Aer Lingus Bill 2003: Report Stage (Resumed).

Debate resumed on amendment No. 3.
In page 4, lines 20 and 21, to delete "for so long as he or she thinks fit".
—(Deputy Crowe).

On Second Stage, members of the Government parties, especially those from constituencies close to Dublin Airport, made a cogent case as to why Aer Lingus should not be privatised. It would be interesting to hear the Minister responding to his backbenchers. When asked whether they felt it would be good policy by the Government to sell the company, they said that it would not and was not in the long-term strategic interests of the company, workers or the public interest. I agree with and commend those Deputies on the Government side. I would like to see them return to the Chamber to discuss these crucial amendments.

Given the limitations in the Bill, I commend my colleague from the Technical Group, Deputy Crowe, for tabling these amendments. It is difficult to amend this legislation in a straightforward manner other than by deleting the section that gives the Minister the power to sell the company. It was clear on Second Stage that the main intent of the Bill was to prepare for the sale of the company. I regret that the Minister was not more upfront and frank about this. Had he been, we could have had a more concentrated debate.

The Government has followed what is known as the "Washington Consensus" for a number of years. The Government seems to believe that social or business objectives cannot be achieved through public enterprise. There is a suggestion that public enterprise is unable to organise the affairs of a company to operate properly in the market and provide the necessary services. I disagree with this basic assumption. I have met a number of people working in public enterprise and I have full faith in them. The ownership structure often allows them to operate in such a way that benefits the proper long-term development of the business. This is the proper background against which these services can be provided. I do not believe that those on this side of the House have an ideological difficulty with the use of public enterprise in the provision of such services. In many cases, such enterprises can serve the public and the State much better.

If the Minister has a problem with the way a company operates, he or she can change the board, policy and management structure. While European directives may say Ministers cannot be responsible for public companies in services, we have seen governments fighting to protect their rights to issue management directions in other areas. I do not see why we cannot do the same in this case.

My party is in favour of the principle of worker participation in companies. This leads to a better working environment and decision-making within the company. Giving a voice in the boardroom to those working on the ground is a clever move. Giving them a share of the profit of the company is an example of good business sense and good social policy. It is also a good economic policy for the country. I support the development and use of employee share ownership schemes and trusts as a way of furthering this goal.

The Minister commented on the Second Stage debate that the reason for giving a 14.9% stake in the company to employees was that it is Government policy to give such a stake where the State is exiting a company. This is not the correct strategy. It does not pursue an ideology that encourages worker participation. In essence, it says this stake will be given to workers to compensate them for the State withdrawing from the business. What message does this give to workers in Aer Lingus? What message does it give to workers throughout the country about the possibility of becoming more involved in management decision-making?

It is deeply regrettable that we are linking the provision of employee share ownership trusts with the sale and privatisation of companies. Yesterday on the Order of Business, Deputy Broughan asked the Taoiseach about the position of the ESOT for An Post. The Taoiseach and the Minister for Communications, Marine and Natural Resources looked at one another questioningly and came to the conclusion that it is going nowhere. The reason for this is that the company is in severe financial difficulties. Therefore, there are no plans to privatise it and the employee share ownership plan will not be introduced. This is not the way to operate ESOTs.

Deputy Sargent raised the issue of ESOTs during Leaders' Questions. Some workers may perceive some of the criticisms my party has directed at the actions of the Government in the Eircom case as being criticisms of ESOTs. It is far from it. The Green Party supports such trusts and seeing workers rewarded. However, the circumstances in the Eircom case, where the workers received a preference shareholding to encourage a further buy-out of the company by venture capitalists, runs against the long-term general interests of workers in terms of participation. Preference shareholding does not convey voting rights. Owing to the tax changes meted out by the Government, we may see more trusts take the form of preference shares. Under this, it will be safe for employers to feed a certain tax-free revenue stream to workers without giving them a say in how the company is run. This is another reason this secret deal was bad not only for the public, but also for workers.

I would imagine that the Aer Lingus workers will understandably be looking at that deal and asking how they are magically to double their stake to 30% of the company on a tax-free basis. I would have to caution the workers that, while the Eircom deal proved to be incredibly lucrative and successful for the unions involved, future returns from a shareholding trust would be far more difficult and precarious after selling an airline. As the Minister knows, the airline business is far more cyclical, with no real fixed assets backing in the same way as Eircom. We are selling goodwill, know-how and the skills of the workforce as much as anything else.

The allowable debate is on the ownership of shares by the Minister, his voting role and the implications for same, so Members should keep to the subject matter.

I will try to draw my remarks to a close, but I am coming around to the point that the sale of the company will not be the magic solution for the workers that the Minister may think. We are dealing with a company in a very cyclical business where large profits, as well as significant losses, can be made in a short period. There is no certainty as to the future of the company in that open market. In such circumstances, the Irish public and State could also be at a significant disadvantage. If we are losing an airline with a strategic role in connecting us — as Deputy Higgins said, an island nation — to the rest of Europe and the world, I do not see the business logic or the benefits in our selling that control and the fall-back position that we have where the State can ultimately decide the future direction, strengths and weaknesses of the company. We are giving up control of a vital transport asset in this Bill, and my party is certainly opposed to that. I imagine that many Deputies on the Government side realise that it is short-term ideology and not necessarily in the best interests of this country. I ask the Minister to reconsider those plans and the Deputies on the other side who expressed reservations about such privatisation to consider supporting the amendments before us, particularly No. 4.

I do not intend to get into a Second Stage debate on this issue, but I rise to support amendments Nos. 3 to 6, inclusive. They go to the kernel of this Bill, whose original purpose was to raise the shareholding of Aer Lingus workers to 14.9%. That was fair enough, but at the end of the Bill, the Minister proposed to take it upon himself to decide to sell shares in Aer Lingus. Committee Stage, on which the Minister referred to that without the general principle of the disposal being laid before and approved by Dáil Éireann, represented a major move. However, it also begs us to come to terms with the Minister's direction.

All of us who have been involved at constituency, regional or national level in terms of the future of Aer Lingus, most importantly, a viable future for the company and this country, are concerned to find the best way to achieve that. We might differ from the Minister in that we feel that there is no need at this stage to privatise the company. I can recall the early 1990s when we had the Cahill plan, which devastated the workforce and brought about major changes. The workforce and we were told very clearly that if Aer Lingus was to have a future, we had to make it viable, and everyone had to pull up their socks and tighten their belts in that context. They did that, but then we were told that we could not get any more equity. No further State equity would be approved by the EU to copperfasten Aer Lingus. Significant changes were made, and we now have a viable company which can show what it can do with the proper management and the full support of the staff. They turned around Aer Lingus, which is now a viable organisation.

However, now people are coming along who were not interested in the past but have their greedy eyes on Aer Lingus and speculate about what profit they can make from involvement in the sale or purchase of the company. If we are all up-front and have the same objective of trying to do what is best for the future of Aer Lingus, it is imperative that we all be at one — the Minister and his officials, the board, the chairman, the chief executive, the workforce, the elected Members and the public. They must all be involved in this process of deciding where we are going. However, the great difficulty is that in many ways we do no know where the Minister is coming from. There is a perception abroad, which I tend to share, that the Minister's thinking, as has been shown with Aer Rianta and Dublin Bus and we can see now with Aer Lingus, is that selling things off is the way forward.

This afternoon there is once again reference to a media report which emanated from the Minister's Department. Many would say that it had his fingerprints on it and that it represents his ideas on future moves. It is very important to achieve clarity and ensure that we are all at one in that regard, particularly those working in the company. What was the status of that report? Was it verbal, as has been said in recent newspaper reports? Did the chief executive and the chairman meet the Minister to give him a written report? He gave the Minister a written report, so the Minister has one. The Minister's understanding was that it represented the position of the Aer Lingus board.

We all get feedback from various sources, but I understand that that was not the position of the Aer Lingus board and that the company made no decision and gave no authorisation to the chairman or chief executive to write a report indicating to the Minister that it was in favour of a 40% sale of Aer Lingus. If that is so, it is extremely serious. If we are to resolve this problem and ensure that we have a strong Aer Lingus which can compete against anyone, including Ryanair, we must all be singing from the same hymn sheet. Senior Aer Lingus executives cannot perform solo. If the chief executive or chairman came to meet the Minister and he were not satisfied with what they said, he might say that ultimately it is the Government's decision.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.