Vol. 800 No. 1
1. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform the actions he will undertake following the conclusion of the vote by public sector unions on the Croke Park II agreement; and if he will make a statement on the matter. [18030/13]
2. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will set out his implementation plan for the Labour Relations Commission's Croke Park II recommendations. [18001/13]
I propose to take Questions Nos. 1 and 2 together.
At its meeting yesterday, as expected the public services committee of the Irish Congress of Trade Unions did not accept the Labour Relations Commission, LRC, proposals for a new public service pay and industrial relations agreement. Clearly the Government is disappointed at that outcome. It is disappointed because it believes the LRC proposals represented a fair, balanced and negotiated resolution to the stark problem that faces the country, namely, that the Government cannot afford to pay its employees as much as it now does.
The proposals would have ensured that direct pay reductions were reduced, in so far as possible, through public service-delivered productivity. By increasing productivity, it would have allowed the Government to deliver the same level of services with a smaller number of staff and fewer agency workers supplied from the private sector. Consequently, the Government could have reduced the cost of the pay bill by reducing numbers of employees in a voluntary way, while avoiding substantial reductions in the services delivered to the public.
The proposals would have contained the really big drivers of the cost of delivering modern public services, especially those which must run on an all-day and through-the-weekend basis. At the same time, they respected the important principle that those public workers who must work at unsocial or inconvenient times at nights or at weekends should receive more pay for that work. Finally, where direct pay cuts had to be applied, they would have applied only at the upper levels of pay and they were the people who have been asked to take that reduction. The core salaries of the 87% of public workers who earn less than €65,000 were to be protected. The majority of those who earned above that amount but less than €100,000 received an assurance that their pay rates would be restored after 2016.
The LRC proposals therefore went a long way towards avoiding the highly unpalatable outcomes for public servants and giving them security about their terms of employment up to 2016. However, I recognise it is unprecedented to ask public servants to sign up to an agreement that has a negative impact on their pay and conditions and it is now clear that a majority were not willing to so do. It is a matter of regret that, as has been made clear on many occasions by the Government in recent weeks, a rejection of these proposals does not change the inexorable budgetary arithmetic. To conform to its budgetary targets and to continue on its path to economic recovery, the Government must make payroll savings of €300 million this year and €1 billion by 2015. The Government will now reflect on the outcomes of the ballot and the manner in which the required savings can be achieved this year and onwards. It must consider how to do so, while ensuring the ongoing delivery of public services to the people of Ireland, who depend upon them.
I thank the Minister for his reply. What surprises me with regard to the Minister's handling of this issue is that if he thought it was such a good deal, why did he contribute so much, more than anyone else, to its rejection? In the week before the deal was agreed, the Minister started by putting out black propaganda against health workers and how much they were paid on Sundays. Thereafter, at a critical time in the talks he himself forced a large proportion of public sector workers to withdraw from the talks. He set about a policy of divide and conquer. In an interview with the Sunday Business Post on 17 March to give himself good publicity during the St. Patrick's weekend, he referred to an across-the-board pay cut and stated, "It is inefficient, in my view, and does not contribute to the process of long-term reform contained in [the] ... agreement".
A question please, Deputy.
Subsequently, the Minister went on to threaten an across-the-board pay cut of 7%, which is the precise opposite of what he had indicated in the aforementioned interview. Thereafter his colleague, another Labour Party Minister, appeared on television during the final hours of the voting period to state that such an across-the-board pay cut would not apply to low-paid workers, which is something the Minister himself never said. The aforementioned colleague then stated that even were the deal to be rejected, there would be plenty of wriggle room. Is it any wonder the deal was voted down? To revert to my question, what actions will the Minister take? While he has told Members the current position, my question looks forward to where we will go next.
Where is the Minister going next with the proposal that he, with help from other Labour Ministers, ensured was rejected by public sector workers?
I am not going to engage in fisticuffs on these really important issues with the Deputy opposite. In respect of the notion that there was any black propaganda, if I said anything at any stage that was untrue the Deputy should put it on the record now.
I noticed that the Deputy himself set out the Fianna Fáil position last Sunday on national television. He said that we should not be looking for €300 million in savings this year but for €350 million. He contested 6% of the €1 billion set out in the LRC recommendations that I supported, €60 million for front-line services. In other words, he accepted 94% of the proposals. We have an issue to address, a shortfall of €300 million in the allocated, voted monies on the pay side of our budget for this year. We have to address this because neither I nor the Government intend that the matter should continue to a crisis point. We are calmly reflecting upon the decision of workers and it is quite clear that different workers voted for different reasons. The very highest paid, including the IMO, senior civil servants, rejected it. They were hardly doing so because it failed to impact on high pay. Others who were very minimally affected voted against it for other reasons. We have to reflect on that but the inescapable issue Government has to address is that we need to find the money.
It does not really matter at this juncture that the Minister's view remains that the Croke Park deal was fair, equitable, balanced and all of the vocabulary he has used. The workers did not act impulsively or rashly, they thought about this carefully and had done the maths. Whereas the Minister has said the core pay of 87% of workers was unaffected, the difficulty was that in respect of premium payments and allowances and so on people were being hit very hard, particularly at the front line. That is now water under the bridge.
The Minister entered into a process in which the unions were summoned, a deal was struck and it was agreed that the deal would then be put to ballot. The Minister's predecessors in Fianna Fáil never went through that routine: they simply legislated unilaterally. The Minister voluntarily sought to engage the unions and the workers in this process. Now the unions have come back and said "No thanks, we are not signing up to that". It is therefore absolutely critical that the Minister make clear today to the unions but more importantly to the workers that he accepts their verdict in respect of that deal. It is also important that he clarifies today that he will not in fact legislate for a 7% cut across the board. I would like him to do that. He is hiding behind reflection and consideration. By all means let him reflect and consider but he should make it clear to workers, particularly low-paid civil and public servants that he, a Labour Minister, will not legislate for a 7% cut across the board.
Can he tell us also how he got on with the troika? I understand he took a call from them. What did they say to him? What did he say to them? What now is the process? While the Minister reflects it is entirely reasonable that we ask him what is plan B. I would like to hear from him today that plan B does not entail legislating for a 7% cut across the board because that was the threat, or the promise that he made to workers in the course of this process.
The Deputy is right. It remains the view of Government that a negotiated agreed settlement would be the preferable way to advance these issues. That is why we did not take unilateral action as our predecessors in government did. In a very measured way we opened the books of the State to the trade unions to let them understand that we had a hole in the arithmetic, thanks to the previous Administration which had unallocated savings for this year and especially for next year, that I believed could not be met by continuing reductions across the board in respect of front-line services.
On that basis we sought a proportionate contribution from the pay bill, that is, since the balance of adjustments to be made on the expenditure side was €3 billion and since the pay bill is of the order of 35% of current expenditure, €1 billion of the €3 billion should come from that. We sought to do that in a proportionate and fair way with the burden falling on those best able to meet it and for the people who understood, the trade union movement and the workers' representatives to negotiate that. The negotiated settlement brokered by the Labour Relations Commission was demonstrably a fair proposal. I agree entirely that to ask any set of workers to vote for a worsening of their conditions in any way, whether it is an extra hour's work for no pay or any reduction at all, is difficult. All the adjustments we have made over the past few years have been difficult for people dependent on social welfare, health and education services. All expenditure reductions are difficult.
The trade union movement will want to reflect on its position. The Government must and is reflecting on its position but the inescapable issue that we must address is that we need to find €300 million this year from additional payroll savings.
Will the Minister tell us how he got on with the troika?
The Minister has spoken twice but has not told us what he is going to do although he has decided what he is going to do. Yesterday, here in the Dáil, we voted to allow the Revised Estimates for 2013 go to the committees next week. The Minister was in the House on Tuesday and the briefing note on the Estimates from the Government to the Opposition parties stated that they largely follow the budget day allocations with the pay deal recommendations by the Labour Relations Commission having been programmed into departmental Estimates. The Minister produced Estimates, and published them yesterday, that factored in the pay deal cuts in the agreement and he will want the committees to approve them next Tuesday. The Minister has decided what he is doing next. He is working unilaterally and he intends voting the measures through the Estimates line by line, Department by Department, next week. He should have told us he was doing that when we asked him what he was doing.
That is a briefing note, not a statement.
The Minister is sending out mixed messages because on the one hand he says he favours a negotiated settlement and that he will not act unilaterally. If that is the case he is not legislating unilaterally, never mind for a 7% cut. That suggests that he is going to go back and re-engage with the unions and the workers. The point is well made in respect of the Estimates and the factoring in of the deal. He was taking that almost as a fait accompli. He may be reflecting but he is causing confusion. If it is the case that he intends to act unilaterally and to force legislation through, despite the vote of workers and their unions, he should just say so. There is no need for a protracted reflection period. If he were to do that it would represent the heaviest hand of this Government to date.
It does not really matter that he still thinks the LRC proposals and Croke Park II were fair and the best deal, as they have been rejected. It is gone.
The Minister needs to find €300 million this year, accumulating to €1 billion by 2015, and he is hell bent that this must come from the public service payroll. He knows well, because I have argued long and hard about this, that he can go ahead and target overpaid and over pensioned people in the system but he cannot credibly levy further hardship on low and middle income earners if he is serious about maintaining decent public services and rebuilding the domestic economy.
I thank the Deputy. I call on the Minister to reply.
There are other places he can find the €300 million.
We are over time. I would like the Minister to reply.
The Minister should come clean and tell us what he is proposing.
We have had two speeches from the Deputies rather than questions. I made a decision to publish the Estimates, which are based on the implementation of the LRC recommendations, because that is what we hoped to do. We had to have some basis for apportioning the €300 million and I wanted the Estimates out because they had been delayed. There are agencies that need funding and, therefore, we need to pass the formal Votes. Obviously, if there is a different formula for the €300 million, we will come back to the committees to have those adjustments made, as is normal, in the course of the year.
Deputy McDonald has the same mantra always. A total of 87% of public sector workers do not earn more than €65,000 and regard that income as a lot of money. To ask for a proportionate contribution of between 5% and 9% from those earning in excess of €65,000 is reasonable. The Deputy referred to high rollers. It is a lovely jibe to make and she will probably get her headline tomorrow again. If the proposals had been implemented, a Minister would have earned €100,000 less than at the height of the boom. That indicates how much we have attempted to reduce pay over time because we are determined that there will be a proportionate response to these difficult challenges. This morning, the Tánaiste challenged the Deputy's party to introduce legislation to cap all public sector pay at €100,000 per annum if that is what they believe is necessary. We will see how many consultant doctors, judges and so on remain in the system once that is done.
The Minister has answered nothing
I call Question No. 3. We are now dealing with individual questions, for which there is six minutes.
On a point of order, I respect the fact that the Leas-Cheann Comhairle must run an orderly shop and that questions must be time limited but it is disgraceful on such a critical issue that the Minister can come in and talk down the clock and not answer parliamentary questions. This is not an informal arrangement.
The Deputy has made two speeches.
We are parliamentarians asking for answers from the Minister and he has spectacularly failed to give them.
The Deputy has made two speeches and this is her third.
I take Deputy McDonald's point. Has the Minister anything to add?
I am happy to answer all the questions. Both Deputies made speeches.
Our questions were tabled.
I asked them to put questions.
It is amazing that they feel they can make long rhetorical speeches but I am not allowed to rebut the inaccuracies they place on the record. Politics is about putting truth to this House.
I challenge Deputy Fleming, if he believes his black propaganda, to outline any instance of untruth uttered during the debate by me.
By all means, the Minister can make his own speech. I have no objection to that but I strongly object that he was asked straightforward questions which he has refused to answer.
Can we all join in?
Will Deputy McDonald please resume her seat?
This is not a casual conversation.
The Ceann Comhairle has spoken about this and the Deputy can take this issue up with him.
That makes a farce of this Question Time.
3. Deputy Mick Wallace asked the Minister for Public Expenditure and Reform his views on whether the changes in working conditions proposed in Croke Park II could serve as a push factor for people with caring responsibilities to leave the public sector workforce; and if he will make a statement on the matter. [17832/13]
I reiterate my disappointment at the decision of the executive committee of the ICTU not to accept the LRC proposals. However, it is still worth addressing some of the misconceptions that arose in respect of the proposals on work-life balance arrangements in the public service and I thank the Deputy for tabling this question.
Work-life balance arrangements in the public service are among the best available options provided by Irish employers, particularly when considered in tandem with annual leave and other provisions. Flexible working arrangements, including flexible starting and finishing times, generous leave entitlements, the capacity to take career breaks and so on, are available across the public service and we are proud of that. Had the LRC's proposals been accepted and implemented, this would have continued to be the case.
The most popular and widely availed of work sharing arrangements would not have been affected by the proposals. Flexi-time would still have been available with most employees able to use additional hours worked in one period to facilitate leave in the next. The proposals would have reduced flexi-leave from a potential 19.5 days flexi-leave a year to 13. This would still have been a generous provision by any comparison.
In recognition of the valuable contribution made by those with caring responsibilities to our society, those in receipt of carer’s allowance were not being asked to increase their hours above the 15 hour a week limit for payment of their allowance. Furthermore, in support of our commitment to achieving the public service target of a 3% employment rate for those with disabilities, such employees who had reached a reasonable accommodation with their employer to work less than 50% of full-time hours would have been able to continue to avail of these arrangements for as long as they were required.
Some of the LRC proposals in respect of flexi-time and work sharing simply reiterated management prerogatives that are currently in place in line with previously agreed arrangements. The LRC proposals to revise flexi-time and work sharing were timely in the context of falling numbers and changing demands for public services. The flexibility facilitated by these arrangements is valuable to both staff and management but they must support the business of the organisation and the provision of services to the public, which is the core objective. The proposals sought to streamline existing arrangements in order that a satisfactory balance could be struck between the delivery of the business needs of the employer – in this case the consistent delivery of high level public services to the people of Ireland – and the need for working parents and carers to have flexibility to meet their personal commitments.
In light of this, I do not believe that the proposals would have acted as a push factor for those with caring responsibilities to leave the public sector.
Life-work balance was good in the public service but the arrangements proposed under the Croke Park II agreement would have undermined it in a big way. The Minister is probably familiar with the equity audit carried out by equality expert, Niall Crowley, who is the former head of the Equality Authority. The audit focused on the changes to working conditions proposed, something which has not received as much media attention as the pay elements. The proposals included pay cuts, increment freezes and changes to working conditions such as longer working weeks with no additional pay. The equality audit focused on the impact of the proposed changes on women and men with caring responsibilities. The key results showed that the provision for additional working hours would have a higher impact on them. That could force women and carers out of the workforce. Second, the provision regarding work sharing, which was to be reduced under the agreement, would have a similar impact. Women and carers would be disproportionately hit. Third, the proposed reduction in flextime arrangements would impact more negatively on women and carers.
One of the principal guiding lights of the agreement was supposed to be an increase in productivity but the proposed cuts could lead to a loss of productivity. Does the Minister not think, given everything that has happened following the implementation of austerity measures, which has undermined the social contract that has been built up since the Second World War, that these proposals will further erode the conditions of those who have suffered most through the austerity campaign, particularly women and children?
The Deputy has raised two distinct and separate issues. I strongly agree regarding the social contract for the past 30 years, which my party has consistently focused on to develop. The input of people from Brendan Corish to Frank Cluskey to Michael O'Leary and others in the employment area is testament to the contribution my party has made to advancing the terms and conditions of workers, particularly women, in this society.
It is an inescapable fact that we are in unprecedented times and need to save money. This can be done in a variety of ways. The Deputies opposite oppose virtually everything we suggest, as is their prerogative.
That is untrue.
I propose to address the specifics of this issue because it is important. I have noted and read the equality audit report commissioned by the Irish Nurses and Midwives Organisation, which was launched in the middle of the ballot. The work-life balance arrangements in the public sector would have remained among the best available to any worker in the State if the Labour Relations Commission proposals had been implemented. That should be acknowledged.
Deputy Mick Wallace referred to work-sharing and asked how many work sharers would have been affected if the proposals had been implemented. Does he have any idea of the figure involved? In the region of 2% of those currently work-sharing in the Civil Service have a work-share pattern of less than 50% and almost 90% of work-sharers avail of the most popular and widely available patterns. Therefore, the vast majority of those engaged in work-sharing would not have been affected by the proposals.
The Minister is well aware that the conditions of women and carers have been seriously undermined, not only this year and last year but also during the previous three years. The Croke Park II agreement was the straw that broke the camel's back and it is fitting that it was rejected in the same week that Mrs. Thatcher was buried, given that the former British Prime Minister broadly shared the Government's philosophy. Mrs. Thatcher wanted to cut the public sector and privatise state assets and it is frightening that the Labour Party is taking part in a similar process. There is a strong correlation between what is being done now and what Maggie Thatcher was up to in her time in power.
Is this a question or a speech?
During our previous engagement the Minister and I had a little spat about teachers. As it transpired, teachers were not impressed with how they were represented at the talks. Does the Minister agree?
Generalisations such as the statement the proposals would have completely upset the work-life balance are great. The Deputy referred to work-sharing and I responded. He should give me an example of all the other issues he raises and I will give him a detailed response to show his statements are not correct. As for his claims that the Government or my party is somehow Thatcherite, we are doing what we need to do to recover the economy. We could pretend, as some of those opposite do, that we can continue to borrow more than €1 billion per annum to provide for the current level of expenditure on public services. There are two simple inescapable facts. First, nobody will continue to give us €1 billion if we do not balance our books and, second, we cannot continue to pile debt on the shoulders of the next generation. The national debt will peak this year at a figure in excess of 120% of GDP, which is dangerously high. We are determined that when this occurs, it will mark the start of the reduction of the national debt to give a chance to the next generation to live, work and thrive in this country.
4. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform his plans for a further reduction of 7,500 in public service numbers by the end of 2014; if he intends to publish a detailed cost-benefit analysis of his proposals; and if he will make a statement on the matter. [18031/13]
In October 2012 the Government decided to accelerate the rate of headcount reduction in the public service, agreeing an end-2014 target of 282,500. Reaching this target will require a reduction of some 8,000, or just under 3%, from the serving numbers recorded at the end of 2012. At this point, the public service will be broadly the same size as it was in 2003-04. This planned level of public service numbers reduction should be understood in the context of the Government’s public service reform agenda. Of course, the need to reduce our unsustainable budget deficit is a factor in this and the headcount reduction will make an important contribution to reducing the cost of public services, but perhaps, more importantly, it is also about laying the foundations of a leaner, more efficient and integrated public service.
The size of the public service has reduced by about 10% since the peak of 2008. While this level of reduction has posed challenges across many areas, front-line services have been largely protected and, in parallel, there has been real and permanent reform of service delivery models to the benefit of citizens and businesses. The better use of new technologies, for example, has enabled enhanced access for the public to many services: over 400 public services are accessible via the Government’s central portal – www.gov.ie – with more to be added over time in line with the e-government strategy; the Department of Social Protection is enhancing its client operations with the introduction of a one-stop-shop, which will bring under one roof all of the services available to and in support of the unemployed; and the new public services card will facilitate easier access to Government services, with more than 150,000 cards now issued.
The Deputy asks about a cost benefit analysis. As he is aware, CBA is a specific technical evaluation tool for appraising the merits of individual expenditure programmes or capital projects. It weighs the cost of a proposal against the gains or benefits to the economy and-or society as a whole. CBA is designed as a tool to help inform decisions on whether to undertake a particular expenditure such as building a new road or introducing an employment subsidy scheme - it would not be an appropriate tool for looking at headcount reduction in the public service and would not usefully inform decisions in this regard.
As I have said, the reduction of numbers in the public service needs to be understood both in the context of the fiscal constraints and the programme of ongoing reform. The Government believes the public service has to be more efficient and deliver better services at a lower cost. This is what the economy as a whole needs to do: be more productive and, therefore, more competitive internationally. That is the only way to secure long-term economic growth, recover lost ground and improve the lives of the people.
It is good that the Minister has said he wishes, as a member of the Labour Party, to reduce public service numbers by a further 8,000 before the end of next year. That is a net reduction and it should be noted that teachers and many others who leave the public service will have to be replaced. The target of further reducing the number of jobs in the public service by 8,000 was originally set for 2015. I am surprised by the Minister's statement that he announced last October his intention to bring forward the target by 12 months. I do not recall that announcement, which he has just confirmed, being made.
The Minister referred to a targeted redundancy programme introduced some months ago to reduce public sector headcount by 5,000. The Labour Relations Commission's document about which we have spoken refers to a further headcount reduction of between 2,000 and 2,500, bringing the total to 8,000.
I ask the Deputy to frame a question, please.
I ask the Minister to reconsider his position on carrying out a cost-benefit analysis. I have never heard of another case of a company or body that was about to incur costs arising from a major redundancy programme refusing to consider carrying out a cost-benefit analysis. Every company and organisation that lays off staff estimates what will be the cost of the redundancy programme versus the projected savings. The Minister has stated one can only carry out such cost-benefit analyses for road building and other capital projects. I have never heard anyone else make a similar statement. I ask him to do the public service a favour by asking the person who wrote his reply to learn something about economics.
On occasion I have heard the Deputy and members of his party state there are too many administrators in the Health Service Executive. This arose because a superstructure was placed on top of the old health board system when the HSE was established. Most believe there is scope for de-manning in the HSE, which has identified 1,500 positions that could be eliminated. Over-manning has also been identified in the Department of Agriculture, Food and the Marine, which has identified 300 positions, and a number of other areas.
The notion that it is good to keep people artificially employed runs counter to the need to have efficient public services. People want to ensure they get value for money. The Government has determined that there will not be compulsory redundancies and I hope we will yet have an agreement that will protect this determination. However, this may not be possible. We need to reach the target numbers by being more efficient. We have achieved a great deal in recent years, including a large number of efficiencies, as is manifest in our ability to protect front-line services with fewer people doing different things. Every company in the country is doing this, as it seeks to become more efficient. We are using new technologies to deliver public services. There appears to be a notion that the public service should be moribund, get caught in a warp or refuse to use new technologies, shared services or have online access to services.
For example, anyone who wishes to tax his or her car does so online rather than by filling out a form and making a payment at his or her local authority office. Some 400 services are available online now and even more are going to come on stream. This is the way forward.
Is it not ironic that the Minister is referring to changes he has made since he entered office in the context of the reduction in numbers, payroll costs, etc.? Will he identify one single action he has taken in this area since he became Minister? Last year he referred to cutting allowances, but the move in that regard was an utter failure. This year he has come forward with the proposal to which my question relates, but that has now gone up in smoke. Nothing he has announced has ever come to pass. In fact, the reductions to which he refers came about as a result of tough decisions taken by Fianna Fáil when it was in government. The current Administration has not introduced a targeted redundancy programme since it came to office. It has not introduced any reforms but has instead issued press releases.
Does the Deputy intend to ask a question?
Does the Minister not think it ironic that he is claiming credit for things for which he had no responsibility?
The Deputy is on very thin ice altogether if he is seeking to claim credit or responsibility for certain things. He spends most of his time denying that the previous Administration - which ruined our country-----
He is in denial.
-----and handed over to us an economy on the verge of bankruptcy and in the control of the troika - was responsible for anything. If he wants to lay claim on the great successes of that Administration, then the Deputy is skating on very thin ice.
The current Government established the Department for Public Expenditure and Reform. In November 2011 we published an entire reform programme containing more than 200 actions, each with its own indicative timeline. All of those actions are being rolled out. Deputy Sean Fleming should consider PeoplePoint and other shared services. This week the Cabinet has decided - an announcement in this regard will be made shortly - to introduce centralised payroll systems and so on. We are also examining the position with regard to centralised banking. The Deputy should visit my Department's website, where he can read about all the proposals - with timelines - we are rolling out in order to fundamentally alter the public service. The latter will become manifest in the coming years.
5. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide details of the State assets that he intends to dispose of in 2013. [18002/13]
I expect that the Bord Gáis Energy sale transaction will be formally launched in the coming weeks and that it will be completed by the end of this year. I further expect that the sale of two of ESB’s overseas assets - at Marchwood in the United Kingdom and Amorbieta in Spain - will also be completed this year.
I like to believe that when the Minister came to office - this may be wishful thinking on my part, but perhaps he will indulge me - he would never have imagined himself as being responsible for butchering the public service, for protecting the people at the top of that service in a very calculated and deliberate way or for selling off State assets. I am sure he will concede that Bord Gáis is a very successful company. It is self-financing and - in common with the ESB - it has consistently returned a dividend to the State. By any standard, the energy sector is both sensitive and strategic in nature. I imagine the Minister and I can agree on that fact. I am of the view that the Government is making a very big mistake in selling off Bord Gáis Energy. This is a decision it will live to regret. The great value of energy utilities is the fact that they are integrated entities.
Will the Deputy please ask a question?
That is part of their value. The Minister indicated that the sale transaction will be formally launched in a couple of weeks and that it will be completed by the end of the year. Will he inform the House of the extent to which he has engaged in discussions with the unions which represent the employees of BGE? The Minister did not refer to Coillte. Is this an indication that the sale of the harvesting rights to Coillte lands is off the table, or has it been delayed? I presume the sale of those rights is not going to proceed this year.
The Deputy again asked a number of questions and she prefaced them by revisiting past issues and making assertions which are profoundly untrue-----
So that to which the Minister referred was his plan all along.
-----in respect of my protecting the highest paid. The Deputy knows these things and she plays her particular game. I will deal with the specifics of this matter. If one considers the position objectively, one will realise that the notion that selling the energy division of Bord Gáis is butchering the assets of the State is fanciful. There are two large energy companies in State ownership in this country and these compete with each other on a notional basis. The larger of the two, ESB, was not permitted to benefit from an energy cost reduction and the purpose of this was to create an artificial market with another State company. That was what passed for competition in the past. It is my opinion that the consumers and workers of Ireland who depend on and want affordable energy would be happier if there was real competition between an external player and a robust, lean ESB, while Bord Gáis concentrated on its gas pipelines, which is what it was established to do in the first instance. Bord Gáis is a very successful company. Its expansion into certain areas - running wind farms, etc. - was never envisaged when it was established.
Does the Deputy believe that a power station in Spain is an essential part of the assets of a company such as ESB, particularly at a time when the State needs financial resources in order to invest in job creation? She will be aware that I have renegotiated the troika agreement to ensure that the financial resources that will be leveraged from the sale of these assets will be invested in job creation. If I do not have time now, I will refer to the position with regard to Coillte when replying to the Deputy's next supplementary.
The Minister is engaging in a degree of historical revisionism in the context of energy prices within the State. Those prices shot up as a result of the adoption of a European Union directive that insisted upon deregulation of the market. The Minister is correct: those prices were increased to artificially high levels and then maintained in order to make what is a very small market alluring to major players. This is because we do not have the same economies of scale that obtain in larger continental countries. That is done, however, and the issue that now arises is whether the Government, on behalf of the people, is going to maintain in State ownership assets in strategically important areas. The energy sector is one of the latter. Before he listed what he intended to flog off, the Minister used to say that only so-called non-strategic assets would be sold. He really laboured that phrase. I am really struggling to understand - despite the standards they have kept while in government - how any Labour Party representative in his or her right mind could describe the area of energy as anything other than utterly strategic. The Minister is, however, clearly not open to my view in this regard. How much does he expect to realise from the sale of Bord Gáis Energy and the two ESB power plants in Spain and England?
The first part of the Deputy's question relates to revisionism. I was referring specifically to the domestic market here-----
The changes to which were driven by EU law.
-----and the artificial competition that was created on foot of a decision by the then Government to prevent one State company from competing with another in order that it might build up an asset. There was a ridiculous situation whereby people were paid a premium to switch from one State company to another and when a critical mass was reached, they were given a further premium to move back. That was an odd way to encourage competition.
The biggest asset to which the people of Ireland require access now is investment in jobs. It is all about jobs, jobs, jobs. We require capital in order that we might invest in job creation. That is what we want to unleash from the meagre resources at our disposal. We have been very discerning in the context of what we have put on the market. We are protecting the transmission lines and, as promised, we are also protecting the ESB as an integrated company. There is no sale of strategic assets.
We are selling off some of the power generating capacity of a State company that will now focus on gas and take on a new responsibility in the form of Irish Water. We are also selling off the overseas assets of an energy company because we need money to invest in our economy, not that of Spain or the UK.
How much will the State get?
