That is a serious disappointment. Here is a case that needs examining, where cutbacks may be counterproductive, where by spending a little more we may, in fact, get in much more revenue. All cuts are not necessarily good. There are places, even given the extreme tightness of the public finances, where we should be spending more money because of the return it would yield.
I have no doubt that every Member of this House understands and sympathises with the plight of the Irish Shipping workers and I have no doubt that they will be the main beneficiaries of this Bill. I have no doubt that Members of this House would be only too happy to find a way to help the said workers. Their experience was a very emotional one. I was personally blamed for their plight in very emotional terms over a prolonged period. Indeed, during the general election there was a campaign against me personally by the said people in my constituency, as if I was personally to blame for their plight. But these are the burdens of public office. In the case of Irish Shipping the course pursued was the only course possible. When the decision was made and announced in this House the then Leader of the Opposition, Deputy Haughey, now Taoiseach, and the then shadow Minister for Transport, now Minister for Tourism and Transport unthinkingly, as was typical of their four and a half years of Opposition, promised that they would set up a new Irish Shipping. Of course that was a false promise and an unwise one, giving rise to false hopes among a very adversely affected section. It was a promise that could not be fulfilled. This policy which I have pursued and which will now be enacted in this House was the best possible way of dealing with the aftermath of the collapse of Irish Shipping.
I do not want to burden the House too long with the history of the situation. In the aftermath of the collapse of Irish Shipping I set up the Committee on Strategic Shipping Requirements, an interdepartmental committee which also included representatives of the Irish Union of Shipping. It issued its report and a summary of recommendations of that report was published in the Green Paper on Transport which I published. I am surprised at Deputy Mac Giolla talking about the publication of the report when already the findings have been published in the Green Paper. The findings are quite clearly what we see as the basic strategic requirements.
I hope that the effect of this Bill will be to provide on the Irish register, with Irish crews, more, and much more in due course, than our basic strategic requirements. Here is an industry which can truly be developed notwithstanding the deep and prolonged recession in shipping throughout the world. Here is an industry which in Irish terms, by wise policies, can be extended and made bigger than it ever was before, giving more employment than it ever did before, because the policies being enacted here today in this Bill and earlier in the Finance Act are policies which open many doors. Up to the day I left the office of Minister for Transport which was then responsible for shipping, there were many expressions of interest and very active inquiries as to when the legislation would be through. I know there are several shipping acquisitions waiting to be completed when this Bill is enacted. That is why I hope it can be speedily passed by this House and by the other House and signed by the President.
There is one other leg to the changes in shipping policy which were brought about by me, the manning levels on our ships over which the Marine Survey Office of the Department of Transport, now the Department of the Marine, has control. The chief marine surveyor eased the manning levels greatly so that our ships could be on a competitive basis with our competitors. Indeed, he also extended the distances certain ships could travel. The boundary of the continental trading area was extended twice and other trading areas were also extended. Those moves had a beneficial effect on the economics of the Irish shipping industry.
There is little doubt that there are great prospects for the future. It is amazing that as an island nation we have had very little shipping on our register over the years. It is extraordinary that a country like Norway with a population less than ours has had for decades a huge merchant shipping fleet giving enormous employment. At its peak that industry employed between 50,000 and 60,000 people in Norway. It would be great for Ireland if we had a shipping industry that would employ that number of people. I do not pretend that that is a possibility in present world shipping circumstances or given the depth of the world economic recession but, notwithstanding those problems, we can if wise policies are pursued by our Ministers achieve good results in the shipping industry.
We have another shipping company and it is no secret that it is in serious difficulties. I am referring to the B & I which is now the only State-owned shipping company in these islands. It is the only subsidised and loss making shipping concern in these islands. The B & I, in the main, services the routes between Britain and Ireland and has some cargo service to the Continent. Sealink operate services on the Irish Sea and make a profit but the B & I do not. The House will recall that as Minister I made strenuous efforts to turn around the B & I. Indeed, the group of State companies for which I had responsibility were loss making concerns when I took office but, with the exception of the B & I, they were profit making or heading towards a profit when I left office.
The Bill may not relate to the B & I but it raises questions about our shipping policy. For some reason which I cannot explain that aspect of shipping is not the responsibility of the Minister for the Marine; it is still the responsibility of the Department of Tourism and Transport. That represents a bad division of responsibilities. It would be a great tragedy if the B & I were to close but I could not support or encourage a continued pouring of taxpayers' money into that company if there is no clear light at the end of the tunnel in regard to it. When I was Minister in 1985 the Government decided to invest in the B & I £20 million and £6 million for three years thereafter. The targets set for the company were that in 1986 they should reach a profit level of £500,000 but the figures for 1986 will probably be the worst figures ever recorded by the B & I. It is possible that they will be as high as £14 million or £15 million. I do not know what the projections are for this year. There are some explanations for part of that gulf, notably my decision as Minister to have a definite policy of low access fares. We decided, because of the overall economic benefit of low air and sea fares, to take on board whatever drawbacks there would be from any State companies arising out of our pursuit of such a policy.
When one balances out the disadvantages for the B & I of such a policy against the advantages for Aer Rianta and Aer Lingus, one will find that there is no net loss to State companies. In fact such a policy can prove of great advantage to the economy. It is right and fair that the targets set when the investment decisions were made in regard to the B & I should be adjusted accordingly. That was made clear by me to the board of B & I when we announced our low access fares policy. It is worth noting that that policy has had good results, particularly on the aviation side. An estimate in the Department of the effect of that policy on the B & I annually was that it would cost them in the region of £5 million per annum or, perhaps, £6 million. That was a good deal less than half of the gap between the £500,000 profit target and the estimated £14 million loss.
What has gone wrong in the B & I? Something serious has gone wrong despite the decision to hire Alex Spain, a very worthy person, the enormous investment made and the major changes in personnel policy. An approach which I favoured as Minister — it was one which did not find favour with my colleagues in Government — is one which merits consideration. It was my view that the huge burden of debt attached to the B & I should be lifted from the company. That could be done by setting up a subsidiary company to whom the assets of the company would be ascribed with a commensurate amount of debt to give them a good debt equity ratio. My suggestion is that the Exchequer should take up the tab for the rest of the debt of the holding company and, perhaps, discharge it over a period of years so that there would not be an upfront call on the Exchequer. That approach has a number of advantages. One is that the exposure of the Exchequer is clearly defined and, secondly, it would give the company for the first time in many years a healthy balance sheet thereby enabling them to seek private investment for their ongoing capital needs.
Many people in the company, in the trade unions and, presumably, in The Workers' Party would on ideologicial grounds oppose that but I would much prefer to allow private investment into the B & I if it meant saving the jobs now threatened. I would prefer to save the hundreds of jobs threatened than to stand on the great ideological principle that there could be no privatisation of State companies. Admittedly, getting the balance sheet right is only one side of the need to make the company an attractive proposition for private investment because such investors need to see profit. However, if the mechanism I have suggested is used we can present a healthy balance sheet to private investors and if the performance is good over the next two or three years the company will have the propect of attracting private investment.
It is important that such a policy is pursued. One of the major problems in the company is that there is a belief that no matter what happens they will always be able to fall back on the State, that there is no need to perform profitably. One of the major advantages of private participation in that company would be the getting rid of that belief, that ingrained attitude.
