Fianna Fáil have agreed to give our second slot in this debate to The Workers' Party.
Private Members' Business. - Sale of State-Owned Assets: Motion (Resumed).
The following motion was moved by Deputy D. O'Malley on Tuesday, 7 April 1987:
That Dáil Éireann calls on the Government to take the necessary steps to facilitate the sale of shares in such State Companies as are thought appropriate and feasible, to employees of such Companies, to members of the public, to Irish pension funds and other institutions; to sell such other appropriate State owned assets as are not needed for national strategic purposes, and to apply the proceeds of such sales in the reduction of public debt and the stimulation of economic and employment expansion.
Debate resumed on amendment a1:
To delete all words after "Dáil Éireann" and to substitute:
Reaffirms its support for an efficient and profitable semi-State sector as a major instrument for economic development and the provision of employment, and endorses the policy of the Government in maintaining and developing a viable semi-State sector which will provide an efficient, cost-effective service to the general public and activity pursue opportunities for growth.
—(Minister for Finance).
Debate resumed on amendment to amendment a1:
To add to the amendment after "growth" the words:
and urges the Government to include, as part of this policy, the selective sales of shares in State Companies to members of the public, Irish pension funds and other institutions on the following basis:
(a) where an element of significant public interest is involved, the State would continue to hold a majority of the equity or would adopt such other measures as are necessary to protect the public interest in question,
(b) the continued growth of, and employment in, the enterprise and sectors concerned would be a major concern in structuring any sale of shares and in the application of the proceeds,
(c) subject to (a) and (b) above, the proceeds would be applied to the reduction of public debt, the reduction in demands for equity that would otherwise be made on the State, and the stimulation of economic and employment expansion generally,
(d) a guiding factor would be the need to ensure that public sector enterprise is a dynamic and flexible factor in the economy generally, moving forward in sectors where development needs are greatest, rather than confining itself in sectors in which the State has had a traditional commercial involvement.
—(Deputy J. Bruton).
Is that agreed? Agreed.
The Fine Gael amendment in this debate differs from the motion put forward by the Progressive Democrats in three respects.
1. Our approach makes specific provision to protect the public interest in companies where this arises, either by retaining majority ownership, or by other methods such as holding a "golden" share which gives specific rights to the State.
2. There is also a requirement that any disposal of shares must take account of the jobs of those in the company in question, and in the sector generally.
3. The Fine Gael amendment makes it clear that, for us, the sale of certain shares is part of a strategy for making the public sector more dynamic and flexible. Whether or not the State remains the exclusive owner of a particular productive asset should be a pragmatic business decision, not an ideological one.
This latter point is important. Ideologists who say that, once the State has bought a company, it can never sell it, are artificially imprisoning State enterprise. If it can never get out, the State will be reluctant ever to get in. Rigid ideological opposition to the sale of State productive assets, is, in fact, a policy profoundly hostile to the idea of a dynamic, efficient State sector, generating wealth and creating jobs.
Fine Gael, of course, agree with the Government that there should be no indiscriminate sales of assets. We favour selective sales of shares, which is not a policy of Governments of one particular political hue.
For example, the Socialist Government in Spain is selling off textile companies, travel and tourist companies and the motor manufacturer Seat, all of which had been nationalised under General Franco.
Likewise, the Socialist Government in Sweden is selling electronics and forestry and banks. Why is the Left in Ireland so conservative that it cannot see the need for similar flexibility in State enterprise here? The sale of State enterprises is not contrary to the interests of workers or trade unionists.
For example, the trade unions in Amersham International, British Aerospace, Britoil, and Cable and Wireless — all companies privatised in Britain — report improvements in the way these companies consulted unions, and in their general attitudes to unions, after they had been privatised, in contrast with practice while in public ownership.
The sale of shares in State companies to the general public provides an opportunity to give the workers in the companies shares as well. Under our present rigid policy, nobody, except the Minister for Finance, may own a share. This is hostile to the whole idea of individual employee shareholding.
The sale of shares in State companies to the public is in line with the original concept of Paddy McGilligan and Sean Lemass. It should be noted that Irish State enterprises are entitled "State-sponsored companies", not "nationalised industries". The original Irish concept was that the State should sponsor the enterprise. Once initially sponsored, there was no inherent reason why the company should not grow up, and cease to be dependent on the State for further injections of capital, after the initial sponsoring.
Fine Gael believe that the proceeds from the sale of shares in State companies can be used either to reduce the public debt, or to invest in new or expanded activities. In the National Development Corporation (NADCORP) the State now has a commercially orientated statutorily established vehicle which can use funds realised from sales to create jobs in new enterprises. Thus the State can get many more jobs for each pound it has employed than if it left the money imprisoned in its original investment.
Ireland is crippled by high interest rates which are dragging down industries. They are caused by excess Government debt. If the sale of State enterprises can help to reduce this debt it can give all enterprises — public as well as private — a chance to survive.
One does not have to accept the huge sale values — £1,000 million for BGE. £800 million for forests, £400-£550 million for Bord Telecom Éireann, £430-£550 million for the ESB, £150 million for Aer Lingus and £40 million for Aer Rianta — quoted by Professor Converey of UCD — to know that the intelligent sale of assets can cut the national debt dramatically.
If this can be done the nation can be liberated from a great burden, and a frustrated dynamic released in Irish society. This would protect the jobs of those in the present public enterprises and create many thousands more as well.
A word of caution in conclusion. Privately owned monopolies are as bad as publicly owned ones. Sales of shares must be accompanied by a competition policy that ensures that no large company can rip off the consumer. The Fair Trade Bill promoted by the previous Government — which extended competition rules to the State monopolies — must be enacted urgently. Otherwise the sale of State companies could be a step backwards, not a step forwards.
The sale of shares, even of a minority holding, will automatically improve the management of public enterprises. The new private shareholders will demand accountability to commercial, rather than political, considerations. New private shareholders will insist that the delayed decision making, layers of consultation, restrictions on staff remuneration and vulnerability to nit picking that have characterised State-sponsored companies must be swept away.
Before the election the Taoiseach categorically opposed privatisation. Last night's speech by the Minister for Finance contains signs of a change. The Minister said that he did "not rule out the possibility of ... changes including some arrangements with private companies". It was interesting too that his opposition was to "indiscriminate" sales of shares. Nobody ever suggested indiscriminate sales anyway, so it looks as if the Minister for Finance is getting gently off the hook on which he was needlessly placed by his leader before the election. I trust that the Government will, therefore, be able to accept the Fine Gael supplement to their amendment.
I hate to disappoint Deputy Bruton but we will not accept his amendment. Sometimes it is very difficult to know where Fine Gael and Labour stand on this issue——
If you stay in the one spot long enough you will find out everything.
The last Government were supposed to stand for private enterprise, at least Fine Gael did, while Labour stand for State enterprise. However, during the last four years they both contradicted their positions.
The former Minister for Energy set out a policy of total nationalisation of the gas industry. He was hell-bent on that road and he got his way——
It was hardly a private sector success.
(Interruptions.)
I did not interrupt anybody but, of course, the truth always hurts. NET were in serious financial difficulties. Then we had a joint venture in the private and public sectors of which I approved and I have directed that it should be followed through. Private enterprise did not get involved on a minority stake basis and it is hypocritical to think that hard nosed business people in financial institutions will invest in small minority stakes just for the sake of rescuing the economy. It will take more than that to sort out our problems.
Deputy Bruton rightly said that the biggest issue facing us at present is the level of interest rates. Since we came to office our first priority has been to take the necessary action and decisions to provide the opportunity and the climate for a reduction in interest rates. We have just completed this. I hope the financial markets respond in the interests of the private and public sectors. If someone asks where we stand at this stage it should be well known that we are sound, sensible and pragmatic people and we always take decisions with a common sense approach.
You never acted it then.
We are not hung up on ideological grounds in relation to it. The Government's amendment to this motion has the very important virtue which is missing in the motion and the other amendments. Our amendment does not arise from a doctrinaire position on State enterprises. There is, for example, a very fashionable argument for privatisation for the sake of selling off assets. I do not believe that this is any more reasonable than the equally doctrinaire view that nationalisation and growth of State ownership are the way to achieve growth and services for our people.
As the Government motion states, our commitment to the State-sponsored sector, which was largely created under Fianna Fáil Governments, is no less now than it was before. We all recall the great days of the late Seán Lemass whose brainchild it was to create many of the semi-State sectors we have today; they had to fill a role in a vacuum that was not being taken up by private enterprise. This is not to say that 20, 25 or 30 years later we should not evaluate their role and the terms of reference they were given. If those have to be changed and the directions have to be changed, it is only common sense and a pragmatic approach to do so. We consider that the country has benefited from State enterprise activities but that does not mean we are not prepared to look again at the performance and role of State enterprises to ensure that they meet the needs of today and give the return to the State which the people have a right to expect.
I would like to take up a few points made in the debate so far, one of which was raised by Deputy Bruton, and is important. It was suggested that bureaucratic control can impair the functioning of State enterprises by tending to slow down decision making because of the need for various layers of Government to be consulted about proposals. Deputy Bruton implied that valuable opportunities are lost because of this requirement that State enterprises give an account of themselves. I can only reply that, if that situation obtained under the last Government, I too think it was a pity. I accept that it is necessary for State companies to be free to take quick business decisions. In relation to the day to day business activities and the medium term strategies it is important that they have the necessary flexibility to operate.
When I look at the record of the last Government in this regard I have to say quite honestly that whatever they say now they did not act in accordance with it when they were in Government because the heavy hand of the State was felt more and more in the State sector. Whatever excuses they used to convince themselves to do it that is the reality of what happened. We all know what happens when the heavy hand of the Government is felt to the extent that good business decisions cannot be taken. I have had experience in this regard and I have always believed that State enterprises need the maximum amount of freedom to take business decisions and to take up opportunities which may arise, because opportunity comes by and does not pause.
There is also a duty on Ministers and their Departments to ensure that State companies' operations and their areas of activity are the best use of resources and talents to satisfy today's needs and to realise today's priorities. State companies must be accountable for their operations. For example, it is incumbent on Governments to ensure that State-owned companies do not add to inflation by increasing costs unreasonably to the general public or to other businesses. Also I hope Deputy Bruton would not suggest that State companies should be permitted to develop long term corporate strategies and plans without any requirement that they should give an account of themselves which can meet with the approbation of Government.
In the past we have seen many examples of State companies who are there to provide services at a competitive cost to the users in the economy, but how many times has the imposition of costs by particular companies not alone contributed to inflation, but, because of their monopoly situation, imposed costs on the private sector and industry in general that could not be recovered in the open and free marketplace? If industry is to grow we all have to be competitive; the State sector has to be competitive; the private sector has to be competitive; and above all we cannot allow the State sector to impose higher costs than can be recovered in normal situations in the marketplace.
Also in the course of this debate it was suggested that one motivation of Government in maintaining ownership of State enterprises may be due to some quirk of the Irish personality that leaves us, as a people, obsessed with the ownership of assets. This is true and it can be attributed to our historic background. For too long we were the tenants and not the landlords and perhaps even at this stage it still lingers on. This may be so but I would not put the same weight on it as other speakers in this debate have done.
I note that the example of this obsession cited by both Deputy O'Malley and Deputy Bruton is that of the desire of Irish people to own their own homes and they characterise this as less useful for national development than applying the funds which go into housing to investment in share ownership. This is an idea which our colleagues on the other side of the House might wish to bring to the notice of all of those people in the country who are trying to or hoping to buy their own homes. It occurs to me that one question which those people might put to them would be: "But, if we invest in business rather than in purchasing houses will the State provide all the houses and will the State do so at a charge that will be less than what we have to pay building societies or other financial institutions so that we will have something left over to invest in industry and business?" I am not sure how they might answer that and, indeed, I am not sure how that policy which they recommend would square with the recommendation by Deputy Colley, in the course of this debate, that there should be increased private ownership of local authority housing.
There is clear contradiction in the points being put forward in this debate. While I accept that Irish industry is suffering from a very low equity base and that it needs money to be invested in it to allow it to expand, nevertheless the impediments to the investment are stopping it going in; money will flow to where it can get the best return. While I commend the business expansion scheme, there are too many strictures in it which impede the free flow of money in and out. Improvements could be made in it but it is not just a question of trying to choose one investment rather than other. Investors and money will always flow to where they will get the best return.
Whatever answer Deputy O'Malley and Deputy Bruton might give, I think that it is a little frivolous to suggest that State ownership of companies and businesses in the semi-State sector is the product of some sort of psychological conditioning. It is the Government's policy to ensure that State-sponsored companies play their role in national economic development. It is in pursuit of that role that assets can be held.
It is certainly not the case that the Government are obsessed with the ownership of assets. The previous Government in a decision on the Estimates for 1987 decided to raise £3 million by bringing forward the sale of the crop in immature non-amenity State forests and that most of the money raised should be used to acquire and plant an additional 1,000 hectares over and above what was planted last year. The Government are committed to implementing this decision.
It is proposed to offer stands of around 20 to 25 years of age which have approximately a further 15 to 20 years of their rotation still to run. The sales will be targeted principally at long term investors such as those investing pension funds who can be expected to manage the crop until maturity. Can anybody point the finger and accuse us of having idealogical hang-ups in the way in which we approach that matter?
In these transactions only the standing timber crop will be sold — the land will remain the property of the State and will be available eventually for further forest development when the current crop is clearfelled by the purchaser.
I must say that the Government see nothing wrong in this method of financing the further development of forestry in this country. It has the great merit of achieving expansion and development of the forest resource without recourse to additional State funding. The advantage of this approach is reflected in a possible national planting target this year, for both State and private planting, of 11,000 hectares — a target never previously achieved in this country. The process of selecting stands for sale is in hand and the initial lots will be advertised for sale in the middle of this year.
Deputy Bruton has also asked about my intentions with respect to bringing, for example, organisations such as the ESB, Telecom and An Post within the ambit of existing competition and consumer protection legislation. I am examining the Restrictive Practices (Amendment) Bill which was published by the previous Government, with a view to deciding whether the Bill should be reintroduced in the Dail. I have put it forward to the Government for a decision in that regard. One of the effects of the Bill, in its present form, would be to move a number of exemptions in relation to such areas as communications, banking and electricity from existing competition legislation, thus bringing such sectors within the scope of restrictive practices and competition legislation for the first time. I agree with that part of the Bill.
One of the best examples of a highly successful semi-State body, who have served as a major instrument for economic development and the provision of employment, are Aer Lingus. It is now fifty years since the State decided to set up Aer Lingus — in 1986 the company, as Deputies will be well aware, celebrated their 50th anniversary — and in the intervening period the company, who were set up to provide this country with an independent means of access by air to Britain and mainland Europe, have grown and developed and spread their wings far and wide.
Aer Lingus employ over 5,000 people in Ireland and carry the vast bulk of air travel segment of tourists to Ireland. As Ireland's flag carrier on the North Atlantic, they have over the years provided a year round service between Ireland and the United States which makes a major contribution to the development of trade, commerce and tourism between the two countries. Notwithstanding the increased participation in recent years by US carriers in the US-Ireland market, Aer Lingus remain the dominant carrier on the North Atlantic routes and continue to play a major role in developing and maintaining Ireland's links with the United States. They also provide the necessary links with London and other points in the UK and have successfully pioneered the development of routes to continental Europe.
Because of the cyclical nature of air transport, it is difficult for an airline to sustain a profitable operation, particularly when providing a year-round service on the North Atlantic. In those circumstances Aer Lingus decided during the sixties to develop ancillary activities to support their core business by earning surpluses which could be used to cushion losses on the air transport side. With Government encouragement these activities have grown substantially over the years. Some of these ancillary activities, such as aircraft overhaul and airline traffic handling, are closely linked to the company's air transport activities. Other non-airline ancillaries, such as hotels in the United States and PARC, which specialises in personnel recruitment and project management services, were developed as opportunities presented themselves. The company's policy in this area has been highly successful, with ancillary activities making a major contribution to the excellent results Aer Lingus have produced in recent years.
In the 20 year period 1960 to 1980 Aer Lingus returned profits on a consistent basis. A serious downturn occurred in the late seventies, coinciding with the world economic recession and a general slump in the world airline industry. In 1981-82, the company recorded net losses in excess of £9 million but these losses were converted to a net profit of £4.97 million in 1983-84. In 1984-85 a net profit of £11.6 million was recorded and the following year, 1985-86, the net profit figure had grown to £16.6 million. I am sure Deputies will agree that this turnaround in the financial performance of Aer Lingus was a significant and praiseworthy achievement on which the board, management and staff must be complimented.
Their achievements are a clear example of a commercial semi-State body's approach to the development of a core business, to the development of ancillary business, all linked and making their contribution towards the maintenance of a national airline. Would anybody have said that they should not have been allowed to do those things? Would anybody have said we should not have a national airline or that we should sell off the national airline and depend on others to provide the service for us? Would our industrial expansion have continued? Would we have found ourselves in bad market positions being cut off from the rest of the world? Those are the major national questions which have been looked at and which have to be evaluated before we come to a quick off the top of the head decision as to what to do with a national airline.
There are those who would argue that a drifting into the hotel situation should never have been contemplated. I have no doubt that successive Ministers for Finance have been told time and again by the Department of Finance that the ancillary services should be got rid of, that the hotels are now worth a lot of money and that they, too, should be got rid of.
That is a quick fix solution to getting the figures right in a one year budget but it ignores the national requirements and where national development is going. We cannot over-rely on others. The commercial market is such that they run when there is profit and when there is no profit, they stop running. That is the reality of commercial life.
Over the next ten to 15 years, Aer Lingus will have to face the major problem of fleet replacement. The cost is enormous. We are talking of hundreds of millions of pounds. The question of the financing of this expenditure has now to be addressed. My colleague, the Minister for Tourism and Transport, informed the House last week, in reply to a parliamentary question, that the Aer Lingus fleet replacement and its financing are currently under examination by an interdepartmental review group. He indicated also that decisions on the means of financing fleet replacement will not be taken until the review group's report has been considered by the Government.
There are people who say that the Government have to provide the money. There are many ways of financing fleet replacement other than looking to the Government for money. If there are people around who are prepared to put hundreds of millions of pounds into a minority stake in Aer Lingus, I do not know who they are. Those who say there are such people should realise that that sort of investment does not take place when what is involved is a minority stake.
Is the Minister serious when he says he does not know of such people?
I am quite serious and if you are trying to convince this House otherwise, you are only being hypocritical about it.
I will tell you after the debate.
There is no financial institution in this country or elsewhere in the world today who will invest in a minority stake in a State-run operation. They will certainly do so on a majority stake.
The Minister is not very well informed and I will tell him about it after the debate.
I would love to hear of them. If I knew who they were I would ring them tomorrow to find out who is codding whom?
I am amazed that the Minister is so ill-informed.
I have not met any St. Vincent de Paul institutions in the financial area yet but we would be only too delighted to find one.
Who is codding whom?
An Leas-Cheann Chomhairle
Order, please.
The Minister should get a better brief before he comes into this House.
I do not need a brief to inform me about return on money or about what private investors will and will not do. I have a good idea of what they will and will not go for. It is nonsense to suggest that you can sell 10 per cent of the national airline——
Who mentioned 10 per cent?
——to people who will not know if they will ever get a dividend and who will have no say in the decision making as the Government of the day will decide what the future policy is to be. That suggestion does not stand up to any financial evaluation. There is a provision in the existing Aer Lingus legislation for investments to take place.
Will you encourage them?
The Government see forestry as an area which offers considerable scope for development, employment, import substitution, domestic and export market expansion. To achieve this, however, they consider there is a need to give State forestry a structure which will allow it to maximise this potential for the benefit of this country. This is not in any way to decry or ignore the great work done by State forestry to date. Indeed we are all aware of the valuable contribution it has made to the development of our forests, timber industries and, through its amenities, to the creation of a greater public awareness and appreciation of its many social benefits.
However, it has now reached a stage where a greater emphasis has to be placed on the adoption of a more commercial approach to its many operations. For this reason it is both timely and opportune that its present structure within a Government Department be changed to one which will give it the scope and freedom to achieve the Government's aim of greater commercial flexibility. The process of examining this is in hand at present.
I do not think there are many Deputies, if any, who would disagree that the timber business and the development of our forests cannot be developed effectively from a State Department. The heavy hand of bureaucracy does not allow those sectors to make the necessary decisions. Timber is a commodity that must respond to the prices in the marketplace. If we continue with the old methods imports of timber will rise and we will be faced with higher prices as the prices on world markets change. It must be obvious to everybody that we are importing too much timber from Russia and Sweden. I am not saying we are not making progress and using more home produced timber but we have a long way to go. I accept that the percentage has increased and that the trend is going in the right direction.
Timber is a commodity that will be in scarce supply in Britain and throughout Europe. It is predicted that imports into the EC up to the end of the century and beyond will continue at a high level. I understand that imports to the UK will be in the region of 50 per cent of their requirements. It is important that we move forward and make our timber and forestry industries viable. If we do not they will be suffocated by the heavy hand of bureaucracy which attempts to run a business that the system does not allow it to run. I do not think this is any different from what I faced when, as Minister for Posts and Telegraphs, I agreed to two of the largest businesses in the country, those responsible for the post and telephones, being moved from the State to the semi-State sector. An Post and Bord Telecom have proved how right I was in that move. They have given an example of how developments can take place in the semi-State sector. The two companies have had a marvellous record of success.
A number of Deputies have mentioned Irish Life in this debate. Let me be quite clear in this regard. No decisions have been taken by Government on the company's future and no commitments have been made or entered into. It has been confirmed to the House in answer to questions that exploratory discussions have taken place at official level in recent months and these will continue. Given the benefits suggested from a sale of State shares in the company it is important that the matter be fully explored. I can go no further than that. I cannot, and will not, engage in speculation as to what a sale of the State's interest would raise, should that course be decided on. There are a number of factors and issues to be decided including changes in legislation before any such evaluation could be attempted with a reasonable degree of certainty. I agree, certainly, that the dividend return to the State from Irish Life does not reflect the asset worth.
Irish Telecommunications Investments Ltd., (ITI), is a body in whose establishment I had a hand. I foresaw it then, in 1979 and later, as a useful instrument in sourcing the funding for the planned, orderly development of the telecommunications network. My own intention was not alone that it should raise loan finance but also that it might develop into an agency for attracting some private capital into the telecommunications area. I cite this attitude of my own, of some years' standing, to show that the positions which we in this Government take today on issues of private participation in State bodies are not the things of fashion. Our interests and intentions in this connection arise out of what is needed for development.
A further example of the Government's will to deal with each State enterprise in the light of their own unique situation and merits is the case of the NET-ICI joint venture. As Deputies are aware, the previous Government approved the broad outlines of a proposal for such a joint venture before they left office. I, too, have accepted the concept of the joint venture which is based on a 51 per cent State shareholding and a 49 per cent holding by ICI. Consequently, I have directed our negotiators that the necessary steps are to be taken to complete arrangements for putting the joint venture in place. Those are just some examples that I cite to illustrate the Government intention.
I do not think there can be any doubt about the views of the Government in regard to the development of the State and semi-State sectors. We are sensible, commonsense and pragmatic people who will adopt the right approach in the best interests of the country. Unlike other Members, we do not have ideological hang-ups or hold the view that we cannot do certain things because principles die hard. We are here to do a job in the best interests of the Irish people and we will pursue development in the State and semi-State sectors. We will continue to create the environment for more growth in those sectors. However, there are no easy times ahead for those sectors and the private sector also will have to become more competitive if it is to continue to exist in a cost-competitive environment. Those in that sector should not think they can rely on the State for handouts or additional equity. We have a job to do in this competitive world and the State sector has to take the challenge on board, like the private sector. I hope that demonstrates where we stand in regard to this matter.
I should like to thank the Minister for that well spread, well thought-out, serious and effervescent degree of confusion which he has spread among the parties on this side of the House. The most positive thing I can say is that we will not have to debate this topic for another six months. I have heard Members term this the great ideological debate. One would almost feel ashamed nowadays to have principles about anything when one hears talk about the dead hand of the State, the intervention of the State and so on. We seem to be reduced to about £3 million worth of immature forestry, an ICI-NET joint venture in a world which is awash with fertilizer and an Irish Life analysis which is of a highly speculative nature. There has been talk about a national airline which is chronically short of capital funds and continues to make a loss on a service we all praise it for running on the North Atlantic. That is not the most fertile ground to open a debate or discussion on the whole concept of privatisation.
Deputy Colley in her contribution last evening had the bones of the cleansing service, office leasing and private medical care to offer us as areas to look at from the point of view of privatisation.
I referred to the general medical services, not private medical care.
Therefore, it becomes private general medical care.
State medical care provided by the private sector.
We are awash with that at the moment.
Is the private conversation over?
We should privatise Dáil Éireann while we are at it.
It already is.
At a time when the country is not setting world headlines with regard to new inventions or new concepts, we are left with the concept of privatisation. It strikes me as being a relatively new invention in Irish life. It obviously owes its origin to a mixture of things, including the ideological fixation with the magic of the marketplace and the somewhat less noble idea of delivering the goods to financial backers. There are pressures from various interested parties to sell the idea that the State should divest itself of all of the profitable enterprises in which it is involved as elements in the private sector seek risk-free ways of investing substantial amounts of money.
Of course the political parties and personalities who are interested in privatisation, whatever their motivation, were slick enough to realise that they could not come out into the open and identify what exactly they were interested in. I am open to correction on this point, but I believe that the word "privatisation" does not appear on the motion we are debating or on any of the amendments thereto. Generally people who are in favour of this concept tend to avoid using the word and have taken to calling their concept "public ownership" and using grand phrases like "the democratisation of ownership" or "a share-owning democracy". The purpose of this jargon and propaganda is to disguise the real meaning of privatisation.
It is necessary to begin any contribution to this debate by defining what privatisation means. It means taking away from the public the assets which the public already own and selling them to the highest bidder without any guarantee that the public, who own the assets, will see any return whatever. That concept of privatisation, especially as defined by its propagandists, is an unusual one. They would have us believe that in some way taking what we own from us and selling it to someone else actually enhances our ownership.
What happens to the money?
We will get to that too. It is little wonder that all but the most crass of those who favour privatisation have some difficulty with the concept themselves. In the recent general election great play was made of the fact that it was not in the strategic national interest to retain ownership of the Great Southern Hotels. Speakers for Fine Gael and the Progressive Democrats were at pains to point out that selling the hotels would improve their efficiency and profitability and would provide some much-needed cash for the State's other purposes. That was the view expressed all over the country, except in the counties where jobs depend on those hotels, the same jobs which were threatened the last time there was talk of selling off the hotels. When the right-wing parties got into Kerry, Wexford or Galway the talk was somewhat modified from the usual concepts which were spoken of here in the metropolis and it was about how wonderful it would be if workers in the hotels had a chance to buy some shares and about how much better and more secure those workers would feel if they owned their own enterprises.
This is not the only inconsistency that has emerged in the public as opposed to the private campaign in favour of privatisation. It quickly became clear during the election that Fine Gael were not prepared to say publicly that they were in favour of privatisation. They were in favour instead of "attracting private investment into publicly owned companies to enhance the development possibilities of those companies". Even when the absurdity of this proposition was pointed out in relation to Aer Lingus, for example, the proposal was maintained as a useful cover for the real thing.
It has never been shown that privatisation would enhance the potential of any of our existing State companies. Taking the example of Aer Lingus, it has been argued that private sector money investing in up to 49 per cent of the company would provide the capital base Aer Lingus will need for fleet replacement and other purposes in the next few years. But 49 per cent of Aer Lignus would realise only a fraction of the £1 billion it has been estimated would be needed for those purposes. Hundreds of millions would still need to be borrowed. Would the private interests controlling the 49 per cent be prepared to guarantee those borrowings? Would they seek no conditions in return? Would such guarantees be acceptable if the 49 per cent was spread over thousands of small shareholders, or would it be necessary to concentrate control of that 49 per cent in a small number of hands in order for it to be effective? The answers to these questions are well known to the people who are proposing this concept; yet they propose the concept as if it were the simplest thing in the world, a sort of workers' paradise where bus drivers and air hostesses would dip into their savings to cough up £100 million here and there.
On a more serious note, one needs to look in some detail——
Seriousness befits the Deputy.
——at the assets we are talking about. What are they? Why are some enterprises already owned by the public and why is it better that they should remain in public ownership?
It is possible to divide the State's assets into several different categories. Many of them are in the form of productive enterprises, some of them profitable, others with a potential for profit. Of course we have to ensure, through more effective management and a high degree of motivation and co-operation, that all of the State's enterprises are making a contribution, not only to their shareholders, the people of this country, but also to general economic growth. But we have already shown that can be done in small companies like the Great Southern Hotels and in great companies like Aer Lingus, and we have shown that it can be done in a public sector context, which is so maligned nowadays.
Other companies run by the State provide essential services, many of them of a strategic nature, such as transport. There is no doubt that there are elements of these companies which would be attractive to the private sector, but selling them would have the inevitable consequence that the social element of the service provided would quickly be lost sight of.
Still other State companies, or companies in which the State has a significant shareholding, are involved in the development of natural resources. I believe as a matter of fundamental principle that the development of our natural resources, whether we are talking about gas, turf, wood, or food, must be carried out in the interests of the people as a whole. This can only be done by maintaining a very high level of public sector involvement. Selling any of these enterprises in return for a "quick fix" of cash is selling out the longer term interests of the people. It might well generate short term popularity for whoever proposes it, but it is not what I or the Labour Party are in politics to do.
In this connection, I have a very strong recollection of the Taoiseach, when he was Leader of the Opposition, lecturing me in this House about the need to develop our natural resources in oil, while warning me against taking any action that might speed that development. I take this opportunity to return the compliment — and it is timely, considering the publicity in recent days about the start of a new drilling campaign. The changes I made to the oil licensing terms, with the approval of the Government, are bearing fruit in this new work. They provide the right balance between the interests of all the people, on the one hand, and the need to provide incentives in difficult times. If and when oil comes ashore, I trust the Taoiseach will have the grace to remember where the incentive came from. No doubt he will be reminded. In the meantime the Labour Party will be watching developments closely to ensure that the balance of advantage remains with the Irish people and is not disturbed by any unnecessary concessions on the part of the Government.
I must refer to one more category of public enterprise. At present there are a number of enterprises in public hands because, and only because, the private sector made a total mess of them when they owned them. These are not instances of the State stepping into a gap. People had to be rescued from the consequences of private sector incompetence, consequences which include very considerable losses and inconvenience. I do not believe it is necessary for me to remind the House of some of the more recent examples with which we are all too familiar where the situation could have been totally catastrophic had the State not stepped in, in most cases at the request of the private sector. As I mention these enterprises I am reminded there are, in addition, hundreds of enterprises in the private sector which needed at one time or another great injections of cash from the taxpayer through the IDA, Fóir Teoranta and other State agencies. The involvement of the State in boosting, or supporting, or rescuing private enterprise is taken almost as a matter of course, even though it can be said that the taxpayer gets little or no thanks for it.
If these are the categories of State enterprise the next question that must be asked is: who wants to buy them? Where has this sudden interest in buying State companies come from? For many months now we have heard about the difficulties facing Irish investors. High interest rates, small markets, difficulties in borrowing capital — these are some of the reasons frequently given for the failure of our entrepreneurs to create jobs.
If one wanted to define a project which was anathema to the private sector, it would have the following characteristics: it would need large investment; it would have a high risk element; and profits would be small or slow to develop. Because a great many public enterprises have these characteristics, all over the world the State has a major input, usually with exclusive control of all the key utilities and natural resource areas, posts, telecommunications, electricity, gas and public transport. The private sector has not interested itself a great deal in any of these areas in the past.
All of these are areas which require an enormous amount of investment, and a certain degree of risk. In the case of some of these areas, because there is a substantial and necessary social content to the service provided, sustained profitability is difficult. Given these characteristics, and what I said a moment ago about projects which are anathema to the private sector why, then, would the private sector suddenly begin to show an interest in enterprises of this sort? The reason is obvious. In the public enterprises concerned, the investment has been made already; the market has been captured; so the risk is minimised and the profit potential is known. But the investment has been made by the State on behalf of the people, and the people are entitled to see that that investment is fully protected. It cannot be protected if the private sector is allowed to take a share of the action.
In every single case of privatisation so far in Britain, the people who bought shares in public enterprises were able to trade them at a profit within 24 hours. The reason is that the Government allowed those shares to be sold in the first place for substantially less than their real value in order to make a success of the policy. It would not do if you were to offer a public company for sale and the offer was under-subscribed. But the net result was that the people who really owned those companies, the people of Britain, have so far lost billions on the sale of the companies concerned. Is there an alternative approach, a more positive way for those with money to invest and to contribute to the economy? I believe there is, and there is ample opportunity.
One of the major achievements of the last Government was the passage into law of the Act establishing the National Development Corporation. I must say in passing, that I am glad the present Government have decided to retain the NDC, despite their oft made earlier threats and the derision with which they have always treated it in the past. It was gratifying to hear, in the Fianna Fáil Party political broadcast in the wake of the budget, the belief expressed that the NDC could make a major contribution to job creation and investment. It was rather unfortunate that they could not have said that in the debate in the House at that time.
The Irish people in both the public and private sectors could have taken the initiative and responded to a positive political initiative. But when the opportunity presented itself Fianna Fáil took the soft option for the sake of providing opposition. I believe that is regrettable. Each issue has to be analysed on its merits. That was one opportunity to do so. Many people who believed in the concept and wanted to subscribe and contribute to it are now quite reluctant and reticent about it because they feel there has been a major political divide on the NDC since their establishment.
The creation of a body such as the NDC has been an important priority for the Labour Party for many years. We have argued that there is every reason why the State should get itself involved in the creation of viable, self-sustaining jobs in each and every sector of the economy where scope can be found. The principal reason why this is necessary is that, despite all the subsidies and incentives — and there are many — despite all the effort made to produce a climate as beneficial as possible, the private sector has not succeeded in creating the tens of thousands of jobs which are badly needed.
As I said earlier, many private sector companies are unwilling to take the risks that are sometimes necessary. Others are unwilling to tie up capital for a long period of time before seeing a return. Others stipulate a very high level of potential profit before expressing a willingness to invest, and do not always measure profit in terms of the social contribution made through job creation.
The establishment of the NDC will enable us to bring a different equation into play. While the NDC will — and should — operate to the highest and best commercial standards in selecting investments and in making management decisions, they will have at the forefront of their priorities the need to respond to our unemployment problem. They will have the power to do so on their own or in co-operation with the other sectors of the economy: the agricultural sector, private manufacturing or service industries, or the co-operative sector itself. In the role they can and should play there is enormous scope for the private sector to get involved both in joint ventures, and in projects of its own, assisted by the NDC.
There is something of a myth about the attitude of those of us on the left to cooperate with the private sector. It is worth reiterating a point I have made in this connection before. There seem to be some who believe that we lack enthusiasm for productive, efficient effort leading to adequate profit. Nothing could be further from the truth. No one could be more supportive than I of a genuine partnership between the public and private sectors. But regrettably it has been my experience that, when others talk about partnership, they frequently mean a sharing where the public sector is guaranteed to lose out. In too many cases the public sector is invited to share the risk, while the private sector is invited to share the profit.
The truth of the matter is that the private sector is less interested in genuine joint ventures, the kind where risk, as well as profit, is shared. If they were interested in such joint ventures, there are plenty of openings presenting themselves. As I have said, the NDC have within their terms of reference the capacity to accommodate any entrepreneurial instincts of that kind. But it has been said, perhaps unkindly, that privatisation is more attractive because it represents an opportunity "to put private hands into public tills". What would be the result of all this? To be more specific, in what way would the introduction of privatisation enhance the development of our economy?
Let us assume for a moment that some large and expensive national asset is to be sold off to Irish interests and let us assume also — although it is a more unlikely proposition — that the State gets a fair price in return. How should the State use that price? By paying off a tiny portion of our national debt? By setting up new enterprises? By giving taxpayers a little bonus? All of these options presumably would be there, so let us examine them. I believe they are worthy of examination.
Before doing so let me make one small point. The resources used by the purchaser or purchasers of the assets are resources which will not be available for any other purpose or investment within the economy. Therefore the act of purchasing a State enterprise cannot contribute any net new development of itself and the tying up of huge amounts of resources in purchases of this sort may well hinder investment and development in other areas of the economy.
Does that not apply to the State as well?
Let us examine the options. Let us assume that the State enterprise we are talking about is BGE, and that they would fetch about £500 million on the open market. That sum could be used to reduce the national debt and it would reduce it by about 4 per cent. Most interesting, it would reduce the cost of servicing that debt by a sum in the region of £50 million to £70 million per annum. However, BGE historically have produced annual profits of more than that, so that the State in the case under examination would be worse off and the deficit would have to be made up in increased taxation. More than that, the State would lose control over a range of other essential things of which the ability to contribute to economic development through energy pricing would be one example.
Suppose instead of taking that foolish approach the State were to use that money in setting up new enterprises in competition with the private sector and take the risks that the private sector will take. I am not sure that is the approach the Right support in this House but we can only presume from what has been said to date that it is. Presumably they support it on the basis that if it is a new enterprise and successful there will be another plum to pick at the end of the day. While I believe in the right of the State to establish an enterprise in any area it seems fit, I fail to see the logic of privatising State industry in order to establish new ones that can be privatised in their turn.
The third option is to spend the money on tax reduction. In the present climate this would be the height of foolishness since in the first instance it is generally accepted that lumps of money given in tax relief tend to be spent on imports, which is hardly a way to encourage development in this country. Secondly, tax reductions financed in this way would be of a once-off character since the sale of assets is always accompanied by the loss of the revenue flowing from the proper management of those assets.
In the course of the past few months in particular privatisation has become a sort of "buzz" word of the New Right as the divide takes place in Irish politics. It has been put forward as a panacea for our problems. The fact that it has not solved problems elsewhere does not seem to matter in this debate. It would be infinitely preferable if the ideology which informs this motion were put to one side and if the economists and thinkers on that side of the economic divide were to analyse what has been happening in those economies where growth has been achieved and where unemployment has been successfully tackled. Ideological preoccupation with denigrating the public sector will not effectively tackle either of those problems, and that is why the Labour Party will be opposing this motion.
We will also be opposing the Government amendment which on the surface may seem surprising because the amendment itself is fairly non-contentious. The contribution made last evening by the Minister for Finance when he was moving the amendment was illuminating. If one can judge by the Minister's speech, this Government are going to pay lip service to the notion of a vital public sector on the one hand but are prepared to weaken that same public sector to the point of collapse on the other. The Minister has not ruled out the possibility of seeking private cash for semi-State enterprises.
It is difficult to take seriouly the sentiments expressed in the amendment when one contrasts it with the lukewarm support for the semi-State sector espoused by the Minister last night and the laissez faire attitude in regard to selling some of the companies that he attempts to disguise as pragmatism.
The semi-State sector can make an enormous contribution to Irish economic recovery. That sector has served this country well since the foundation of the State at times when there were many gaps in our economic programmes and when there was a dearth of private sector investors coming forward to make contributions. Rather than attacking the semi-State companies and trying to apply new economic theories which have not worked elsewhere, we should be revitalising the semi-State sector.
If we are talking about bringing confidence back into this country that would be an ideal area in which to start. We as politicians and Members of this House should start by supporting the workers and the management in the semi-State area and not at every opportunity take swipes at them. Many of their problems down through our history have been caused by political interference in the management and decision-making processes of their companies. The time is long overdue when we should support and fund adequately the semi-State sector and not starve it of the necessary cash. The actions of the Minister for Finance last night, coupled with the ideology expressed in the motions from the other right-wing parties in this House, give little ground for confidence for the semi-State area in the time ahead. The Labour Party will be making their contribution to defending, as in the past, the contribution made by the semi-State sector, which I believe they can continue to make to our economy.
Needless to say, The Workers' Party are totally opposed to the privatisation of semi-State companies. Despite the massive hand-outs to private enterprise and private companies in recent years — over £1,000 million in 1986 — the private sector has failed to deliver jobs or to expand what it has already. In fact, jobs are closing down daily. The same private sector now wants to get its hands on the profitable operations in the public sector. To auction off our public sector companies in order to satisfy the avaricious appetite of private enterprise would be the kiss of death for State industry and for industry generally which is dependent on the State.
Starved of share capital by successive Governments favouring private enterprise, our State companies are being forced to borrow from private banks at exorbitant interest rates. Despite the obstacles placed in the way of our State companies and the restrictions placed on their operations in order to prevent them from competing with private enterprise, these companies have played a crucial role in the social and economic development of the State. Contrary to the daily propaganda about loss makers, last year our 17 main public enterprises had trading profits of £447 million and after payment of financial charges they had net profits of £85 million. The Workers' Party in declaring our outright opposition to privatisation of any of our State enterprises reiterate our longstanding policy that our State enterprises should be used as the engine for economic growth and recovery. There is no time to waste if the full potential of our State companies is to be utilised to tackle the massive jobs crisis which is the legacy of decades of reliance on private enterprise.
The Workers' Party demand that substantial amounts of State funds at present being swallowed up by private companies be redirected. If they want the State off their backs take the State off their backs and redirect this money for investment into the development and expansion of State industry. Some initiatives are needed to lift the heavy burden of under-capitalisation in our public enterprises. An efficient and dynamic State sector generating wealth and creating jobs is the cornerstone of The Workers' Party's plan for economic development and job creation. The party will fight inside and outside Dáil Éireann to oppose and expose those who would hijack the State resources in the interests of private profit.
The statement is constantly made that private enterprise is efficient and State enterprises are inefficient. The right-wing Financial Times in a major review of privatisation in Europe, quoting an Amex Bank review of the subject said:
While there is widespread feeling that privately owned companies are more efficient than government enterprises, it is harder to prove than might be expected.
That is from The Financial Times of 10 December 1986, page 24. In a review of privatisation in the Economic Journal, John Kay and D.J. Thompson found that the empirical evidence does not show that UK privatisation has led to improved performance of enterprise. The Office of Telecommunications in the UK found that the domestic telephone service of British Telecom has not improved since privatisation and most people believe that it made no difference to the service. That was stated in the Financial Times of 4 December 1986.
Another article in the Financial Times— a journal of interest to Fine Gael and the PDs — stated that privatisation has financial rewards for those at the top. I quote from the issue of that publication of 18 December, 1986:
What is beyond doubt is the benefit to those who run the organisations privatised. For example, the boss of BT gave himself a rise of £60,000 in 1985-86. The boss of Cable and Wireless was paid £11,291 when in public ownership, and this increased by five times this amount a year later. But by 1986 his salary had soared to £238,893. Britoil's boss pushed his salary up from £65,000 in 1982, prior to privatisation, to £106,000 in 1985. Jaguar Car's boss got £86,366 in 1984, and a year later it increased to £172,959.
On top of this, the company bosses get shares in the companies. It is no wonder that David Kingston of Irish Life and some of the other less than public-spirited State company bosses want our State companies privatised.
That is an unworthy statement.
It is proof of who benefits from private enterprise.
On a point of order, is it in order for the Deputy to attribute motives of that kind to a member of the public who is not here to defend himself?
The person referred to has ample opportunities and has used those opportunities to make his statement in favour of privatisation.
I am taking the observation made by Deputy Mac Giolla as a political observation.
The gentleman in question is not a politician and is not here to defend himself.
He is a public servant when he is head of a public company.
I am being deprived of the few minutes I have.
Many sentiments have been expressed now and there is ample evidence of people giving their opinion on others. In respect of the opinion given by Deputy Mac Giolla in this case I am not ruling that it is out of order and I ask Deputy Mac Giolla to continue.
We are discussing privatisation. One company who are under much pressure to privatise is Irish Life and one of the persons leading the campaign to privatise the company is David Kingston. I think I am correct in quoting him, and in referring to him, and I have quoted who benefits from private enterprise.
The private sector in Ireland has proved incapable of running any of our State companies. In the past few years we have nationalised two private enterprise companies with the full agreement of all parties in the House because private enterprise collapsed. The Dublin Gas Company should be quoted as an example of the dangers of letting private enterprise loose on essential services. The record has been disastrous both from an economic and a safety point of view. The legacy of bungling private enterprise can be seen in 1,000 holes all over the streets of this city. If this had been a State company there would have been howls from the PD and Fine Gael benches to have it privatised. There is gross inefficiency and mismanagement in private enterprise. In relation to mismanagement private enterprise cannot even run their own Irish Management Institute, the State has to run it for them. They are totally incapable of running their own tiny enterprises and have no hope of running the large State companies, the biggest employers in the State, such as Telecom Éireann, CIE, ESB, An Post, Aer Lingus and Bord na Móna.
I should like to refer to the amount of tax incentives received by private enterprise in 1985 — export sales relief costs the taxpayer £423 million, Shannon relief costs the taxpayer £57 million, reduced rate of tax on manufacturing profits costs the taxpayer £113 million, stock relief costs the taxpayers £11 million, reduced rate of corporation tax costs the taxpayer £7.6 million, relief on capital allowances costs the taxpayer £114 million and section 84 loans costs the taxpayer £110 million. This information was received from the Minister for Finance, yesterday.
This is a total of £836 million featherbedding for private enterprise, provided in one year, not taking into account the various grants and other financial supports and without any reference to support for agriculture. I should like to wind up by saying that the State companies are unable to avail of the various State grants given to private enterprise although they are forced to bear uneconomic enterprises for social reasons. For example, the Sugar Company must maintain the Tuam factory for social and political reasons, CIE must maintain uneconomic lines, the ESB must burn turf in their stations for social and political reasons but they are not given any special grants for this. In fact they must beg for subsidies when they are pushed to the wall and as soon as they do the howls come from the privateers, whom we have in full strength among us, about inefficiency in public enterprise. I have proved my case that private enterprise in this country, whatever about other countries, is totally inefficient and incapable of running any State company.
The Deputies have been generous to give the Deputy some time.
I should like to thank the Members of the House who have contributed to this debate and to indicate at the outset how appalled I was at the remarks made by Deputy Mac Giolla in relation to Mr. David Kingston, the chief executive of Irish Life. If we have reached the stage where a chief executive of a public company cannot speak out about what he considers to be in the best long term interests of his company without exposing himself to vilification and attribution of base motives of self-profit, we are surely on course for creating a class of servile useless chief executives in all our State bodies.
Hear, hear.
This debate has been accompanied by a great deal of pretence. First, there is the pretence of The Workers' Party to be here to protect the public sector and more than that, they believe, along with Deputy Spring's party, in taking more and more of our commercial life into State control. I want to stitch it into the record that the Labour Party and The Workers' Party are committed formally and openly to taking insurance and banking into public control and therefore——
The ICI wanted to give us——
(Interruptions.)
——people are coming into this House pretending to be one thing when in fact they are the other. This attitude does not stop there. Even from the Government benches there appears to be a new spirit of realism born since they assumed the powers of Government in relation to the question of whether they should dispose of State assets. It is remarkable that the Taoiseach, while he was Leader of the then Opposition, is quoted in The Irish Press of 22 February 1987 as assuring Mr. Peter Cassells, an assistant secretary of the Irish Congress of Trade Unions, that Fianna Fáil have no intention of privatising established State bodies such as Aer Lingus, Bord na Móna, CIE or any other commercial semi-State body. It seems evident today that there is the beginning of a backsliding on that issue.
During the course of the general election campaign I was privileged to appear on RTE television in the company of Deputy Michael Noonan who was there as a representative of the Fine Gael Party. He told the people of Ireland, through the medium of television, that Fine Gael's policy had been in favour of privatisation since 1969 and he said that I as a member of the party ought to have known that. All I can say is that I was a member of the party during all the period when he described it as their policy and I never once heard the word spoken at a Fine Gael Ard Fheis, or elsewhere.
The Deputy must have heard it elsewhere.
If there was any room for doubt on the issue, I would refer both Deputy Bruton and Deputy Noonan to what they put before their own members at their Ard Fheis in October of last year. On the question of State enterprise they asked four questions and these were seeking guidance from their membership on the issue. One question was: Should State enterprises with the capacity for expansion or diversification be encouraged to seek minority participation by the public or by private interests with a view to increasing their activities and employment? There is no doubt that some members of the Fine Gael Party have secretly been in favour of privatisation, but the fangs that they are showing now on the issue were, if I may use the phrase, dentures which were removed for comfort while they were in office. It turns out that although, as soon as he was returned as Minister for Finance, Deputy Bruton, on the quiet, sought various studies to be made and made various approaches to English merchant bankers with a view to seeking how privatisation was done, as soon as he poked his head above the ideological parapet which divided him from Labour in the then Cabinet, he was shot down in flames by Deputy Spring. His first and only essay in privatisation was immediately withdrawn and was consigned——
What about NET?
——to the files.
(Interruptions.)
When will the Progressive Democrats form a Government? Never.
They will form a noisy Opposition.
Deputy Yates, who is considered now to be a young tiger in the Fine Gael Party——
The Deputy would not welcome that.
——in 1985 made a speech at the Dublin Junior Chamber of Commerce. So impressed was he by his speech that he sent it to the Chairman of the Joint Oireachtas Committee on State-sponsored Bodies. If one goes to the passage in that speech, which is a little difficult to put together here, which deals with privatisation, the young tiger's stripes appear to have recently emerged. He had this to say — and I quote from page 4 of the text that he gave to the committee:
Privatisation: Since 1978 various politicians, economists, the Stock Exchange and the Confederation of Irish Industry have all promoted this concept. However, the response of successive governments has been uniformly negative. It can therefore be reasonably assumed that due to certain political objections this option is not feasible.
These are the people who claim that the Progressive Democrats, by urging that there should be an openness to privatisation, had stolen their political clothes. If they are standing naked and clothes-less if I may put it that way, they are standing at the counter of the pawn shop where they handed in their political clothes and their policy clothes in order to participate in Government. If they are now trying to redeem what they regard as their political clothes, so be it, but do not let anybody in this House say that this idea has been stolen from them. The record shows that the Fine Gael Party in 1986 were still confused in collectively asking themselves questions on the issue. The record shows that Deputy Bruton's efforts in this regard were being shot down in Cabinet and the record shows that Deputy Yates, who was an avid proponent of the private sector at that time, was not prepared to regard privatisation as a political runner.
That is being quoted very selectively.
These are the realities of the situation. The motion as put before this House——
This is a case of a Deputy setting a shy to shoot down.
Would Deputy Bruton please allow Deputy McDowell to conclude without interruption?
Why does he not deal with the points in the debate?
The Deputy is trying to prove that he is a better privatiser.
The Deputy is a pirate.
In relation to the motion which the Progressive Democrats have put before this House, it is not an extreme motion and is not ideologically motivated. It is not one which calls for the mass privatisation of every asset that there is in Irish society. It is not a motion which calls for an indiscriminate divestment by the State of all its assets.
Not the profitable ones.
It is not a resolution which is indifferent to the difficulties which any programme of privatisation poses. What it most certainly is is a resolution calling on this House to ask the Government to examine every State asset with a view to deciding, on certain political and economic criteria, whether it should remain in public ownership, or whether the public would be better served by divesting it and giving it into different hands. We propose this, not simply as an isolated resolution but as part of a general, overall view of Irish society. The view that we have of Irish society is one where the forces of competition are released, one where the forces which stifle enterprise and investment are combated and are reduced wherever possible, one where social justice will be obtained by guaranteeing to the largest group possible of Irish people the right to economically participate in the life of the country.
We believe that social justice depends on economic participation and that every wall and obstacle that is put in the face of economic participation, which is work, which is employing other people, which is running businesses, should be tackled and systematically removed in order to bring people into the economic life of the country. We emphatically reject the policies of marginalisation of sections of Irish society, the young and the weak, putting them out of the economic life of the country, away from the marketplace and on to the dole. We believe that unless this House addresses in a radical manner the obstacles to economic participation and economic growth, then there will be no economic progress. There is no demand here, as I have said before, for mass handing over of assets to the private sector. For instance, in relation to the Gas Board it is not the Progressive Democrats's view that An Bord Gáis should be handed over to the private sector. That is a company which is at the moment enjoying considerable income from a depleting asset and there is no economically sound reason for handing it over to the private sector.
Why do the Progressive Democrats want it run down?
There is a plenitude of enterprises ranging from Irish Life — whose chief executive has been vilified here by Deputy Mac Giolla — to the various other commercial bodies run by this State; there are other matters, too, which can be the subject of privatisation. There are services which at the moment are carried out by local authorities and central Government which could be more efficiently and cheaply carried out by private enterprise.
Exactly.
There are other and easily thought of assets in the hands of the State now which are yielding a very small return which, if converted into liquid money, could either reduce our indebtedness and the interest burden on the Irish economy or, alternatively, could be reinvested in a more productive way. The State has huge amounts of assets on its hands. It has barracks that it does not need, lands that it does not need, forests which could just as well be cultivated in the national interests by private investment groups or pension funds. All these are possibilities which must remain open. What the Progressive Democrats say is that this resolution calls on the Government to approach the question of privatising or divesting any of the State assets in an open minded and rational way, using rational political and economic criteria and not approaching the matter with a closed mind such as that which is suggested by the left or the absurd mealy-mouthed way suggested by some of the people to my left in this Chamber.
There is no point, as the Minister pointed out in his contribution, in offering anybody a 49 per cent interest in Aer Lingus. Nobody is going to be so foolish as to make an investment of that kind. The Minister was right and Deputy John Bruton wrong on that issue. Eventually the record will show who was right and who was wrong on that issue.
I commend the motion wholeheartedly to the House. I ask the House to reject the amendments to it because they are mealy-mouthed, unclear, not thought out. They constitute a recipe for doing precisely what we have been doing for the last 20 years, which is fiddling while the economy burns.
I am now putting the first question: "That amendment to amendment a1 be made."
Amendment put.
The Dáil divided: Tá, 41; Níl, 97.
Tá
- Barnes, Monica.
- Barrett, Seán.
- Begley, Michael.
- Birmingham, George.
- Boland, John.
- Boylan, Andrew.
- Bruton, John.
- Bruton, Richard.
- Carey, Donal.
- Connaughton, Paul.
- Cooney, Patrick Mark.
- Cosgrave, Michael Joe.
- Crotty, Kieran.
- Deasy, Austin.
- Deenihan, Jimmy.
- Donnellan, John.
- Doyle, Avril.
- Durkan, Bernard.
- Enright, Thomas.
- Farrelly, John V.
- Fitzpatrick, Tom.
- Flaherty, Mary.
- Flanagan, Charles.
- Griffin, Brendan.
- Hegarty, Paddy.
- Higgins, Jim.
- Hussey, Gemma.
- Kenny, Enda.
- Lowry, Michael.
- McGahon, Brendan.
- McGinley, Dinny.
- Mitchell, Gay.
- Naughten, Liam.
- Nealon, Ted.
- Noonan, Michael.
- (Limerick East).
- O'Brien, Fergus.
- O'Keeffe, Jim.
- Shatter, Alan.
- Sheehan, P.J.
- Taylor-Quinn, Madeline.
- Yates, Ivan.
Níl
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Bell, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Matthew.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Byrne, Hugh.
- Calleary, Seán.
- Clohessy, Peadar.
- Colley, Anne.
- Collins, Gerard.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Gibbons, Martin Patrick.
- Gregory, Tony.
- Harney, Mary.
- Haughey, Charles J.
- Higgins, Michael D.
- Hilliard, Colm Michael.
- Howlin, Brendan.
- Hyland, Liam.
- Jacob, Joe.
- Keating, Michael.
- Kemmy, Jim.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Leyden, Terry.
- Lynch, Michael.
- McCarthy, Seán.
- McCoy, John S.
- McCreevy, Charlie.
- McDowell, Michael Alexander.
- Mac Giolla, Tomás.
- MacSharry, Ray.
- Mooney Mary,
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J. (Limerick West).
- Connolly, Ger.
- Coughlan, Mary T.
- Cullen, Martin.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- De Rossa, Proinsias.
- Desmond, Barry.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Fahey, Frank.
- Fahey, Jackie.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Malley, Desmond J.
- O'Malley, Pat.
- O'Rourke, Mary.
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Power, Paddy.
- Quill, Máirín.
- Reynolds, Albert.
- Roche, Dick.
- Sherlock, Joe.
- Smith, Michael.
- Spring, Dick.
- Stafford, John.
- Stagg, Emmet.
- Swift, Brian.
- Taylor, Mervyn.
- Treacy, Noel.
- Wallace, Dan.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wright, G.V.
- Wyse, Pearse.
Tellers: Tá, Deputies F. O'Brien and Flanagan; Níl, Deputies V. Brady and Browne.
Amendment declared lost.
Question put: "That amendment No. a1 be made."
The Dáil divided: Tá, 78; Níl, 21.
Tá
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Matthew.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Byrne, Hugh.
- Calleary, Seán.
- Collins, Gerard.
- Connolly, Ger.
- Coughlan, Mary T.
- Daly, Brendan.
- Davern, Noel.
- Hyland, Liam.
- Jacob, Joe.
- Kemmy, Jim.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Leyden, Terry.
- Lynch, Michael.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- Mac Giolla, Tomás.
- MacSharry, Ray.
- Mooney Mary,
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J. (Limerick West).
- O'Dea, William Gerard.
- Dempsey, Noel.
- Dennehy, John.
- De Rossa, Proinsias.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Fahey, Frank.
- Fahey, Jackie.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Gregory, Tony.
- Haughey, Charles J.
- Hilliard, Colm Michael.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Leary, John.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Roche, Dick.
- Sherlock, Joe.
- Smith, Michael.
- Stafford, John.
- Swift, Brian.
- Treacy, Noel.
- Wallace, Dan.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wright, G.V.
Níl
- Bell, Michael.
- Clohessy, Peadar.
- Colley, Anne.
- Cullen, Martin.
- Desmond, Barry.
- Gibbons, Martin Patrick.
- Harney, Mary.
- Higgins, Michael D.
- Howlin, Brendan.
- Keating, Michael.
- McCoy, John S.
- McDowell, Michael Alexander.
- O'Malley, Desmond J.
- O'Malley, Pat.
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Quill, Martin.
- Spring, Dick.
- Stagg, Emmet.
- Taylor, Mervyn.
- Wyse, Pearse.
Tellers: Tá, Deputies V. Brady and Browne; Níl, Deputies Harney and Colley.
Amendment declared carried.
Motion, as amended, agreed to.
The Dáil adjourned at 9 p.m. until 10.30 a.m. on Thursday, 9 April 1987.