Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Thursday, 19 Jul 1962

Vol. 196 No. 16

Committee on Finance. - State Guarantees (Transport) Bill, 1962—Money Resolution.

I move:

That for the purpose of any Act of the present session to provide for guarantees by the Minister for Finance in respect of moneys payable by Córas Iompair Éireann under contracts entered into by Córas Iompair Éireann with the approval of the Minister for Transport and Power given with the consent of the Minister for Finance it is expedient to authorise:—

(1) the advance out of the Central Fund or the growing produce thereof of moneys required to be paid by the Minister for Finance in respect of sums due under a guarantee under such Act;

(2) the repayment to the Central Fund out of moneys provided by the Oireachtas of moneys advanced out of that Fund or the growing produce thereof to meet payments under a guarantee given by the Minister for Finance under such Act which have not been repaid to the Minister in accordance with such Act, and

(3) the charge on and payment out of the Central Fund or the growing produce thereof of the principal of and interest on any securities issued by the Minister for Finance for the purpose of borrowing under such Act and the expenses incurred in connection with the issue of such securities."

On the Second Stage of this Bill I raised certain questions of a general character which have special reference to the Money Resolution. This is a Money Resolution designed to provide the requisite guarantee to enable Córas Iompair Éireann to enter into a contract with General Motors to purchase diesel engines. The Minister recommends it to us on the grounds that Córas Iompair Éireann have been able to make an advantageous bargain with General Motors after what the Minister describes to us as an adequate competitive tender with a variety of other companies. The additional advantage accrues that General Motors Corporation are prepared to give the Board of CIE extended credit at a moderate rate of interest. We are anxious to facilitate CIE to avail of this extended credit on advantageous terms. That seems to be a very sensible proposal.

But I want to recall an interesting fact, because I am always zealous to educate Fianna Fáil. I remember during the inter-Party Government administration, when Deputy Norton was Minister for Industry and Commerce, a contract was negotiated, and one of the arrangements was that extended credit would be made available by a foreign firm for a very large capital sum. In that year we were appropriating £10,000,000 under the Small Dwellings (Acquisition) Acts for housing. We had other very large capital liabilities for housing the people under the housing drive then going on. We were very glad of the opportunity of getting extended credit for a large capital sum, thus releasing capital resources here for work urgently necessary. I can remember the Fianna Fáil Party rising up in these benches and saying that no more awful confession had ever been made on behalf of an Irish Government than that we should accept commercial credit at the hands of a foreign firm. Do you remember it?

It was a totally different thing. That was credit being extended to the Government.

This is the Government, too.

No. This is a guarantee to a State corporation, instead of advancing money from the Treasury. The case the Deputy is describing is one where the Government had not got the money.

Not at all.

The Parliamentary Secretary is not quite as stupid as that. He does himself an injustice.

I am perfectly correct. One was a case where the Government had not got the money.

On the contrary, we paid out much more money.

In that year we were providing £10,000,000 under the Small Dwellings (Acquisition) Acts. Here is the proposal the Minister puts before us now. Instead of giving the money from the Exchequer to CIE and letting them pay for the engines—there is no reason why we could not advance the money to CIE from the Central Fund and let them pay for these engines—we are saying to the company: "You may inform General Motors that if they give you extended credit on advantageous terms, we, the Government of Ireland, guarantee the payments."

That is a very sensible thing to do. It is just as simple to do it now as it was to do it five or six years ago and release capital here for other necessary capital investment in this country. If we had to provide 6,000,000 dollars for the purchase of these engines from the capital available for domestic development, that would have meant a reduction of approximately £2,000,000 or £3,000,000 in the available capital for investment in necessary and desirable capital development at home.

I just want to impress on them (1) it is a good thing they are learning sense, and (2) I hope Dáil Éireann will approach these matters in the same way as we tried to approach them, that is, to recognise that the national credit is the concern of all of us and that to say, for cheap Party advantage, that the Government of Ireland have no money does an injury to Ireland. It is a shameful and despicable activity on the part of any political Party that they, for the purpose of trying to deceive simple people at home, should denigrate their own country before the world and say "Our Government have no money".

I want to emphasise perfectly clearly that there is no difficulty at all. If we wanted to buy these diesel vehicles and pay for them, the Government of this country could write a cheque for them in the morning. But they elected, on the merits of the bargain negotiated by the Board of CIE with General Motors, to say: "Instead of writing a cheque for it, we approve the bargain you have made and, in order to facilitate the completion of it, we authorise you to say to General Motors that the Government of Ireland guarantee these payments." General Motors then say: "We are prepared to make these advantageous terms available because the Government of Ireland give that guarantee."

That guarantee is not given on behalf of the Fianna Fáil Government. It is given by the authority of us all here in Dáil Éireann on behalf of this country. We are pledging Ireland's credit for this transaction. That is a sensible and prudent thing to do, and we are prepared to endorse it. I hope, if a similar situation should arise after this Government have left office and we are responsible, that the Fianna Fáil Party will make a corresponding approach to matters of this kind and join in with us in any similar case in saying: "That is a sensible arrangement. It is right and proper that our Government should act rationally in these matters and, where it is more advantageous to finance transactions of this kind by this method, we are glad to see them to do it, and we are not going to get up and shout from the hustings `The Government of Ireland have no money."'

The Government of Ireland have all the money necessary to carry out whatever duties devolve upon them in the wise administration of their affairs. If every other country in Europe were in a position to say as much, they would have more to boast of than they claim at present. Let us try to say that always from both sides of the House. It will be good for the country, good for all of us and it will be a useful demonstration to our neighbours of what responsible, democratic Government means. That is one of the matters I wanted to refer to. I have been waiting for the chance, because I think it is good for you to get your noses rubbed into that kind of folly of your past. You learn slowly and with difficulty, but I have to confess you do learn.

Do not be so pessimistic. You do learn, but it is a slow process.

It took 30 years to teach them about the top hat.

There is another matter I raised on the Second Stage. The Minister made some reference to it, but I should like to raise it again. I understand from the Minister that this money we are guaranteeing will operate to complete substantially the dieselisation of CIE. We think that is a wise policy. We think that on balance, the dieselisation of the rail transport of the country is wise. But I want to direct the attention of the House again to a matter that, sooner or later, we will have to consider. When we passed the first Transport Act in this country, nationalising the transport services and giving that body a complete monopoly, that step was justified on the ground that we wanted to give the country a transport service which accepted the technical liability of common carrier. That is to say they bound themselves to accept any traffic tendered and to deliver it to the destination indicated by the consignor; secondly, on the ground that we wanted to maintain in the country a traffic authority which expressly undertook not to provide differential freight rates; that is to say that, if they quoted a special freight rate to any individual in the community, they thereupon undertook to make that special freight rate available to everybody; thirdly, on the ground that we wanted to maintain in the country a transport undertaking which would maintain rail transport in all essential areas of a character acceptable to the people in those areas. In consideration of their undertaking to do these three things they were to have a complete monopoly of all traffic.

That situation continued to obtain up to the time of the 1958 Transport Act. Under that Act we relieved Córas Iompair Éireann of the obligation of common carrier. We relieved Córas Iompair Éireann of the obligation to refrain from quoting differential rates and now they can quote a special rate to any individual in the country, and they are doing it under the package deal on a pretty large scale. Thirdly, when we come to the question of maintaining rail services in all parts of the country, we understood the present Taoiseach, who was then Minister for Industry and Commerce, to say that that obligation remained in so far as Córas Iompair Éireann would not close down a railway line without full prior consultation with the local interests involved.

Between 1958 and the very recent public statement by the Chairman of Córas Iompair Éireann, that undertaking was completely ignored and a great many railway lines were closed down without any prior consultation with local interests. Now the Chairman of the Company has announced that, under the general authority conferred upon the company by the 1958 Act, he will close down virtually all the branch lines in the country, though he has added that that will not be done until everybody involved has been given ample opportunity of coming to discuss it with him and his Board, which is, I concede at once, an implementation of the original undertaking given by the present Taoiseach, which had not been implemented heretofore.

I want to pose this question. In the new situation, what is the case for continuing the monopoly of transport? I am moved to ask that question by this fact: there are individual entrepreneur outside carriers who have got limited, or general, licences to engage in the transport business. I know of one case where a man was operating three lorries. I think he had a general transport licence for the three lorries. Recently he retired from business. I understand that he was able to sell his plate, covering three lorries, for £12,000. That meant that there was some hardheaded business man who had seen his books and was satisfied that the opportunity to operate three lorries in general transport was worth a capital sum of £12,000. I think all of us know individual plates with restricted areas of licence changing hands for sums of up to £1,000. There is nothing wrong in that, but it is evidence of the profitability of the transport business to those who have access to it.

I want to ask the House has not the time come, now that we have completed by this guarantee the modernisation and equipment of Córas Iompair Éireann, now that we have acknowledged the right not to be a common carrier, now that we have acknowledged the right to suspend the prohibition on differential rates, now that we have acknowledged the right to close down branch lines, for a cessation of the monopoly of transport? What case can anybody make, once they have been fully modernised and equipped, and put on an absolutely equal footing with any private entrepreneur, for saying that there should not be free competition? Why should there not be free competition? Why should not anybody be allowed to engage in transport subject to the general regulations governing safety, fares, labour conditions and so forth? That is a matter we ought to consider.

The Money Resolution to this Bill provides the money for, as I understand it, the completion of the modernisation of the major transport undertaking in the country, and this is the stage at which we should ask ourselves this question afresh and take a completely new look at the situation because, and this is a thing people are liable to forget, everything everybody uses in this country is at some stage of its existence moved from one part of the country to another and thereby makes it contribution to paying the transport charges. What it is vitally important to remember is that virtually every export we have, including our entire livestock exports, carries some element of cost deriving from the transport it has undergone at some stage of its sale and export. If, by restoring free competition under the new dispensation, a material reduction in these costs can be made, how can we refrain from giving the most careful consideration to such a reform if we are serious about preparing ourselves for the new atmosphere of the Common Market into which we are moving?

I hear the Taoiseach, I hear the Minister for Industry and Commerce, and I hear them with approval, saying to the manufacturers and business men in this country: "We are moving into a new climate. You ought to get business consultants in and review your whole set-up to see how it will measure up to the impact of the Common Market." I am putting this to the Minister for Transport and Power. He is responsible for a very material element in the whole costs structure of all our exports. Is it not time that he asked himself as Minister for Transport and Power the same question the Taoiseach and the Minister for Industry and Commerce are urging the businessmen all over the country to ask themselves? Have the members of Dáil Éireann not an obligation to ask themselves: can there be any reform of administration or organisation which would give us better transport at lower costs than the set-up that at present exists. Unless we do that I do not see how we can with clear conscience expect, as we do expect, and rightly expect, businessmen to make that examination of conscience in respect of their own individual businesses.

I invite the Minister for Transport and Power to give us his view of these important matters and to tell us how is it that it is necessary for every individual businessman in the country to streamline and revise the whole methods of procedure to meet the threats of the Common Market if we are content to drift along with what I suggest is a wholly out-dated transport concept in the light of the 1958 Act and in the light of the guarantee under this Bill which, according to the Minister's statement, completes the modernisation of CIE.

I thought I had already dealt with this matter on the Second Stage of the Bill. The position in regard to CIE is that it is in no sense any longer, if it ever was at any time in the past 15 or 20 years, a complete monopoly. There are competing with it some 70,000 private lorries and contractors, 960 licensed hauliers and 190,000 private motor cars; and in so far as passenger transport is concerned, if the number of private vehicles increases at the present rate there will be about one for every 10 people in the course of the next eight or 10 years.

A further answer to Deputy Dillon is that CIE provides a service throughout the country either on the roads or on the rail of a kind which ensures regularity, ensures that a very wide variety of people can be certain of sending their goods on a particular route on a certain date. In making the effort that is now being made to pay its way, CIE must take account of the fact that within certain limits a great many of its services are uneconomic. In other words, if the CIE monopoly were eliminated by an Act of the Oireachtas it is, to my mind, inconceivable from studying the reports of CIE that buses would be run in a great many areas with the regularity with which they do run, and that lorries would travel on regular routes serving particular areas and would be known to cover those routes at specified times and on specified occasions.

CIE activities include a number of operations which will almost in perpetuity be losing operations and others that are profitable. Therefore, even though CIE has the privilege of making package deals and has proved that in respect of road transport it can, in connection with many individual operations, be more economic than private haulage concerns, it has, as I have said, to carry out public transport policy which involves a combination of losses and profits. Even in Dublin city, for example, a great many of the bus services make no money, in fact actually lose money. The same applies to road passenger services. I am sure Deputies do not need statistics in regard to this matter. All of them must see going around the country CIE lorries which on many occasions appear to have only a few parcels in them; on other occasions those lorries may be full but the fact remains that for the small farmer, the small householder and the small industrialist, such service is regarded as essential both in this and every other country.

When Deputy Dillon speaks about the sale value of carrier licences, he is speaking about licences in respect of transport services where the owners do not have to provide regularity of service. They choose their route and the goods they carry and the operation is almost known in advance to be profitable to them. I should say also that the fringe benefits of the pensions scheme to the workers in CIE add an inevitable cost to the whole operation which is not met in most cases, so far as I know, by licensed carriers, and in respect of some of them at least, I very much doubt whether they keep the rules in regard to conditions of employment that are kept by CIE. The House must be aware that the main thing is that these licensed carriers use their transport in their own way whereas CIE maintains a great panoply of public transport services and in the case of all the railway lines that are closed and a substitute of bus services provided it is not in any sense monopolistic because it is up against private competition but it does continue to run them regularly throughout the country. I think that applies to a great many transport systems throughout Europe where countries are also concerned about the cost of exports and therefore with transport costs. Whatever changes are made in legislation for private or public transport it is essential to have a public transport company that has the privileges that are left to it under present legislation.

I should say in reply to Deputy Dillon that CIE is making a tremendous effort to reduce its transport costs by more modern methods and although successive wage increases which apply to the rest of the community have added to their costs they are doing their utmost to prepare for the Common Market by a vast scheme of reorganisation which is taking place by making use of containers wherever possible, by using work study methods on the input and output of goods from stations and depots, and by ensuring the greatest productivity possible.

It would take me much too long to give a detailed account to the House of the work of reorganisation. A great deal of it is highly complex and extremely tedious to relate but it is going on. When I last inspected some of the new depots I was told that the increase in productivity on the whole operation had been anything from 25 to 30 per cent. In so far as package deals are concerned CIE are able to compete more effectively. If the general progress of CIE is examined since 1958 it will be seen there is far more productivity and that CIE for the sake of its own survival as well as for the sake of its adhering to the terms of the 1958 Act, is doing all it can to provide an economic transport service at the lowest possible cost to the community.

It would be better if it delivered the goods within a reasonable time, of which I shall give the Minister some details at a later stage.

Progress reported; Committee to sit again.