I would like to make an announcement a Cheann Comhairle. I wish to inform the House about a development in this matter which would be helpful in our handling of the Committee Stage debate.
Private Business. - B & I Line Bill, 1991: Committee Stage.
Question proposed: "That section 1 stand part of the Bill".
Is that proposal agreed? Agreed.
I should like to inform the House that yesterday afternoon my Department signed an agreement with the Irish Congress of Trade Unions and the B & I unions on matters relating to the sale of B & I to ICG. I should like to read that agreement into the record of the House. It states: The Irish Congress of Trade Unions and the B & I group of unions acknowledge the view of the Minister for Tourism, Transport and Communications that the acquisition is in the best long term interests of B & I, its employees and customers and also acknowledge his views——
On a point of order — I do not want to interrupt the Minister unduly — while I have no objection if the Minister wishes to read the statement into the record of the House, but I would have thought that the contents of the agreement with the Irish Congress of Trade Unions could be given effect to by way of amendment by the Minister to the Bill before the House.
I have done that.
I suggest that this is a rather unusual way for the Minister to try to buoy up——
I think the House should hear the Minister out. I have had the agreement of the House to hear the Minister, and he should be heard.
——what is a pathetic case.
Deputy Rabbitte, please obey the Chair. I have the approval of the House to hear the Minister is respect of this statement and I will not permit him to be interrupted in this fashion.
On a separate point of order, a Cheann Comhairle——
Could we hear the Minister out?
——could we have a copy of the statement?
That is a reasonable request.
I will see to that shortly.
Let us hear the Minister out.
The following is the text of the agreement:
The Irish Congress of Trade Unions and the B & I Group of Unions acknowledge the view of the Minister for Tourism, Transport and Communications that the acquisition is in the best long term interests of B & I, its employees and customers and also acknowledge his views that it will lead to the creation of an enlarged Irish-owned shipping enterprise with the resources to develop and provide an enhanced level of services to Irish tourism and export trade.
The Minister for Tourism, Transport and Communications accepts the legitimate concerns of the Irish Congress of Trade Unions in relation to the future development and ownership of the B & I company and the development of Ireland's access transport services.
To address these concerns, the Minister hereby affirms that the Government: (1) fully accepts the importance of shipping for Ireland from a strategic point of view; (2) will seek to have at all times sufficient ships on the Irish Register which could be utilised in times of emergency to service our strategic trading routes; (3) will continue to pursue vigorously with the European Commission Ireland's case for the funding of improvements in access transport services.
The Minister also affirms that ICG have indicated to him their intention to maintain the company in Irish ownership and have confirmed that their plans for B & I over the next five years include: the retention of all existing B & I shiping routes; the provision of extra capacity on them.v. Leinster; the sourcing of an improved vessel to replace the m.v. Munster on the Rosslare/Pembroke route; an upgrade of facilities throughout B & I; the replacement of B & I's container ships; the provision of long term sustainable employment in B & I and share ownership for B & I employees.
The Minister undertakes to obtain from ICG an undertaking that they, ICG, will fully abide by the current trust deeds and rules of the B & I pension funds as disclosed to ICG during the due diligence exercise.
The Minister acknowledges that the ICTU and the B & I group of unions strongly feel that he, on behalf of the Government, has a pivotal role to play in ensuring these pledges by ICG are fulfilled. Accordingly, they have sought a specific undertaking from the Minister that he will perform this role.
The Minister undertakes to introduce an amendment to the B & I Line Bill, 1991, on the rights of employees as agreed with the ICTU and B & I group of unions as per attached.
Subject to ratification by its members, the ICTU and the B & I group of unions have confirmed that they are prepared to positively cooperate with the sale of B & I to ICG on the basis of this agreement.
Signed on behalf of Minister for Tourism, Transport and Communications; signed on behalf of ICTU; signed on behalf of the Core Group of the B & I group of unions.
The Industrial Officer of the Irish Congress of Trade Unions also obtained the consent to this agreement of the General Secretary of the Seamens Union of Ireland.
As the agreement covers many of the amendments before the House, I wonder whether Deputies who have tabled amendments would consider yielding to the agreement and, in particular, to my amendment No. 15, which gives effect to the Government's commitments in the agreement with the trade union movement. I thank the House for giving me this opportunity to record the agreement with the trade unions.
I should like to briefly respond to the Minister's statement if I may.
Deputy Rabbitte and Deputy Yates, your responses must be very brief. Deputies will have an opportunity to debate the matter when the Minister's amendment No. 15 comes before the House, but not now.
The Minister is asking that we withdraw our substantive amendments arising from the statement he has read to the House. On behalf of my party, I wish to indicate that we are not prepared to withdraw our amendments. They have to be discussed in full because the Minister's statement——
Can the amendments not be discussed when we come to them, Deputy? That is the way to proceed on Committee Stage.
I promise the Chair that it will not take longer than two minutes for me to explain why the Minister's request cannot be acceded to.
The agreement the Minister read into the record of the House is the usual kind of industrial relations trade union agreement that arises as a result of a threat, such as the threat of the B & I group of unions to take industrial action. In so far as it assuages some of those points, it is welcome. However, the fact remains that there are substantive strategic and public interest questions raised by the Bill and the amendments on the Order Paper. In addition, many of the paragraphs of the agreement, as I have read it, are exceptionally vague. They talk about the Minister's——
I am sorry, Deputy Rabbitte, I gave you some latitude, but, strictly speaking, you will have ample opportunity to various amendments, other than the Minister's amendment, to give vent to your views on the matter. I call on Deputy Yates.
I thought that because the Minister was given an opportunity to make a statement we would have an opportunity to reply but we will have to reply in due course.
That would make a farce of Committee Stage procedure.
Briefly, I should like to say I am not agreeable to the Minister's proposal that we yield our amendments but I feel it appropriate that in the suggested groupings circulated by the Chair's office amendment No. 15 be grouped for discussion purposes with what is proposed. It is not satisfactory that Members do not have a copy of the agreement. We are not satisfied that it goes as far as legal amendments to the Bill would go in securing the strategic and other interests the Minister has referred to.
On behalf of the Labour Party, I could not agree because the agreement read into the records of the House will have repercussions in relation to many aspects of the Bill. Having examined the amendments over the weekend, certainly I could not agree to the Minister's proposal. I oppose his suggestion.
I should like to make a brief comment. Clearly, the Minister in issuing a statement is attempting to scuttle the serious opposition of parties of this side of the House to the methodology used in giving away a public enterprise such as the B & I. Opposition parties will not accept the suggestion that we withdraw any of our amendments. What essentially happened is that the Minister held a gun to the heads of the workers in B & I. The Agreement was afait accompli, the Government decided to dispose of B & I to ICG——
I ask the Deputy to not go into detail now.
The Minister thinks the agreement should somehow or other, because it has the sanction of the Irish Congress of Trade Unions, alter in a substantial way our amendments but we will be fighting to present them to the House.
The points Deputies are expressing can be made on amendment No. 4 in the name of Deputies Byrne and Rabbitte because that amendment will be taken with amendment No. 15, the Minister's amendment, and other amendments.
Question put and agreed to.
NEW SECTION.
Here we have amendment No. 1 in the names of Deputies Byrne and Rabbitte. I have observed that amendments Nos. 2, 5, 6, 7, 8, 10 and 16 are related. Therefore, I suggest that we take those amendments together; they are related. Is that satisfactory?
What happens in the event of amendment No. 1 either being accepted or defeated; do the remaining amendments in that group then fall?
No, they are voted on separately but discussed together.
I move amendment No. 1:
In page 3, before section 2, to insert the following new section:
"2.—(1) The Minister for Finance shall not sell or otherwise dispose of all or any shares in the Company, other than with the consent of both Houses of the Oireachtas.
(2) Where the Minister wishes to sell or otherwise dispose of any such shares, he shall lay an order before both Houses of the Oireachtas specifying:
(a) the person or persons to whom he wishes to sell or dispose of any such shares,
(b) the price proposed,
(c) any terms or conditions attached to the sale or disposal,
and no sale or disposal shall take place until such time as both Houses of the Oireachtas have passed a motion approving the order.".
This amendment is logical and sensible and adheres to the best of parliamentary procedures one might expect from a House of Parliament. What is lackingvis-á-vis this Bill are proper parliamentary procedures. For example, we must protect the State investment in the B & I in that the State represents the taxpayers. Therefore, if the Government want to dispose of all or any of its interest or shares in a public company like the B & I, the House should have the right to debate and decide the issue; that is of fundamental importance. It is widely acknowledged in all circles, not just The Workers' Party circles, but financial editors, corporate finance spokespersons, financial journalists and others, that the proposal outlined by the Government for the disposal of the B & I to ICG constitutes anything from a Christmas present to the ICG or, in the eyes of some journalists, that the State is getting a poor deal from the sale, while others have acclaimed the deal to be a bad one on behalf of taxpayers, that in fact it means that the company will go for a song. Those statements emanate from highly responsible, articulate, deeply involved corporate financiers——
Captains.
——who have no particular axe to grind one way or another but who are merely taking a bird's eye view of what is happening. It is important that the House accept this amendment, in that it would oblige the Government, in negotiating a deal for the disposal of public assets, to have the matter fully debated in the House so that, in turn, we can ascertain whether taxpayers will receive a fair rate of return or a good deal. As legislators that is our duty.
We also want to ascertain — in accordance with subparagraph (2) (b) of our amendment — the price proposed. If this amendment is accepted it would be my hope that we could examine the whole question of price and what influences it. We hear much about the B & I company have been a loss-maker. If this amendment were accepted we could debate in great detail whether the company is a loss-maker or is capable of making profits. We would also have to examine the Government proposals to ascertain what has influenced the price recommended. Could the Minister inform the House today whether the price recommended has been influenced in any way by newspaper reports that the Minister, his family and friends benefited at some stage from——
That is disgraceful.
On a point of order, a Cheann Comhairle——
Deputy Byrne should not make such allegations. If the Deputy has a serious charge to make of that kind there are ways of doing it. He may do so by way of motions or outside the House and afford people aggrieved an opportunity of redress but he may not do it in such a manner.
A Cheann Comhairle, on a point of order, may we ask for a unequivocal withdrawal of that allegation from Deputy Byrne?
If this House is prepared to listen to me we will ascertain what is outrageous and what is not. In fact what is outrageous is the sale to the ICG Group of the B & I.
Deputy Byrne, having regard to the seriousness of the allegation of personal implication I ask that you should now withdraw that allegation. One can criticise without personalising matters.
I have to state that it would be quite improper of me not to quote for the record the source of my information. The source of my information——
The Deputy may not display articles, periodicals or papers in that manner. He may quote from them certainly but I have asked the Deputy, in all seriousness, to withdraw the allegation.
First, a Cheann Comhairle, there was a specific allegation made. There was a question posed as to whether the Minister had been compromised in his dealings with the ICG Group——
In no circumstances.
That is shocking.
Deputy Byrne, I am on my feet. I ask you for the third time to withdraw the allegation.
What allegation are you alleging I made?
The allegation you made against the Minister.
I am asking questions, a Cheann Comhairle, and it is my right to ask questions.
The Deputy is asking questions——
Are you trying to deprive me of quoting from papers in this House?
I ask the Deputy then to moderate his language.
I want to quote for the recordThe Dublin Tribune article by Colm Murphy——
Deputy Byrne——
I am asking the Minister whether he stands over this article.
Deputy Byrne, I have been on my feet for some time and you have ignored me completely, especially my request; I cannot tolerate that. I ask you now to withdraw the allegation or leave the House.
A Cheann Comhairle, there is a series of questions being asked of the Minister——
There can be no "ifs" or "buts" about it, Deputy.
A Cheann Comhairle, I am not making allegations. I am asking the Minister to tell the House whether he has been compromised.
(Interruptions.)
If the Deputy does not obey me he shall have to leave the House. I have asked the Deputy to moderate his language and rephrase it whatever way he likes but that statement cannot stand.
A Cheann Comhairle, it is important——
Deputy Byrne, are you withdrawing it or are you not?
I hope to rephrase——
The Deputy will obey the Chair this time.
A Cheann Comhairle, with your assistance, I have asked the Minister a question.
If the Deputy persists——
I have not alleged anything of the Minister. I have cited a newspaper cutting. I have asked the Minister, in the course of the debate, how prices are arrived at in order to back-up my argument——
Deputy, please do not try to circumvent the ruling of the Chair.
A Cheann Comhairle, I am seeking your assistance. What would you suggest is the best way to ask the Minister if he is prepared to deny the newspaper article——
If it impugns the character, integrity and good name of the Member concerned the Deputy must withdraw it.
A Cheann Comhairle, I would like to——
Withdraw it Deputy or else——
I would like to——
Deputy Byrne, I must now ask you to leave the House.
I want to put on the record that I have not intended to impugn the character of the Minister. I simply wanted to——
(Interruptions.)
The Deputy should read the whole article. This is a smear, a new low.
I will not be deprived in this House of asking questions of a Minister based on newspaper reports.
We will catch up on the Deputy. He has been scurrilous.
Is the Deputy withdrawing the allegation?
I never made an allegation. I was quoting an article fromThe Dublin Tribune.
No, this argument cannot continue. If the Deputy does not now obey the Chair he must leave the House. If he does not leave the House now I shall be obliged to name him. He understands the implications.
I will withdraw any imputation that the Minister has somehow or other allowed himself to be compromised by accepting cheap holidays, as reported in yesterday's newspapers.
Thank you, Deputy.
The debate we are having reinforces the reasoning behind The Workers' Party's amendment. Huge issues need to be debated before a public asset, like the B & I Line is disposed of. Before one can decide on the price one has to look at the company's trading performance, the company's assets and the terms and conditions attaching to the sale or disposal. The terms of the proposed disposal, which have been agreed by Cabinet, seem to indicate that indemnities and warranties could affect the State in the future and we have not been given information about them. I am arguing that this House should be given the right to debate a huge range of issues before the Minister is allowed to dispose of any or all of the shares of this company to a private company. What would have happened if, for example, the company were successful in the case taken to the High Court to cover themselves for £17 million? This issue was not brought to the attention of the House and we had to figure out from newspaper reports who was claiming what against whom. At the end of the day it is important that taxpayers know the terms and conditions attaching to the sale or disposal. In this case, the £17 million surplus in the pension fund is a key issue, and we will not be given the opportunity to debate it. If our amendment was accepted this would be an integral part of the debate.
The media have quite rightly identified that the company were sold very cheaply, some go so far as to say they were amazed the Minister was so keen to dispose of B & I so rapidly given the company's turnaround since 1987. It is anticipated that the company will make a profit of £4 million next year and they made a profit of £2.5 million last year. The Minister has given a commitment to clear the crucifying debt which was dragging down the company and when they are no longer burdened by that debt we will be dealing with a very lucrative and profitable company. It is right to ask whether ICG are getting a bargain. Does that sale represent a Christmas box from the Minister? Were the taxpayers adequately protected?
Our amendment will also give us the opportunity to discuss the future viability of the company in the central corridor when EC Structural Funds money becomes available. It will seem strange to the man and woman in the street that the Government decided to sell this company to ICG for £8.5 million after their debts were cleared and after they made £4 million clear profit in one year and that they will get assistance from EC Structural Funds. In fact in four or five years the public may be asking why we gave away such a lucrative company who had the potential for making huge profits, for £8.5 million. We must look at the question of future employment in the company. When one decides to sell off a company one looks not only at the price but at the terms and conditions of the sale. We are entitled to question the implications of this sale for jobs. Clearly, a decision has been taken by Government to sacrifice more men and women to the dole queues this Christmas by accepting so speedily the ICG offer in preference to the staff/management buy-out offer.
There seems to be sound parliamentary reasons for accepting our amendment and I ask Members to give it their full support.
To have less than five hours to debate Committee, Report and Fifth Stages of this Bill is wholly inadequate. In effect, there will be no Report Stage and I believe more than half the amendments will not be reached. For such an important matter, involving such large sums of public money, this is wholly unsatisfactory. Amendment No. 5 in my name is identical to The Workers' Party's amendment. It seeks that the Dáil gives its consent to the final deal in relation to the sale of B & I Line to ICG. At the outset let me make it clear that we will be voting in favour of amendment No. 1.
The Dáil is being asked to sign a blank cheque today, to underwrite a deal about which we do not know the small print. That is unacceptable to the taxpayers and it is undemocratic. Essentially we are being asked to buy a pig in a poke. In amendment No. 1 The Workers' Party propose a new subsection. It states that "any terms or conditions attaching to the sale or disposal" should be laid before both Houses of the Oireachtas. My understanding is that the £8.5 million price tag is a maximum price which may be reduced in certain circumstances if certain liabilities or warranties apply to Irish Ferries. It is quite extraordinary that Members of this House could be briefed late last Wednesday evening to the effect that there were very substantial claims against B & I Line assets to which the Minister made no reference whatsoever on Second Stage, despite five Fine Gael speakers specifically requesting him to outline the situation in relation to liabilities.
I understand there is a pending claim before the High Court by Ro Ro Ferries Limited, Moorefield Limited and Nolan Transport Limited and that there was a claim for an interlocutory injunction before the High Court yesterday that assets to the extent of £70 million could not be discharged by B & I Line. I understand this was struck out by agreement on the basis that the share purchase agreement did not transfer the assets but the shares. It also transpired in relation to that case that there are no financial proceeds payable currently for unsecured creditors. Will the Minister clarify that? Section 4 states:
The Minister for Finance may, on such terms and conditions as he considers appropriate, indemnify the Company against liabilities incurred by it before the sale or other disposal by him of any shares of the Company ....
The Minister may give an indemnity but also, he may not and the question is, where does this leave those claims: will the taxpayers be lumped with it, or will it be Irish Ferries, perhaps who will be lumped with it or will unsecured creditors be told to get lost? A vital matter is the terms and conditions that will finally apply to the sale.
Since the matter issub judice, I cannot say what the effect of any of these claims will be. Deputy O'Sullivan referred to the possibility of a claim in relation to Pembroke Port should Irish Ferries wish to relocate in Fishguard or breach any current agreement in relation to port and dock arrangements in Pembroke. That claim could be in excess of £1 million. There may be other claims of which we are not aware. We must ensure that after the Minister has concluded the deal the Minister for Finance will not bring in a Supplementary Estimate for several millions to pick up the tab for any liabilities awarded by the High Court against the B & I Line assets. That would be wholly unacceptable.
We are asking that the final elements in the small print be sanctioned by this House. That is democratic, fair and reasonable. Yesterday's hearing was struck out on the basis of leave being granted to the plaintiff to re-enter a claim at a later date. All those issues remain as uncertain as ever. I ask the Minister to consider accepting amendment No. 1 or amendment No. 5. This would not preclude any aspect in his final deliberations with Irish Ferries but it would give the House an opportunity to debate the matter. It would be completely unacceptable if, following further negotiations, we were to hear after the haze of festivities that the actual sale price was £4.5 million instead of £8.5 million. The Dáil would be powerless and would not be consulted.
The Minister referred in his statement earlier to an agreement he has signed with the Irish Congress of Trade Unions and the B & I group.
The Deputy correctly referred to the limitations on time. I suggest that the best employment of time is by adherence to specific amendments. The Minister was given permission to make a statement and the Deputy was given permission to comment on it, but I would not see in the amendments we are discussing any matters relating to the statement. The statement might be more correctly discussed under other amendments.
On a point of order, while I do not wish to have any dispute with the Chair, if he reads the statement he will see that those who proposed the grouping to exclude reference to this were quite wrong. Such subsection (2) in amendment No. 1 states that where the Minister wishes to sell or otherwise disponse of any such shares, he shall lay an order before both Houses of the Oireachtas specifying, amongst other things, any terms or conditions attached to the sale or disposal. We are told in the Minister's statement that he and ICG have agreed a number of things. They shall, for instance, seek to have at all times sufficient ships on the Irish register which could be utilised in times of emergency to service our strategic and trading routes. Is that a condition of sale? I am quite entitled to argue that it should be a condition of sale. That is absolutely valid. I do not wish to argue with the Chair.
The Deputy is right.
The Chair repeats that there are other sections to which it might be more directly related. The Chair is concerned about the best utilisation of time in the contributions made. Standing Orders are calculated to get the best out of Committee Stages. The Chair wishes to remind the House of that. The House can accept or reject that advice.
Fair enough. My argument is that we should seek before the deal is concluded that the Dáil would give consent in respect of a number of matters. We should know the exact terms of the small print in relation to the price, the exact details of liabilities and who would be responsible. We should know what the Minister has negotiated with Irish Ferries. The Dáil should have an opportunity to know exactly the position in relation to any conditions attaching to the sale concerning EC grant aid, to which the Minister referred specifically in his statement. We should have information about a possible "sweetheart" deal on corporation tax losses to be caried forward and we should know if that is a condition of the sale. We should also know about any agreements on industrial relations issues which are part of the deal.
The shareholders of ICG were insisting on the final deal in clear, written contractual form. Why should the Members of this House be given any lesser rights than those shareholders? Irish Ferries will say that all this is subject to the approval of their shareholders. We are saying that this House, which represents the public and which nationalised B & I in the first instance in 1965, should be given the same right ofimprimatur. I ask the Minister to accept this because he has been outmanoeuvred at every hand's turn in his private negotiations with ICG. His hand would be strengthened if he could say that the deal would have to be approved by the Dáil.
The Minister read a very important statement which needs careful study and attention. While I fully support the amendment, nevertheless it is important that we should also look very closely at this agreement. I would detect——
We are dealing with section 2. Later there is an amendment by the Minister. Would the Deputy and the House not accept that that is the appropriate time——
On a point of order, the Chair seems to be under the impression that the Minister's statement relates only to amendment No. 15. That is not the case. This is a fundamental amendment.
The Chair does not see how it refers directly to amendment No. 1 in the Deputy's name.
It does.
It does. Right through it——
If Deputy O'Sullivan can demonstrate how it refers to the section, let him do so.
I was trying to elaborate, but it is difficult to speak when one is being constantly sidelined or interrupted.
The Chair is much happier to listen and not to interrupt. The Chair does not regard itself as interrupting but rather as directing the House as to how best it may employ its time.
I appreciate that and I am not arguing with the Chair on this issue. The Chair must also take into consideration the fact that this statement was made to the House at the beginning of the debate. It is very important that we should look at this aspect. The amendment lays down certain conditions for the disposal of B & I and it would appear that there is a conflict with the statement read by the Minister. The Minister affirmed that ICG have indicated to him their intention to maintain the company in Irish ownership. Intention is not a guarantee. I would have grave reservations about intentions to retain the company in Irish ownership. I, and other Members, have experience of intentions which never materialised.
I am anxious to find out from the Minister what is in the fine print of this deal. This House has a direct connection with the proposed sale of the B & I Line as it is taxpayers' money which is being utilised to hand over a semi-State company to a private enterprise. It is surprising that ICTU have apparently given their approval to this proposal. When did ICTU change their policy in regard to such matters? I take issue with ICTU's position in regard to this proposal in view of the fact that the B & I Line have been turned around from a loss-making to a profit-making company and that they have a rosy future. Perhaps the B & I Line should have taken over ICG. Such a move would have been far more beneficial for this country. The proposed sale of the B & I Line to the ICG will be to the benefit of a private company at the taxpayers' expense.
The amendment states that an order specifying any terms or conditions attached to the sale or disposal of the company shall be laid before this House. That is a very reasonable proposal, taking into consideration the millions of pounds of taxpayers' money put into the B & I Line. I can see no reason for not disclosing that information. The amendment also proposes that the Minister for Finance shall not sell or otherwise dispose of all or any shares in the company other than with the consent of both Houses of the Oireachtas. This House has direct responsibility for such matters in view of the moneys we have sanctioned over the years for the promotion of this company.
As I said, I was somewhat surprised at the Minister's statement this morning as he left many questions unanswered. The Minister said he had put down an amendment to the Bill on the rights of employees as agreed by ICTU. We like to tease out such issues as the debate develops. I accept that there are time limitations on us but having listened attentively to him, I have to say that the Minister's reply to the Second Stage debate was very calculating, cold and clinical. I know that is his job and perhaps that is the way he operates but, as I said, we must have some input from the point of view of the employees. The Minister indicated that he has reached agreement with ICTU in regard to certain conditions for employees. It is the responsibility of this House and not the trade union movement or anyone else to look after the interests of taxpayers and workers. This is what we were elected to do.
There is nothing positive or concrete for employers in the agreement in front of me. This is what worries me. As I said earlier, I have had plenty of experience of companies who got involved in mergers, takeovers, etc. and in some instances it was the workers who suffered at the end of the day. I support the amendment which will provide a safeguard to ensure that we will have some control over the disposal of this very important and valuable State asset.
On a point of order, I seek some clarification. With regard to the grouping of amendments Nos. 1, 2, 5, 6, 7, 8, 10 and 16, amendment Nos. 5, 6, 8 and 10 are in my name. Will this be the only opportunity I will have to debate these amendments which deal with such issues as the golden share, even though they will be voted on later?
That is correct. I understand the House already agreed that for discussion purposes they would all be taken together.
This is the only opportunity I will have to discuss them.
That is correct.
There will be even more latitude when I speak on the golden share.
Separate questions may be put on each amendment.
I appreciate what the Minister is attempting to achieve. His statement may not be exactly relevant to paragraph (c) of the amendment but I see a certain relevance to it. Many people have conveyed their concern to me about the proposed sale of the B & I Line to ICG and the terms of the Bill brought before the House by the Minister. I am heartened to have heard the Minister's statement today on amendment No. 15 which deals with the rights of employees. This amendment contains many commendable proposals. While I understand Deputy O'Sullivan's misgivings about the amendment, the Minister is making a very definite attempt to seek as strong a set of assurances as possible in relation to the rights of employees and pensioners who are concerned about the future of their pension fund. I welcome the Minister's statement which I found very encouraging.
I will try to give as full a reply as possible to the questions asked. I appreciate Deputy Byrne's withdrawal of what had been suggested. Anyone who knows me would know better than to suggest such a thing.
We are dealing with amendments to section 2 which seeks to amend section 2 of the 1971 Act by increasing from 106 million to 142 million the number of ordinary shares which may be purchased by the Minister for Finance. In effect, this will enable the Government to invest £35 million in the B & I prior to the completion of the sale so that it can be used for the repayment of the company's debts. I should point out that the management-staff buy-out consortium's offer also sought the write-off of £35 million in debt by the Government. The debt of £35 million is broken down as follows: a bank debt, £29.8 million; a loan in respect of them.v. Munster, £2.5 million, and amounts due to Milford Haven Conservancy Board, £2.7 million. The bank debt figure is an estimate because the precise date of completion of the sale is not known and the amounts due on individual loans can vary as a result of foreign exchange movements. The loan in respect of the m.v. Munster relates to the cost of refurbishment and other modifications which had to be undertaken by the B & I. The amount of £2.7 million due to the Milford Haven Conservancy Board is the sum to be provided for in the B & I's accounts as at 31 December 1991. This sum is in respect of facilities provided to the B & I at Pembroke under the terms of an agreement with the Milford authority. That is the intention of section 2 to which these amendments have been tabled.
I have some sympathy for the idea behind this amendment — I cannot accept it in its present format — in that it seeks to ensure full disclosure of all relevant matters. Paragraph (a) proposes that the Minister shall disclose the person or persons to whom he wishes to sell or dispose of any such shares. That information has been given to the House and fully discussed here. Paragraph (b) proposes that the Minister shall disclose the price proposed. Such details were given by me in my Second Stage speech and I will be happy to elaborate on it here today. Paragraph (c) refers to any terms or conditions attached to the sale or disposal of the company. A fairly full reference has already been made to those.
I know the question of indemnity is of concern to Deputy Yates in particular, but my hands are tied in that my advice from the Attorney General's office is that under no circumstances should I discuss the case or the amount of the claim because to do so could give some advantage to the third party involved. I am advised strongly by the Attorney General's office to content myself to pointing out that this case issub judice. However, in fairness to the Deputy, I can say that if any such liability were ever to fall to the Exchequer it would have to be voted on by the Oireachtas and it would have to be brought to the Floor of this House. The Deputy will gain some comfort from knowing that the matter would have to be brought before this House. Having thought about and listened to the advice of the Attorney General, however, I am happy to state that, so far as I am concerned, we have an exceptionally strong case and I am satisfied that that is the situation.
Are there other cases?
I have to confine myself to this case. As I said on Second Stage, we went through a very definite process in taking the decision to dispose of the company. We called in SKC Corporate Finance last year and they looked at four options: maintaining thestatus quo, developing the company with additional capital from the Exchequer, liquidating the company or selling it. Having completed the assessment, SKC Corporate Finance recommended rejection of three of them and opted for the sale of the company. Following that there was a trawl of the international shipping market and, as the House knows, we have had two rounds of public tender for the company. I really do not know any other way of getting the best price for the company apart from putting it up for public tender, which is what I have done on two occasions. People are suggesting that the company is worth more, I would gladly have taken more at any time. However, the price I got is the best available in the marketplace.
One or two union sources suggested I might have been able to get more if I had done it some other way, but it can be seen from the management/staff buy-out proposals that they valued at a lower price than Irish Ferries did. I restate that I know of no other way of getting more value for a company than having two rounds of public tenders. I must also point out that it was not just my decision; I behaved extremely professionally in this matter. I appointed an assessment committee comprising representatives of my Department and the Department of Finance at very senior level and SKC Corporate Finance. They unanimously recommended that we should accept this offer as the best available for the taxpayers and shareholders. I got the best price available in the market after two rounds of public tender offers. If there had been any other offers I would have welcomed them at any time in the past 12 months. Top value has been secured for this company because of the process I went through, the involvement of SKC Corporate Finance over 12 months, two public rounds of tender and the assessment committee to which I referred. It was only after that process I agreed to proceed with the sale as outlined to the House.
On Second Stage Deputy Rabbitte asked me a whole list of questions. I should like to oblige him with the answers and I have drafted a reply to every question he raised but I do not know when I will be able to fit in the answers. I will convey the answers in writing if he wishes but I would prefer to answer his questions in the House if I can seize my opportunity.
If there had not been a guillotine on the Bill the Minister could have replied to my questions.
The information sought in the amendment has been given in so far as I can physically and legally give it to the House and it should be acceptable.
In retrospect, we should not have agreed to the Minister reading out a statement of agreement with the trade unions which, effectively, has nothing to do with the issue before the House. Deputy Liam Fitzgerald went out of his way to welcome it and I welcome it so far as it appears to protect the pension rights of existing workers. However, as Deputy Yates pointed out, it has nothing to do with the question of principle before us and questions raised in this amendment.
The Bill before the House does nothing more than make B & I commercially more attractive to sell, and indeed the Minister has just agreed with that; a sum of £35 million State equity was provided to prepare for the sale.
Fundamental questions are raised in this amendment, the most fundamental concerns the question of the terms and conditions attached to the sale or disposal. The Minister, for example, in replying said that the question of the price is clear, that everybody knows the price and to whom we are selling. He asked what the fuss is about. However, as Deputy Yates pointed out, that is not the case; we do not know the extent of the indemnities that might mature and the company will have to be indemnified by the State post sale.
In any event, I do not accept the major deceit which the Minister is trying to inflict on the House, which is that he did everything right, engaged in a trawl of the shipping market and got the best price. Nobody agrees with that. The Minister is wrong to say that he believed union sources are saying he could have got a better price. The Minister knows that it is not only union sources who are saying that. As Deputy Byrne said in introducing the amendment, every financial commentator has said that a lousy deal has been done for the taxpayer, that the Minister is selling it for a song and, as Deputy Yates said, we are being asked to buy a pig in a poke.
I wish to refer the Minister to a statement in yesterday's edition ofThe Irish Times by Brendan McGrath. He wrote a major condemnatory article of the performance of the Minister in this respect. He said:
To invest £36 million to wipe B & I's balance sheet clear was a wise move by the Government, but many senior corporate finance figures in Dublin believe that the most logical step after cleaning the balance sheet was to let B & I trade profitably with no debt burden and groom the shipping line for a sale to the private sector in two or three years' time when B & I would have had a solid trading record. At present, the Exchequer will reap the grand total of minus £27.5 million through the sale of B & I to Irish Continental Group — a paltry return from a company that in two or three years might be sold at anything up to 10 times its pre-tax profits at that time.
What does the Minister say to that? It is not from a trade union source. When the Minister said that he engaged in a trawl of the shipping markets throughout the world he knows very well — and the Government already have experience in this regard — that they prepared the Irish Sugar Company to be floated on the market; the same applies to Irish Life. He knows that you do not take a company with a balance sheet like the B & I and sell it at this time.
The Minister has not answered the question — and I do not know whether he has a reply drafted — why we should sell it now. Brendan McGrath estimates that it could get a factor of ten of pre-tax profits. Any financial consultant would tell you it would certainly attract a factor of eight of pre-tax profits which are estimated, under the existing situation, to achieve more than £4 million next year. Why the indecent haste in selling a company which has been in State ownership since 1965? Why do we suddenly, before Christmas, with minimal debate in a situation where the Taoiseach said we would not be bringing forward the legislation before Christmas, introduce and railroad it through the House at a time which is least propitious for the taxpayer in terms of getting value for money?
Until the Minister answers that question we are perfectly entitled to argue this amendment for full disclosure to this House, because it is a lousy deal for the taxpayer. I suspect the Minister knows it is, and I am trying to find out why it was made. There is no point in saying that the MSBO valued the company at less. They put together the best package they could, came up with as much money as possible and were treated in a very shabby way by the Minister. The Minister is aware also discussions were taking place with another institutional investor who was willing to put up the remaining tranche of money that would have made it equal to the bid by ICG. Most important, the Minister has not answered to this House why the board of B & I — leaving aside the trade unions, I have a great deal of sympathy with what Deputy Gerry O'Sullivan said earlier — say the Minister has concluded a lousy deal. It is they who are saying this is the least propitious time to sell off the B & I. I am not making any ideological argument here, I am merely saying it is the least propitious time to sell off this company and that the board of the company have put that view to the Minister. Contrary to the impression which he sought to give the House — he referred to the fact that he met them on five occasions — the board of the company will testify, and I stand over it, that he never consulted them about his proposal to sell this company in this manner to ICG. He excluded them entirely and at the last meeting he had with them on the morning we debated Second Stage on 10 December, there was a flaring row between the board and himself because of the manner in which he handled it. On Second Stage I put on the record the questions the board put to the Minister at that meeting. It is not my view, the view of The Labour Party or even the view of the Fine Gael Party but rather the view of the board that the Minister did a bad deal, and he has not answered that question either.
It appears, we have protected the position of workers in the B & I in respect of pension entitlements and like Deputy Fitzgerald I welcome that. This is one of the major questions we have to resolve. Deputy Yates has commented that he would like to have time during the debate on this amendment to address the critical question of a golden share or some mechanism that would give the State some strategic control in shipping terms over the future destiny of this country. The Minister came in and read out this agreement with the unions. Deputy O'Sullivan has confessed to being bewildered as to what this means in terms of the traditional ICTU position on it and I have great sympathy with that view. The point is that the trade unions did what trade unions should do. Assisted by the debate that took place in this House and the universal criticism of the manner in which the Minister handled the matter, they declared the intention to take industrial action, and then at the negotiating table they got the best deal possible.
However it is a minimalist deal. It provides for certain assurances in respect of terms and conditions of employment but it does not do more than that. Elsewhere the document is vague and aspirational. Deputy Yates referred to paragraph 2 of the first page of the agreement where it says that the Minister will seek to have at all times sufficient ships on the Irish register which could be utilised in times of emergency to service our strategic trading routes. The Minister will seek to do it: is that a condition of sale? The amendment refers to the conditions of sale. Is it going to be a condition of sale that we will have this assurance from the new ICG that the Minister will continue to pursue vigorously with the European Commission, Ireland's case for the funding of improvements in access transport services. I am sure he will but it is a pity he did not pursue it more vigorously when the B & I were in State ownership. It is a pity that ICG, having got a Christmas parcel all wrapped up in a red ribbon, should now have the Minister's commitment to get additional Structural Funds for them. I wish them the best of luck and since this is the only shipping company we have left I hope they are very successful but I would not adduce it as an explanation of what a splendid deal this is for the company. Then there is the statement that the ICG "have indicated their intention" to the Minister? What precisely does that mean? In relation to paragraph (c) of our amendment——
It is not even a fig leaf.
It is not even a fig leaf and I would like to know whether the Minister will tell us whether these are conditions of sale. They are manifestly not since they are not included in the list of amendments before us. The only amendment deals with terms and conditions of employment of workers and I welcome it.
No regard has been taken of the fact that one proposal as compared to the other would have provided 100 additional jobs. I would have thought in the crisis we are in that that was a factor to which the Minister ought to have given a higher priority. I am not making any allegations but I am thoroughly bemused at the indecent haste and the manner in which a very bad deal was done on behalf of the taxpayer by a Minister who claims to have a certain professional competence in this area. I am assured by all sources, with whom I have spoken, including the board of the company, that this is not something which was thought up by the civil servants in his Department but a personal political mission undertaken by the Minister on behalf of ICG — and the ICG only — with such a very bad return for the taxpayer. I am ashamed of it and I do not think the industrial relations agreement, concluded with the group of unions, is here or there in that regard. I have tabled an amendment, so too has Deputy Gerry O'Sullivan and the Fine Gael Party, to ensure that the employees' pension rights are protected. I am delighted that is the case because nothing else there is worth the paper it is written on. ICG will tell the Minister at a future date where to go if he seeks to give effect to any of the aspirations.
We are debating amendments to section 2 of this Bill which, as Deputy Rabbitte said deals with the restructuring of the finances of the B & I so that what amounts to a gift can be given to Irish Ferries to take over the running of B & I. Even though the section and the amendments to it seek to wipe out these debts, in fact they are not being wiped out because there will be no debts, they are being transferred to the taxpayer. It will be the taxpayers' responsibility from now on and not B & I's responsibility. I do not object to the belated restructuring of the affairs of B & I and I do not disagree with the Minister when he says that of the four options presented to him by Stokes, Kennedy Crowley the one to sell off the company was perhaps the wisest. However, I am in full agreement with Deputy Rabbitte on the hasty decision not to consider further the management/staff offer for B & I.
The Minister said ten minutes ago that the amount offered by the management/ staff was less than what he has now received from Irish Ferries. All sorts of combinations are possible when one set of shareholders is being replaced by another set. There can be deferred payments and other arrangements. If the Minister was serious in his professed wish to see the management/staff take over this company, I am certain, satisfactory arrangements could be entered into following discussion whereby payments could be made over different periods or in different ways. I am sorry the Minister has introduced this legislation hastily to put through this deal which is puzzling everybody. I read a very impressive article in yesterday'sIrish Times by Brendan McGrath who made a number of very forceful points in this regard. All the Opposition speakers in this House have expressed puzzlement at the haste with which this legislation is being put through, especially in view of the Taoiseach's undertaking here some months ago that there would be no legislation at this time. I understand that a number of Fianna Fáil backbenchers are equally puzzled by it. Deputy Rabbitte believes that the civil servants in the Minister's Department are puzzled as well. Who is the father of this Bill? Where did it come from? The only person missing from that list is the Minister and, therefore, he must be the source of it. He must also be the source of the speed with which he wants to put it through the House. The House is entitled to an explanation from him in that regard.
In this amendment we are talking about the conditions of sale. There is one other condition of sale which should be there and the Minister has responsibility in this regard. It should be a condition of sale that what amounts to a gift to Irish Ferries should not introduce unfair competition in the transportation of passengers and goods to and from this country. The elimination of those debts is a grant to Irish Ferries. They objected to a small grant of £500,000 to the Cork-Swansea Ferry Company and they took it so far as to bring their objections to Europe. They are now getting what amounts to a £35 million grant themselves.
I hope the Cork-Swansea Company do not adopt the attitude which Irish Ferries adopted and go to Europe claiming unfair competition because we need more boats bringing more people into this country. That was a petty mean act on the part of Irish Ferries and I am glad it failed. The Cork-Swansea Company is now profitable having wiped out their previous losses and in future they will be paying corporation profits tax at a rate of 42 per cent. As Deputy Yates said, the debts of B & I transferred to Irish Ferries will mean that Irish Ferries who objected to a small company getting a grant of £500,000 will be able to set off the losses of B & I against their future profits. Surely the House would agree it would be most unjust if that were to happen.
When Irish Ferries were asked to take over the running of Cork-Swansea Ferries some years ago they would only do so on the basis that they would get a £500,000 grant, a £500,000 loan and another £1 million State guarantee. If that was the type of management we were going to introduce to Cork Swansea Ferries, which needed that type of undertaking from the Government, then the board of Cork Swansea Ferries have done an extremely good job by merely having a grant and a guaranteed loan of £500,000 for the last number of years and are now in profit. One has to admire the business acumen of Irish Ferries who have hammered out this deal with the Minister with regard to B & I.
I would remind the Minister that apart from transport the Minister also has responsibility for tourism. In this regard he must ensure there is a level playing pitch between Irish Ferries and the Cork Swansea Ferries in shipping people to Ireland. Irish Ferries will now have a dominant position in bringing people to this country. I hope the Minister will bring it home to the board of the new company that he or his colleague, the Minister for Industry and Commerce, will if necessary bring the new company before the competition authority if they abuse the dominant position which is being given to them, with inadequate debate in a very hasty manner, in this Bill.
We are constantly hearing about the value of this company and that Irish Ferries are getting it at a bargain at £8.5 million. There were only two offers for the company, the management and Irish Ferries. The management offered £2 million down, and £3 million to go, guaranteed by the £6 million pension fund. The £8.5 million being offered by Irish Ferries is way above that.
Deputy Byrne asked me on Second Stage if I would indicate that I was totally against the pension funds being used. I agreed with his point and I am delighted that the pension fund has been protected. It was a dangerous proposition in the original offer to suggest that the £6 million pension fund was to be used. Stokes Kennedy Crowley recommended to the Minister that he should accept this offer. The Minister read out a statement signed by all the people involved, the trade unions and so on stating that they were happy that it was in the best interests of the B & I, its employees and the customers that this Bill should go through. Deputies here are saying they know better than Stokes Kennedy Crowley about the value of the company, that they know better than the trade unions about the best interests of their members. Who are we to listen to? We are supposed to debate the facts as we see them.
The trade unions would not have got their pension rights if they did not give the Minister his little paragraph. I have been around too long to buy that one.
I made a statement in relation to the pensions the moment I saw that offer. The Minister had not negotiated that or discussed it with the unions when I made that statement. The trade unions felt this was a good deal. The Opposition Deputies said that there would be dreadful trouble with the unions and so on. I said I hoped that when this Bill came through they would come together and sort themselves out. They have done better. They have——
——praised the Minister.
I am delighted they have praised the Minister. That is a bonus. I am interested in what is in the best interests of B & I, Ireland and the employees. I hope this new company will be successful. Despite what newspaper gurus say, who knows what the company is worth? Shipping is a very difficult business. If businessmen believed there would be huge profits they would have been in making offers to the Minister. Businessmen want to make money and if they see a quick buck to be made they will be in like a flash with offers. There were no great offers and everybody knew that B & I would have to be sold. If the management had put a good package together I would have called on the Minister to accept it. The offer made was not in the best interests of the company.
I read the article in the newspaper to which Deputy Byrne referred and I thought his comment was petty. It is only in the past few days and weeks that people are saying that B & I is a good bargain. Nobody made an offer for it or said it was a very profitable business. The new company will have a difficult time. I hope they will succeed. I was delighted with the Minister's statement earlier because it gave us an idea of exactly what had been agreed between the trade unions and the Minister.
I remember going to the stock sales when I was very young. The seller would sit in a box beside the auctioneer, and although the auctioneer had tried to sell the stock, if the price was ridiculously low, the auctioneer would turn to the seller and tell him to either take it or leave it, in other words, the seller had either to bring the stock home or accept a bad price. The unions were put in a similar position yesterday in relation to this agreement — they either had to accept it or have a straightforward confrontation. At a time when they were never less secure that was the Christmas message from the Minister: get lost or accept any deal no matter what humiliation is involved.
In relation to the future of the B & I Line and the commitments given, now that I have had time to analyse what the Minister said, it does not hold up. The Minister acknowledged that the ICTU and the B & I group of unions strongly feel that he, on behalf of the Government has a pivotal role to play in ensuring these pledges by the ICG are fulfilled — these pledges include the retention of all existing shipping routes, the provision of extra capacity and so on — and accordingly, they have sought a specific undertaking from him that he will perform this role. The Minister went on to say that he will introduce amendments not in relation to those points, as Deputy Rabbitte said, but on the rights of employees in regard to their pay and conditions and pension fund. We are dealing with pledges, pivotal roles, indications, intentions and undertakings, but they are not worth the paper they are written on. They are not even suitable as a firelighter. The fact is that there is no commitment or obligation on what was a State guarantee to retain shipping services. This agreement is welcome so far as it protects the pay and conditions of the employees, but I would like the Minister to clarify whether it gives legal effect to what the Greencore workers were given in relation to pay and conditions and SI 306 of 1980 introduced by the then Minister, former Deputy Gene Fitzgerald.
In relation to price, the Minister pressed the replay button on this video show and pointed out that he had two open tenders and had trawled the high seas to see if there was anyone who would take the B & I Line. This is not so.
He found the pirates.
There are ways one can privatise a company — by public flotation, public or private tender or private negotiation. This was not done by public tender but by private negotiation. It was a negotiated sale; if anything, it was a private tender. I cannot understand why someone in Stokes Kennedy Crowley did not ask the Minister why, given the advice of the chairman of the board and the views of financial commentators and analysts, that the price is too low, he did not say that this could be a crucial turning point in terms of the trading and operating surplus and the financial position of the B & I Line? Given that for 1991 we are talking about a trading and operating surplus of £2.4 million or £2.5 million and the projection is for an extra £4 million next year, why not sit tight and tell ICG, the staff-management buy out consortium P&O or whoever else might be interested, that all bets are off because we are not happy with the result of negotiations or the price that we will look at it again next year? The company were shifting towards an improved balance sheet and this would lead to an improved price. When deciding a price account has to be taken of the ratio of profits to capitalisation.
Even if we were to leave that aside, the Minister was in a strong position to say to ICG that, whatever way we look at it, if they were to acquire the assets of the B & I Line — mobile and property and shipping routes in the event of the B & I going out of existence it would cost them over £20 million. In those circumstances I cannot understand how the Minister can continue to justify this maximum price of £8.5 million. No public tenders were sought. This time last year Stokes Kennedy Crowley made inquiries to find out who might be interested in the event of the B & I Line being put up for sale. When the Minister invited the SMBO in September, he did not invite anyone else to make an offer. They had to meet a specific deadline and a number of other conditions.
When it came to the liabilities, the old smokescreen was put up — that we must genuflect to the Attorney General's advice, although last week when Deputy Rabbitte produced material which emanated from that source it was promptly ignored. As the House is aware, under Standing Orders, legislation takes precedence over any issue which issub judice. Of course, the B & I have a defence but the Minister still has not said whether there are any other claims or explained why he did not acknowledge the existence of these claims.
We are taking together four amendments in my name — I have already referred to amendment No. 5 under which the Dáil would have to give its consent to the deal. I would now like to refer to amendment No. 6, given that I will not have another opportunity to deal with it. That amendment reads:
In page 3, before section 3, to insert the following new section:
"3.—The Minister for finance shall, notwithstanding any disposal of his shares in the Company, retain a special share in the Company to which shall be attached the following rights exercisable by the Minister with the consent of the Government:
(a) no sale or disposal of shares in the Company, and
(b) no sale or disposal of strategic shipping services (as may be determined by the Minister from time to time), shall take place unless the terms thereof have been approved by the Minister."
The Minister did not reply to that amendment, neither did he refer to it in the flimsy document he put before us today. In my Second Stage speech I pointed out what this deal means for the ICG but I made a mistake in saying that the share price would increase from 12p to 24p. What I should have said was that the earnings per share are projected to rise from 12p to 24p. What is there to stop the ICG being sold in the morning? What if someone wanted to buy ICG? There is no measure or mechanism accepting the importance of shipping from a strategic point of view or the Irish Shipping Register. No reference has been made to resale in the short, medium or long term future. We are trying to ensure that the Government would have to approve any resale and this would be tied in with the retention of shipping services.
If the Minister asked Irish Ferries what their position is in relation to the shipping services on the southern corridorvis-à-vis Rosslare-Pembroke, they would tell him they are not projecting any profits on their proposal to replace the mv Munster on that line for three years. What would happen if some whiz kid in NCB gets a brain wave and suggests that they get rid of their services on the southern corridor because they could make more money by concentrating traffic on the central corridor, by doing a deal with the Stena Line by giving them the exclusive option on the southern corridor and maximising profits and increasing fares in the process? That would be a very attractive option for ICL.
The Minister said he is playing a pivotal role and is looking at the pledges, undertakings and so on, but he has no control under the monopolies and mergers law and will not be able to stop ICG from acting in any particular way when it comes to the retention of shipping services. Similarly, if losses are sustained by European Container Services — ECS — in relation to the freight/cargo services between Dublin and Antwerp, Le Havre and Rotterdam, and they decide to abandon any of those medium haul routes, where would Irish industry be, given that they already have problems with capacity, the lo-lo terminal at Dublin Port has been scrapped by Sealink, and they have let the Holyhead Port run down, while the British Government have failed to develop western ports on the Irish Sea?
Where will Irish industry be? It will be out with the washing. There is an abandonment of strategic factors here and this can only be overcome by the retention of a golden share. Whatever may be said about Margaret Thatcher, in all privatisations in Britain she ensured that where a strategic national interest was involved a golden share was retained so that there would be some control over developments.
I reiterate that in 1965 when the B & I Line were set up there was an underlying strategic interest in their acquisition. In my amendment No. 6, I propose that the State retain 20 per cent of the company. Certainly a sufficient number of shares should be retained. I know that Deputies have other amendments down to the effect that the Minister, by order, would have control. This is the last opportunity for the House to exercise control in relation to shipping matters for an island country that is depending on such services.
The Minister did not refer to any of these issues. How would he define his role in this regard? ICG are not in a position to give undertakings and, therefore, the only alternative is to make legal provision to protect the workers. I ask the Minister to reflect on his position in this regard and to realise the weakness in what he has proposed because, except in so far as some narrow industrial relations aspects are involved, there is no legal protection.
I intend to push our amendment to a vote before 2.30 p.m. The Minister has not answered the case made by The Workers' Party, Labour and Fine Gael which clearly supports the position as outlined by financial commentators and financiers. One would not sell a house with dry rot, particularly if there was only one potential buyer and if the dry rot is a £30 million inherited debt as in the case of B & I. The logical position that should have been taken on behalf of the taxpayers was to agree to write off the debt and allow B & I to continue trading profitably, as they have been doing. They would have played a role on behalf of the State and the taxpayer in bringing tourists from the Continent and Great Britain and would have been a profitable and buoyant company.
Nobody seems to understand the logic of the position taken by the Minister in disposing of B & I at this time. What are the prospects of European funding of B & I after the company have been sold to ICG? As financial correspondents have asked, why, having written off the £30 million debt, did the Minister not decide to hold on to the company for another two or three years and then make a decision on the matter based on market conditions?
If that was done B & I could trade profitably and the united workforce and management could be proud of their efforts on behalf of the company. Instead the Minister has alienated the vast majority of the workforce and management in pursuit of his sweetheart deal with ICG.
The Minister in his statement today spoke about the agreement made between the Irish Congress of Trade Unions and the B & I group of unions and said he had covered adequately many of the questions posed here. His statement was to the affect that indications have been made to him or that he is going to try to get an undertaking from ICG. The Minister said he acknowledged the rights of the Irish Congress of Trade Unions and the B & I group of unions who strongly feel that he, on behalf of the Government, has a pivotal role to play in this matter. The Minister talked about extracting pledges, indications or markets from ICG. This is a handshake and a slap-on-the-back type of agreement but it has no legislative base. The Minister can list as many things as he likes but that is of little use. He said that ICG have indicated they will allow for the replacement of B & I's container ships and the provisional long term sustainable employment of B & I workers. The Minister could have come in with 50 pages of indications from ICG or 50 undertakings to sustain the shipping line between Ireland, Britain and the Continent, but without the legislative base as proposed in our amendment they would be of little value.
Amendment No. 1 refers to "any terms or conditions attached to the sale or disposal". If the Minister does not accept this amendment his statement is not worth the paper it is written on. It does not guarantee job security for the workforce at B & I, nor does it guarantee that ICG will adhere to all the terms as indicated.
Amendment No. 2 proposes that the Minister for Finance shall not sell or otherwise dispose of all or any shares in the company other than to employees of the company or a venture in which employees of the company hold the controlling interest. Tremendous efforts have been made by the B & I workers on behalf of the company and that has been recorded in this House and acknowledged by Fianna Fáil backbenchers and the Opposition parties.
Let us look at the history of B & I, particularly the five year agreement negotiated in 1987 under which the workers made many sacrifices. Since then the company have come from the doldrums to earning a trading profit of £4 million. This improved performance was obtained on the basis of the input by the workforce and management of B & I. It is an incredible snub to the workforce and an indictment of the Minister's sensitivity and his political determination that he would allow privatisation of this company without agreeing beforehand certain conditions for the B & I workers.
There is no doubt that many sacrifices were made on behalf of B & I including the laying off of 600 workers in 1988. As a result of the five year agreement men and women voluntarily took a 5 per cent decrease in wages and they signed an agreement that there would be no industrial disputes during that period. They worked very hard on behalf of the company — some families have been working there for years, long before 1956 when they became known as the B & I Line. Those people have been treated very shabbily and I would like to record that yet again. I will be pressing our amendment.
Other speakers are still offering — Deputies Liam Fitzgerald, Cosgrave and Jim Mitchell — and I will have to hear them before the vote is called.
I would like to reply.
I have heard from Deputies Yates, Byrne and Rabbitte that this represents very bad value and the deal that the Minister's Department have entered into——
The board and every independent commentator supports this view.
——represents bad value. The board are now being quoted, but it is quite understandable they would regard it as bad value because anything that would not give them an absolute assurance in relation to certain matters pertaining to themselves would certainly be bad value, and if I were on the board, I would consider it in that way too.
That is unworthy of the Deputy.
All I am saying is that if I were on the board I would have to take that perspective and I do not blame them for that. I am not casting any aspersions on that. One has to put aside the views of those who have been put on the spot in order to try to arrive at an objective view. Deputy Rabbitte among others referred to the views expressed in newspaper articles. I do not wish to trivialise the journalistic judgement that a multiplier by a factor of ten should be applied to pre-tax profits to determine the price. We could all pull figures out of the air. I know a number of people in the shipping business and they repeatedly talk to me about the peak and trough pattern of the business. The shipping business is all about peaks and troughs, it is up and down from month to month and year to year. Anyone could pull a formula out of the clouds, and I suspect that the journalist, whom Deputy Rabbitte referred to, did that, or alternatively was helped to do that by people who held a particular viewpoint?
That was the view of many and not just one journalist.
Does the Deputy accept that a multiple of pre-tax profits is the usual mechanism for the purchase of any particular company?
Acting Chairman
The Deputy should be allowed to make his contribution without interruption.
No, not necessarily. It varies from business to business.
The Stock Exchange does not do it that way.
Acting Chairman
Let me say at this stage that this is not "Questions and Answers".
Sir, assertions have been made and I have to take on these assertions. I am asking the Deputies opposite who made those assertions to clarify and elaborate and tell us which professionals have told them what the formula should be. Quite frankly if there is a tendering system, as there is in this case, why did it not bring forward more prospective buyers?
Because there was no normal tendering system.
Yes, there was.
The Minister will clarify the matter if I am wrong in that regard. Where were all the other interested parties in Ireland and abroad who could not come forward and make these generous offers applying the formula of a multiplier of ten on pre-tax profits? Since those assertions have been put so strongly, where are the potential purchases and are they still around? Have they spoke to the Deputy in person and told him they would be prepared to offer £20 million, £30 million, £40 million or even £50 million for the company, because they think it is worth that? I have not heard anything about them.
Deputy Rabbitte seemed to trivialise the signing of the statement by the unions. Surely if the unions and congress signed this statement, they must have confidence in the determination and commitment of the Minister to seek to obtain the maximum assurances possible.
I know with precision the extent of confidence in the Minister.
We are being asked to play a game of Russian roulette.
Acting Chairman
Let us allow the Deputy to speak.
It is difficult to know exactly what Deputy Yates' attitude is to privatisation.
I am not opposed to privatisation.
The Deputy appears to want to sell off and then pull back. If the management and staff buy out had proceeded what provisions are in place to prevent the staff from selling on the company? The Deputy is very worried about ICG selling on the company.
The same conditions should apply.
Acting Chairman
Deputy Fitzgerald has a right to make a contribution without interruption in the same way as other Deputies were allowed to make their contributions to this debate. Members then have a right to reply.
I am merely raising these questions so that the Deputies will have the opportunity to reply to them and clarify the position for me.
Deputy Yates has made most of the points one should make on behalf of this side of the House. Most of the Second Stage speeches were hard on the Minister and rightly so. The Minister has made a bad deal and has forgotten the staff, the people who worked very hard to turn the company around. It was pressure from outside this House, the media and the staff, that forced the Minister to present this document this morning.
This document affords no protection to the workers. I am worried about the employees and as both Deputies Liam Fitzgerald and Stafford know, B & I Line staff come from the north-side in the main. During Second Stage I spoke about the tradition of people from Howth, Baldoyle and Sutton working for the company, and they have put a great deal of time and effort into saving the company over the years so that it is now in profit. They are being let down by this document because it affords them no protection whatsoever. Deputy Fitzgerald knows the people I am talking about. Deputy Fitzgerald knows the people in Howth, and Deputy Stafford knows the people on the north side. It was they who brought about this pressure and the Minister reacted to this pressure by producing a document which he hoped would get him through the Committee Stage debate.
This document is not good enough because it does not provide any protection for the staff. The Minister states that the Government have a pivotal role to play in ensuring that the pledges given by ICG are fulfilled, but what does that mean? This document is useless to the staff. We know that when ICG will take over the company there will be staff duplication and the B & I administrative staff, will suffer and will lose their jobs when the 200 or 300 staff are made redundant. The northsiders will lose their jobs and will be put on the dole. Irish Continental Group will not have staff duplication and when decisions have to be made it will be the B & I accountant or administrative staff who will lose out. As I said on Second Stage, the only way to protect the staff is by way of a golden share. This has not been addressed and the Minister should look at it again. In Aer Lingus, for example, the State have a share in the company and in that way the employees are protected; it also keeps the company in Irish hands, and rightly so. That is the way things should be. We ensure also that we have control over our ports because shipping is vital to a country that exports goods. The only way to ensure that we do this is by bringing in a golden share.
I am very disappointed that both the Second and Committee Stage debates have been so short and, indeed, that Question Time is so short. The amendments before us are crucial to maintaining ownership of a shipping fleet by Irish shareholders. When the heartbreaking decision had to be taken in relation to Irish Shipping Limited — a decision which has been vindicated by time but which was then the subject of much ill-based criticism by the present Minister — we were able to salvage Irish Continental Limited, now known as the Irish Continental Group. The dream or hope was that this would eventually emerge as a new shipping fleet for Ireland. The Government of which I was a member extended the 10 per cent tax rate and business expansion scheme to shipping but unfortunately within months the new Fianna Fáil Government effectively strangled the business expansion scheme as far as shipping was concerned because they tightly limited the amount of investment in shipping by Irish taxpayers. The most crucial issue from this country's point of view arising from the Bill is whether a shipping company will remain in Irish ownership.
The continuity of service is vital, not only in relation to ferry services to Britain and the Continent but also because we have to look ahead to the possibility of resurrecting a deep-sea shipping fleet and giving employment to the many hundreds of people who have the skills necessary for such facility but who are unemployed as a result of the recession and of the unfortunate but necessary decision made in relation to Irish Shipping. The effect of the Bill, unfortunately, will be to put more people in the shipping sector out of work. The only way to save those jobs and to create more jobs is for an extension in the forthcoming budget of the business expansion scheme to shipping.
Progress reported; Committee to sit again.