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Dáil Éireann debate -
Tuesday, 20 May 1986

Vol. 366 No. 8

Private Members' Business. - Irish Deep Sea Shipping.

I move:

That Dáil Éireann calls on the Government to formulate and publish a policy for Irish deep sea shipping and to declare its determination to maintain in Irish hands, adequate ferry services to the UK and mainland Europe.

I do so because I see the results of the inertia on the part of the Government in the whole business of shipping. The motion calls the attention of the House to that inertia and we hope that perhaps it will spur the Government into some kind of action to help to remedy the serious situation that has arisen in regard to Irish shipping. I will first of all comment on the amendment put down in the name of the Minister for Communications:

Dáil Éireann notes that the conclusions and recommendations of the Committee on Strategic Shipping Requirements set up by the Minister for Communications, were published in the Green Paper on Transport Policy and that the Committee's report is at present being considered by the Government; and also takes note of the substantial financial support for the B & I Company recently approved by the Government.

I will come back to "the substantial financial support" for the B & I Company as incorporated in a Bill which is the oddest I have seen since I became spokesman for Transport. I do not know whether that Bill has been examined in detail by commentators. I cannot understand it. It is connected with a shipping company but is substantively concerned with the Department of the Public Service and not the Department of Communications.

I wrote to the Minister for Communications and asked him for a copy of the report of the committee on Strategic Shipping Requirements and I was told that it was not available to me and could not be made available to me. There is reference in the Minister's amendment to parts of the report being published in the Green Paper on Transport Policy. If that is so, why is the report not available to the House? The committee is a committee of the Department of Communications and its report should be available to those Members of the House who are trying to urge the Government to develop a policy in regard to shipping. It is an appropriate time for decisions to be taken by the Government on the development of shipping — they should be searching for areas for investment.

We need a development policy in the Irish shipping area — I spell "shipping" with a small "s" because I will be referring to Irish Shipping and to other lines including the B & I. It is appropriate to ask the Minister, now that unemployment has reached such a high level, that the morale of the country is exceptionally low, that young people, including those highly qualified in the science of marine engineering, are emigrating apace to Britain and the US, often illegally, and to the continent, to take cognisance of the fact that ships are available at rock bottom prices at present for anyone here who wants to develop a shipping company.

The cost of oil, according to this week's The Economist, is $13.60 for North Sea Brit. That is a 49.3 per cent drop on the price 12 months ago. I am painting a picture of this area to encourage the Government to develop a shipping policy and to come down hard in favour of a deep sea fleet of modest size, and other developments in relation to shipping. Such developments might help in a very important area where morale is very low, where we have many people unemployed and where large sums are being paid in unemployment assistance and benefit to people with high qualifications. We have highly trained sailors but we are not doing anything about them.

This is a sorry tale. I do not want to go into it in detail. However, we want to castigate the Government — we have done it over and over again — about the treatment of Irish Shipping workers and the way the Government have washed their hands of responsibility for them. It is very difficult to get hard figures but we are told the Irish Spruce could be purchased for £7 million. That is the market value. Yet, figures up to and even more than £100 million are mentioned as the cost of liquidating Irish Shipping. That is crazy economics. It is Stone Age economics in anyone's language, to do something that will cost so much and end up having nothing at all. There are aspects of this matter that are so crazy the House could not understand them. For instance, why is there an Indian crew on the Irish Spruce while fully qualified Irish Shipping personnel are walking around drawing unemployment benefit in Dublin, Cork, Galway or elsewhere?

I call attention to this craziness because on occasion, for example with regard to the Insurance Corporation of Ireland and Irish Steel, the Government have gone over the top in order to buttress up those companies. It is a tu quoque kind of argument. The fact is that the former workers of Irish Shipping are asking those questions. They are quite understandable questions and the Government should answer them. They could save the whole situation if they had a positive development policy for Irish Shipping. The people who were caught in that trap picket Dáil Éireann every Wednesday. It is an orderly picket and the people have well reasoned arguments. They are temperate people and, above all, they are persistent. They will keep at it until they see that justice is done in their case.

This saga, this tragedy, has continued since 1984. I quote from an article in the Irish Independent by Tom Reddy entitled “Scuttling of Irish Shipping proves very expensive”.

...It has now been estimated that the total bill for liquidating the shipping line will top £170 million. The liquidation may take over five years to complete.

I know the Minister said £50 million but even that is the price of seven vessels such as the Irish Spruce. I am not saying we have to invest in vessels that size in a new deep sea fleet. We could invest in smaller vessels and I note there was a recommendation to that effect in the Green Paper. The article continues:

...The obvious question that the Minister and his advisers now have to ask themselves is, would it have been cheaper to keep the fleet afloat? The answer appears that it would have been and, despite the huge subsidy, the State would have a creditable asset in a large and modern shipping fleet.

If the process now in train continues, we will have nothing at the end for all the expense. The taxpayer is also footing the other bill, namely, the social welfare payments for more than 250 people. I do not have to continue about Irish Shipping because the details have been spelled out here time and again. However, I thought it better to recall some of the scandalous facts with regard to Irish Shipping in the context of this motion.

In other places, and even in this House, I have indicated what other countries roughly the same size or even smaller than Ireland have been doing with regard to the provision of deep sea fleets. At random I give deadweight tonnage for the following countries: the figure for Belgium is 3,890.4; Denmark which is territorially smaller than Ireland has a tonnage of 7,973.4; Finland, which is tightly packed in by seas to the north and to the south west has 3,209.2; Iceland, with a very small population, has 165.9 and Ireland has 270.5. Norway has a huge fleet and even Switzerland has a larger fleet even though it has no harbours. We should have a fleet and we should start to establish that now no matter on how small a scale.

I reject the idea that Fianna Fáil, in or out of Government, have been or would be irresponsible with regard to State investment. The Minister, Deputy Mitchell, has so indicated as far as Irish Shipping are concerned. There is a tendency to spread this kind of propaganda. The propagandists of the Government, and Fine Gael in particular, wish to get the idea abroad that we were irresponsible and would be again. After a recent comment of mine on the whole shipping area, the Minister jocosely asked me in the House what would be the cost of my suggestion and I reported that it would be £7 million in that instance while he was spending up to and in excess of £100 million with nothing to show at the end.

I wish to know from the Minister when he is replying what are the Government doing with regard to a deep sea fleet. What proposals are with the Government and at what stage are such proposals? Has the Minister presented them to the Cabinet and are they under consideration there? Have there been any decisions, either positive or negative, with regard to a deep sea fleet? Is a policy objective being pursued by the Department and, if so, what is it? Are we talking about a State company or about something else? What consideration has been given to the co-operative proposal from management that was sent to the Department by some of the former employees of Irish Shipping? Have there been any consultations with private shipping interests about a deep sea fleet? Has a full private venture been discussed with anybody in the shipping world? Has a joint venture been discussed? I should like to know if there is any kind of incubus on the Government's conscience with regard to the workers or have they written them off?

The House knows that Fianna Fáil have decided there will be a deep sea Irish fleet. We envisage a fleet that will be small to start and, as is the natural evolution, that it will grow as success demands. We are totally open to suggestions. We have no ideological hang up about the type of company. It may be a totally State-owned company such as B & I or a private company. It would be necessary to encourage people in that regard. It could be a semi-State company or a joint venture of the private sector and the State.

I made the point earlier that this is a good time to buy ships. I have had some consultations with experts in the private field who indicate that possibly there will be further shrinking until about November of this year. That is guesswork and it is hazardous but at present there is value for money in the shipping market. Fuel costs have dropped by over 49 per cent according to today's quotation in The Economist. Perhaps there is some little reservoir of goodwill left for the Irish flag and for the tradition which Irish Shipping had established. The House would generally agree that the tradition established over almost 50 years was admirable and that the flag and the crews were well received and well thought of throughout the world. That goodwill has to a certain extent been dissipated by ships being arrested in foreign ports. We have always contended that it would not have been necessary if the matter had been better handled by the Minister and if he had acted according to the advice of the board of Irish Shipping Limited. I was listening on my car radio a few days ago to Dr. John de Courcy Ireland, the great marine historian of this country, regretting that this whole matter had been badly handled.

I am asking now whether anything is being done. Is there any move? Is there total lethargy and inertia in the Department? Is there any positive thinking with regard to this matter? Will the Minister publish any policy with regard to a deep sea fleet?

We regard the maintenance of the Irish Continental Line in Irish ownership, either State or private, as being of special importance. That line has been successful and it is fitting in the context of our membership of the EC that we should have a direct link like that, dependent on nobody, with the Continent. It has been a financial success, despite modest hiccups, and a success in showing our flag. It is important to concentrate on service on ICL ferries and it will become increasingly so as competition sharpens. There must be continuous service and the management should write that in their diaries each morning and see that that attitude goes down the line to the people dealing with the public.

What is being done about ICL? There are all kinds of rumours about difficulties and I will refer to two of them in a moment. Brittany Ferries are operating successfully from Cork to Roscoff. They are doing that not just to exercise their engines but to develop business and make a profit. It Brittany Ferries can do it, we should be able to do it with our own company, whether it is public or private or half and half. There are predators ready to take any company that they can utilise to make a profit and nobody will criticise them for that. We do not want to lose more jobs. We do not want frustrated young people who have studied and trained for this career and find they have nowhere to go. I want to stress the importance of service and courtesy and intensive training in that regard.

Is there an Irish customer at present for that company? Would the Minister spell out to the House what the commitments of the purchaser would be as of now? There has been a report that the complicated tax partnerships have turned buyers away from ICL, that a consortium of investors own ICL and have leased it back to ICL, that there was a guarantee of tax breaks and that the company that would purchase now would have to assume responsibility for those tax breaks. Is this true? The House should know it. If people can speculate about it, the Minister is the person who can say definitely whether it is true or not.

Another complication has been reported in regard to the pension scheme. The sad conclusion has been canvassed that a guarantee of the pensions for ICL employees will cause a deterioration in the position of the former employees of Irish Shipping Limited. This is the place for the Minister to make quite clear the position with regard to the sale of ICL, his plans for maintaining it under the Irish flag, the difficulties, whether he thinks they are superable and what action is being taken in this regard.

I turn now to B & I. This House was saddened when the very expensive Zeus consultants and a chairman were appointed to B & I at a time when the then chairman and his board had plans for bringing the company into profit. A good deal has happened since then and I will not go back into the detail. I questioned the wisdom of that at the time, particularly in regard to the heavy expense. We will have to posit what has happened and take it as given. We must decry a loss of jobs as a result of the new arrangement. I commend the fact that the management have been strengthened and have committed themselves to tightening up the company and making it efficient and profitable. This could have been done, in some instances at least, without the loss of jobs, which has been sustained.

I do not at all agree with the arrangement with regard to the southern corridor. It was said that if there was competition between the B & I and the new owner of Sealink on the Rosslare to either Fishguard or Pembroke run that B & I would lose out. I cannot see how it should be immediately taken for granted that B & I would be the loser. When I visited that area it was the other company that was worried about the competition. When we were studying that problem there was some evidence at the time that lack of capacity caused a loss of custom and that if the B & I had a larger ship on the route they would have been able to cater for far more business than they actually did. Now we have an agreement about sharing the route and this has been criticised by me and by others as being a very dangerous arrangement as far as the consumer is concerned. There is no competition now and a quite and cosy arrangement between B & I and Sealink can militate against the rights and advantages of the consumer.

This House should tease out the implications of the arrangement that has been made. I criticised the arrangements before this at the Chartered Institute of Transport weekend and in the House. I see that the Minister, Deputy Kavanagh, quite recently echoed my sentiments with regard to that arrangement. He was taken to task by the Taoiseach about it and about Aer Lingus. We are not dealing with Aer Lingus at the moment; but, as far as I am concerned, having read about the arrangement and having read the consumer commentary on the matter, I am on the side of the Minister and not of the Taoiseach in this regard.

I want to comment also on the duty free shops and the shops generally. That will be a joint effort on the southern corridor in a jumbo ferry boat when the arrangements are finalised. I am very afraid that Irish drinks and Irish goods will not get a fair crack of the whip unless management in B & I is much more alert than they are with regard to the Sealink boats now plying between Dún Laoghaire and Holyhead. I made a personal listing at the end of January/beginning of February of what was advertised on board a Sealink vessel sailing between Dún Laoghaire and Holyhead. About nine spirits were advertised for sale on the walls in the boat and not a single Irish product was mentioned among them. Admittedly, Irish whiskey and so on was available in the duty free shop, but there was no plugging of it. I can see that that was probably appropriate when Sealink was a British-owned company. But it is now privately owned by an American, Sherwood, and we should make a pitch to have at least equal commercial exposure on these routes when we are supposed to be in a type of partnership with Sealink. I know that jewellery was available on that ship and not a single piece of it was manufactured in Ireland. Yet everybody knows that that is an area of our artistic life that has flourished in recent years, with expert people in silver and gold and other precious stones of whom I could mention half a dozen by name, and they should be able to get a presence on those ships.

I mentioned also that the Channel Tunnel is going to act as a lodestone and pull traffic towards the southern part of Britain and therefore the Rosslare/Fishguard run will be exceptionally important. I am sorry to say that we are not going to own half the ship, which will be wholly owned by the partner, but we will still be paying for Pembroke and we should keep an open mind on it.

In regard to the Bill mentioned in the amendment that the Minister put down to my motion, I would point out that it looks better than it actually is. There is provision in the Bill for £38 million of equity. The main body of the Bill is concerned with industrial relations, and this is alarming. I do not want to waste time reading the Bill but it claims for the Minister the right to settle industrial relations. In other words, the board of B & I would no longer be responsible, as a normal board is, with regard to remuneration for their staff. But the right is being reserved to the Minister for Communications. The implications of this are horrendous as far as industrial relations are concerned and when that Bill comes before the House we will be able to deal with it more fully.

Dún Laoghaire is a total investment by Ireland. There is no other investment there and we owe it to our taxpayers to see to it that companies that use Dún Laoghaire appreciate it and pay for the services, and we should see that the services provided there are properly reciprocated at Holyhead and other places.

I would like to know also what the position is with regard to Belfast Ferries. Fianna Fáil were very keen on this out-of-Belfast service as we were about to provide a subsidised airlink with Derry city. So I would like to know what is the present position. What is the present financial position with regard to the B & I? Is it in profit in 1986 or is it making a loss? I am subject to correction but, as far as I know, the annual reports for 1984 and 1985 have not been published yet. Can the Minister tell the House if B & I, under the new arrangement, is profitable?

I want to know also about the new scenario with regard to the ferries. I understand that the Leinster was put in for refurbishment and fitting out. Was this a success? Is there any truth in the rumour that the company that did the job did not trust the Irish Government and held the ship? This is the kind of thing that follows what happened with regard to Irish Shipping. This lack of trust can only be damaging. Where is the Inishfallen? There are two ships operating on the Rosslare/Fishguard run pending the availability of the jumbo boat.

I would like to know about Pembroke. Is Pembroke going to be used at all by any facility in this country, because we will still have to continue to pay an annual substantial sum to Pembroke despite the fact that we will not be using it? Unfortunately, Bell's company has gone — the Dutch have purchased it. But perhaps the Government could approach other companies and tell them there is a facility there for which the Irish Government are paying and that if they could use it the country would be saving some of its loss.

I have not time to go into the whole question of B & I freight. There was at one time a report that the B & I was terminating the freight part of its business. I would like the Minister to tell me what the position is.

The chief purpose of this motion is to act as a stimulus, a goad to activity, because there is no activity with regard to shipping as of now. The fact is there is serious turmoil in the shipping world. In north-east England a shipbuilding company is laying off thousands of workers as reported in this week's copy of the Economist. This is an indication of the kind of chaos that exists but that is no excuse for the lack of activity.

The Eithne was commissioned by an Irish Government and in design it has been so successful that other Governments are going to pay £1 million per ship for using that design. In my view that ship should have been built in an Irish yard and consequently the total moneys would have accrued to an Irish company, giving jobs to Irish workers to the benefit of the national economy.

I move amendment No. 1:

To delete all words after "That" and substitute the following;

"Dáil Éireann notes that the conclusions and recommendations of the Committee on Strategic Shipping Requirements set up by the Minister for Communications, were published in the Green Paper on Transport Policy and that the Committee's report is at present being considered by the Government; and also takes note of the substantial financial support for the B & I Company recently approved by the Government.".

The origins of the present public debate on the issue of strategic shipping capacity lie, of course, in the liquidation of Irish Shipping Limited. The Minister for Communications has set out in this House on a number of occasions the circumstances which led up to that event and I do not intend to go over that ground again in any great detail. I do think, however, that it is worth emphasising once again that much as the Government regretted the collapse of Irish Shipping Limited and the ensuing hardship to the company's employees, the Government had no choice but to allow the liquidation to proceed since the total cost to the Exchequer of keeping Irish Shipping Limited going up to the end of 1989 would have been about £144.5 million. Moreover, even if the Exchequer had met this enormous bill, the company would still have had debts of £59 million at the end of that period with little grounds for expecting that it could service them from their own resources. It would have been socially and economically indefensible for the Government to have kept Irish Shipping Limited in operation at such a cost. Events since November 1984 have vindicated the Government's position. Freight rates have fallen still further and the overall cost of keeping the company going is now estimated to be of the order of £220 million

Irish Shipping Limited, over the years provided the necessary national strategic tonnage and, in the context of a general review of shipping policy undertaken in the preparation of the Green Paper on Transport Policy, the Minister decided that the time was ripe for a thorough reassessment of the country's strategic shipping needs. It had after all been over 20 years since the strategic deep sea tonnage requirements of the country were last reviewed and more than 40 years since the most fundamental question, that is the necessity to maintain a strategic deep sea fleet, was addressed.

It would be helpful to the debate if I were at this stage to say a few words about the present state of the world shipping industry. Shipping everywhere is still reeling from the worst depression for 50 years. Freight rates remain low and the industry is still bedevilled by a chronic imbalance of supply over demand. The past three years have seen heavy losses by shipowners, bankruptcies of shipping companies, debt rescheduling, deferred delivery of new vessels and more and more vessels being laid up. Anyone who had occasion to fly into or out of Athens and to view all the shipping tonnage laid up there will have an idea of what the problems are as regards shipping at this time.

The worldwide picture is of an industry realigning itself and in the process taking a long hard look at its own position in the context of the enormous long term changes that are taking place in world trade. Between 1984 and 1985 the world fleet of ships over 100 gross registered tonnes was reduced by 2.4 million gross registered tonnes from 418.7 million gross registered tonnes to 416.3 million gross registered tonnes. The contraction is a welcome one, but nevertheless is relatively insignificant compared with the rapid annual increases in tonnage recorded during the seventies.

The influx of new ships on the market, stimulated by State grants and subsidies aimed at maintaining shipyard employment rather than meeting any need as far as shipping is concerned, has not yet ceased. The world order book for bulk carriers at the end of 1985 still amounted to over 20 million deadweight tonnes, 16 million of them for delivery during 1986, and there is little hope of this being matched by an improvement in demand, quite the contrary, as we have seen so far. There is still a substantial surplus of capacity in the dry bulk carrier and tanker sectors. In mid-1985, the surplus of the dry bulk carrier sector amounted to about 29 per cent of demand, 50 million deadweight tonnes and in the tanker sector to about 59 per cent of demand, 101 million deadweight tonnes.

Ireland, of course is not alone in having problems to face and decisions to make regarding its merchant fleet. Within the overall picture of surplus capacity the European Community's share of world tonnage has declined since the beginning of the decade. Within the Community many member states have experienced a decline in fleet size, drastic in some cases. Member states generally are now engaged in internal reviews of their shipping policies. And most importantly, a Community policy on maritime transport is on the way at last. As Deputy Wilson will know, an extremely difficult and complex task still has not been completed but it is on the way at last.

The Minister should be in there pitching.

Much has been said about shipping in the Community since the Treaty of Rome came into force, but little of any practical value was done until recent years. Since 1973 we have, of course, seen the major European shipping nations brought into the Community and this has made shipping an even more important part of the Community's own transport system. At the present time about 90 per cent of the Community's external trade, and about 25 per cent of internal trade, is seaborne and, in terms of fleet ownership and influence the Community is a formidable force in world shipping.

While there had been earlier steps towards shaping the Community's external relations in shipping matters, 1985 was distinguished as the year when a blueprint for a European shipping policy finally emerged. It was not before time, as the problems affecting international and Community shipping had become acute. This development was necessary in order to put the Community in a good bargaining position as far as shipping is concerned. The Commission Memorandum on Maritime Policy is perhaps one of the most significant documents that body has ever produced. The Minister has welcomed at Council the Commission document both for its useful analysis of the problems facing the industry and for its proposals for tackling those problems and promoting the wellbeing of the Community's shipping industry. We fully support the view that a non-protectionist shipping policy is in the best interests of Community shipowners and shippers alike, but I recognise as well that Community action is the best way of countering the growth of protectionism by other countries and those trends which militate against the very principles of free competition which we espouse.

The Commission's memorandum on maritime transport policy was forwarded to the council on 19 March 1985. In reviewing the fortunes of the European shipping industry over the past ten years the Commission ascribed its relative decline to the loss of comparative advantage, the development of other countries' fleets — sometimes of substandard safety levels and often with the aid of protectionist policies — and in addition to these factors the overall recession in international trade. In the Commission's view, the most pressing problem for the European industry was the increasing use of cargo reservation and rate undercutting by State-trading and developing countries.

The most obvious cases of protectionism are in the liner sector where the Commission noted a trend towards cargo reservation by developing countries. It indicated its concern to prevent any increase in bilateral agreements between Community member states and developing State trading countries which restrict access to other member states or OECD states. The Commission also tackled the application of the EC's competition policy regarding liner shipping and the conference system in particular. It broadly confirms previous statements on this issue, accepting the role of conferences in the sector.

In the bulk sector, the Commission again adopts an open policy, noting the role of flags of convenience in keeping European shipping competitive — 25 per cent of open registry tonnage is owned by EC nationals. It discounts claims that flags of convenience are reducing employment opportunities for European seamen, although the Commission will investigate further the use of foreign seamen on European vessels. While recognising that problems exist the Commission believes that a mandatory genuine economic link between flag State and ship would run counter to EC shipping and trading interests.

There are now proposals for four specific instruments of EC shipping policy which in due course will be settled by the Council of Ministers. The Commission has proposed a draft regulation to combat cargo reservation, with a system of diplomatic and financial sanctions: if diplomatic approaches fail, the Commission proposes a combination of quotas and financial charges against the country and its shipping companies. The Commission also proposes a regulation to combat unfair pricing arrangements, notably by State trading companies, which affect European shipowners.

The Commission has proposed a regulation to liberalise the Community's internal shipping arrangements. This will remove restrictions on freedom to provide shipping services within the Community including offshore supply and the coastal trades. The Commission has also proposed application of the competition rules of the Treaty to maritime transport.

When you consider that the member states run across the rull range of the shipping industry from the massive Greek tramp industry to our own small fleet I think Deputies will agree that the reaching of any form of workable consensus will be an achievement in itself. There are tremendous doctrinal differences within the Community in attitudes to transport in general and shipping in particular. Common problems produce common interests, however, and ultimately common solutions can and must be found to the benefit of all. The package of measures addressing internal and external issues has been making progress slowly and painfully, but I think purposefully enough towards the goal of a common maritime policy. We may well see concrete results before the end of the year. I have had experience of the major efforts made under the Dutch Presidency at a Council meeting which I attended seeking to get common thought and common endeavour towards this end. Against that background of domestic and international factors, the Minister for Communications established the Committee on Strategic Shipping Requirements, representative of the relevant Government Departments and other interests. The committee's brief was to investigate and report on Ireland's current and future strategic shipping needs and how these should be met.

The conclusions and recommendations of the committee were published in the Green Paper on Transport Policy of November last. The committee confirmed the need to maintain on the Irish register a strategic fleet of deep-sea vessels for the transport of essential supplies in an emergency. They estimated that total dry cargo tonnage of 158,000 dwt, of which 140,000 dwt should be deep-sea vessels, would be needed to transport such supplies. They concluded that there was an overwhelming case, on strategic grounds, for the provision of incentives for the maintenance and development of the Irish fleet. They proposed that, as a general principle, a larger number of relatively small ships would be preferable to fewer larger vessels because of the greater impact of losses of the larger vessels in an emergency, and they concluded that the acquisition of tanker tonnage at this time could not be justified on economic grounds.

In light of those conclusions, the committee recommended that:

—measures be taken to provide an effective stimulus to existing Irish shipowners and to attract new investors to the industry,

—State agencies give a lead in greater use of Irish shipping services and control the choice of shipping services,

—The IDA take steps to ensure that Irish shipping companies get a better opportunity to compete for the provision of transport services for grant-aided industries,

—the employment of Irish ships to the greatest extent possible to carry coal supplies to the ESB generating station at Moneypoint be explored,

Buy the Irish Spruce.

They recommended that:

—a comprehensive review of manning requirements on Irish ships be undertaken, and

—the question of future training of Irish maritime officers and seamen be pursued.

The key recommendation of the committee is the one relating to the provision of incentives for the maintenance and development of an Irish fleet. Although some reservations were expressed, the committee felt that, from the Exchequer's point of view, this would be the least expensive way in which and adequate strategic dry cargo fleet could be provided. The committee were also of the belief that there may be opportunities for State sector-private sector co-operation to provide the necessary strategic tonnage.

Following consultation by the Minister with the other Ministers concerned, the committee's report is at present being considered by the Government.

I deny strongly the inertia on this matter suggested by Deputy Wilson earlier. The Minister has acted expeditiously and with vigour in this. He has given due consideration and he has had the matter examined. There is no instant solutions to this matter and it is now before the Government——

Twelve months for the European and six months for the Irish.

——and he is approaching this task with the same vigour and enthusiasm as he has done with all of the other complex problems he has faced within his Department. I am sure this will be resolved expeditiously.

I would like to take this opportunity to thank the representatives of the shipping industry who served on the Committee on Strategic Shipping Requirements and whose expertise in this area was of particular value to the committee's deliberations. I should also like to thank all those bodies and individuals who made submissions to the Minister on this subject in response to the Green Paper.

The Minister has already taken action to meet one of the committee's recommendations, that relating to manning levels and trading areas for Irish ships. The basic principle applied by my Department to manning requirements on board ship is that the longer the voyage and the bigger the ship, the larger crew of officers and ratings it must carry and the higher must be the qualifications of the officers. Manning levels for particular ships on particular voyages are determined in part, therefore, by reference to the zone — known as a trading area — within which the ship operates. My Department have now undertaken a comprehensive review of trading areas and manning levels, including those applied in other European maritime countries, with a view to ensuring that Irish ship owners are placed on the most competitive footing consistent with safety. I must emphasise the safety aspect and assure Deputies that the Minister would not be prepared to take any decisions which might compromise the safety of our ships and of those who sail in them. On foot of the Department's examination, the Minister has decided to extend the trading areas within which our ships may operate. In addition to this general move, the Department have agreed to adjustments in other manning levels on particular ships in consultation with the individual shipowners concerned. These changes will improve our competitive position in a market which is becoming tougher all the time. Changes in this general area are made in consultation with the Irish Chamber of Shipping, with which body discussions have been and continue to be on-going. Much common ground has emerged from these discussions and this is reflected in decisions taken to date. These discussions will continue under the guiding principle which I have indicated, namely competitiveness always subject to safety.

Deputies will be aware that the Minister recently announced the Government's decision to provide substantial funds to enable the board of the B & I to implement their rationalisation plans for the restoration of the company to profitability. Subject to the enactment of the necessary enabling legislation which has been published, which will be introduced shortly in this House and on which there will be a detailed debate on the various questions raised, the Government over the next four years will allocate £38 million additional equity for the B & I, of which £20 million will be provided in 1986. This represents a very substantial level of investment by the Exchequer in present financial circumstances and is an indication of the Government's commitment to maintaining a strong Irish presence in shipping services on the Irish Sea. It is also a recognition of the importance of our access transport services to trade, commerce and tourism and to our national economy generally.

The Government are fully aware of the importance of keeping a significant share of cross-Channel traffic in Irish hands. While we welcome external participation in shipping services to and from Ireland, both for the traffic generating capacity which it brings and the competitive spur which it provides, we cannot afford to rely entirely on foreign interests to supply vital national needs. Our economy needs efficient shipping services if it is to prosper and the Government consider that a significant level of Irish participation operating under equitable conditions is an essential ingredient in ensuring the efficiency and quality of cross-Channel shipping services.

This major investment by the Government as shareholder is contingent on a matching contribution by the board, management and the workforce of the B & I towards the restoration of the company to viability, in accordance with the mandate which the Minister gave to Mr. Alex Spain, the new chairman and managing director when he was appointed in May of last year.

Deputy Wilson raised the question of fare increases on Irish Seas routes and B & I. Sealink pooling arrangements. It must be noted that in the past, cut throat competition for market share operated with fares failing to keep pace with inflation as far as the Irish Sea was concerned. As a result, B & I incurred very substantial losses which had to be met by the taxpayer. It should be readily understood that that this situation could not continue and that, inevitably, fares would increase to cover service costs. Compared with their 1985 fares, however, the B & I have either decreased or held the level of off-peak stimulus of their week-end fares for 1986. It will be appreciated that passenger traffic to Ireland is seasonal, with low demand in winter and excess demand at peak travel times. Many of us who use cross-Channel links by sea will readily appreciate the extroardinary fluctuations which take place, exceptionally low in winter and extraordinarily high in a good tourist season.

In common with other sea and air carriers, B & I must charge premium rates during peak periods if a profit is to be achieved. Notwithstanding this, the company have retained a peak period stimulative fare, the seven day mid-week family fare. As indicated, the B & I incurred serious losses over the last number of years due also to the downturn in trade and tourism in addition to the other matters which I outlined. If such losses were to persist, the continued operation of the B & I would be placed in jeopardy. The agreement between B & I and Sealink British Ferries is essentially a pooling arrangement which is feature common on other European ferry routes. The agreement was entered into in the context of the B & I's commercial mandate in an effort to reduce costs while maintaining capacity commensurate with demand. It is not anticipated that the agreement will encounter any difficulties under EC law. It should be pointed out that Ireland continues to promote full commercial freedom of shipping and an open ports policy. Indeed, our policy in that area is much more liberal than many of our partners. There is no restriction on shipping companies wishing to operate to and from our ports. The same can be said of air fares. We all like cheap fares when we use the service but we must take into consideration other elements involved and ensure that we have a presence on the cross-Channel link, which is vital. We must ensure that it is an economically viable presence. Nevertheless, fares should be reasonable. Everyone will accept that if the service is to be available on an all the year round basis, not just during peak periods with someone creaming off the profits, fares must be set at a realistic level.

I referred earlier to the importance of our access transport services. I should perhaps in this context draw attention to the fact that the Minister, in the course of a recent discussion in this House regarding Irish Continental Line, at present in the hands of the liquidator of Irish Shipping Limited, indicated that he would take every step possible to ensure the continuation of a direct ferry link between Ireland and the Continent of Europe. Deputy Wilson asked for details in so far as Irish Continental Line are concerned but the Minister has consistently pointed out that this is generally a matter for the liquidator——

That is a terrible answer.

The Minister does not want to get involved in details but he has assured Deputy Wilson on many occasions of his clear interest in the continuation of the Irish Continental Line and that he will not be found wanting in fulfilling his duty in that regard.

Deputy Wilson said that Fianna Fáil promise they will bring back an Irish deep sea fleet. They may promise that, but tonight Deputy Wilson told us they were open to suggestions and did not have any ideological hang up about this. He was saying, in other words, that Fianna Fáil have not done anything about formulating a policy. They can say that they will back a deep sea fleet but they have not said how they will do that. That is not our approach. Our approach is to take into account all factors and study them.

The approach of the Coalition was to kill Irish Shipping and they did kill it. The Government should be ashamed of themselves. They wronged Irish workers and pulled the flag down.

The Government are considering all the factors. We will produce a costed policy and not a pie in the sky one or a promise-all like the big spenders. We will produce our policy in a considered way. What Deputy Wilson has said is par for the course as far as his party are concerned — promise all and do not bother about the costing. It is left to us to do the costing.

The Coalition are in power and they are not doing anything. They should be ashamed of themselves. We said we would put forward a proposition for a small Irish deep sea fleet and we will do that.

At the recent Ard-Fheis projects costing about £800 million were promised.

I am glad to have an opportunity to make a contribution on this motion in support of Deputy Wilson. Our motion states:

That Dáil Éireann calls on the Government to formulate and publish a policy for Irish deep sea shipping and to declare its determination to maintain in Irish hands, adequate ferry services to the UK and mainland Europe.

As an island nation with a total population of 3,500,000 — five million on the entire island — our economy is very exposed and trade with other countries is an economic lifeline for our future. We depend on exports to keep our economy ticking over and that cannot be emphasised enough. To be involved in the highly competitive export markets it is essential that we should have the wherewithal to transport goods from the production centres here to marketplaces in Britain, mainland Europe and the US. Getting exports from point "A" to point "B" is an integral part of production, marketing, selling and delivery. At the end of 1984 Irish Shipping was liquidated and we all agree that that was a sad day for our economy. It was a sad day for our economy that the Coalition decided to let Irish Shipping go to the wall. The Government did not recognise the strategic and economic necessity of having a deep sea merchant shipping fleet. It was a proud day for the country when Seán Lemass established Irish Shipping. That was done at a time when our economy was going through a difficult period; but Seán Lemass, being a man of vision, knew it was necessary that we should have complete and absolute control in this area. He recognised that without a deep sea fleet we would be exposed and isolated. Seán Lemass made a decision at that time that was in the best interests of the country.

The performance of the company for years was excellent by any standards. Indeed, it was the pride of State companies for many years. The country's flag, the symbol of our nationhood, was to be seen in all trading ports around the world. In these times of peace the Coalition tell us that there is a surplus cargo carrying capacity available. I do not dispute that, but that could change very quickly. With the liquidation of Irish Shipping our credibility as a trading nation took a very severe battering and it will take years — it will not be easy chore — to restore our credibility in this area. The Coalition effectively walked away from their responsibilities and that in the area of world trade and cargo carrying will not be forgiven. We may pay a steep price for that decision for many years to come.

Those who examine the difficulties experienced by Irish Shipping will agree that the charter agreements entered into by the company with concerns in Hong Kong and Japan were a major error of judgment. That error was compounded by a world economic recession that lasted longer than most Governments and economists anticipated. The combination of those factors put severe stress and strain on Irish Shipping. However, the Government could have chosen to help the company ride out the storm and stay in business until there was an economic upturn.

Last year the Government produced their Green Paper on transport policy. It was accepted in that Green Paper that the first half of the eighties was difficult for world shipping and that that depression hurt many shipping fleets. The boom that was anticipated for our increased tonnage did not materialise and as a result we had surplus capacity available. The Green Paper readily recognised the importance of having a dependable and efficient transport service available for industry, agricultural produce, and tourists. At a time when a reappraisal of our industrial position is being carried out we cannot over-emphasise the importance of having a strategic fleet available. The importance of its availability cannot be divorced from the overall plan for the development of our economy. We have to recognise that at the time of war the cause of exporters will be a very long way down the list of considerations of those we would be depending on.

Given the mobility of world trade today we cannot live in splendid isolation, a small island population on the perimeter of Europe, a member state of the biggest trading bloc in the world. We could not continue to operate in those circumstances without the wherewithal to export our produce and import necessary supplies. We are living in a world in which there is the constant noise of sabre-rattling and war mongering. Who can say with any conviction that there is not a war brewing?

Our slice of world trade is very small, but it is of vital importance to our economy. Economists and others looking to the future, at the quarter of a million people unemployed, at the present level of taxation, the necessity for national wealth to invest in infrastructure that lags far behind that available in other member states of the EC, are examining the possibility of expanding our slice of world trade. It is difficult to argue with the contention that the future success and well-being of our country are dependent on our ability to secure a much larger slice of that world trade. For example, a couple of percentage points of an increase would work wonders for our economy, would give hope and confidence to investors and, above all, convince young people leaving our educational establishments that there is a life at the end of the tunnel, that we are up and doing and that their future is not as gloomy as some people would like us to believe.

An increase in our exports would mean also an increased volume of trade from our shores whether that trade be with Britain, Europe, America or elsewhere. We must ensure the carriage of our produce from point A to point B. We must examine it in the context of our control of all the elements that are part and parcel of our industrial development and expansion. We cannot run the risk of leaving the control of our exports in the hands of others who when it suited them could depart leaving us isolated, holding the baby.

I might move on to the question of port development and its importance in the context of this debate. In my constituency there is the deep sea port of Greenore, a port through which the volume of trade has expanded enormously over the years.

I am sure most Members of the House will be aware that that port is privately-owned, that it has been expanded and developed without any State support. Many people — and I share their view — foresee the future development of Greenore port as absolutely vital to the development of the north-east region generally. In the last three or four years there has been a rapid increase in the numbers of people unemployed in the County of Louth. There was also the migration of some of the workforce from the other counties in the north-east region. The development, or opportunity to do so, of the north-east region is being ignored by this Government. They are not prepared to recognise the difficulties obtaining in those counties. Neither are they prepared to recognise that the increased unemployment figures represent a manifestation of their lack of commitment to County Louth in particular.

There is an urgent need to make capital funds available for development of infrastructure in County Louth. While the labour content of many capital projects is relatively low, the expenditure of moneys under that heading would generate activity locally, putting a much larger amount of money into circulation which must boost jobs in the trade and supplies sector. That is apart altogether from the advantage to the area of a proper road structure, and the extension of the natural gas pipeline to Drogheda and Dundalk where there are industries hanging on in the hope that the Government will take that decision quickly. They have been hoping in vain for far too long. The agreement with the British Government to extend the natural gas pipeline to Belfast having fallen through after various attempts to revive it, one would have thought that the Government would see the urgency of its extension to Drogheda and Dundalk, giving the inherent advantages. Unfortunately, that decision has not been taken. I am asking the Minister to convey that message to the Government and to have that decision taken as a matter of urgency.

The possibility of establishing a special Border counties development authority, with Greenore port constituting the outlet to the sea for the produce manufactured in the area, carries obvious benefits. The possibility of introducing special measures to get the Border counties off their knees economically is being ignored. The Dundalk economy is suffering from the poisonous effect of the Government's economic policies of the past three and a half years when rapidly increasing unemployment has been the order of the day, with no end in sight. Indeed, in a town in which people never knew unemployment, industries that stood the town and country well for generations have been allowed go to the wall. Unfortunately, it appears that the Government are not prepared to implement the necessary remedial measures. Unemployment, unknown to many people a few years ago, has now become a fact of life.

The Coalition Government taxation policies have left County Louth with a trail of bankruptcies and liquidations. The stagnation induced by these policies is like a cancer eating at the economic body of the county. Still the Government have not recognised the measures which need to be taken.

Debate adjourned.