Our party spokesperson has informed the House that Fianna Fáil will vote against this Bill. In general, I oppose the privatisation of State companies unless there are specific reasons. Semi-State companies play a major role in the economy. They have a total turnover of approximately £4.5 billion and make a considerable contribution to the country's welfare. Up to £1 billion is returned to the Exchequer through income tax, PRSI and so forth.
The sale of 20 per cent of Telecom Éireann for £183 million is a giveaway. It represents a severe undervaluing of the assets of one of our major semi-State bodies. When we reflect on this sale in four or five year's time, it will be seen to have been an absolute giveaway. Only hindsight will prove my contention but that has been the case in regard to other privatisations of semi-State bodies in both the UK and Ireland. Shares of Irish Life and the Sugar Company, which at the time did not appear to be the snip this sale is, were seen in hindsight to have been sold too cheaply. The sale of Telecom Éireann will be the most glaring example of this.
There is no logic in what the Government is doing. It made the decision to seek a strategic partner and to sell part of the company. It advertised for partners and, one by one, the partners pulled out of the negotiations. The Government has ended up doing business with the only company that remained interested. The Minister has championed this deal but I believe that has more to do with his pig-headedness or determination than anything else. Having decided on a policy, he stuck to it and tried to put the best face forward. However, in being obliged to deal with just one bidder the Minister, in his heart of hearts, must be disappointed with how this matter has turned out, although he will not admit as much. He had to do business with just one partner because he had to stick with the course to which he had committed himself. If part of a State company is being sold, why must it be sold to foreigners? This must be a manifestation of a type of inferiority complex in the minds of some Irish people. Why can a company not be sold to the Irish public or to the pension funds of Irish workers? Why must we always behave as if we cannot do business at home or as if nobody here has money and we must bring in foreigners? The current position is that people living abroad can buy shares in a company which owns a portion of Telecom Éireann. In effect, people in Sweden or Holland can buy shares in the development of Telecom Éireann but Irish people cannot.
We are selling 20 per cent of Telecom Éireann. However, whether the portion is 20 per cent or 35 per cent, the deal is wrong and is bad for the Irish taxpayer. The Bill allows the Minister to sell up to 49 per cent of Telecom Éireann without referring back to the Dáil for further approval. Those who console themselves with the thought that we are only privatising 20 per cent of the company are living in a dream world. This is privatisation and we have seen with other companies that the only big and important step is the first step. Once it is decided to privatise or sell a portion of the company the principle has been established, after which there is no real argument.
It was amazing to listen to the last speaker, Deputy Kenny. If he were in Opposition he would have been thumping the table about a Government selling or privatising the jewel in the crown of the semi-State sector. Instead he talked about technology and ignored the fundamental issue, or at least it was a fundamental issue for people who label themselves members of the Labour Party or the left. I worked for 25 years in a semi-State company and, in many ways, that is where I arrived at my philosophy on these matters so I share the concerns of those people.
The notion that one can induce a foreign company to pay £183 million for 20 per cent of a company and that it will not try to seriously influence that company is a joke. Once a private company has invested its first £1 it is looking for reward and the rewards in this case will be delivered on the backs of the efforts of Irish employees in the future.
The notion that we are entering a strategic alliance with one of the giants in the telecommunications industry is a fallacy. While KPN/Telia are a fine company, they are not much larger than Telecom Éireann. The notion that KPN/Telia is vastly superior than Telecom Éireann in terms of technology is wrong. In recent years taxpayers have invested a fortune in the company and it can compete with the best telecommunications companies in the world. Perhaps the alliance will be beneficial in the future, but Telecom Éireann is linking up with a company that is only at a similar stage of development. Future technological development will have to be worked out between the two companies, we will not get it for nothing. The public has been short-changed and this is not a good deal.
I fail to understand how members of the Labour Party and Democratic Left can support this deal. The comments of many of their members in the past, particularly when Irish Life and the sugar company were being privatised, now ring hollow. This sale is being made on the cheap and will provide a quick killing for foreign companies, not for the taxpayers. Deputy O'Malley stated that taxpayers will not even benefit from the proceeds of the sale. It appears the £183 million will be kept within Telecom Éireann and the person who buys a 20 per cent share will at least get back 20 per cent of his or her money.
Very few speakers from the left contributed to the debate. I am familiar with the views of Deputies Sean Ryan and Kenny on the question of privatisation. Deputy Ryan and I worked for the same employer some time ago. I am shocked at the manner in which their philosophies have changed. Do the members of the Labour Party have any honesty? Deputy Ryan took credit for the £175 million which the Labour Party secured for Aer Lingus and TEAM Aer Lingus. Has he forgotten it was a Fianna Fáil Minister, Deputy Cowen, who did the spadework and delivered the deal at the Cabinet table? I accept we were in partnership with the Labour Party at that time, but the achievements were made with the co-operation of the staff of Aer Lingus and TEAM Aer Lingus and as a result of the efforts of the then Minister, Deputy Cowen. A number of Labour Party members prolonged the process because they were afraid to stand up to the shop stewards, some of whom did not understand that we are living in a changing world. If the Labour Party had given them the facts, matters could have been resolved much sooner. The northside six failed to understand the limits of what was possible. At one stage they were minus one because Deputy Shortall did a runner on a crucial vote on a TEAM Aer Lingus motion for fear people would know how she voted.
I am amazed and annoyed at members of Democratic Left and, in particular, the Labour Party for the manner in which they brazenly support this legislation. It conflicts with many of their hollow promises. The scene is changing in many semi-State companies and this has been talked about at union meetings for the past ten or 12 years. The Labour Party and Democratic Left created the image that they are the honest brokers, the protectors of semi-State employees. They conned the people prior to the 1992 election. I am sure Members will recall the sermon from the ramp at the airport when people fell hook, line and sinker for a number of false promises. Many of those people are now out of work or are working approximately 30 hours in March, 35 in April, 50 or 60 in July and are back on the dole for three or four months towards the end of the year. Many workers in Telecom Éireann, the ESB and CIÉ are bitter about the false promises of Democratic Left and the Labour Party. A total of 2,000 jobs are being shed in the ESB and a further 2,000 in Telecom Éireann. It is reported in this morning's newspapers that 800 jobs are to be shed in Iarnród Éireann and more in some of the other CIÉ companies. At least Fianna Fáil were honest with the workers, but for those who made the false promises, it is a case of watch what we do rather than what we say.
Many workers have been betrayed and some leading trade unionists have been brow beaten. Some workers voted for restructuring because they were bribed into selling their jobs. A person of 50 or 55 years of age who is offered a cheque for a large sum of money will usually consider only the short-term, accept the cheque and leave the workforce. Trade unionists, however, must protect the long-term interests of those who continue to work. Deputy Ryan stated that he had no difficulty with selling 35 per cent of the company, although it is incidental to the main function of the strategic alliance. It is amazing how the views of the Labour Party and Democratic Left have changed. A previous principle is now simply incidental to the strategic alliance.
Deputy Ó Cuív spoke about worker-directors, something which is close to my heart. The recognition of the role of the worker-stakeholder in State industry, through representation on boards of State enterprises, has made a unique contribution to necessary changes in recent years. A comparison with State organisations elsewhere demonstrates the value of the concept, and as it matures the benefits increase. In the light of such positive achievement, it is disturbing that the Bill will effectively deny the worker-stakeholder in Telecom Éireann 50 per cent of their representation on the board of the company. In his anxiety to sell off part of the public asset, the Minister is trying to quietly halve the worker-stakeholder interest in the Telecom Éireann board-room. It appears the three director vacancies to be filled by the new partners will be made possible by kicking out the worker-directors. Where is the equity in that proposal? What have workers done to deserve this? A sum of £183 million or 30 pieces of silver has turned matters on their head. Other speakers stated that the main union in Telecom Éireann has been negotiating with the Minister in this regard, but a compromise has not yet been reached. There is a danger that the agreement of workers about the deal could change unless this difficulty is resolved. Is the Minister bluffing? I fail to understand how the number could be reduced from four to two.
It is probably a case of softening them up by threatening to reduce the number to two, but that he will make compromise on Committee Stage by increasing it to three so everyone will be happy. On the basis of arithmetic, it is ridiculous how he has reduced the number to two. It would be ridiculous if they are that easily fobbed off by increasing the number of three to make everyone happy.
The situation in Telecom Éireann, and other semi-State bodies, is that the big unions take most of the positions on the board and the last place goes to an amalgam of the smaller unions. That is what happens in most companies. If we reduce the number, it could mean that the big unions will take everything while the smaller ones will be disenfranchised. Another rumour floating around semi-State companies is that worker-directors will serve a four or five year term, like the commercial directors, and will leave in turn so that only one or two will be elected at an election. That would be a disgrace, anti-democratic and would silence and push out members of the small unions. I accept that such a provision is not contained in the Bill, but it is a rumour which has been floating around. It would represent a very bad deal.
I understand KPN Telia is to get three places on the board for 20 per cent. When it requires 35 or 49 per cent, how many places will it get on the board? Will another worker-director have to move over each time the stake increases? The main union has made some recommendations. It has asked that the number go back up and suggested a Pat Rabbitte "baby chair" type solution where people could be on the board but could not necessarily vote. The minimum number should be three with that solution or another director for the worker-director shareholder. Reducing the number to two is not a genuine move but a tactic to soften people up.
Another suggestion from the unions — I do not like the sound of it and it makes me nervous — is that in future it would not have to be a worker-director on the board, that it could be an outsider or the general secretary of the union. That sounds very fishy and I am inclined to think I smell a rat. I wonder what deal has been done. Do some union officials see themselves appointed to the board as the price for their support for this deal? I feel very strongly about that. This issue is about the worker-director not the unions getting a general secretary, a leading light, a sympathiser or an outsider on the board. It is vital that it should be a worker-director who will muscle in. I hold a strong view on that and I hope there is no compromise. As of right the figure of two should return to three. Some means should be found to increase it to four — perhaps another place based on the shareholding — otherwise we will find that the big unions will take everything. It will be a case of might is right and the small unions will be pushed aside.
On the appointment of the director of telecommunications regulation, why is it that in most legislation we are taking away power from politicians and the Minister and setting up independent bodies? It is as if suddenly the politician, no matter what side of the House he or she is on, is crooked, that one cannot trust him with power and that one must have an independent body. It is about time all sides of the House pulled together and started a campaign to bring power back to the politician otherwise we will be reduced to the status of messenger boys. I do not know why this is happening, whether it is because of The Irish Times or senior civil servants, but most Bills propose the establishment of an independent body and take power away from the Minister.
In some cases the Minister may be afraid to exercise power and looks for a skirt to hide behind. We are doing away with our positions by giving power to everybody. Because we set up a body and take power away from the House, it does not mean that somebody will not do a favour for their mother or brother; it does not mean that suddenly life is straight and people are more honest. We need to cop on and stop setting up independent bodies in legislation.