Ba mhaith liom ar dtús mo bhuíochas a ghabháil leis na Seanadóirí a ghlac páirt sa díospóireacht agus mhol gnéithe eagsúla i gcás B & I. I want to thank the Senators for their contributions and for the various suggestions they made with regard to the making of a viable commercial enterprise out of B & I. That would be my opening remark — the brief that B & I have from the Government, a consciously taken decision by the Government, is to become commercially viable, and the plan, which is outlined in my opening speech, is the vehicle for achieving this.
Senator Cregan made a very valid point about how expensive it would have been to get rid of the company and he indicated that he thought that if we used the money that was spent on the B & I to give free vouchers to travellers to the country we would have been better off. I do not accept that because we have in the company and its property valuable assets and what we are doing is what I have said, trying to bring about a position when as a straight commercial company it will be making a profit for the country. It is true to say — and I am referring to remarks made by a number of Senators — that ships were built at Verolme Cork Dockyard on the expressed wish of the Government, ships built for the B & I. I think that a general bottom line rather than a specific bottom line is the important matter here. The economics, as anybody knows, are a protean science and whereas there may have been a dearer ship at Verolme, and this point was made by a number of Senators later on in the debate, the wages, PRSI payments, the income tax, etc., which accrued to the Exchequer from the operation in Cork were not negligible nor of course in anybody's philosophy is the fact that hundreds of people were employed over a number of years in the building of those ships.
It is true to say that in cars, plus tourists using cars, and heavy freight lies the successful future for B & I. They will have a certain income from foot passengers but as has been pointed out in the debate, the ever lowering air fares will leave that area less profitable than it used to be because it is a faster way to travel and when the rates approximate and when you put hotel charges, etc., into the budget, the foot passenger area is not one from which B & I in the future can expect to gain substantial profit. It is also true to say that they took more than 816,000 passengers to Ireland last year, and that is a substantial number.
With regard to the strategic importance of it, certain doubts have been cast upon that belief. Recently there was a Sealink strike and anybody sitting at my desk would realise the importance of having a company of our own. Mushroom producers, meat producers, producers of other perishable goods peppered my office with phone calls. There were cries de coeur coming from all parts of the country to try to get goods out of the country because Sealink were on strike. It is important to take note of that, it is an important ingredient, it may not be the predominant one that dominates all our thinking, but it is an important one, one that was recognised by some of the Senators, and discounted by others.
A number of people, including Senator Cregan who made the introductory contribution said, that shipping companies are making considerable profits. It is well known that shipping companies in general, both deep sea and short range ferry types have not been the most profitable places to invest money for some time. This is a world wide phenomenon and it is as well to put it on the record of the House lest people think that B & I losing money was in some way out of kilter with what was happening in the shipping business throughout the world. I was disappointed in the contributions of a number of people who did not make an analysis of the new plan, the plan that is meant to make the company commercialy viable.
The unions adopted a responsible attitude throughout the debate. They knew that the situation was either to come to an agreement across the board with management or to go into liquidation. They knew that and they responded to it in a way which was complimented by a number of Senators during the debate — a cut of 5 per cent in their earnings, a freeze on pay increases over a period and the guarantee of industrial peace. That was no small plus for the company in their new situation.
Senator Farrell linked the importance of B & I to our determined effort to develop the tourism industry. It was a question of having a viable plan, as he said, or of sinking. He indicated that from studying the old procedure a sense of reality had come to the company both at management and union levels. I just want to reiterate what I said a moment ago, that 816,000 passengers were taken to the country by B & I and that 1.44 million tonnes of freight was shifted and the points I made about the Sealink strike are highly relevant in that context.
Senator Ross made a lengthy contribution and knowing his philosophy I more or less expected that the points he made would be made. He indicated that he thought it would be better if the House did not pass this legislation. I would just like to ask him if he wanted the Government to liquidate and, if so, if he wanted the Government to pay the upwards of £45 million owed by B & I.
A sum of £45 million is no small potatoes, if you will pardon the expression, at present when the Goverment are cutting down hard on expenditure over the whole spectrum of our national economy. If we liquidate it, does he envisage the country without a ferry service? I made the point already about what happened when Sealink were on strike.
Did he want a monopoly on the Irish Sea? We shrink from monopolies because we know that when there is a monopoly the tendency of the boardroom is to inch up prices and consequently make it more difficult for our exporters. It is well to know that the Government took over B & I in the mid-sixties in different economic circumstances from those which prevail today. It was a boom decade, but it was a private company which failed at that time and the State had to take that company over. It is as well to remember these things if we want to achieve a balance in our judgment about this company.
Senator Ross said things were not quite as dramatic as I or the Government maintained. My opinion is that it is quite dramatic for 1,000 people to find themselves out of jobs — 1,500 to 1,600 people if you take the total before the redundancies took place. It was definitely dramatic for the workers. It would be highly dramatic for their families and it would be dramatic for exporters.
It is a loss, as Senator Ross pointed out, to both Houses of the Orieachtas that the accounts were not available for the past two years. I understand they will be available shortly. I do not condone the late publication of accounts. The reason for the late publication is, as everybody knows, that the situation was very bad. I believe that all of these companies should produce their accounts as soon as possible after the end of their financial year. Indeed, in the Dáil, when I was in Opposition I put down an amendment to shorten the time and the then Minister indicated to me that the time I was demanding was a little too short, and he put a limit on the time in that instance. I had written down that Senator Ross did not make an analysis of the plan because with his expertise and knowledge in these matters I would like to have heard his opinion during his speech. He gave that opinion later. There was an amende honorable at the end of his speech. Unfortunately he said that he did not think it would work, but at least he had made an analysis of the plan.
Senator Ross advanced the criticism that we did not define the objective. I contend that that is not true. I made it quite clear to management and workers, separately and in a joint meeting, last May what my objective was. The objective was no different from that which Senator Ross would advance as a valid objective for either a semi-State company or a private enterprise, that is to say, we wanted them to get their house in order, we wanted them to achieve viability in the full commercial sense of that word.
I have to agree with Senator Ross that colossal sums were paid out. I have to agree that could not continue, and it will not continue. He pointed out that in 1985, 1986 and 1987 the company were massively off target. Again, I have to agree. The purpose of the whole re-arrangement is to put an end to that.
Senator Ross asked about the report of the Oireachtas Joint Committee on State Sponsored Bodies and whether it would be relevant, or if it would even be debated. I will not be making the decisions about whether it will be debated but in so far as it takes accounts of this new plan and these new developments, of course it will be relevant. It will be particularly relevant to me since I made it quite clear when the agreement was being made that the Department, I as Minister and the Government will be reconsidering the whole position in the autumn. So the results of the deliberations of the committee will be important to me and to the Government. I must say that the people who are acting on that committee and who brought their expertise to bear on this debate also deserve my gratitude and thanks.
The reference to Ryanair by Senator Ross was pertinent. I stated quite clearly that I did not accept the argument that it was merely the lowering of air fares that caused severe difficulties to B & I Line. It was a factor — anyone who looks at the figures will have to admit that. It is that which led me to the conclusion that a heavily targeted and sharp marketing of the advantages of B & I line for those who are coming with cars, on holidays or on business, is the area to go for. Freight is also an area to rely on, not freight tout court, but the roll-on, roll-off freight for which the exporters are showing a great preference. As Senators know, the door-to-door service has been scrapped as part of the new plan.
Senator Ross was wondering whether the strikes were significant. The fact is that the only strike which was mentioned cost £5 million. That is not a bagatelle in my book — I suppose when dealing with large sums of money on the Stock Exchange it might be, but I would love to live until the time when £5 million will be a bagatelle. In agreement with the contributions of other Senators, the industrial relations record in B & I has not been a bad one. Everyone must concede that.
Senator Ross made the point that there is a feeling B & I in that the Government will bail them out and that this might take from motivation — there is still a belief that when the chips are down the Government will help. We have made it quite clear that the situation as it obtained before could not continue. We found that private enterprise was toying with the idea of taking the company over provided the Government paid the £45 million debt. I do not suppose I have to make a comment on that. The fact is that we are giving this plan a chance. We are getting monthly accounts of the revenue and the costs and how the budget and the reality relate to each other. We will make our decisions in the light of the information which comes through in that way. We have left the board of management in no doubt whatsoever about what we expect them to achieve. I know that air fares will continue to fall, as Senator Ross said.
Senator Ross mentioned over-capacity for freight on the Irish Sea. I have no evidence that there is over capacity at the moment for freight on the Irish Sea. That is why I say that with the transport of cars and heavy freight therein lies the future as far as I can see of B & I. He ended with a ringing appeal to close B & I down and let private enterprise take over. I am no enemy of private enterprise or of efficient profit-making State ownership either. We must realise that most private enterprises in this country have been liberally supported over the years by the State purse as well. I am not criticising that as a modus operandi: I am merely stating it as a fact.
The Government decided to review the position of B & I not later than autumn of this year — I want to put this on the record straight — on the basis of detailed comparisons, as I have just said, of the company's performance against forecast. Given that that is the Government's position, it would not be appropriate for me to speculate on what may or may not happen at the end of the year. It is up to the company now to perform to the best of their ability and to make sure they meet, and indeed exceed if possible, the financial target for 1988, the financial target they have set themselves under the plan. I was glad to hear suggestions from various Senators as to other areas where they might explore. The more of that kind of contribution the better.
Senator McGowan has a complaint, which I share, about the loss of railways; in his case in Donegal in my case in Cavan. We had the luxury of both the Great Northern Railway and the Midland Great Western and Southern Railways serving my native parish when I was a schoolboy. Now we have no railway at all and I continue to regret it. Senator McGowan raised the question of social implications and leaned heavily on them. I understand his position. He is no slouch when it comes to plugging the case for Donegal no matter which particular area of national life he is dealing with. He said the company must work efficiently. He admitted that B & I operations were not impacting on Donegal but he was willing to say that B & I should be supported if this had a good economic effect on the rest of the country, which from a Donegal man is a fair confession. He said that management and staff must realise they cannot continue to get subventions and subsidies over the years. That was the general theme in the House. I probably might be hearing more about the ferry from Moville to Glasgow but I am not making any comment on it as of now.
Senator Ferris stressed the importance of efficiency in the operation, that there was a national responsibility involved in the case of B & I. He spoke in a complimentary fashion about B & I efforts to increase the number of tourists into the country during 1987. The statistics of 126,000 cars, 816,000 passengers and 1.4 million tonnes of freight are genuine figures and are a measure of the contribution B & I are making.
He and other Senators mentioned the docking facilities. It is a fact that B & I have not got the best possible slots at Holyhead. My officials at the moment are working on that. We expect to put a good deal of muscle into the talks with the owners of Holyhead in this regard. We have a counterpoint in that Dún Laoghaire is a facility available to all comers. I do not accept any — I am not saying responsibility because I was a member of Government at the time — blame for the placement of the building of the ships. It has been brought up in the Dáil and in the Seanad. The decision was a proper one at that time.
The Senator also paid a tribute to the workers and I have done so myself. The question was, are we going to swim or are we going to sink. They knew that was the position, they acted accordingly and they have made it somewhat easier anyway to achieve commercial viability. No private enterprise would have taken the responsibility of B & I at that time. As I said, the question of what the Government's decision in autumn will be depends on performance in the meantime.
Senator Ferris, again among others he was the first to mention it in the course of the debate — emphasised the importance of looking at new business opportunities. He talked about the importance of dynamic management and he — others were specific later on — indicated there should be marketing force, so to speak an eager beaver marketing force, looking for new opportunities to exploit in the commercial business of the company.
Senator Hillery, who is a member of the committee and gave us the benefit of his membership and of the study that is being done in that committee, said that proper scrutiny of the operations is critical. He complimented the company on their good passenger and freight performance as evidenced by the statistics given and made the very important point that as a company B & I provided a substantial number of jobs over the years. That is not something anybody can leave out of consideration, either on economic or social grounds in considering the fate of any company. The strategic point was made by Senator Hillery. I do not think I have to emphasise my own experience, it was only a short experience, when Sealink were on strike, a strike incidentally which did not start on the Irish Sea. It started between Britain and France. It had nothing to do with the Irish Sea operation whatsoever. This again, shows how an enterprise can be affected by something over which it has no control whatsoever,
Senator Hillery, as becomes his profession, emphasised the importance of B & I sharpening their marketing. I hope they will read this debate and realise how conscious this House and the Oireachtas generally is of the importance of this. Senator Hillery raised the comparison of performance and forecast. I guaranteed already in my speech that this was taking place. As a matter of fact, for other companies also the same procedure is being followed as of now. I agree with them. It will not be an easy future. A good service is needed and strong marketing.
In a lengthy contribution Senator Bradford made many points. He made the point that, as it seemed to him, it was the last chance. It is a fair summary. The day of reckoning is an ominous kind of way for putting it, but he used the words anyway. He went along with some of Senator Ross's suggestions that the thing to do was cut the losses and let it go. It was one option. He did not come down heavily on the side of that option but he mentioned it with some favour.
The other option was to take advantage of the expertise that was already there, not to scatter it, not to get rid of it, but to pay attention to what has been substantially a good record in industrial relations. He also said we would have to take cognisance of the assets. The assets are very considerable. He dealt with the serious social consideration and said that it placed restrictions on the company as a purely commercial venture. I make the point that there are bottom lines and bottom lines. There are specific ones for the specific commercial company. There are national ones and, in particular, something that came up for criticism time and time again, the placement of the building of the two ships in Cork.
He complimented the unions on their major sacrifice and thought with me that the deregulation argument was exaggerated but criticised B & I for being too slow to react at that time. He thought that Sealink were more successful. It is not for me to comment on a private company. I said — it is true — that the shipping buisness generlly, both deep sea and the short linkage shipping, have not been the most successful businesses in the past few years.
He emphasised the importance of new ideas and, in particular, the idea of linking Europe into their operations. Europe is linked in already in the freight situation. I mentioned that in my opening speech. He was the first to mention — others agreed with him — the cruise potential. I reiterate what I said already. Ideas are important and the more of them that come from people of experience in the commercial field or even, specifically, who have shipping and marine expertise, the better so that the board of management will know of the interest of the Houses of the Oireachtas and also take advantage of any ideas which, when tested, they may find commercially viable.
He raised the point about the shore based personnel and the seagoing personnel. The redundancy package is being worked through at the moment. While it has not been concluded, the shore based numbers will be reduced more than the seagoing numbers when the final count is made. I can put that on the record of the House now.
As many Senators said, we will be watching the accounts closely. One point he made that I would not agree with is that the Members of the Oireachtas and the public generally should know month by month what the accounts are. I do not think one could do that. If you had a monopoly situation yes, but where you have commercial rivals I do not think it would be wise to let other people know exactly how you were going on.
We did not accept in the original proposals the idea of the holding company. That will come up for consideration again. It has not been accepted. I mentioned that we are working on the berthing facility at the moment.
Senator O'Callaghan, who has expertise in the tourism area and personal involvement in it, emphasised that he regarded B & I as important not merely in the tourism area but in the matter of industrial exports. He complimented the management and the unions on the acceptance of this new slim line company and he emphaised, what we have been emphasising, that it is important for the company to make money and to make a commercial success of it. Whatever social factors come to mind, this is what this House and the Oireachtas generally are looking for in this instance. He made a very good point that if the situation had been reached where the company had been a private company, it might well have closed down at that time and left us in the middle of the tourist season with a back-up of industrial perishable exports and no place to go.
He raised the point of the individual performance of the ships and how important it was to see to it that a good service was provided on the ships. I have to agree with him, not specifically on B & I. I have had experience of less than sharp, efficient and courteous service on ferries. It is not good enough. I know what I am talking about because fairly close relations of mine did summer holiday work from a university on certain ships. I was appalled by the general attitude of staff, as they relayed it to me, to customers.
Over the past three years or so B & I have concentrated on that aspect. Aer Lingus have special studies, seminars and influencing group meetings to see to it that courtesy and efficiency, and the customer is always right philosophy, are instilled into their staff. I would like strongly to support what Senator O'Callaghan said. He made a comparison between Irish staff and other staff but that does not take away from my total support for his views on that.
He, too, mentioned the potential of cruise business. I accept that. The first thing I want them to do is to prove themselves between now and the autumn and, as soon as they have proved themselves and begun to make profit, I would like to see that type of expansion or expansion into any other field in which they could make a profit.
Senator Harte paid a well-deserved tribute to the workers and their attitude during the discussion. The Irish Congress of Trade Unions, as the House knows, made a significant contribution at that time but there seems to be an ambivalence there with regard to the placement of the contracts. We are going back a bit. It is not very productive to go back too much, but I maintain that the placement of the ships at that time was a good thing for the economy of the country generally. Admittedly, they may have been somewhat cheaper in Japan. I have not heard any complaints about emigration from Japan or a lowering of the standard of living, so it does not pain me that they did not get two contracts from here.
Senator Harte also made the contrast between shore based and seagoing staff. I indicated to him what was happening in that regard. All reference to the travel tax will have to be referred to my colleague, the Minister for Finance, Deputy MacSharry, who will deal with it in his usual efficient and possibly ruthless way. The £5 tax is a larger proportion of the ferry charges than it is of the fares from Ireland to New York. That goes without saying but it is not an exorbitant imposition. In my opinion as far as children are concerned the percentage looks high.
Senator Daly referred to the contrast between services. He had an unfortunate experience with Aer Lingus and he worked it into his contribution on B & I. It shows the intensity of his feeling in that regard. He said he hoped that it highlighted in some way the importance of giving full information about fares and about the reduction of fares. I am grateful to him for his remarks about the efforts to bring down air fares and about the help that was given to me by the European Commissioner, Mr. Sutherland. He was a useful ally. In the end, of course, the Treaty of Utrecht was more powerful than either myself or Mr. Sutherland and held up the package for a considerable time. We got over the Treaty of Utrecht and in December 1987 succeeded in putting the package forward. I may say now, if the Leas-Chathaoirleach does not shoot me down, that I will be signing tomorrow with Lord Brabazon an air agreement which is even more liberal than the liberal passages in the European air agreement.
B & I, as Senator Daly said, provide a very good service, in particular in the area the Senator mentioned. Many years ago I had to emigrate and when I came back to Dublin for a job interview were it not for the fact that I could get a night's sleep on route back I would not have been able to come for that particular interview — what is more I got the job — at a time when the service being provided for thousands of people between this country and Britain was appalling and atrocious. I often regret since that I did not jump on a herring barrel and rally the hundreds of Irish people who were being so badly treated on that particular service at that time. That is one of my regrets.
Senator Daly stressed that it was important that B & I should know that there was no licence to do again what has been happening over the years. That is certainly true. He also mentioned the possibility of cruises.
I am grateful to the Seanad for the wide-ranging debate and for the ideas they have put forward. Even where I did not agree with these ideas I was very glad to hear them expressed because I know they represent a philosophy with regard to the commercial life of the country. I recommend the Bill to the House.
