way contribute to the success of the newspapers. I was anxious not to do anything that would conflict with the NUJ or trade union regulations in regard to journalists and I agreed on the basis that I might aid one of the newspapers. This country needs more newspapers of the calibre of The Sunday Tribune and Daily News. I regret the way those newspapers have been allowed to slip because they could have made a great contribution. I hope the Minister when replying will deal with the difficult situation in regard to company law. I hope the changes we consider necessary arising from this matter will be introduced to ensure that we do not have such occurrences again. An individual should not be permitted to treat workers, irrespective of who they are, in such a despicable way. I am pleased that I have had an opportunity of expressing my solidarity with the workers and I join with other Members in calling for action and assistance on their behalf.
The Chair is happy now to be associated with the congratulations passed to the new Minister of State and to call on him to conclude.
I thank the Leas-Cheann Comhairle and the other Deputies who have wished me well in my office, however long it may be.
Sin ceist eile.
I share the abhorrence and concern of the Deputies who spoke in relation to the recent events in The Sunday Tribune and the Daily News. I read both newspapers. I have been a reader of The Sunday Tribune since it was first printed. The editor of the Daily News was born in my constituency and the editor of The Sunday Tribune had the good sense to marry a girl from my constituency. Apart from the quality of The Sunday Tribune and the different market the Daily News was aiming for I had an interest in the process of both newspapers. I, like the other people who spoke tonight, share the concern of the employees of both newspapers.
The establishment of those newspapers resulted from decisions by private interests and did not involve or require any prior consultation with the Minister for Industry and Energy. Similarly, the decision to cease activity did not require any notification to the Minister. The setting up of those papers did not involve any assistance from any of the State agencies for which the Minister is responsible.
The special position of newspapers in our society is recognised and taken specially into account under the provisions of the Mergers, Takeovers and Monopolies Order, 1979. This order was made by the Minister for Trade, Commerce and Tourism and it requires the notification of any takeover proposal involving a newspaper. Its purpose is to guard against any undesirable trend towards concentration in the control of existing newspapers. Such proposals would require clearance by the Minister for Trade, Commerce and Tourism.
Most of Deputy Gallagher's fine address was related to the Minister for Trade, Commerce and Tourism rather than to the Minister for Industry and Energy. Everything the Deputy said related to that Department. The Minister for Trade, Commerce and Tourism is the Minister concerned with the Companies Act. Deputy Gallagher mentioned the Fraud Squad being brought in to look into the situation. Clearly the ethics and actions of Mr. McLaughlin are questionable, undesirable and perhaps, as Deputy Higgins said, "despicable" is a better word.
Unfortunately, it is not a matter in which I have any function. When I knew what was to be discussed here this evening I had a discussion with the Minister for Trade, Commerce and Tourism about having this matter examined. It is clearly wrong to have a situation whereby, whether individuals have resources or have not any, people should be duped, as they undoubtedly were on this occasion.
Mr. McLaughlin produced certified documentation some weeks ago to the editor of the Daily News, the NUJ and other people associated with the launching of the newspaper that he had £600,000 accommodation available from three different banks. He argued that this, coupled with the cash flow from sales and advertising, would adequately fund the Daily News for a reasonable launch period of from six to 12 months. This documentation in regard to bank accommodation was certified by the bank's solicitors and was secured in two cases on two factory premises in south Dublin. Those who acted on sight of this documentation did not anticipate that Mr. McLaughlin would refuse to draw on these available funds. It is for him to answer why he so acted.
The salient facts are that after 15 issues the Daily News had settled down to a base of approximately 80,000 copies a day and a market survey shows that this base was consistent with success. However, to move the base from 80,000 to 100,000 copies per day, a circulation which would have made the project very viable, funds for the promotion and development of the package would have been necessary. These funds of £600,000, which everybody was assured would be available, plus the revenue from circulation — approximately £10,000 per day at the time of the closure — would have made possible the goal to drive the circulation up to 100,000 copies. There is no doubt that this goal could have been achieved and the Daily News would have been a successful paper.
I agree that in future if we have situations like this Governments should have a look at such promotions to ensure that when financial accommodation is available, as in this instance, those concerns should be legally obliged to draw on that accommodation. That involves the Minister for Trade, Commerce and Tourism rather than the Minister for Industry and Energy. I have already spoken to him about this matter. Deputy Higgins implied that the resources were not there. Of the £600,000 Mr. McLaughlin had available, approximately £60,000 was expended on that newspaper.
The resources were stripped from one newspaper to be put towards the other.
That is correct. The debts were not known to the staff and the people who accepted what Mr. McLaughlin had told them. The Smurfit group are owed in the region of £900,000 for printing. I understand that Mr. McLaughlin is a debtor for something like £700,000. There are a number of other creditors. Many of the best journalists in the country left good, secure employment in other newspapers because of what they saw in the development of these two newspapers, particularly the latter, which did not get a great opportunity when one considers the amount of time it was allowed to develop. There were about 150 employees in both newspapers. In the Daily News there were about 80. About 20 per cent of those 80 left secure employment in other newspapers, a top-class bunch of journalists who did not draw any salaries for the time the paper was in operation. In fact, they paid their expenses out of their own pockets in the belief they were with a viable operation. It was a despicable act that within a couple of days of receiving their first pay cheques the plug was pulled from the operation.
I share the apprehension of the other speakers. The arresting of any future situations which may occur should be directed to the Minister for Trade, Commerce and Tourism. It is undesirable that this should happen. I hope that the employees involved, who have given their skills to these newspapers, will find a future in other newspapers in the country.
The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 3 November 1982.