Dáil Éireann debate -
Tuesday, 8 Mar 1988

Vol. 378 No. 9

B & I Line Bill, 1988: Second Stage.

Minister for Tourism and Transport (Mr. Wilson)

I move: "That the Bill be now read a Second Time."

The main purpose of this short but important Bill is to increase from £96 million to £100 million the amount of additional share capital of the B & I in which the Minister for Finance may invest. This enables the Minister for Finance to purchase sufficient additional shares in the company to give effect to the recent Government decision to provide the company with up to £11 million in Exchequer equity in 1988.

The House will be aware of the recent troubled history of the B & I. When I took office in March of last year, I found a company facing major difficulties. A restructuring package involving substantial Exchequer funding which had been put in place in the course of 1986, aimed at turning the company round, had failed in that objective. Substantial losses had been incurred in 1986 and were similarly forecast for 1987 and subsequent years.

An Leas-Cheann Comhairle

I wonder if we could desist from holding illegal meetings in the House. The Minister to continue without interruption.

Mr. Wilson

In February 1986, in the context of proposals made by the board of the B & I to the then Minister for Communications for a financial rescue package aimed at restoring the company to viability, the Government approved equity injections totalling £38 million, £20 million to be paid in 1986 and £6 million in each of the years 1987 to 1989, inclusive, the 1988 and 1989 injections to be subject to the achievement by the B & I of profit targets determined by the Minister for Communications with the agreement of the Minister for Finance. The targets set were a profit of £500,000 in 1987; of £1 million in 1988; and of £2 million in 1989. The company had forecast a trading loss of about £5 million in 1986.

During the course of 1986, B & I received £20 million from the Exchequer. By March 1987, however, the company were in serious financial difficulties. The 1986 trading loss had been £6.8 million or £1.8 million more than forecast and far from expecting to meet their modest profit target in 1987, the company were, in fact, forecasting trading losses of nearly £15 million for 1987.

In May 1987, I brought the B & I situation to the notice of the Government and subsequently on 27 May I called in the board of the B & I and directed them to submit to me as soon as possible an agreed plan of action, for implementation in the autumn, aimed at restoring the company to viability. The company had already exhausted the £6 million Exchequer equity allocation for 1987 and, to provide time for preparation of the plan of action and to prevent disruption of B & I services during the peak tourism season, the Government agreed to provide the company with additional Exchequer equity of up to £8 million, of which £6 million would represent an advance of the 1988 instalment due under the 1986 restructuring package. In the event, the company drew down £5 million of this additional allocation in 1987. It recorded a loss in that year, including financial charges, of £10.6 million. In the two years, 1986 and 1987, the company received, therefore, £31 million in Exchequer equity. An Exchequer guarantee was also issued during 1987 in respect of bank borrowings of £6 million which had been incurred by the B & I with the Minister's consent in 1986.

Some commentators blamed the company's continuing losses on the impact of the policy of air transport liberalisation and lower air fares initiated by my predecessor in 1986 and greatly intensified by me since then. Indeed the B & I themselves would argue that competition from air services was a major contributory factor to the deterioration in the company's performance. I accept that the liberalisation of air transport did not make the company's job any easier. At the same time, any commercial organisation has to react positively to adverse changes in its commercial environment by developing and aggressively marketing new business initiatives and by reducing costs. This applies to the car ferry companies, including B & I, no less than to other commercial enterprises faced with challenging circumstances. Lower air fares cannot, however, be blamed for all of the B & I's problems. Major contributory factors in the deterioration in the B & I's financial performance were the company's disastrous strikes in late 1986 and early 1987 and inherent cost weaknesses in B & I's operations, particularly on the freight side.

In any event, I would have to say that the benefits to the economy and the community as a whole of lower air fares, greater air access and a boosted tourism sector far outweighed any adverse impact on the revenues of the B & I. The results of the crash tourism programme I initiated in 1987 bear this out. For the first time in the industry's history total tourism revenue is estimated to have topped the £1 billion mark. Over 2.1 million visitors came to Ireland in 1987 and total out of State revenue amounted to over £720 million. This represented an increase of 12 per cent and 11 per cent respectively on the previous year. Arising from this improved performance, Bord Fáilte estimate that 4,000 new jobs were created in the tourism sector in 1987. There is a question there of job equivalents.

It was against the background of substantial B & I losses that I directed the board of the B & I last May to produce a plan of action aimed at restoring the company to viability. The House will be aware of the long and very difficult negotiations between B & I management and unions which culminated in the submission to me by the board of the B & I in December 1987 of a plan of action which had the across-the-board support of the B & I workforce. I had indicated to them in May last year that there was not any point in coming with such a plan if there was not across-the-board support for it. It is only fair that I should acknowledge the very responsible and constructive approach adopted by the B & I unions, under the auspices of the ICTU, during several months of very difficult negotiations. I should also acknowledge the significant concessions made by the company's workforce in agreeing a plan to secure the B & I's survival. I also acknowledge the sustained contributions made by the Chairman and Managing Director of the B & I, Mr. Alex Spain, by the members of the board, and by the management of the B & I, towards achieving a viable plan of action.

The broad strategy of the B & I plan is to create a new low cost company able to compete in the increasingly competitive passenger and freight markets, through a reorganisation of services, the shedding of more jobs, a reduction in pay and changes in conditions of the remaining employees. The main features of the plan are as follows: a reduction of 585 in staff numbers from 1,464 to 879; a guarantee of industrial peace from the B & I unions until the end of 1990; an across-the-board pay cut of 5 per cent from 1 January 1988, a pay freeze until June 1989 and extensive changes in working conditions; and a reorganisation of car ferry services.

The B & I-Sealink agreement, which expired on 31 December 1987 was not renewed. The Liverpool service was terminated on 1 January while an independent B & I Rosslare-Pembroke service was resumed at the same time. The Dublin-Holyhead service has been intensified and now operates on a two round trips per day basis all year round instead of just during the peak season. The car ferry, the Connacht, will no longer be required and will be sold.

On the freight side, the B & I-Pandoro UK Trailer Service agreement has been replaced by a new agreement with Pandoro under which B & I will no longer be involved in door-to-door services but will concentrate on the port-to-port business only. The B & I's European container service will be made more cost efficient through the reduction of staff and other costs.

The implementation costs of the plan, which mainly comprise redundancy compensation payments, are being largely financed by the sale of assets, principally the Connacht. The bulk of the £11 million financing requirement for 1988 relates to payments of capital and interest on B & I's existing bank loans and bank overdraft facilities.

Having noted the company's plan of action and its across-the-board support by the workforce, the Government on 11 December 1987 agreed, on the basis of the plan, to provide the company with up to £11 million in Exchequer equity in 1988. The Government also decided to review the position not later than the autumn of 1988 on the basis of detailed comparisons of the company's performance against forecasts.

In view of the manner in which the 1986 restructuring package, which included Exchequer funding over a four year period, went so badly off line, I am sure that Deputies will agree that this time we must proceed more cautiously as far as the demands on the Exchequer are concerned. It is a very reasonable response on the part of the Government to the B & I's latest plan to allocate further funds up to £11 million for 1988 for the company and to review the position later this year on the basis of performance against forecast. The plan forecasts a small operating loss, that is before financial charges, for 1988. My Department will be receiving regular and frequent interim reports from B & I during the year and I myself will be closely monitoring the situation.

Before I conclude, I wish to emphasis one point. The future of the B & I cannot be assured by Government support alone. It is equally dependent on full co-operation by all concerned in the provision of continuous, reliable and efficient services. I have acknowledged the significant concessions made by the company's workforce in agreeing the plan of action with B & I management and I trust that the combined efforts of the board, management and staff will ensure that the new strategy of a slimmed down B & I will help the company to achieve a cost-efficient operation, to exploit new business opportunities and provide the type of low cost shipping services required for the development of our trade, tourism and general economic growth.

I commend the Bill to the House.

Mr. J. Mitchell

It would be irresponsible of this House to let this Bill through without a critical analysis of the history of B & I, and of its present state. It is fortuitous that, as former Minister for Tourism and Transport and for Communications, I have been asked to shadow this Bill through the House today. I suppose no one other than the Minister is in a better position to comment on the history of B & I than I. The Minister in his speech referred to the present problem of B & I and the latest explanation or rationale that exists within B & I for that state.

However, there are three main reasons for supporting the Bill. The first is that to close the company would cost the Exchequer a great deal more in the short term than to keep them going. Secondly, there is, in my opinion, a strategic national need for an Irish presence on the cross-Channel ferries. Thirdly, the B & I group of unions have contributed very positively to the salvage package recently negotiated for the company.

Notwithstanding these factors, the B & I Bill represents a mysterious black hole into which tens of millions of taxpayers' pounds have sunk without trace. For over 20 years now with an uncanny consistency B & I have never reached either the annual targets set for them or the projection for end of year outturns which the company make at the beginning of each year and, of course, each year a new explanation is given for the missed targets which in turn decorates the annual accounts as "exceptional expenditure'. The latest rationale for missed targets, as the Minister said, is the air fares competition. Management and unions alike are seeking refuge under the wings of lower air fares as an explanation for the fact that B & I's returns for 1987 are almost £20 million worse, in my calculations, than targeted, although this is obscured in the Minister's presentation. My calculations are that the targets which were for £500,000 profit in 1987 are now, when you add up all the different aspects of what the Minister said, something like a £19 million loss. They are trying to rationalise and blame air fares competition and ipso facto account for a £20 million deviation in their outturn for 1987 from that targeted.

I am culpable for the latest plight of B & I in the minds of both management and unions in B & I, but seeking outside scapegoats to blame has always been a hallmark of B & I, whereas in almost all cases the problems have been internal. In relation to the effects of lower air and sea fares on B & I's revenues, the Department's Estimate while I was Minister was effectively less than £6 million per annum. I made it clear at the time that the Government were prepared to adjust their annual targets accordingly on the basis that the overall economic benefits of lower access fares clearly outweighed their drawbacks for B & I. I am glad that that point has already been made by the Minister.

B & I cannot credibly ascribe a £20 million deviation from the 1987 target to air fare reductions. This is heavily emphasised by the fact that the other ferry companies serving Irish ports are all private and profit-making even after the air and sea fares revolution. Would Sealink still be on the Irish Sea route if it were not profitable to do so? They have nobody to blame or give them free equity. Would Belfast Ferries still serve the long Belfast-Liverpool route if it were not profitable to do so? They have nobody to give them free equity. Would Irish Ferries or Brittany Ferries still be serving the Ireland-France routes if it were not profitable to do so? Of course they would not. They are still making profits even after the air fare revolution and they have no scapegoat like me to blame. They have had to react competitively, to perform, to make profits, not just since air fares were reduced but for all those years when B & I were consistently losing money. I have described it already as a mysterious black hole.

Why then do B & I not make profits on their routes when all other ferry companies serving Irish ports make profits? With the exception of the Cork-Swansea company just set up, no other company get any subsidy or free equity. B & I are the last subsidised shipping company in these islands and they still manage to make enormous losses. Why do they not make profits? How then can they seek refuge in the air fares revolution when all other companies have managed to survive, make profits and continue in being even though they have no uncle in the Department of Finance to come out with another chit for £4 million?

To put it in a more comparative context, B & I were one of eight State companies for whom I was responsible when I became Minister for Communications in December 1982. At that time only one of those companies, Aer Rianta, were in profit and a tiny one at that. Major structural and accountancy improvements, major new approaches in the State sector turned the State sector round. That was one of the great achievements of the previous Government. Every one of those companies today are in profit, some of them substantially so. Aer Lingus, Aer Rianta, CIE, BTE, Great Southern Hotels, An Post and RTE have all been turned round and are doing well. Only one, B & I, have not reacted to the same restructuring and, even more, the same efforts of the Minister and the Department. Indeed, we went further with B & I than with any of the other companies. We want to exceptional lengths to bring in a top rate manager from outside at above Devlin rates. As the Minister has said, £38 million was committed to investment. The ships were overhauled, restructured and made completely modern and attractive. New companies were brought in to run the dutyfree shops but despite all these exceptional movements, this exceptional investment, restructuring of the board of management and new controls, B & I's performance was never worse.

The three year agreement with the unions is a ray of hope but poor industrial relations, at least in the sense of strikes, have never been a contributing factor to the company's perpetual problems. I know what the Minister has said about the ridiculous strikes that have taken place in the past year or so, particularly by the officers. The history of the B & I has been one of continuous losses way above targets set by the company itself, but bad industrial relations resulting in strikes was never a problem.

I have studied the question long and hard and I still do not understand where or what is the black hole of the B & I. It is a mystery to me that this company can suck in so many millions of pounds when all the other companies in the State sector and all the other ferry companies are making profits.

I believe the passage of this Bill today is advisable and necessary but for the reasons I have stated, I think it only right that Dáil Éireann should seek a final, independent and professional analysis of every nook and cranny of this tormented company. If we do not, the chances are that we will have yet another B & I equity Bill before this year is out, and certainly as an annual feature of the legislative programme.

I hope the Minister takes on board my proposal. I know the Oireachtas Committee on Semi-State Bodies have been examining the B & I in the way that they examine other companies, but I have some prescience as to the sort of information that is being fed to the committee by management and unions blaming all the latest failures on air fares which is totally absurd, especially in the light of the reaction and performance of the private companies who have to deal with the competition just as they have and have remained profitable.

I do not know if we should express the desire that this will be the last B & I Bill of this kind before the House, because there is some major problem in the B & I that we have not identified yet. We have to seek some way of limiting the exposure to risk of the Exchequer in the future, laying more emphasis than the Minister did on the fact that the future of the B & I will be dictated not from Dáil Éireann or the Department of Tourism and Transport but from within the B & I itself.

The Minister said that the Government alone cannot guarantee the future of the B & I. I would go much further and say that the Government cannot guarantee the future of the B & I. The only people who can guarantee its future are the B & I people themselves. In order to restrict the exposure to risk of the Exchequer I proposed — unfortunately it was not accepted by the Department of Finance at the time — that we would create an operating subsidiary to the B & I which would own the assets and be responsible for that part of the debts which equalled the assets, so at last they would have a one to one geared balance sheet, and if they wanted more investment they would have to justify it in the gilt markets or in the equity markets just as Sealink, Irish Ferries and Belfast Ferries have to do; the Exchequer would then take on responsibility for the holding company's debts. The exposure of the Exchequer would be limited and it would be absolutley clear and enshrined in legislation that if further funds were needed by the B & I they would have to be found in the equity markets. Unfortunately, that was not accepted. To my astonishment £20 million was agreed as an initial investment in the B & I, and tranches in subsequent years of £6 million each, giving a total of £38 million. Even after that massive investment we have losses beyond the bounds of reasonable explanation. Here again we have the Minister proposing yet another tranche of Exchequer subsidy, because that is what it is. We call it equity but in fact it is subsidy, and we will continue to have B & I Bills of this nature. I predict that we will have another before the year is out because the B & I will have run out of money. We will have one every year unless we take some more decisive steps.

It has become the custom in the western world in recent years for people to support the concept of privatisation as an ideology. Likewise there is a group very strongly of the view that all privatisation is wrong and that State enterprise is right no matter what. I do not belong to either of those camps. I do believe there is a major continuing role for State enterprise. As I said many times when I was Minister, the biggest enemies of State enterprise are often those who are its strongest adherents, refusing to co-operate with obviously needed restructuring and new practices. In 1982 there was a major crisis throughout the State sector. It has been said that there have been very significant changes in trade union attitudes and none better illustrated than in the case of the B & I. But there is still an ideological belief that certain things just have to be owned by the State and that to do anything else is somehow wrong or regressive or somehow antisocial. It is that sort of thinking that has consigned many of the our State enterprises to sure failure. Any enterprise, private or public, needs to be able to acquire and dispose of assets depending on developments. It often makes sense to realise gains from previous decisions, to dispose of assets that have gained in value and to provide much needed money for the company. Much of this is still resisted by some on the ideological left but these are matched in every way by those on the ideological right who want to privatise no matter what.

In the case of the B & I there is a very strong case for saying that this should be the last tranche of free capital that this House is prepared to approve for this company. There has to be a decisive new beginning. I suggest that this be done by setting up an operating subsidiary that owns the assets and has the responsibility for a like amount of the debts, the Exchequer to take on responsibility for the rest of the debts to be remitted over a period of years. That is the only way we have any hope of bringing certain realities home to the B & I or of ensuring that they act competitively with the other companies on the Irish scene, namely, Sealink and Belfast Car Ferries, Brittany Ferries and Irish Ferries, all of whom are operating profitably notwithstanding the air fares and the sea fares revolution of which I am happy to have been the author. I believe that the overall economic benefits of cheap access routes far outweigh any small drawbacks in the B & I. Even if we do not look at it from the broad economic point of view but from the State sector point of view, Aer Rianta are a booming company whose profits have been greatly enhanced by the increase in air travel. Aer Lingus, in the transport sector, are a booming company even though they thought the liberalisation of air fares would be the end of the world. Even in the limited State sector, the overall policy is correct and beneficial but in the wider economic area it is even more beneficial.

When the Minister comes to reply I would like him to outline some of the things he did not outline in his opening speech. What are the present projections for B & I's performance this year? What profit or loss does he expect them to make after this tranche investment? What is the outlook for B & I in terms of car and passenger numbers for this year? What is the present position in relation to their freight performance for this year? Perhaps the Minister could give us some sketch of how he sees the company developing in 1989 and 1990 not only in relation to the profit and loss account of B & I but also their balance sheet. What are his future plans for the company? Does he rule out another B & I equity Bill this year? Will he come to the Dáil with a B & I restructuring Bill along the lines I have suggested? The House deserves to know what the medium term outlook is for this company. I hope the Minister will give us clear replies to the questions I have raised and the underlying assumptions which give rise to those projections.

One of the consistent facts about the B & I is that their projections are never realised. That has been the case since 1965 when they were acquired by the State. I think the officials in the Department of Communications, as a rule of thumbs multiply by two, add ten, and take their first thoughts away. That is the way it is with B & I. I remember when we announced the four year investment package of £38 million and the bringing in of Mr. Alex Spain as Chairman and Chief Executive, B & I sources leaked to the media how unfortunate this was as we were heading for a greatly improved loss of £3.9 million compared with £7.1 million last year. They were buying this until I pointed to the history of the preceding five years of B & I's projections and the actual outturn, and that year turned out no different. The losses were not £3.9 million; they were several times that figure.

In conclusion I would like to say that this Bill is a holding operation. Clearly it is not the last we will hear of the B & I this year and we may hear more about them in the next session. Obviously, the Minister will not disclose his plans prematurely but he has a responsibility, in asking for these funds, to let us have some outline of the direction of his thoughts on how he will tackle and attempt to stop the haemorrhage of funds to plug the black hole which the B & I represent and which I tried valiantly to plug but did not succeed.

Mr. Cullen

In addressing in this Bill may I say I have an enormous feeling of déjà vu. I have been in this House for 12 months. The Minister and Deputy Mitchell have great knowledge about this matter. Either as Ministers or in Opposition, the same things have been said by both of them for the past five, six or seven years. The same problem is continually being identified by them. The answer is still the same, that is, simply to put more money into B & I. This is showing up the losses and that is how it has been since this company were purchased. Well in excess of £100 million has gone into this company. In a country of this size with the limited resources we have, how can that be justified? There are options. While Deputy Mitchell has alluded to them, he did not say exactly what he means. It seems to be something to do with ideological views of privatisation on the one hand, which are incorrect, and ideological views of public holding companies on the other hand, which seem to be correct.

I do not have any ideological hangups about B & I. There are tremendous opportunities out in the market for B & I. There is no doubt that other companies — as a matter of fact all the other companies — operating on the Irish Sea both to the UK and to the Continent are making substantial profits——

Mr. J. Mitchell

Nonsense.

Mr. Cullen

——and here we are with the B & I who have failed on incredible levels over the years. Not only are they making losses but they cannot hit their targeted losses. Their projections are being doubled on a consistent basis. If Deputy Mitchell is unable to find out where the black hole is I can tell him I am at a loss to see it but I will not stop at that and look to the past. I want to look to the future.

In looking over the debate on the British & Irish Steam Packet Company Limited Bill, 1986, in 1986 I find it extraordinary that the Minister, Deputy Wilson, who was then in Opposition referring to ICL said and I quote from the Official Report, 11 June, 1986, Volume 367, columns 1763 and 1764:

I know there are difficulties in regard to the sale of ICL and I outlined our party's policy in that regard. We want ICL maintained in Irish hands, public, private or public cum private. We are not particularly worried about the combination but this profit making company should be retained in Irish hands.

All I can say is thank God that B & I did not purchase and that this Government did not purchase that company at that point in time. Had it been purchased we would be in a worse situation than we are now.

Irish Ferries, as they are known today, are making a profit in the market place. I suggest to the Minister that they could be a potential purchaser of the assets of B & I. It is obvious that the company laden with debts would not be attractive to anybody or even be feasible for consideration. I am not suggesting it. One of the inherent problems we now have with B & I is that, because of the huge financial constraints on the company, they are being forced to cut back in certain areas which I do not think are the correct decisions to make in marketing terms. They may be the only decisions that company can make because of the constraints of the financial situation, but that is not a healthy situation for the potential development of the Irish sea routes.

Having regard to all the debates we have had on the potential for tourism it is wrong that we should be losing potential tourists from various areas within the UK because of cutbacks in the B & I. This cannot be sustained. A sum of £11 million and upwards is going into that company purely to show up what has happened last year. The Minister said:

The bulk of the £11 million financing requirement for 1988 relates to payments of capital and interest on B & I's existing bank loans and bank overdraft facilities.

Basically we are showing up the situation. It is inevitable unfortunately — the PDs and I would like to see a completely different picture — that the Minister will be back in the House within the next 12 months with proposals for some other way of funding B & I, more or less through the Exchequer. I understand we cannot pull the plug tomorrow because of the forthcoming tourist season and all of the huge problems that would create but I had hoped the Minister would refer to some definitive course of action he could take over the next few months. I have been present on both occasions when debates took place on B & I in this House. I will quote from the Official Report, Volume 373, column 3216, of June 1987. The Minister said:

I have told both the board and representatives of the B & I unions, whom I also met recently, and I got a very good response from them, that if the company are to survive it will be necessary for the board, management and staff to face up to the need for drastic and radical change which will eliminate the company's losses. I have directed the B & I board to submit to me as soon as possible a plan of action for implementation in the autumn. Between now and then, the Government will be considering the position with a view to a long term policy decision.

The Minister repeated all that in October when he was speaking on the Estimates with regard to B & I and I will not bore the House by repeating it.

Where is the plan? Is the plan the Bill? Is this what we have been waiting for? Is the simple answer that once again we stick another £10 million or £11 million into B & I and let them carry on regardless. I was very conciliatory towards the Minister in those speeches of last year. I encouraged him to do something to finish the matter but I cannot stand here today in all honesty and hold my hand over my heart and say I am satisfied with what has happened. I do not think the Minister can be satisfied with what has occurred. It is obvious from his contribution that there is a huge level of frustration with B & I. It is obvious to me that he has tried to do something but it appears that it has all come to naught, for whatever reasons I do not know. The frustration is obvious in that he has very little to say about the future of the company. I find that a strange position.

We, in this House, are capable of making a definitive decision with regard to the future of B & I. We can do that here today, if we so wish. The Minister can bring plans forward today, if he so wishes. It is obvious that B & I are incapable, and they have gone out of their way to prove they are incapable, of making decisions. I respect what the chairman of B & I achieved over the past few months in times of crisis. I respect what the workforce and unions did when they realised finally all the mistakes they had made and their outrageous carryon in years past. Unfortunately, is it too little, too late? If that agreement had really borne fruit I would have expected the Minister to come in to announce the next stage beyond the agreement and to tell us in the House today what exactly the company will face and where the Government stand in regard to the company. I think that is a reasonable request. I think it is something the Minister should want to do. It is something we in Opposition expect from him.

Cartel arrangements existed on the Irish Sea routes over a long period. This again was referred to at length in 1986 by all Deputies, including Deputy O'Malley. B & I suffered greatly under these arrangements. I want to raise some points on this matter as it affects the future, and I do not wish to dwell on the past. Sealink have a massive operating advantage on the Irish Sea because they have control of the ports in the UK. I believe the Minister acknowledges this fact and would agree with me. Until such time as we get our act together in the harbours in this country, we will never be in a position to compete fairly with Sealink on the Irish Sea. Control of the harbours is one of the master strokes of Sealink operations. Because they can dictate the times in the first instance that are suitable for them to use their own ports in the UK they get the prime sailing times from every single port. B & I have then to agree to the times that are left which are obviously outside the peak convenient times from a business, tourist or freight viewpoint.

Mr. J. Mitchell

——and trains.

Mr. Cullen

The same thing applies to trains. How are we proposing to compete with that? This question must be taken in conjunction with the future we are to have in the operation of a profitable seagoing ferry company out of this country.

It has already been identified that B & I have the potential to be profitable. However, there are other things that the Government can do to ensure that companies such as Irish Ferries and a revamped B & I have a real chance to compete on an equal footing. It is ludicrous to say that we simply take one course of action and the rest follows. That is not necessarily true. It is interesting to note that when the 1986 Bill was before the House, Deputy Nealon — who was obviously standing in for Deputy J. Mitchell — said this was the last straw, this was the end of the road, that this could not happen again. He said we have reached the end, we have got to shore everything up, we have to stop here. It was made clear to B & I that no more funding was going to be made available and that they would have to stand on their own two feet. Yet, here we are two years later in the same situation, and the same happened in 1985, 1984, 1983 and 1982. This obviously cannot simply go on. We are losing out in the development of our tourism and in freight transport costs.

I want to turn to the problem of freight transport costs out of this country. It has been identified by Irish business that the huge cost of transport out of this country is a major problem and we at this stage are doing nothing about it. I ask the Minister whether it would not be more imaginative for him to come into the House and at least say, for instance, that we are going to create a free port area in Rosslare, that we are going to give our transport operators on a commercial basis a cheaper rate of diesel so that we can start business up and running in a far more definitive and positive way. Would money spent in that way not be of far more benefit in terms of job creation and in the creation of connections throughout Europe with the oncoming Single European Act and all that that whole area entails?

Imagination is necessary in this whole regard. There are options for the Minister. Deputy J. Mitchell has alluded in some way to these type of things without actually naming them. However, I am saying what they are. It is not an ideological thing but simply a matter of commonsense. Students at school are taught the importance of getting a balance sheet right but we behave in this House as though we cannot find an answer to the problem. In the business world you would not get away with that, and quite rightly so. Politicians should not be allowed to get away with it either. We are failing in our responsibility if our response to the people is that we do not know the answers, or that we are in some way unable to find them. If that is what the Government and certain people in Opposition come up with they should not be here because that is not the answer. The answer is in the whole spectrum of what we can do in regard to B & I.

Mr. McCartan

That is a very profound answer.

Mr. Cullen

I would like to know from the Minister if there has been any contact with private interests. I agree with Deputy Mitchell in this regard. It is vitally important — I have stated this before — that we have an Irish-owned ferry company operating out of this country. I would not like to see a company from abroad being responsible for the operation of ferries in this country because strikes could totally strangle our whole access to markets, as happened some time ago with the agricultural industry when goods which we had to send to the Continent urgently were destroyed. Has the Minister or his Department been approached by any private interest or have the Department gone into the marketplace and put out feelers for bodies with an interest in the assets of B & I? Has the Minister requested that any private interest might take over B & I? These things should be considered, rather than somebody shouting ideological viewpoints at the Minister. They do not worry me and I am sure they have never worried the Minister.

It has been mentioned earlier that the competition in air fares and the steep reduction in the cost of air transport in this country is somehow responsible for all the ills of B & I. I do not accept that, I am sure the Minister does not accept it and anybody in this House would be very foolish to accept it. There are certain factors with regard to low air fares that should be considered. It is right to say that because of the advent of lower air fares the trade and marketing perspective of B & I would naturally have to change but that has not happened. B & I did not react in time to what was happening on the air routes. Because of their failure to react, they are now saying in a very simplistic way that air fares came down and we lost our passengers. If every business in the country was run on that basis they would all be out of business.

There are many factors involved in the whole B & I spectrum. Has the Minister received any definitive plans from B & I as to how they can get into the added value tourist market? There is a much bigger spin-off from the type of tourist who comes here with his car and his family than there is from the person who comes in on a plane, stays in one place and goes away again. The market in the UK is huge. The potential for us on the sea routes has not been tapped. We need to garner the potential in that area. B & I should address themselves to a marketing concept. They should not just take a ship from point A in the UK to point B in Ireland and think that is the end of their role. That is only the instrument whereby they bring about the final end of their business. They are involved with people, as is anybody involved in transport or tourism, and at the end of the day it is they who pay the piper.

The options available to B & I are vast. I am disappointed that there has not been some formalisation from B & I in this regard — otherwise, I am sure, the Minister would have adverted to it — as to how for the coming season they will tackle this situation. I suspect that the Minister's reply may be that the task force which he has set up will take care of this whole area. That, on its own, is not the answer. This is part of an overall strategy that must be co-ordinated between the ferry company on the one hand and how the tourism aspects are promoted on the other hand. I would like the Minister to say if any discussion has taken place on this whole area which is of great importance to us in the summer months. We are now well into March and bookings are taking place at an enormous rate. I suspect that we have lost out on many bookings to the Continent and it is very sad if that proves to be the case.

I have referred to the tourists coming here in cars, to the added value that we offer and the opportunities open to B & I in that regard. We have many amenities here. We do not have to spend vast sums of money, as other countries do, to create false amenities, as it were, or man-made facilities. We have all the facilities that many people on the Continent and in the UK are only too willing to come to this country for, but that is not happening because for a number of reasons these things are totally unco-ordinated.

There is potential for development of continental routes out of this country. If B & I were in a marketing position they could open up routes in that direction. The vast bulk of people taking holidays on the Continent do not stay in three star, four star or five star hotels; they use the camping facilities throughout the Continent and they travel by car. There is a fly-drive element but many people drive their cars great distances. I know, from going to Denmark regularly where my wife comes from, that a great number of tourists drive to that part of the Continent. There is not an exceptionally hot climate there but people drive long distances on holidays and the added value that brings into the country is tremendous.

Recently the Minister stated that Germany is the largest single tourism market in the world but we have only 1 per cent of that market. There is no reason why we should not be planning down the road. One matter that will affect us in the future is the channel tunnel and the potential it will hold for us on the Irish Sea. We will not be in a position to build a chunnel for the foreseeable future but there will be a huge increase in volume of potential tourists from the Continent through the UK. It is not unreasonable to ask what plans B & I have in that regard. The potential is there for that company and I see no reason they cannot make a profit. They have been utterly spoiled over the years and lethargy has destroyed the whole ethos. As I have said earlier, efforts have been made to counteract that and I respect those efforts but I want to see what the follow-on will be.

The other factor that will affect us in the next few years is the change in the market in 1992. Ninety per cent of goods transported out of this country go by sea and in this regard there will be a great need for an efficient, well operated company. B & I do not have to concentrate solely on the tourist market. That is a very important area with great potential, but how we ship freight in and out of this country is an extremely pressing question which I believe comes within the realm of what the B & I will do in the future.

If this Government at interdepartmental level are discussing areas I believe they should be discussing, this should be done in conjunction with other issues and not in isolation. My great fear about this Bill is that, unfortunately, it will go through on the nod at 7 o'clock and will then fade away, and the B & I problems will also fade away until once again we are faced with another crisis. It is fundamentally wrong to think we can deal with the problems of this company in isolation. The Minister is to be commended for the way he has tackled air transport, but can we not apply the same dynamic approach to the operation of our ferries which have great potential?

By getting this Bill through the House this evening we will be once again putting money into the coffers of the B & I. I hope the Minister will answer the points I raised as well as those raised by Deputy Mitchell. We in the Progressive Democrats cannot support this Bill. We do not want a repeat of what has happened time and again. If something definitive was being done and if we could see this as the final measure, things might be different. I can see the frustration this is causing the Minister and Deputy Mitchell because they are repeating what has been said many times. They are very disappointed having to do this, and I do not blame them. As I said, their frustration is obvious. Obviously Deputy Deasy did not want to contribute to this debate and go through the same old rigmarole. As a colleague from Waterford, for whom I have a lot of regard, I do not blame him. It is only right that one party in this House will say enough is enough, not just for ideological reasons but for reasons which are important to the future development of this country. We must call a stop because there are other options which must be taken.

In his speech today the Minister said, "The future of B & I cannot be assured by Government support alone." This was said also in 1986 and 1987. I will await with interest to hear what the Minister says when concluding this debate. Maybe he has come here simply to whet our appetites and has something of great interest to reveal later this evening. I sincerely hope so and I will welcome it. If he makes a concrete suggestion I will review my position but what I have heard here today is not satisfactory. Things have gone too far and we are prepared to call a halt. Nobody has had the courage to do that up to now but I am not prepared to come back into this House and repeat on another occasion what I have said today.

Mr. Kavanagh

The Labour Party will support this Bill but we want to comment on the problems of this company. We have seen the traumas experienced by the B & I for many years and the comparisons made between this company and others operating in the same area. We know of the efforts which have been made by the Government and management and staff in recent times to get this company on a firm footing. Everybody in the country wants to see that happen. Everybody wants to see the B & I operate profitably and successfully. We would all like to see the final trading figures in the black.

We should look at the history of this company and query the black hole which has already been mentioned. The previous Minister with responsibility for this company inquired where all those tens of millions of pounds went. The Joint Committee on Commercial State-Sponsored Bodies are looking very closely at the history and problems of this company and are producing a report. As a matter of fact there are two of us in this House who should be in Setanta House where this company are being discussed and a report being prepared for discussion in the Dáil at a later date. It is important that this Bill was introduced today because I believe the decisions that have been taken, and that will be taken later tonight, will give the B & I a breathing space to get their act together and to meet some of their problems and, hopefully, overcome them.

It is important to put in context why this company seem to have had problems over the years. When the board of the company set out the corporate objectives in 1965, I am sure they met with the general approval of the House. The objectives were to provide and develop a modern, efficient, profitable, national and comprehensive surface transport system to and from Ireland. When the Joint Committee on Commercial State-Sponsored Bodies looked at that company in 1978 — and various committees have looked at that company over the years — they felt the B & I included broader obligations in their corporate aims. On page 17 of the report produced in 1979 they said:

The B & I sees itself performing a primarily commercial role; to that extent it retains a strong market orientation and a desire for financial targets. However, it would appear to the Joint Committee that it includes in its corporate aims obligations of a broader nature. This view was confirmed during the taking of evidence, when a B & I representative stated that the Company had an overriding social obligation to the community and that concrete evidence of that is the money expended in the building of new ships at Verolme, so as to keep the business at home in Ireland. To the extent that the Company has to incur significant expenditures in meeting social and national obligations, because the Government requires it to do so. The Joint Committee recommends that such costs should be clearly identified and an indication given of the extent to which they affect the commercial success of the Company.

The latter part of that recommendation was never carried out in the production of accounts and the showing of the cost to this company down the years of carrying out social and community obligations on behalf of this country at the direction of Government. This was a commercial company whose original aim was to be efficient and profitable and to operate a national, comprehensive transport system. However, that is probably where its problems began. The Connacht was built in Verolme Dockyard in 1978 at a cost of £16 million and was designed for the Cork-Swansea route in addition to a summer service to the Continent. Because it would be necessary to compete with other companies permission was refused at that time for that summer service. I mention that by way of an example of how losses occurred at that time. The Leinster was built in Verolme Dockyard in 1980 at a cost of £24 million. It was exactly the same type of vessel as the Connacht but, built two years later, the cost had risen by £8 million. I might add that, on that occasion, the B & I did not require that vessel at all but — for what would appear to have been electoral reasons — were told it was being built anyway. It will be seen, therefore, that losses were incurred on account of interference by Members of this House, in particular members of the Government at that time, leading to some of the problems encountered by the company in those early days. There was also an instruction issued to the company for the retention of the Cork-Pembroke service, again for political reasons, its cost having to be borne by the company.

There were various other decisions taken over the years, one when I was a Member of the previous Government, in relation to the imposition of a travel tax to be imposed on everybody travelling out of the country whether by sea or air. Certainly that has had a detrimental effect on sea travel. Take the case of a child travelling to London with the B & I line on a fare costing £6, the imposition of that travel tax of £5 almost doubled that fare. An adult travelling on a fare costing £11 had the same £5 imposed whereas the budget air fare to London would be approximately £91 and would attract the same £5 travel tax. Let us suppose that one decided to travel to New York on a first class air fare, which would cost in the region of £1,200, that fare would still attract only the £5 travel tax. It will be seen that the imposition of that travel tax acted as a disincentive to the fare structures within the B & I. Perhaps the Minister would reconsider the effectiveness of that travel tax which would appear to have been imposed in a budgetary fashion rather than by way of ensuring equity in travel fares as between air and sea.

The company had to accept decisions taken and encounter problems not of their making, which cost them dearly over the years and placed them in a very difficult position. It is my belief that certain management decisions added to the problems of the company. For example a Jetfoil was bought some years ago which was found to be totally unsuitable for the open sea. It was the type of vessel more suited to service in the Mediterranean where they do not encounter the same storms and difficult waters between here and, say, Liverpool and other English ports. That Jetfoil remained in Arklow for several years before being sold at a loss of almost £3 million. Surely somebody with naval knowledge or experience within the company would have known it to have been a vessel totally unsuitable for use between, say, Holyhead and Dún Laoghaire or Liverpool and Dublin.

The types of decisions taken over the years have had repercussions more on the workforce of the company than on management and the workforce have had to take the brunt of decisions to restructure the company. If one looks at the employment position within the company one finds that the workforce has been reduced from almost 1,900 in 1985 to approximately 700 or 800 as a result of the latest agreement reached between the Government, the company and the workforce. In fact in 1985 there were 1,829 people working in the company. In 1986, under a deal done by the previous Minister, that workforce was reduced to 1,464. The latest agreement will see a further loss in the workforce of 585, so it will be clearly seen that the greatest losers in all of this have been the workforce at all levels.

If, as has been suggested, some other independent, commercial company were to take over from the B & I Line and all of their operations were to close that would not mean the end of Government commitments to the company over the years. There have been debts accumulated over the years which will continue to have to be repaid and which will amount to quite a large sum this year. When the current year's accounts are prepared, taking into account the latest agreement reached, undoubtedly they will show a loss on account of heavy interest charges accruing on outstanding liabilities.

The Minister, unions and management have come to an arrangement in an endeavour to render the company a slimmer, more active, acceptable one to the general public, one that will be able to fulfil its original mandate. We do not foresee the company becoming profitable because of the heavy interest charges outstanding and which the Minister admitted himself. However, he did not say how long these commitments will continue or what will be the likely outcome on the profit and loss account in future years. One can only hope that their future activities will result in their making a profit, when it will be possible to ascertain how the company are performing under the new arrangement.

The last accounts we have are in respect of the year 1985. In the course of his remarks the Minister indicated that the accounts for 1986 are available to him but not to the general public. The 1985 accounts include extraordinary items to the extent of about £51 million. These extraordinary items deal with the writeoff of various ships, previous arrangements for redundancy packages, for reductions in staff and the general way depreciation is handled in the accounts. These have absolutely nothing to do with how the company were run by their staff and the people involved in the day to day running of the operations out of Dublin and Dún Laoghaire. These arrangements were made because of decisions made, not with the staff and the ordinary management, but between Governments and the board of directors. Because of that, I suggest to the Minister, this company have received a great deal of criticism which perhaps they do not deserve. The criticism should be laid at the door of anybody who was in Government when the various decisions were made, and I think that refers to many Governments since 1965.

I am glad the Minister made an attempt to avert the very serious situation which occurred last year. The rescue package which has been agreed between the unions, management and Government will give a breathing space to the company. It is only a breathing space because, unless proper decisions are made in the future, unless we can ensure that the company are given reasonable treatment on the other side of the Irish sea, say in Holyhead, and unless the conditions for the company are improved over what they are at present as against those arrangements which the Sealink company now have, the company will operate at a disadvantage.

I looked at the jetty arrangements in Holyhead in late 1986, and I can only say to the Minister that the ramps provided there for the B & I boats were something similar to cattle ramps. I hope things have improved in the meantime because fair treatment was not being meted out to the B & I by the organisation in Holyhead. Promises were made to me on that occasion that improvements would be made. I hope they have been carried out and that pressure is being brought to bear on the people running the port in Holyhead, which I believe is owned by the Sealink company. I hope the arrangements will give an even break to the B & I in operating out of that port which I believe will be the most important one for them during the coming years.

This company can be profitable and do business. Efficiency can be brought back into the company which will put them on a sound footing for the future. As a result of what has been achieved by the workforce and what has been agreed to both now and in the past, profit can be made but it will be eaten into by the very heavy responsibilities which were entered into prior to 1986-87. More business can be brought to the company through the arrangements that have been suggested. There is a great need for the continuance of this company in public ownership. They have to carry out a responsibility on behalf of this country. They cannot be just closed down and handed over to the vagaries of some other operation, or let go to somebody else. They came very close to that last October or December but I am glad it did not happen.

Because of the complexity of the problems of this shipping line, there is obviously no simple solution to these problems. Job cutting and cost cutting are not simply the solution. The company require a far deeper and more intensive re-organisation than simply coming to an agreement with the unions and organising a reduction in the numbers operating the company. Their marketing must be improved and there must be increased efficiency, flexibility and innovation in the company. This must be brought about by a more enlightened management. I believe the B & I staff can be relied on to contribute to all these essential areas in the future.

The Minister has given a breathing space to the company and he and the Government are to be thanked for that. He will have our support for this Bill. Whether in a joint committee or in this House, this party will continue to keep a close watch on the progress of this company in the years ahead. We believe they are an essential part of surface transport for this country and we know the arrangements that have been made and the contributions of all concerned will lead to the essential changes which are necessary for the existence and improvement of the company in the years ahead.

Mr. McCartan

I intend to be very brief in response to the Minister's Second Stage speech on this Bill. When one looks at the Bill, its purpose and intent, one wonders at the earlier furore in the House with regard to the period of time being made available for a discussion on the Bill. It is very simple and straightforward in its intent. Its purpose was mapped out for us, not just on the publication of the Bill, but by previous Governments and by the past history of this company which we seem anxious to avoid in considering the status of the B & I shipping line. We are simply agreeing to a necessary and inevitable contribution to the continued future of the B & I line.

It is also significant that there is not one amendment coming from any of the benches which were so vocal in signalling the shortage of time available. Having listened to the contribution from the Progressive Democrats speaker, Deputy Cullen, and to the succinct single point he made, I wonder how much more time that party would have put to good use in any debate on the Bill and its intent. As I said it is succinct and to the point, has a single purpose and for that reason The Workers' Party indicate their support for the Bill.

The history of the B & I has been referred to in passing. I believe that one of the significant facts of its history has not yet been mentioned, that is, that it grew out of the failure of the private sector in the area of shipping. The B & I came into being in 1965 because the company who previously owned the shipping line were in a disastrous financial situation. The Government of the day took a decision based on reasons of economy, strategy and prudence, which apply equally today with regard to the existence and continuation of the company. The company, once established, had major disadvantages attaching to them from their previous pre-State ownership, from which, in effect, they have never significantly been allowed to recover. They had problems of interest payments on huge borrowings to capitalise their development.

In the earlier years their was no other way in which they could have obtained their revenue, irrespective of profitability or otherwise. They could never have matched the necessity for capital investment needed to build their fleet and develop their services. How, may I ask the great advisers on better business management who have contributed to this debate so far, could the money have been raised and the company developed other than through borrowings which have involved the company since then — as is the unfortunate legacy of almost all State and semi-State companies — in massive interest payments on their capital borrowings?

Mr. J. Mitchell

But they have all proved themselves.

Mr. McCartan

These are facts in the history of the company that contributors to this debate simply want to set aside. They want to lecture the company and the Minister on how better to run their jobs, ignoring very fundamental economic facts. The depreciation of the fleet over the years, coupled with the instances indicated by Deputy Kavanagh, constitute a very major problem with regard to the control and development of the B & I. It is much more interesting to ask how decisions were taken, if we are to take Deputy Kavanagh's word for it, and I have no reason to doubt that, on the imposition on the company of stock that was not particularly suitable or with regard to services that the company should supply which were particularly desirable, economically or otherwise. How were those decisions arrived at? What great brain either within the Government at political level, or within management level in the company, agreed to the type of arrangement indicated with regard to the MVs Connacht and Leinster and the Jetfoil? How was the decision taken with regard to the maintenance of the Cork-Swansea route? These are matters that we could spend a little more time analysing and understanding, so that that type of decision will not be taken in the future. It is all very well in a debate like this to say let us forget the past, as Deputy Cullen has said.

Mr. Cullen

I suggested looking to the future. I cannot change the past.

Mr. Kavanagh

We must look to the future.

Mr. McCartan

There is no point in forgetting the past if we do not look at the mistakes that have been made with regard to the B & I, or understand why those mistakes were made and rectify the situation so that, in looking to the glossy, rosy future that the Deputy talks about, we will be in a position to enable the B & I to tackle that future in an enlightened and constructive way.

Mr. Cullen

Is the Deputy saying that that has not been done?

Mr. McCartan

If the Government continue to allow political decisions to be taken without consideration of the development of the B & I decisions, that will saddle that company with the disastrous financial legacies that such decisions impose, we will never get the company right. All these rescue packages introduced in this Dáil and forced on the workforce of the company will continue until the inevitable happens — when the B & I will probably have to be scrapped.

Mr. Cullen

That is what we are saying.

Mr. McCartan

The Deputy is not saying that and I shall explain why I do not believe that the PDs or Fine Gael are saying that. They talk about the need for a more streamlined, more efficient arrangement. Deputy Cullen suggested that Irish Ferries could do it for us. That is not what I am talking about here. I am talking about an unambiguous commitment to the B & I shipping company from all parties in this House. It is incredible to hear people in here saying that the B & I should be getting on with the job out there, forward looking, competing against the odds, out on the open seas, developing and doing all the things that we want them to do but we in here spend our time tearing lumps out of the company, deriding them from top to bottom——

Mr. Cullen

I did not do that.

Mr. McCartan

——describing them as inefficient, incapable, having a past that none of us wants to examine or understand and without giving concrete suggestions as to how the matter can be put right. All talks of aspirations, in my respectful submission, will not put the B & I right until we understand the existing structures between Government and the company and within the management of that company which led to series of disasters that was outlined and itemised for us here by Deputy Kavanagh. Unless we tackle that political perspective, all the other rhetoric we have heard will not achieve one iota of improvement.

The question of ideology has been mentioned again by the Fine Gael and PD contributors. There is a suggestion here that the spectre, or shadow, of ideology is raised only when it has to do with protection of the B & I company or of the State sector, that that ideology is the sole preserve and concern of the left.

Mr. J. Mitchell

I made the opposite point.

Mr. McCartan

The point that I want to make at this stage is that the arguments put forward for the introduction of privatisation into the B & I is as motivated by ideology as anything argued by me or anybody else who talks about the protection of the existence of the B & I and their future development in public hands.

Mr. Cullen

I did not say that either.

Mr. McCartan

One of the most important features of the company is its status——

Mr. J. Mitchell

There is no strike.

Mr. McCartan

——its strategic importance to Irish industry and to the Irish economy. Many of our major exporters avail of the B & I as access to and egress from the Irish market. When we talk about the strategic importance of the existence of the B & I, it must be understood that that strategic importance can be preserved only so long as the company remain in public hands.

Mr. Cullen

Not at all.

Mr. J. Mitchell

Not at all.

Mr. McCartan

There is no difference between an Irish privately owned shipping company and an English or any other privately owned company.

Mr. J. Mitchell

That is not right.

Mr. Cullen

Absolute rubbish.

Mr. McCartan

As far as The Workers' Party and I are concerned, the handing over of the B & I, as the last vestige of State controlled shipping, to private interests would be as disastrous as allowing the P & O or Sealink to come in and take over the routes.

Mr. J. Mitchell

No other country has a State owned shipping company any more. That is ideology par excellence.

An Leas-Cheann Comhairle

Deputies Cullen and Mitchell, Deputy McCartan is making his case in the manner required of him. There is no obligation on the Chair to allow the Deputies to take issue with him on that. Deputy McCartan, without interruption, please.

Mr. McCartan

The history of this country has shown that private interests in shipping have been unable to sustain a viable shipping line necessary to service our needs. It is our belief that they would not have the necessary commitment to sustain a viable service. It must be said that they would be motivated by maximisation of profits and not concerned with national interests. We cannot get away from that and those who argue in favour of a private exclusive company supplanting the B & I are not arguing in the better interests of our economy or of our shipping interests.

The B & I, with all their problems, have taken their future seriously. In the face of an eleventh hour ultimatum from the Government they have, thankfully, made decisions, with the full co-operation of the workforce, that will ensure that they can continue to operate. The scale of the concessions made by the workforce must be acknowledged by the House as a major contribution to the viability of the company. The Minister gave us details of the reduction in staff numbers, almost 600, and that was an unprecedented concession. The fact that the workforce have guaranteed industrial peace in the company to the end of 1990 will enable both management and workers to work towards the viability of the company. The workers made an unprecedented concession on pay, not just allowing for a pay freeze but agreeing to a reduction in wages. That is an indication of the goodwill of the workers and it must be matched by a commitment from all sides of the House to the future of the company.

It is incredible to hear talk of pulling the rug from under the B & I after the workforce have made such heroic sacrifices. I regret that Deputy Deasy is not present to repeat the inevitable message of privatisation from the ranks of Fine Gael. I waited for the inevitable demand from Deputy Cullen of the Progressive Democrats to close down the B & I, in line with his demands that we should close down our State transport company, CIE. I was surprised he did not demand that we should hand over the B & I to the private sector. However, it is my belief that the sacrifice of the workforce has made it impossible for the Progressive Democrats to argue for the privatisation of the company. We must respond to that sacrifice. We must tell the workers that we are prepared to give something in return for their efforts to preserve the company and make it viable.

Deputy Cullen in referring to Irish Ferries did not put up a strong argument for the privatisation of the B & I. That company has been trading for less than a year and it was ridiculous to use them as an argument for the privatisation of the B & I. Such a suggestion is a non-runner and I was pleased to hear the Minister reject it.

Mr. Cullen

It is easy to say that we should give them £11 million, the easy option.

Mr. McCartan

I wonder why Deputy Cullen should raise the red herring in regard to privatisation. The privatisation of the B & I would not succeed and I do not believe such a move would be supported by a majority of Members. Most Members recognise the heroic and unprecedented contributions of the workforce of the B & I to the continued viability of that company.

Mr. Cullen

I agree with that and I have acknowledged their contribution on two occasions in the House.

Mr. McCartan

Deputy Cullen is very reluctant to agree and I am glad the enthusiasm of the Deputy, and his party, for privatisation has been halted.

Mr. Cullen

What about the 1,000 jobs already lost? What does the Deputy have to say about them?

Mr. McCartan

Most Members recognise that the B & I have little room to manoeuvre as a shipping line between this country and our nearest neighbour. We have given a very limited brief to them. There are a limited number of ports available for the line and only a specific number of crossings can be made on the Irish Sea. We must bear those points in mind when considering the company and their future development. We must ask ourselves if the company have the scope to diversify, like other State companies have done to their profit.

Bearing in mind that the company bring a big number of tourists to Ireland we should ask ourselves if the company are entitled to a subsidy from our tourist industry. There is no doubt that the line carries a big number of tourists annually. The trip from Holyhead to Dublin is a small vital part of the holiday of British visitors. In my view the B & I have been left in too small a corner of this market. It is important that we consider whether we should pay a subsidy to the company in recognition of the outstanding contribution of passengers using that line to our tourist industry.

Another point of significance is that the B & I must compete with a company who maintain absolute control over the ports they utilise. I am referring to Sealink and that company's involvement in the ports on the other side of the Irish Sea, in particular Holyhead. The British Government set their company up very well to compete on the Irish Sea and I wonder if the Minister would consider doing something on this side of the water to help the B & I achieve equal or comparable status in the ports they use in this country. The B & I do not have any substantial control over the port or port facilities in Dublin, Dún Laoghaire, Rosslare or Cork. It does not have available the same facilities as Sealink. This position can be looked at in an attempt to help the company in the very competitive war between the shipping lines.

The Minister mentioned the issue of deregulation. While none of us complains about the advent of deregulation in relation to airline pricing, we must recognise that it has had and will continue to have a fairly significant impact on the numbers travelling by ferry. I estimate a drop of approximately 20 per cent in the numbers availing of ferry services by reason alone of the fairly substantial reduction in prices offered by the airlines and the increase in their services. This matter must be considered.

B & I provide a crucial service to the economy. We must maintain control over shipping available to this economy as a matter of strategy should emergencies occur. During the Falklands crisis the British Government pressed into service huge elements of their merchant shipping fleet, as well as passenger liners. We must realise how vulnerable we could be if we did not have a residual fleet to rely upon.

In a reply to me today by the Minister for the Marine the very small nature of our cargo fleet was highlighted. The Minister indicated that serious efforts are being undertaken by the Government to increase our minuscule merchant fleet. He said it is possible that in the event of an emergency Irish tonnage would fall short of minimum requirements. We do not have the capacity within our own fleet to meet everyday requirements should an emergency draw away other facilities. This highlights the importance of a fishing shipping fleet. We live on an island and we are very isolated from the Continent if we do not have control of ships.

I do not believe that the interests of Irish shipping were well served by the appointment of Mr. Spain to the management of B & I. While we expected a streamlining we could never have anticipated the emasculation of the company by Mr. Spain and his management team.

An Leas-Cheann Comhairle

It is not the custom to criticise any person who is not in a position to defend himself here. It is a well-established custom.

Mr. McCartan

A custom. I appreciate that.

An Leas-Cheann Comhairle

A requirement.

Mr. McCartan

I will accept your ruling. I do not have my book of Standing Orders to hand. While I may have been remiss in naming the person, it is no secret that a pivotal role was given by the previous Government to the management of B & I. It would be an extraordinary state of affairs if we could not discuss the consequences of that.

An Leas-Cheann Comhairle

The Deputy will admit to a realisation of the need for such protection and the reason we do not use names.

Mr. McCartan

I admit to nothing, Sir. I would be a remarkable state of affairs if in the range of contributions on this issue one could not refer to the decision to bring in private interests to manage a State company.

An Leas-Cheann Comhairle

The Deputy would be perfectly in order in referring to the new private management brought in.

Mr. McCartan

Dare we mention his name? The ground work that was being held was, until the intervention of this Government, leading very quickly to the ultimate demise of B & I. Interests were waiting in the wings, very close to the private interests brought in to manage B & I, to take up the pieces that would be left. Very important lessons must be learned from this experience. I hope the Government in indicating a commitment to the continuation of B & I will not repeat that mistake and will leave B & I unfettered by the narrow political decisions which have proved disastrous in the past. The company must be allowed to develop with the goodwill of the workforce. They must be allowed to maintain their important strategic contribution to our economy.

Mr. D. Ahern

Deputy McCartan began by saying he would be brief but went on to give a lengthy submission. I intend to be reasonably brief. Like Deputy Kavanagh, I have been a member of the Oireachtas Joint Committee on State-Sponsored Bodies and, part of our brief, we examined the B & I line. It would have been of benefit to those who contributed to this debate to have been party to those meetings and to have heard the submissions from the management and unions. We were given a broad perspective on the past and the future of B & I.

I find myself in the middle, between the extreme Left and their idea of the extreme Right. In relation to Irish Life I came out quite strongly in favour of privatisation but I am not sure it is feasible in relation to B & I. Given its past history and present problems, I am not sure many entrepreneurs would want to become involved. The auditors report in the 1985 annual report and accounts for the B & I states:

The Balance Sheet on page 13 shows an excess of liabilities over assets and, in our opinion, on that basis there did exist at 31st December, 1985, within the meaning of the Companies (Amendment) Act, 1983, a financial situation which under Section 40 (1) of that Act may require the convening of an Extraordinary General Meeting of the Company.

The opinion of the auditors was that the company were insolvent. The reason reports have not been made available during recent years is that the company are insolvent. The State has continually invested in the company and there have been continual losses. At one of the meetings of the joint committee in 1986 someone said that if this was a private company it would have gone out of business long ago but the fact of the matter is that this is a State company and, as Deputy Kavanagh has said, there is a social element involved.

Mr. J. Mitchell

None.

Mr. D. Ahern

Having said that I think that all of our State bodies should be run on an economic basis. One of the things which came across very clearly to the joint committee was that a proper monitoring procedure was not adopted in relation to this. Perhaps various Departments did monitor it but the fact is that reports were not made available to both Houses of the Oireachtas or to the general public. One of the recommendations and aspirations of the joint committee was that reports of State bodies should be made available more frequently in the future so that the general public will have an idea how a particular company is getting on at a particular time.

We could blame the management for what would appear on the face of it to be disastrous decisions. For example, a jetfoil was purchased which obviously was unsuitable for the Irish Sea. Someone must accept responsibility for that. We could also blame the Government for various decisions which they made. Some Deputies referred to the fact that boats were built at Verolme where the State had an involvement. In my view it was of much greater benefit to the State to have them built at Verolme than elsewhere even though it may not have had a great effect on the accounts of the B & I. There was also a strike in late 1986 and early 1987 and, as a result, the company lost £5 million net. These are all things which have helped to leave B & I in this situation and there are storm clouds ahead despite the fact the Government are bringing forward this Bill.

There are a number of points which I made at the meetings of the joint committee which I would also like to make here. One of these was that lower fares have been introduced. We are all in favour of these but we have to proceed with caution in the future as we are now getting to the stage where it will be a free for all and enterprises such as the B & I will only suffer as a result. The committee also questioned how the Department——

Mr. J. Mitchell

Compare it with Sealink, Deputy Ahern.

Mr. D. Ahern

I did not interrupt you, Deputy Mitchell.

Mr. J. Mitchell

That is rubbish.

Mr. D. Ahern

I ask you not to interrupt me.

Mr. J. Mitchell

The committee of which you are a member heard evidence from the company only. What about Sealink and air fares and what about Irish Ferries and air fares?

Mr. D. Ahern

We also met the unions.

Mr. J. Mitchell

They are both from within the company. Did you meet anyone from the Department?

Mr. D. Ahern

We did not. The Department made decisions in relation to lower fares. At the same time they did not seem to be aware that they were not allowing their right hand to know what their left hand was doing.

Mr. J. Mitchell

That is not true; that is just propaganda.

Mr. D. Ahern

It is not. I congratulate the Minister on adopting the attitude which he has adopted since taking office. He laid it on the line to the company that they would have to get their act together and come forward with a plan. At a stage when it was generally accepted that the company were going to the wall, the Minister had the courage to stand up and say that if they did not bring forward a plan on an agreed basis on a particular day, he would not provide further finance for the company and the company came forward with an agreed five year plan which I think can lead the way to a better B & I service in the future.

Deputy Kavanagh referred to travel tax. Obviously, that is a matter which the Minister should look at to see if he has any leeway to ameliorate the plight of B & I vis-à-vis the airlines. Is it fair that someone going on these routes should pay £5 while those going on transatlantic routes should also pay £5? UK berthing facilities are such that they place the B & I at a disadvantage and the Government will have to do something about this matter. We provide a better service on this side of the Irish Sea and we should receive a similar service on the far side because obviously we are losing business as a result of the poor facilities provided in the UK.

Anyone who attended the meetings of the joint committee would have recognised the bona fides of both the management and the union and I must say I was very impressed by the representatives of the union who, as Deputy McCartan said, have taken a pay cut of 5 per cent and have accepted a reduction in the workforce of nearly 600. This is unprecedented. They want to help in making the company viable and are willing to do so in conjunction with the management. I agreed with what is being done here today and I congratulate the Minister on bringing this Bill forward. I agree with what a number of other speakers said: other areas should be pinpointed where B & I could get into rather than just the passenger area which obviously is a dying trade.

Miss Harney

I would like to speak in support of the points made by Deputy Cullen earlier this afternoon on this matter. It is time that as legislators in this House, particularly at a time when we are trying to get the public finances in order, we questioned the moneys which are voted by this House to various State projects and in particular to State companies. I do not think it is good enough that we should continue to put good money after bad into companies such as B & I. Today, once again, we are apparently going to vote another £11 million to this company. I do not see any sense in this.

During the years 1965 to 1985 at present money values the B & I received £190 million in subsidies from the State. Apparently we could have bought Sealink for one-third of the cost of the subsidies we have ploughed into the B & I. Does it make any sense that we should continue to do this and nod it through this House almost without question? Deputy Cullen was right to ask for a debate on this matter and not simply to let all Stages of this Bill go through in a matter of three hours. Eleven million pounds may not seem an awful lot of money in the context of what this company have already received but, until we turn our affairs around in this country and until we begin to dispose of certain State assets and liabilities such as this one, we will not be able to keep pace with the rest of the world which is daily passing us out. The Progressive Democrats make no secret of the fact that we fully support the idea of this country engaging in a programme of privatisation which includes not just the selling off of State assets but the selling off of various State services which could be much better run by private individuals coming together.

There is a paranoia in this country about the State getting involved in all kinds of activities. When Deputy Mitchell was in power there was an effort to take over Bewleys. I do not know why we were getting involved in restaurants. As an economist friend of mine said, we would probably have An Bord Bun to run that same institution. We must realise that it does not make sense for this small country to get involved continually in State activities which could be better run, from the taxpayers point of view, by other groups. I have no doubt that some private individuals would be more than capable of providing this service if allowed to do so.

Obviously, nobody would be prepared to take over this company in their present form. We have to take off our ideological blinkers and realise that every time a matter comes before this House about allocating public moneys, sometimes under the pretext, as this is, of additional share capital, writing off massive debts, we will have to question it and to say "no." The Progressive Democrats are putting this Government on notice that we will not allow matters of this kind to go through the House unnoticed as they have gone through the House for so long. As a party we are fully committed to examining each aspect of State activity, including the area of transport, to see whether or not the job could be done better by allowing private individuals into the market-place.

Only three years ago the leader of this party fought a lone battle to open up air transport. Members of Fine Gael, the dominant party in Government——

Mr. J. Mitchell

The Deputy predicted the exact opposite to what happened.

Miss Harney

——particularly Deputy Mitchell who was then the Minister, and members of the present Government said at that time that it was intolerable that we should speak in these terms. What have the results been? Air fares between Britain and Ireland have dropped by 54 per cent and in the following year——

Mr. J. Mitchell

Deputy O'Malley predicted the exact opposite.

Miss Harney

——traffic increased by 33 per cent. This country has benefited enormously from opening up air transport in this country.

Mr. Wilson

Are you not going to thank me?

Miss Harney

I will not.

Mr. Wilson

You should.

Miss Harney

You are taking great credit wrongly for what has happened. Deputy O'Malley was the only person in this House at one stage who advocated that these measures should be taken, and he fought a lone battle.

Mr. Wilson

Read my speeches at that time. I divided the House on it.

Miss Harney

I have read the Minister's speeches at that time on it.

Mr. Wilson

You did not; you are bluffing.

Mr. McDowell

I heard your speeches in Buswells Hotel.

Miss Harney

I read the Minister's speeches and I also sat here and listened to them at that time.

We must adopt the same principles in relation to sea transport. It does not make sense for this country to exist in a protectionist atmosphere, as if the rest of the world will fall in with our plans. Even in the USSR the state is beginning to roll back its influence, because people realise that modern market forces cannot be allowed to pass them by.

I listened on my monitor to what Deputy McCartan said about these matters. If we were to follow the advice given by people like Deputy McCartan, we are supposed to make decisions about B & I and every other State company not on the basis of commercial sense but on the basis of political sense. That is what has been so wrong with decisions in relation to major State bodies or semi-State bodies. The decisions have been made not on the basis of commercial sense but on the basis of what the political forces of the day dictate. Those are the forces which lead this country and this House to vote millions of pounds to CIE, to B & I, or whatever.

We must realise that the taxpayer will not be able to continue to take on board the kind of losses and economic disaster which have been so much part and parcel of the way these companies have been run. We have to make decisions on the basis of the commercial criteria that would apply if those companies were operating in the private sector. We cannot allow anything else to dictate decisions.

For every £1 billion reduction we can make in the national debt, we will save about £100 million per year on the basis of the present interest rates of about 10 per cent. Given that 90 per cent of income tax alone goes to service the national debt, would it not make far more sense if we were to dispose of major State companies and reduce the debt and, in return, reduce the amount of money taken in income tax from the hard pressed workers? The point made by Deputy Cullen this evening and by Deputy McDowell last week calling for a White Paper to be produced by the Government was valid. A group other than public servants should compile this White Paper as it must be objective.

We brought in economists from outside the State when we were looking for advice about cuts. These same people should be asked to examine every area of State activity and to question whether or not it is still necessary for the State to involve itself in so many activities, or whether it would be better to dispose of some assets and some of the current services provided by the State and allow them to be run by private individuals. We must do that if this country is to prosper and to be able to compete, and in order to reduce the high levels of unemployment.

A recent study carried out here indicated that in relation to telecommunications, for example, we were 60 per cent dearer than the average price in other European countries. We were 23 per cent dearer in relation to electricity and something like 50 per cent dearer in relation to postal services. Irish companies cannot be expected to compete with EC countries if they have to face such enormous costs because of the high price of many of the services currently being provided by the State. It is well known that many of the prices are so high because there is an over-abundance of manpower in these firms which would not be tolerated if they had to operate in a competitive world.

It has been suggested that there are 1,200 more people than necessary working in the ESB. Who is paying the price of that? Those 1,200 jobs night be protected in the ESB because this House has never really questioned the way we apply ourselves to doing our job in relation to State bodies. We should think of the thousands of other jobs which are lost because industries cannot compete or expand, or cannot start and develop. We have to realise that jobs protected at those high prices in the public service cost far more in terms of other jobs down the line in many other sectors of the community.

It is not good enough to say, as Deputy McCartan said earlier, and as other Deputies have often said in this House, that the reason we must never look at privatisation or competition is that there would be job losses in State bodies. We must face the fact that there will be job losses, but they will only occur because there is overmanning in those bodies and because those bodies do not need the huge amount of manpower they often have to provide a service. The jobs lost there will be more than made up in the other jobs created right down the line. Those who are at work will reap the rewards of reduced levels of taxation if we have a much slimmer and more efficient public sector and semi-State sector.

As Deputy Cullen said in relation to B & I and as we have done in relation to CIE and other State companies, the PDs will look at each of these issues as they come before the House. If we believe it is not appropriate that more and more good money should be thrown after bad we will not be afraid to oppose these measures. We will spell out our reasons and take on board the political hassle that no doubt comes with that. It is too easy for purely political reasons to bury one's head in the sand and ignore the economic forces that should be the criteria governing any decision in relation to these matters.

An Leas-Cheann Comhairle

An tAire.

Mr. McDowell

I understand the Minister is to reply to the debate at 6.45 p.m. Before he replies, let me say that I do not wish to prolong the proceedings, but this Bill is one on which it is very wrong for this House to take a quick decision without a long and adequate explanation on a cost-benefit analysis basis of what is at stake. It seems wrong that this House should commit another £11 million of taxpayers' money to capitalisation of an already loss-making concern without persuading the ultimate shareholders, the Irish people, that there is a greater interest to be served and a reason to inject further capital in this company.

We are no different in some respects from any other group of people who are being asked to invest moneys in a company and we should apply the same criteria as any other would-be investors. Indeed, we have a higher duty in this House to examine this proposal from the Minister. It is not our money we are spending individually or collectively in this House. It is taxpayers' money, and it is not simply taxpayers' money, it is moneys which are being borrowed abroad on which an interest price tag has to be paid. This £11 million which the Minister proposes to advance to B & I in the course of restructuring them and just staving off the inevitable for yet another season will cost about £1 million per annum in interest charges which have to be paid by the taxpayer each year in order to fund it. That calls into question a number of issues.

First, why do we want to remain owners of a shipping line on the Irish Sea? Does a strategic or national interest dictate that we should persist in funding a shipping line in this day and age in the circumstances? Quite regardless of the circumstances which brought us into ownership of the B & I Steam Packet Company a couple of decades ago, we must now ask ourselves whether it is legitimate for us to maintain that ownership. That question must be asked not simply on the basis that we have assets we might divest ourselves of but that we are embarking on a course which has in all probability further cost to the taxpayer down the line.

It is suggested that the shipping business between Ireland and England is a strategic business and that for various national purposes it is important that there be an adequate supply of ships on that line. If that is the case, this House is entitled to be informed as to whether there are others willing to purchase the ships, some or all of the ships that are not surplus to requirements. From the Minister's speech it seems that at least one is now surplus to requirements. Are there other people willing to purchase them and put them into the same service or a different service or more lucrative services plying between the same ports?

If this House is not satisfied that nobody else will buy these ships or run similar services using other ships, then it is folly for us to go further into the mire and spend more money staying in this business ourselves. We should be told clearly and unequivocally whether others are willing to supply the service using their own capital, rather than going to the taxpayers to provide more capital for what is in effect a hopeless case, the B & I Steam Packet Company. We should be told whether there are others willing to provide these services so that we can withdraw from this arena in which we have distinguished ourselves so badly.

There is more than ample evidence that plenty of people are willing to run ferries and passenger and freight services where profit is to be made. It is not as if there is a shortage of ships or a worldwide reluctance to invest in what should be safe and predictable routes. It is not as if this country has problems of seasonality or geographical location or some other set of problems which would prevent private capital from investing in this route. All the other ferry and freight companies plying between Ireland and England are, first, profitable and, secondly, privately owned.

Mr. Wilson

That is what the Deputy thinks.

Mr. McDowell

Why should this country and this State decide to enter into a highly competitive situation with funds that not merely we cannot afford to spend but which we do not have in the first place and must borrow on the international money markets? That is a crucial question which the Government, with respect to them, have never answered. I do not believe that strategic interest argument has been adequately made out or that it can be shown that there would be a vacuum if the B & I Steam Packet Company were no longer to function on these routes. Even if there were a vacuum, I do not believe any lessening of the services would have a dramatic or serious strategic effect on our economy. I suggest that the Government at the very least failed to make out a case in any shape or form to the effect that Ireland needs to plough more money into the B & I Steam Packet Company or the services and ships employed on this line.

We cannot simply regard resources which are to be spent on this decision by the Minister as free goods. As I have said, they have to be borrowed elsewhere and could be expended or invested elsewhere. In that context our decision here tonight must be very clear, rational and cold. The Minister made a case in his speech that there has been a considerable degree of evidence to suggest a willingness on the part of the workers in the B & I Line to change their work practices, moderate their wage demands, guarantee industrial peace and the like. That is, belatedly, a credit to those workers and I do not want to denigrate it or take away from it. That sacrifice should be saluted but, unfortunately, it is not enough. It does not justify wasting money, and the strategic interest this country has is not in providing or maintaining those jobs, even a reduced number of jobs, to which the Minister refers.

We have no strategic interest in retaining 1,200 jobs in any industry where the cost to the taxpayer cannot be justified. The ESB, to which Deputy Harney referred, is also an example of a company who are overmanned. Here is an example of detrimental overmanning which is costing other jobs in other areas. There is also the matter of interest costs and the time of Government which will be absorbed in the B & I as a result of their continued existence in a vain effort to make them commercial. This country cannot bear these costs any longer. We must at some stage cry "stop" and apply reasonable, sensible commercial criteria. Nobody in the marketplace in his right mind would invest this extra £11 million in this company now. It has negligible value. It has negligible value in a market sense, and I do not believe that there is any strong case for deciding that it has anything but negligible value in a social sense. We have no social interest above the economic interest, and I am not so ideologically made up that I refuse to blend social and economic interests. But we do not have an economic or a higher social interest which requires maintenance of this service.

As has been pointed out, the Sealink company is just as effective a means of transport in many respects as the B & I Line. It is now in private ownership. I am sure its owners probably have complaints about the profits they make, but they are still providing the services and I have no doubt that the very competitive situation that has arisen out of the airlines fare structure reduction in recent times will have an adverse effect on the shipping services in relation to foot passengers at any rate between Ireland and Britain.

But all these criteria do not justify making out a hard case based on sympathy or based on admiration for the management of B & I who have been trying to turn the company around, or admiration for the workforce of B & I, who, belatedly, have undertaken sacrifices to keep the company in existence. We cannot afford, as a society, to carry on commercial businesses to the point where they are manifestly no longer viable and then, effectively, find ourselves being presented with a case based on sympathy rather than cold commercial criteria. We cannot go too far down that line.

I believe that if the B & I Line were to be allowed to be liquidated there would be a demand for the services of the people who are willing to work in shipping between Ireland and England. There is a market for their services. It might be that for a short period there would be fewer people employed. It might be that their trade union practices might be less restrictive. It might be that their jobs would be, on occasions, more seasonal. It might be that their remuneration would not be as high as it is now. But I have no doubt that there are some people — and there is clear evidence that there are people — who are willing to invest capital and who offer to carry on services between the ports now served by the B & I.

The Government have a very high onus of proof on them to establish that it is right that this House should put more money into the B & I Line. All of the activities in relation to that line over the last year have shown that they have, reluctantly on occasions, and under duress on other occasions, been brought to reality, but far too late. The time for harsh measures, the time for deadlines, the time for unilateral warnings and threats is long since gone. Now we are in the position that it is all too late. This shipping line is not going to return to profitability. It is not going to give a return on this capital that we are being asked to invest nor to any of the other capital that we have been asked to invest in it, and there are others who are in a far better position to run this service.

I want to make one last point. This House, and the Government which this House nominates after any General Election is not well qualified to run a shipping service. We have no particular function in the matter and no qualifications. We are not good readers of the market and our record in making commercial decisions, as Deputies Harney and Cullen pointed out earlier, is not one of which we can be proud. Therefore, on any occasion when there is a proposal to invest the people's money as capital in any commercial or quasi-commercial operation, we should be very slow to do so and we should not do so unless the case is made out beyond doubt that this is a good investment. I am afraid that on this occasion not only is that case not made out but it is staring us in the face, if we have the political honesty and maturity to face facts, that this is throwing good money after bad, that this is a deferment of a political decision which may be embarrassing to make but which must be addressed by this House, that is, to get out of capitalising and operating shipping services on the Irish Sea. That is something we must face up to. It is wrong that the price of lack of political courage on the part of politicians and the political establishment is an extra £11 million cost to the taxpayer. Therefore, our party is absolutely opposed to extra capitalisation for B & I because the Government have failed to make out the case.

Minister for Tourism and Transport (Mr. Wilson)

Is mian liom at dtús mo bhuíochas a ghabháil leis na daoine a ghlac páirt sa díospóireacht agus a nocht a dtuairimí éagsúla i rith na díospóireachta sin.

The B & I moved 1.44 million tonnes of freight in 1987 from this country and brought into the country 126,000 cars, some business but mainly tourists. It also dealt with 816,000 passengers. I merely give those few statistics to indicate the important role the B & I are playing in the commercial life of the country. It was against that background that when I had a look at the state of the company's finances and referred the matter to Government that we decided, having considered it at more than one meeting, that we would have to call in both management and unions and indicate to them that they would have to come up with a blueprint for a commercially viable shipping company.

I make that general statement because a good deal of the waffle I have listened to was an indication that people did not understand that that was the objective the Government set for themselves in their dealings with B & I.

Miss Harney

When were they first told to do that?

Mr. Wilson

In the month of May of 1987, I called in the unions and indicated to them that this was a crisis.

Miss Harney

Were they never told that before?

Mr. McDowell

They were told it ten years ago.

Mr. Wilson

I will deal with the various points made by Deputies in this House. Unfortunately, my time is very short.

Deputy Mitchell rightly pointed out that it would have cost more to close the company down than it would to keep it going. That is not a good motive for keeping it going, but I am afraid it was a brutal fact. I agree with Deputy Mitchell and disagree with the people who said that it is not necessary to have this company in present circumstances to deal with freight and passengers between this country and the United Kingdom.

Deputy Mitchell and others paid tribute to the unions' contribution when this package was being put together. I do not accept that argument about air fares. It had an impact but, as I see it, the foot passengers will not, in the future, constitute any great percentage of the profits and moneys that are to be made by the B & I. It is not true to say, as Deputy Mitchell said, that all the semi-State bodies except B & I were making a profit. There is a substantial subsidy to be made to the transport company as well, as the Deputy knows. A sum of £113 million is a substantial amount of money. It has to be put above the line and it is money.

Deputy Mitchell said he put a suggestion to the Department of Finance that they should take care of the debts accrued by the company and that the company should be allowed a plain sea to operate on and prove that they could make a profit. One of the difficulties about that is that the moneys are not available as of now. It is not the responsibility of the State to look after the debts incurred by the B & I except in so far as the State guaranteed those debts. I do not intend to depart from that position.

The B & I, as I said in my opening remarks, were under no illusion from the start about what my objective was. That objective was that they develop a commercially viable shipping industry here operating from Dublin to the United Kingdom. I know that the profit and the benefit in tourism will be in cars for the future and the slimmed down freight operation which was put in the package by the management and the unions.

I am disappointed that many of the contributors to the debate did not examine the package put together by the chairman and chief executive and the unions. There was no analysis of the redundancies, no analysis of the shedding of services, no analysis of the responsible attitude of the unions in putting that package together. A number of Deputies referred to profits that are being made — I will not be specific about companies — by shipping companies at present. I do not know where they are getting their statistics. My information is that all the shipping companies, both on the short routes and on deep sea routes, are in serious trouble and are finding it very difficult to make the kind of profits they could make by buying saving certificates. That is, in fact, my information in my Department and I want to put it on the record of the House. There is an idea that we should start a private company, start shipping, start a commercial deal, and, hey presto, the money will come in immediately. That is not a fact as of now.

Mr. Cullen

How are B & I going to do it?

Mr. Wilson

I would not be so bullish about the profit situation as referred to by several Deputies — Deputy Cullen, Deputy Harney and Deputy McDowell — who mentioned it in their contributions. I pointed out at the time I announced the new arrangements that I would be reviewing the situation in the autumn. That will give time for the new shake out to get settled down and to face up to the facts of life on this particular operation. Do not forget that there are hardly very many people in our society at present who would take a cut in what they are being paid to save the company for which they are working. That position deserved commendation from this House and I am very disappointed——

Mr. Cullen

They did get it.

Mr. Wilson

——that nobody did commend them for what they did.

Mr. Cullen

I most certainly did commend them.

Mr. Wilson

The Deputy's colleagues did not. In fact, they said they did not count at all when they were deciding on policy for this company, get rid of them, sack them, wives and children did not count at all, crass commercialism and make the bottom line your ideal. That was the theme of the contribution by at least two of the Deputies here tonight. Where is the plan? I do not think Deputy Cullen listened to what I had to say. He came in with a prepared speech. He did not listen to what I outlined.

Mr. Cullen

The Minister did not see me with a script in my hand.

Mr. Wilson

I am not saying the Deputy had a script in his hand; I am saying he came in with a prepared speech. He did not deal with rationalisation of the company and he did not listen to what I had to say. If somebody says it is not necessary to have this company on the Irish Sea, I wish that person had been in my office when the Sealink went on strike. I had mushroom growers, meat exporters, perishable good exporters haunting me and hammering me on the telephone to try to get space on the B & I ships so that they would not lose their goods and that they would not go to loss. I wish people would be a little more realistic and stop talking in terms of high finance, of profits and so on and think of the realities of the situation, the people who are exporting goods out of this country and the people who are working at that business of exporting.

Miss Harney

Can the B & I not go on strike?

Mr. Wilson

With regard to Sealink and the ports I accept that we need to pressurise the Sealink company which owns Holyhead to get better slots for B & I to work out of. We have reasonable control in that the Office of Public Works own and control Dún Laoghaire harbour and we are working on that in the interests of B & I and in the interests of an even playing field for them in this particular regard.

Mr. Cullen

Would the Minister accept that the B & I management themselves are making that a major issue and that there is a problem?

Mr. Wilson

I have been in consultation with the B & I about this and we are working on it in my Department to see to it that there is, so to speak, a level playing field.

Mr. Cullen

It is a valid point.

Mr. Wilson

I was asked was there any contact with private people. Private people would have one look at the debts which the B & I have and they would run like the hammers of hell away from that situation. There is no way in which they would walk into it. Some people suggested that the banks might take it over but we, the Government, were to pay the bank debts, bank debts which we had not guaranteed. Alice in Wonderland has nothing on the kind of thinking that some people have in regard to this situation.

Mr. Cullen

It is easy to keep pumping the money in.

Mr. Wilson

I agree that it is in heavy freight and in the businessman with the car, and the tourists with cars that the B & I must seek their market and must seek to develop their muscle. There seems to be — probably from lack of knowledge — the idea abroad that the B & I are not trying to sell. The B & I are trying to sell, are publishing brochures, are holding conferences with tourist operators and travel agents in order to get people to use their services into this country and I gave the statistics of how many did come.

I take the point that Deputy Cullen made about the Channel tunnel. It will have an important impact on transport in this country. It will have an important impact on the areas which will be used from this country — Rosslare and that particular part of the country will become more important. I want to say that the finished Channel tunnel is far down the road. It will be very expensive and it will be expensive to use it. We should keep that in mind also when we are thinking of planning ahead. It is important to have a commercially viable company. It is important also that 879 people should be working in this country where work is getting scarcer and scarcer and where our numbers of unemployed are becoming greater. We have got a guarantee of industrial peace. We have workers who took a 5 per cent cut and who have taken a freeze in their wages.

Deputy Kavanagh supports the provision of this Bill and dealt with the expenses that were imposed.

An Ceann Comhairle

I am sorry to have to interrupt the Minister, but the time has come to put the question. As it is now 7 p.m. I am required to put the following question in accordance with the Resolution of the Dáil of this day: "That the Bill is hereby read a Second Time, the Bill is hereby agreed to in Committee and is reported to the House without amendment and Fourth Stage is hereby completed and the Bill is hereby passed."

The Dáil divided: Tá, 88, Níl, 13.

Tá

• Abbott, Henry.
• Ahern, Dermot.
• Ahern, Michael.
• Andrews, David.
• Aylward, Liam.
• Barrett, Michael.
• Bell, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Matthew.
• Brennan, Seéamus.
• Briscoe, Ben.
• Browne, John.
• Burke, Ray.
• Byrne, Hugh.
• Calleary, Seán.
• Collins, Gerard.
• Conaghan, Hugh.
• Connolly, Ger.
• Coughlan, Mary T.
• Cowen, Brian.
• Daly, Brendan.
• Davern, Noel.
• Dempsey, Noel.
• Dennehy, John.
• De Rossa, Proinsias.
• Desmond, Barry.
• de Valera, Síle.
• Doherty, Seán.
• Ellis, John.
• Fahey, Frank.
• Fahey, Jackie.
• Fitzpatrick, Dermot.
• Flood, Chris.
• Flynn, Pádraig.
• Foley, Denis.
• Gallagher, Denis.
• Gallagher, Pat the Cope.
• Geoghegan-Quinn, Máire.
• Haughey, Charles J.
• Higgins, Michael D.
• Hilliard, Colm Michael.
• Howlin, Brendan.
• Hyland, Liam.
• Kavanagh, Liam.
• Kemmy, Jim.
• Kirk, Seéamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Lynch, Michael.
• Lyons, Denis.
• McCartan, Pat.
• 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.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Batt.
• O'Leary, John.
• O'Rourke, Mary.
• O'Sullivan, Toddy.
• Pattison, Seéamus.
• Quinn, Ruairí.
• Roche, Dick.
• Sherlock, Joe.
• Stagg, Emmet.
• Swift, Brian.
• Taylor, Mervyn.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Walsh, Joe.
• Walsh, Seán.
• Wilson, John P.
• Woods, Michael.
• Wright, G. V.

Níl

• Clohessy, Peadar.
• Colley, Anne.
• Cullen, Martin.
• Gibbons, Martin Patrick.
• Clohessy, Peadar.
• Colley, Anne.
• Cullen, Martin.
• Gibbons, Martin Patrick.
• Harney, Mary.
• Keating, Michael.
• Kennedy, Geraldine.
• McCoy, John S.
• McDowell, Michael.
• Molloy, Robert.
• Kennedy, Geraldine.
• McCoy, John S.
• McDowell, Michael.
• Molloy, Robert.
• O'Malley, Desmond J.
• O'Malley, Pat.
• Wyse, Pearse.

Tellers: Tá, Deputies V. Brady and Briscoe; Níl, Deputies Harney and Cullen.

Question declared carried.