Deputy John P. Wilson sought and was granted permission to raise on the Adjournment the position regarding OIE hotels. He has 20 minutes.
Adjournment Debate. - OIE Hotels.
I want to thank the Chair for allowing me to raise this matter on the Adjournment. It has engendered a great deal of heat over the last 48 hours or so and appears to be the basis for an ideological warfare, so I thought that it would be as well to raise the subject matter in the House.
The Minister, in his introductory speech on the Estimates, did not mention OIE at all but referred to them in his reply as I had asked some questions. I shall read the Minister's reply:
Deputy Wilson inquired whether the sale of OIE Belfast Hotel had been completed and whether any policy decisions had been taken in relation to OIE. The sale of the Russell Court Hotel in Belfast is, of course, primarily a matter for OIE.
Something, of course, that we all in this House will probably have to address ourselves to is the problem of availability of information.
I put down a Parliamentary Question with regard to the finances of the CIE hotels earlier this year and was refused information by way of reply to a Parliamentary Question on the basis that it was a matter for CIE. We have touched upon this on a number of occasions and on a recent radio programme I mentioned that one of the complaints made by the McKinsey consultants about CIE was the difficulty of getting information from them. This House will be called on, whether CIE are disposed of or whether they are continued as a semi-State body, to pay out money. That being so, this House is entitled to information about individual transactions. I quite understand and am on record as having stated that that was the raison d'etre of the regulations originally, when the expenditure of public money was not involved to the same extent as it is today — that there is only one principle on which to go now which is full freedom of information with regard to semi-State bodies and their finances.
The Minister said in his reply:
I understand from the company that a contract for the sale has been signed and that the sale is to be completed by end of June. The sale price is a matter between CIE and the purchaser.
It is in a sense, but it is not in another sense.
I have been reviewing the operation of CIE generally and I expect to be in a position shortly to bring proposals before Government on the future operation of the Great Southern Hotels.
That quotation is from the Minister's speech on the Transport Estimate of April, 1983.
What we would like to know in the House is, has the Minister prepared those proposals, what are those proposals, how do they relate to the CIE hotels as of now? I want to put it on record that there were no decisions by the Fianna Fáil Government to sell or dispose of the CIE hotels. I was empowered to discuss the matter with the trade unions and as far as I can remember, it was Mr. Rabbitte of the Irish Transport and General Workers' Union who came in to discuss the whole problem with me when I was Minister for Transport. The trade union, naturally, being concerned for their members, outlined the reasons for the retention of the hotels in State ownership and with many of the arguments one could agree. They were anxious that they be maintained as prestige hotels, available to those organisations which had developed tourism in the country, particularly Bord Fáilte, Aer Lingus, B & I, Irish Continental Lines and so on. They were anxious that they be maintained as hotels. This, too, I regarded as important and, indeed, had outline discussions with a hotel group about it. One of the points made during that discussion was that it was important that these hotels, in prime locations in many towns and cities, should continue as hotels, because there was a danger of speculation and we were committed to the position that they should not be available for speculative purposes but for hotels.
In the discussion with the trade union representative and right through, I emphasised how important it was that the commercial viability of the hotels should be assured. Quite frankly, I cannot see — in some cases, anyway — how management could succeed in losing money in some of these hotels, but management did succeed in losing money in some of them — some of the hotels which are built into the social and commercial fabric of the towns and cities in which they are located. Whatever one's ideological views might be, there is no gainsaying that if a hotel has a prime location, has already established itself as a prestige hotel in an area, if it is the social and commercial centre for the area, then it should be making money and I am convinced that that should be written down as headline No. 1 for the hotels, no matter what their future may be. There is no point in handing anybody a blank cheque with regard to the operation of these hotels.
I had exploratory talks with a group of hoteliers and outlined my own views on this and emphasised that they had played a large part in the development of the tourist industry of the country and that their loss could not be tolerated from the hotel scene. The figures which I got at that time showed that each and every one of the hotels was losing money. It occurred to me to point this out when the thesis was being advanced that the only reason that CIE were losing money was that the Belfast hotel, the Russell Court, was a millstone around the neck of the operation. It was a millstone, but it is a millstone which has been sold.
Again, I asked questions in my contribution on the debate on the Estimate as to the money that was received for it, whether the full price was got and so on but did not get that information. This semi-State wall seems to be erected when one is seeking that type of information.
What am I putting forward here as positive policy? I am putting forward as positive policy that the hotels should be retained in public ownership. I am putting forward as positive policy, against the background which I have already mentioned, that the management of the hotels should be told straight out that their business was not to run a public relations exercise but to run a profitable hotel, that they were handling money which was the taxpayers' money and that their obligation was to maintain their prestige hotels and to make a profit in them. They were, as I have mentioned, the front-runners, the flag ships for our hotel industry, arbiters of good hotel management originally. Bord Fáilte, Aer Lingus, B & I and ICL have an interest in them.
I gather from reports that the Minister is about to put proposals to the Government to sell them. I do not think there could be a worse time to choose to sell an hotel than the present. As has been pointed out by certain members of the Government already, sale in the marketplace at the moment will be at a loss. Disposing of the company will be very expensive, so ordinary that it would persuade one at this moment not to put them on the market.
I hope the Minister will take that into account when he is making his decision. The ideological end of it is less important, although it is the one that seems to catch the attention of those who interest themselves in the matter as of now. What a hard pressed taxpayer will be looking for is a balance sheet which will show that the individual hotels are making a profit and contributing to the development of the country without being a drain on the Exchequer.
With regard to the question of debts to the Revenue Commissioners, I should like to state that it was a sensible thing for three Ministers for Transport to ask Ministers for Finance to delay any action they might take for the collection of this money. This is something which in the nature of things could be resented by small businesses upon whose back someone lights if he is two or three days late sending in PRSI or VAT. The only purpose in doing that was to prevent a collapse of the company. Indeed, I suggest to the House that, in many instances, some of which are known to me and the Chair and other Members, that the Revenue Commissioners as of now should slow down their demand. I know of a number of instances where they have put viable industries into liquidation in the past 12 months. Had the Revenue Commissioners waited and tempered their demands there was a possibility in two cases I am aware of, of the firms being in a position to pay off all debts when a lift in the recession came.
The policy of Fianna Fáil with regard to these hotels as of now is that they should be retained as a unit, Óstlanna Iompair Éireann, that the management should be summoned and told that it is their obligation — they have fine buildings and sites, and have been built into the life, commercial, social and industrial of the areas where they are located — to regard themselves as failures if they do not make a profit. I should like to emphasise to the Minister that the market is bad at present and it would be a disaster to suggest that the hotels should be thrown on the market and sold at what may be a great loss to the Exchequer and the taxpayer who has sustained them for so long.
I should like to refer to the 1979 report of the auditors, Craig Gardner and Company, Chartered Accountants, the most recent report I could find in the Library. A note in that report indicates that the auditors were satisfied that the accounts had been prepared on a going concern basis as the directors were satisfied that adequate finance was available to enable the company to continue in operational existence for the foreseeable future. I do not know how far the vision of auditors and accountants goes but it seems to me that the Minister would have a case to answer if he now asked OIE to sell the hotels when a very prestigious company just four years ago said there was a commercial future for the hotels.
First, I should like to thank Deputy Wilson for raising this subject on the Adjournment as it gives me an opportunity to clarify some of the points made over the past couple of weeks, and especially over the past couple of days. This has been highlighted by Deputy O'Leary's expulsion from the Dáil this morning, which I very much regret. During the exchanges today Deputy O'Leary said it was a disgrace to say that the previous Government had decided to dispose of the hotels.
The Fianna Fáil Party issued a statement today which I will read:
Fianna Fáil states categorically that while in Government it did not decide to dispose of the CIE hotels. The financial problems facing the hotels were considered and different interests including the trade unions were consulted, but proposals to dispose of the hotels were rejected by the Government.
Fianna Fáil fully supports the retention of the six CIE hotels in public ownership, subject to them being run on fully commercial lines and with appropriate staffing, and will oppose in the Dáil any decision to close, sell off or privatise the hotels, many of which are famous tourist landmarks.
In his statement Deputy Wilson has just repeated that the Government made no decision to sell off the hotels while he was Minister for Transport. He referred to a meeting with a hotel group, and I think he said they held exploratory talks. Soon after those talks the Government made a decision, and the reference number is S. 19973. That was on 1 September 1982. The September decision was to the effect that the Minister for Transport should consider——
"Consider" is important.
It is important. The Minister should consider:
(i) In consultation with the Minister for Trade, Commerce and Tourism and other appropriate interests, the gradual disposal of the Great Southern chain of hotels and the Russell Court Hotel, Belfast; and
(ii) The question whether, in the event of the property being developed otherwise than as hotels, part of the receipts should be paid over to the Exchequer.
The next time the Government considered this matter was during the course of the Estimates discussion. On 22 October of last year, reference number S. 19936C 22978, the Government's decision was to provide £6 million in respect of OIE. This provision was, it was said, to meet the closure costs of OIE, and it was also stipulated that no extra statutory redundancy payments were to be made to the workers.
I know Deputy Wilson did not deliberately mislead the House. He has simply forgotten, but it is right that I should have the opportunity to correct the record. I inherited that decision. When I took office I felt I should talk to the unions and have time to consider the matter. I did not make any decision at the beginning of this year's because it would be too late for this year's season. Therefore I felt that the hotels should continue for this season and this would give me time to make recommendations to the Government.
This has been made a party political issue. I do not want to make it a party political issue. Neither do I want to hide under the cover of the decisions of the previous Government. The Government will decide in the near future on the future of the OIE hotels regardless of the past. We will try to make the best decision, in the interests of employment, in the interests of tourism and taking into account the interests of the taxpayers. Because of the overwhelming burden of public debt we have to make these decisions.
On the question of OIE in general, Deputy Wilson is right. None of the hotels has been making money. Some people have the impression that some of them are making money, but none of them has been making money in recent years. The situation has been so bad that, as Deputy Wilson mentioned, the latest accounts he could get in the Dáil Library were for 1979: they are the latest published accounts. The reason was that the directors were unable to sign the accounts in the following years because of the insolvent state of the company. Only recently, following assurances from me, have the board been able to sign the accounts. I am glad to be able to say that before long the accounts will be laid before the Dáil for recent years. That has been a very unhealthy and unhappy situation.
I would like all those involved in Óstlanna Iompair Éireann and in tourism to know that their interests will be uppermost in my mind and in the minds of the Government in coming to a decision. In everybody's interest, that decision should be taken very quickly.
The Dáil adjourned at 5.20 p.m. until 2.30 p.m. on Wednesday, 2 November 1983.