During my contribution last Thursday I stated that the Sugar Bill was part of an ongoing policy by this Government to privatise our commercial public enterprises, a piecemeal approach to this very important issue. I stated then and I repeat now that a major debate is required both in and outside this House regarding the benefits to this State of such an approach.
I strongly oppose this Bill because it proposes to hand over to private interests majority control of this viable, efficient, commercial public enterprise which has been built up over the past 50 years by the sweat and expertise of hundreds of thousands of Irish workers.
The Sugar Company was established in 1933. Notwithstanding the opposition to the proposal at the time Seán Lemass took a very enlightened approach which proved to be a momentous decision on his part. I wonder what he would now think of current Fianna Fáil policies and whether he would feel he was betrayed in any way? Since then the Sugar Company has made a very significant contribution to the social and economic life of rural Ireland particularly in terms of employment and quality of life. It must be stated, however, that like other State companies the Sugar Company was established against a background of failure by the private sector in this area. If one studies the history of Irish life, particularly the agricultural sector throughout the forties and fifties, one sees that the Sugar Company grew in strength to the benefit of the Irish farmers. The Sugar Company gave employment to people in rural Ireland at a time when there were no other opportunities available to them.
I do not think the Labour Party are adopting a negative approach in opposing this Bill. At a time when the Coalition Government are proposing to hand over the majority shareholding in this highly succesful State company to private interests it is appropriate that the contribution made by the workers in this company down through the years is highlighted and recognised by people. We should not forget that it is their efforts alone which have made this company the highly desirable asset it is today. Very few people have anything good to say about our State companies and they believe they should be privatised but it should be remembered that it is only because these companies are so successful that private enterprises want to take them over now. Many people who did not avail of the opportunity to get involved in State companies when they were being set up are now seeking to take them over when history has shown that they can be made viable from an economic point of view.
Many people in exalted positions have said that all State companies should be privatised. I want to say clearly that State companies have made a major contribution to the economic development of this State throughout their history. As I have said before, if we want to privatise State companies we should have a major debate in this House on the merits or otherwise of such a proposal.
It should be noted that a bias has always existed against the public sector. This has been evident down through the years in the case of the Sugar Company. For example, not alone were Erin Foods expected to meet their social obligations but they were also expected to balance their books at the end of the day. Grants which were made available to companies in the private sector were not readily made available to the Sugar Company and Erin Foods. This prevented the company from making developments which would have given more employment in the food processing sector. Unfortunately, this meant that the great opportunities which existed in that sector at that time were lost.
At a time when almost 240,000 people are unemployed in the State and there is a huge level of emigration it behoves Dáil Éireann and the Government to look at the various options available whereby jobs can be provided for our people at home. I want to point out very clearly that when opportunities were highlighted in the public sector no grant aid was made available to companies unlike the private sector where the IDA provided grants to companies including companies from abroad which set up here. However, many of those foreign companies left fairly quickly when they did not receive the type of returns they had expected.
What has brought about this change of policy on the part of Fianna Fáil in regard to our commercial public enterprises? In their recent election manifestos they have given commitments to preserve and strengthen our commercial State companies. Indeed, while various Ministers stated clearly that they had fudged a little and encouraged a type of privatisation they were adamant that the Fianna Fáil Party would never envisage handing over more than 50 per cent of the shares in a public company to private individuals. If that was the case then the Progressive Democrats input into this Bill is very obvious. Since the Progressive Democrats were established they have proposed the sale of most of our semi-State companies, in many cases to the highest bidder. Given the about turn by Fianna Fáil on the issue of privatisation and their proposal to hand over more than 50 per cent of the shares in the Sugar Company to private concerns I wonder how the employees in some other State companies feel at present. I wonder how the employees in Aer Lingus feel about the commitments which have been given in regard to that company, It will be interesting to see the further developments in regard to that company.
I note from the various annual reports that the Sugar Company have made significant profits, particularly since 1986. In the 1990 annual report the managing director of the Sugar Company, Christopher Comerford, reported that in the period 1989-90 the company had achieved record levels of turnover and profitability. Profits before tax were almost £22 million, an increase of 4.86 per cent on the previous year. Profits have been increasing steadily in recent years. Profitability was recorded in the various sectors within the Sugar Company. For example, in the Sugar sector operating profits were £17.7 million, an increase of 18 per cent on the previous year. Further profits were reported in the agri-trade division, the animal feeds section and the agri-chemical section, to name but a few. Profits were made by the company through diversification. The staff took an interest in and gave a commitment to the company. Through their efforts the company succeeded in making a profit and can now look forward to the future. The commitment of the workers has to be acknowledged.
In the light of this report and indeed reports from previous years the question must be posed, why privatise now. I have my own ideas on this. A small group of people feel that is the way to go, that is the way to develop. They feel they can now move in and make a profit. It disturbs me somewhat that this Government readily look across the water and adopt the conservative policies of England, policies that have not always proved successful. I would ask them to reconsider their attitude to this matter.
I wish to refer briefly to the terms of reference and indeed the composition of the Government's ad hoc committee who examined the future of the Sugar Company. They were asked to consider three main options: the status quo, full privatisation or partial privatisation of the company. In my opinion this was a totally unacceptable way of evaluating the future direction of the company and setting in place precedents that would be followed in the future in assessing the merits for privatising other State companies. I repeat once again that a wider debate is required on this most important matter. Privatisation is a fancy word for taking something that belongs to the public and handing it over to a very small number of private individuals who can make a profit from it.
I acknowledge that, given the numbers of Progressive Democrats and Fianna Fáil Deputies in this House, with the support of the Fine Gael Deputies, this Bill will be carried. The question I would ask is why we must hand over a 55 per cent share in the company to private interests. I look forward to the comments of the Minister for Agriculture and Food on this matter. The Labour Party will be proposing amendments recommending that majority shareholding of the company remain in State ownership, in the interests of the people of Ireland.
The Bill before us does not adequately meet the concerns of the existing workforce. I note that the Sugar Company have given a commitment to give a written guarantee in regard to continuity of employment, to negotiating wages and conditions of employment, to the recognition of trade unions and so on. However, if this Bill goes through in its present form, the State will retain only a 45 per cent share in the company. In view of this it is imperative that the guarantees given to the workforce be incorporated in the Bill. I do not have to suggest to the trade union people the importance of this. The Bill as it stands does not go far enough to meet the commitments given.
I believe the minimum requirement of controlling interests will not be met. The assets of the company which have been built up over the years by the hard work and expertise of thousands of Irish people will be handed over. I would ask the Minister when replying to expand on his proposals for a stock market floation. I would also ask him to say how he proposes to spend the money that will accrue from the sale of the company. Given the economic position I would urge that the money is not wasted for short term political gain. Does the Minister propose to put some of the money back into the agricultural and horticultural industry? These are some of the questions that have to be answered. The Labour Party have no hesitation in saying that the Bill as it stands does not meet the requirements of the workforce. We hope that on Committee Stage the Minister will take on board some of the amendments we intend to put forward so that the Bill as enacted will be more realistic. I want to convey once again that I and the Labour Party are opposed to the Bill.
