I move:—
That Seanad Éireann approves the following Order in draft:
State Guarantees Act, 1954 (Amendment of Schedule) Order, 1957, a copy of which Order in draft has been laid before the House.
Destructive Insects and Pests (Consolidation) Bill, 1957. - State Guarantees Act, 1954 (Amendment of Schedule) Order, 1957—Motion of Approval.
The purpose of the draft Order is to provide the Dundalk Engineering Works Limited with working capital by way of bank borrowing guaranteed by the Minister for Finance. Under the State Guarantees Act, 1954, the Minister for Finance may guarantee both as to principal and interest borrowing by a body scheduled to the Act, with in the limit specified in the schedule. Section 9 of the Act empowers the Government by Order to add a body to the schedule and to specify the limit within which borrowing by that body may be guaranteed. A draft of the Order must be laid before each House of the Oireachtas and the Order may not be made until a resolution approving of the draft has been passed by each House. It is proposed in the draft Order to add Dundalk Engineering Works Limited to the Schedule to the State Guarantees Act, 1954 and to insert the sum of £500,000 as the maximum amount of borrowing by that company which can be guaranteed by the Minister for Finance.
Common services on the G.N.R. cross-Border secondary lines were terminated on the 1st October last and passenger services on the "stump" lines remaining in the State, on the 14th October. Merchandise services on the "stump" lines in the State are being continued for a further period on an experimental basis. The termination of these services will immediately reduce the volume of railway work available for the Dundalk Works. The projected closure of the Porta-down-Derry line, and the decision of the Belfast Minister of Commerce to terminate, one year hence, the G.N.R. agreement entered into in 1953 for the joint acquisition and operation of the G.N.R. undertaking will inevitably involve a further reduction—possibly to the point of extinction—in the amount of railway engineering work to be done. As already announced the Dundalk Engineering Works, Limited, has been formed to take over the works and carry on general engineering work there. The new company will continue to undertake all the engineering work required by the G.N.R. on a basis that will involve no extra cost to the board and will also actively canvass the possibilities of attracting to the Dundalk works new industrial activities of the type for which the works are suitable.
The Dundalk works provide employment for some 1,100 workers, the majority of them skilled men. The works are the biggest source of employment in Dundalk, with a weekly wage bill of the order of £10,000. If the works were to close, or if the volume of employment there were to be seriously curtailed, the loss of employment would be a severe hardship on the men and the prosperity of Dundalk would be adversely affected. It is to be hoped that the efforts of the new company will be successful and that these efforts will ensure a growing volume of permanent employment which will be independent of developments affecting the future position of the G.N.R.
Arrangements are proceeding for the leasing of the works to the new company. The company requires considerable working capital to enable it to carry on and develop the works. As the works are being leased by the company it has no assets to offer as security against bank borrowing in the normal way. There are at present legal difficulties in the way of a transfer of ownership. A new situation will arise, however, in October 1958 if the G.N.R. agreement is then terminated as proposed by the Minister of Commerce. The G.N.R. will then cease to exist as a separate undertaking and ownership of the works will be transferred to the new company. It is hoped that it will be possible to arrange for the transfer of the physical assets to the new company without capital liability. Meanwhile the company will operate the workshops under lease. Dundalk Engineering Works Limited is a State sponsored company in which the Minister for Finance holds the entire capital of £100. This will be the position for some time at least but should the success of the venture or other circumstances warrant it the structure of the company can be altered later if necessary.
The company has already tendered for some large contracts abroad. Naturally, we hope that it will be successful in securing some or all of the contracts it is seeking. On the assumption that it may be successful in securing these contracts or some other contracts of equivalent dimensions it is estimated that a working capital of £500,000 approximately may be required. This sum is required as working capital in the ordinary sense of the term. It is intended to enable the company to buy materials, pay wages and do all the work involved in completing any orders the company may receive.
It is important that the company should be in a position to tackle vigorously and without financial impediment the task of developing new activities at the works. The provision of working capital is in itself, of course, no assurance of the success of the enterprise. The board of the new company have been given an immense task. Over 1,000 workers are involved. The establishment of a new enterprise in this country employing 1,000 skilled men would be a big achievement at any time, but the preservation of employment on that scale at Dundalk is as big an undertaking to face and nobody should have any illusions about the size of the task. It is not possible to guarantee at this stage that the efforts of the new company will be successful. The success of the venture will depend, in the main, on the competence with which the undertaking is directed and the opportunities which arise for the development of new forms of engineering activities at the works. It will particularly depend on the energy and enthusiasm with which the workers in the works face the task of building up the efficiency of the works in a way which will enhance the prospects of developing new activities particularly export business. Indeed the great asset of these shops is not the machinery or buildings that are there but the skill of the workers and it is that asset that has to be turned into revenue to maintain the workshops.
I should perhaps refer to a number of subsidiary problems which has arisen out of the transfer of the workshops. These problems, some of which have not yet been resolved, relate to pension and other rights of the workers who will be transferred to the new company. Some of the workers in Dundalk works have pension rights based on a fund; some have what might be called rights based on traditional practice. The pension fund is substantially in deficit but payment of the pensions is at present guaranteed by the G.N.R. Board. The clerical and most of the supervisory staff at Dundalk works are members of the Railway Clearing System Superannuation Fund and means are being sought to preserve the pension rights of those officers who transfer to the new company. These and other staff problems have been the subject of numerous discussions between all parties concerned, including the trade unions representing the men. It is the aim of all concerned to remove these problems and the anxieties that go with them in a way which will leave no permanent discontent behind. The solution of some of the problems involved will require legislation and the necessary legislation will be prepared in due course. In the meantime there would seem to be no reason why suitable and acceptable working arrangements cannot be completed.
I recommend this motion to the House. The enterprise with which the new company is being entrusted is a major one which could not be carried on without adequate working capital. I am sure that the proposed Order which will provide the necessary working capital meets with the approval of the House.
It seems to me that these difficulties of the Dundalk workshops were bound to come to a head, once the Government declined to exercise its right, under the 1953 legislation, to keep open the secondary lines of the G.N.R. However, that is so much water under the bridge. Even though I did not see eye to eye with the Government attitude and their approach to the problem at that time, nevertheless matters have taken their course and we now have to deal with the difficulties which have resulted.
It is prudent that the Government should not await the end of the agreement on 1st October, 1958, before doing anything about the workshops. They have taken a commendable step in trying to tackle the problem in the intervening months. I wonder, however, if the steps they are taking are the right ones. I remember that some two years ago the T.U.C. suggested to the Government the setting up of a heavy engineering authority. The idea was that this authority would be based on the railway workshops in Inchicore, would be independent of public transport, while still carrying out work for the railways, and would have freedom to develop heavy engineering, do work for other semi-State organisations or private industry, and possibly work for foreign industry.
Due to the fact that Dundalk will become redundant next year, it is right that the effort should be made in order to use and develop the workshops at Dundalk. But there seems to be this difference. The heavy engineering authority suggested by the T.U.C. would be a semi-State undertaking along the lines of the E.S.B., Bord na Móna and other like concerns. However, we do not seem to know exactly what is intended by the Government in regard to the Dundalk Engineering Company Limited. Will this be a semi-State undertaking along the lines envisaged by the T.U.C. or, on the other hand, will it be a private undertaking?
It seems obvious, for a start, that private enterprise and industry, as such, cannot undertake that type of work. We are being asked here to provide a guarantee of loans by this new undertaking without being told in fact what is envisaged. The capital of this company is, I think, a nominal £100 and it is held exclusively by the Minister for Finance. Therefore, it would seem that the Minister for Finance would be the person who has appointed the directors.
I have to say to the Parliamentary Secretary that the trade union movement is puzzled and alarmed by the fact that the Minister did not think fit to appoint as a director somebody with experience in trade union matters. This seem to be a complete departure from the practice of, not only this Government, but of all previous Governments. Indeed, I would have thought that in dealing with workshops such as this, in which there is a variety of trade agreements and so on, it would be desirable to continue the practice of appointing somebody with that background of experience in trade union matters. I wonder can the Parliamentary Secretary give us an explanation for this departure from practice? Perhaps he can say, which would be more satisfactory, that steps will be taken to correct that unfortunate lapse at the earliest opportunity.
Another matter to which I should like to refer is the position of the workers employed in the Dundalk workshops. There are some thousand workers there, most of them skilled craftsmen in receipt of trade union rates of pay. As the Parliamentary Secretary said, that employment for these should be continued—important not alone for themselves but indeed essential for the survival of Dundalk town, as we know it. The position seems to be satisfactory enough for the moment in regard to the salaried employees. In the case of the salaried employees working in or having connection with the Dundalk workshops, they will continue as employees of the G.N.R. Board, until legislation changes that position. They will, in effect, be seconded to the new undertaking, without disturbance of their superannuation or compensation rights.
I am rather worried about the position of the other workers. It seems to me that whenever this new undertaking takes over these other workers, from that date they will cease to be employees of the G.N.R. Board and will, in effect, become employees of the Dundalk Engineering Works, Limited. That is fine as far as it goes, but, as the Parliamentary Secretary said, these employees are members of pension funds of the G.N.R. Board.
As far as I understand the rules of such pension funds, they provide that once the workers leave the service of the railway, they get a refund of their contributions to the pension funds. That is no consolation whatever to the individual concerned. What is all important to him is the safeguarding of his accrued pension rights. It is no compensation to say to a man of 59 or 60 that he will get back whatever he has contributed to the pension fund. What he is interested in is his right to a pension at the pensionable age. It may be arranged, and probably will be, that the contributions, by agreement with the relevant employees concerned, will be handed over to the new company, which would continue to make the appropriate deductions from the pay of the men—the same deductions as would have been made for the pension fund if they had remained employees of the railway. But is that sufficient? I am not attempting to question the good intentions of the Government and of the new undertaking in this matter, but you are dealing with a very important matter when you interfere with the pension rights of individuals.
It has been the precedent in this State to deal with such problems by legislation and to make provision by legislation that the accrued pension rights of the individuals affected be a major charge on public transport. I am sure the Parliamentary Secretary will tell me that it would be the intention to continue the pension rights of the employees concerned. The intention would be that such pensions would become a charge on the new undertaking, the Dundalk Engineering Works. Has anybody any idea of the cost to this new undertaking of such a handover of rights? Has anybody any idea that, if the cost is discovered, the new undertaking would look very kindly on the prospect of having this new liability put on their shoulders?
This is all very unclear to the people concerned. I would press the Parliamentary Secretary most earnestly to examine the position and see if it would be necessary to introduce some legislation to guarantee the pension rights of the people concerned, before the take-over of these employees from the G.N.R. Board. That is just one of the problems involved. There are others and it seems to me that new problems are being discovered as day follows day and week follows week.
It would probably have been more helpful to the trade unions if an examination of the resulting problems had been made by the G.N.R. Board, once this take-over was suggested, and was put down clearly in writing, because my experience is that most people are trying to feel their way in the dark in regard to this take-over. Trade unions cannot be expected to know all the facts. In an undertaking such as the G.N.R. with various pension funds—there is a variety of them —trade unions as such are not party to those pension funds. The individuals as employees of the G.N.R. are; but we all know that as individual employees, we may belong to a superannuation fund and we just accept the fact and pay in and are never very clear at any stage what our rights are. Here now people are largely in the dark and it is regrettable that the difficulties which will arise from this take-over were not examined earlier by people with the necessary knowledge, people on the G.N.R. who have the facts, and not have the trade unions attempting to grope their way in semi-darkness discovering new difficulties as day follows day.
There is one last word before I conclude. It would be remiss of me to sit down without saying that I, like other representatives of the workers, wish this new undertaking every success. We think it is very important that it should succeed. We hope that it will get the necessary work to give full employment to the people in Dundalk and, if possible, to expand the employment there. We know that the people at the head of this undertaking have the necessary drive and we hope that they will succeed.
Senator Murphy seems to be under the impression that this present situation with regard to the Dundalk works arises from the fact that the Government here failed to keep the northern lines open. The Senator knows the Government could have taken that course by guaranteeing the loss, but in any event they could not undertake the obligation for a longer period than the G.N.R. agreement would remain in force. There is an indication from the Belfast authorities that that agreement will terminate in a year's time, so there would not be a great deal gained by undertaking the very heavy financial burden which the guaranteeing of the loss would entail.
I do not think that Senator Murphy should press me very hard on the details of the rights of the workers who are to be transferred to the new undertaking. It is true that the wages staff pension fund is in deficit and I take it the Senator knows that. The G.N.R. is the guarantor.
And the Government is the guarantor to the G.N.R.
The G.N.R. will cease to exist, perhaps, in a year's time. Therefore, a new guarantor will have to be found. The Minister has had meetings with the workers' representatives, and I think those workers are satisfied that the Minister will do everything possible to ensure that whatever rights they had are preserved. Senator Murphy ought to leave the position at that and allow this transfer to take place as smoothly as possible.
The ownership of the works will, as has been indicated in the statement, be considered definitely when the G.N.R. agreement terminates; and, as has been indicated, it is anticipated that the transfer of full ownership will then take place. In the meantime, it is hoped that whatever work the G.N.R. will require to have done will be carried out for them, as usual, in the Dundalk works. After that, there is no guarantee of further railway work because it is likely that the Belfast to the Border end of the line, if it still continues in operation, will have its share of railway maintenance work carried out in the Belfast works.
This is a matter which is very much in a state of flux at the present time. It would be most undesirable to go into in any great detail in relation to the matters which apparently are nearest to Senator Murphy's heart. I want to tell him they are very near the Minister's heart also, and he can rest assured that, in so far as the can see to it, the men will be no worse off. But he cannot—and neither can anybody else—guarantee the success of this new Dundalk Engineering Company. Its success will largely depend on the contracts for work which they will be able to secure in the ordinary way.
Senator Murphy asked why no representative of the trade unions was appointed to the board. I do not think the Minister adverted to the representative capacity of anybody on this board. There is nobody representing organised employers on it, and the Minister would not have that type of consideration at all present to his mind when he was selecting the members of the company. I want to assure Senator Murphy, and to put it in the simplest words possible, that there was no offence meant, if he wanted to indicate that trade unions had been shabbily treated in the matter.
I think the proposal at this stage cannot be elaborated upon any further than my introductory statement. Anything I might say in reply to Senator Murphy's remarks would be quite superfluous.
Could the Parliamentary Secretary say if he would examine the desirability of having legislation to safeguard pension rights? I accept the good faith of the Minister and of everybody else concerned.
I can assure Senator Murphy that the Minister, on more than one occasion since this situation arose on the G.N.R. system, has expressed his concern for the effect of the change on the employment and prospects of the railway workers. He has referred to that result of the change more than to any other consequence which the change is likely to bring about. I do not want to stress the matter any more than that. I can assure Senator Murphy he will attempt to do, and is determined to do everything that is humanly possible in the interests of the workers.
Question put and agreed to.