Dáil Éireann díospóireacht -
Tuesday, 2 Dec 1986

Vol. 370 No. 5

Adjournment Debate. - Hospitals' Trust Sweepstakes.

Mr. V. Brady

I should like to thank the Chair for giving me an opportunity to raise this very important matter that affects more than 200 people. I feel strongly about this as I am sure other Members do. At this stage most people are aware of the background to the virtual closure of Hospitals' Trust. It is worth recording that at one time Hospitals' Trust employed more than 2,000 people. At that time there was not the same amount of competition in the form of pools, draws and lotteries. Hospitals' Trust had the field to themselves in those days and as well as creating a lot of employment they gave in the region of £55 million to the hospital fund. Obviously, that took a tremendous weight off the shoulders of taxpayers as many hospitals had projects funded by Hospitals' Trust.

The announcement last year of the Government's intention to run a State lottery caused a lot of worry to the promoters of the Sweep. Having considered the matter Hospitals' Trust decided to cancel their operations in January last. At that time the 200 permanent workers were laid off. They were not made redundant and they have not been told if work will be available for them in the future. Since then those people have registered as unemployed persons but still harbour the hope that some day they will be re-employed by Hospitals' Trust.

I understand that during the year a number of proposals were put to the Minister for Justice. When I questioned the Minister about this in the House he gave me certain information but subsequently he saw fit to reject the proposals put forward by Hospitals' Trust. He may have had good reasons for doing that and in my view the proposals submitted to him were not 100 per cent. I can understand the Minister's reason for rejecting that application. However, nothing was done to ease the lot of the employees laid off since January. Those people did not receive any redundancy payments or information about their future. Most of them are women who have given tremendous service to their employers. Many of them worked with that concern for between 30 and 40 years. It is worth noting that there was never a strike or trade dispute at Hospitals Trust and the employees have always been very loyal to the concern. One can understand why those people feel betrayed by management. Many of the employees had planned their future and gone so far as to plan for their retirement. It is sad that they should have been let go with one hour's notice without any hope for the future. The position in regard to those people is urgent because as they have been unemployed for almost 12 months they will shortly find their unemployment benefits reduced substantially. When that occurs they will face serious problems. In fact, many of them will have to consider disposing of their homes. This is unjust.

I understand that the chief executive sought a meeting with the Minister on a number of occasions, according to information given to me by that individual. I must add that it was four months after the closure before the chief executive had an opportunity to discuss the matter with the Minister. The property occupied by Hospitals' Trust is owned by the State and is on a 14-year lease from the State. It is estimated that the property could fetch in the region of £15 million on the open market and, being adjacent to the headquarters of Allied Irish Banks and the grounds of the Royal Dublin Society, it is in an attractive location. I have no doubt that if it was put on the market there would be a big demand for it. One puzzling aspect about this is that while a sweepstake has not been held since 1985 and 200 employees were let go in January last, 26 employees remain working with the concern. I do not know what they are doing but, obviously, expenditure is still high. The company are still running a number of cars and there are a number of large expense accounts. However, the output is almost nil. The only matter those employees seem to be involved in is preparing proposals to put to the Minister for the future. Is the Minister able to throw some light on that?

Can the Minister establish if Hospitals' Trust will function in the future? If they do not what will be the position in regard to redundancy payments to the employees? I understand that negotiations have been going on between the Minister, Hospitals' Trust and other parties for the sale of the lease on the property. Obviously that will result in the concern getting some money and I hope that is put aside for the benefit of those who have lost their jobs. It is the responsibility of the Minister to ensure that justice is done in this case. Those faithful employees have been dumped without any information as to where they go from here. I had hoped that with the setting up of the national lottery employment could have been found for many of those employees but, unfortunately, that was not the case. It is regrettable that no additional employment will be created by such a major project. However, one effect of the national lottery will be to put hundreds of people who gave excellent service to Hospitals' Trust out of a job.

I accept that to a large extent this is outside the control of the Minister but I presume he is in constant negotiation with the management of Hospitals Trust, I should like to refer to a letter I received from the chief executive of Hospitals' Trust on 15 October. In the course of it he says that the position regarding the employees of Hospitals' Trust Ltd. who are at present laid off is a continuing cause of concern, particularly in regard to their unemployment benefits. He said the company were endeavouring to ascertain from the Government what type of operation they would be willing to let the company pursue but so far the information had been largely contradictory except in so far as the company had been told that they could not operate a scheme that might be in competition with the national lottery. I will refer to one more paragraph. It states:

Rumour has it that a Junior Minister indicated that we could continue to operate our traditional sweepstakes, but that suggestion can hardly be taken seriously as all our efforts have been to alter our traditional sweepstakes because they would no longer be viable with the National Lottery.

Perhaps the Minister would comment on those paragraphs. I am sure he will share my concern for the welfare of all those people who are being laid off and who have had no indication of where they will go from here.

Minister for Justice (Mr. Dukes)

I appreciate Deputy Brady's concern for employees and ex-employees of Hospitals' Trust. I hope Deputy Brady will understand that I cannot comment on a letter I have not seen, and I do not intend to comment on rumours referred to in a letter that I have not seen. I would have nothing useful or constructive to say on those points.

However, it would be useful if I pointed out briefly some of the principal features in the history of the Hospitals' Sweepstakes to illustrate the background of the present position. Hospitals' Trust (1940) Limited have been running sweepstakes for the last 50 years or so in one guise or another. The connection of the Minister for Justice with that operation arises from the fact that it is to him that the various sweepstake schemes, by law, have to be submitted for sanction.

I do not intend to go into all the details, but over the years a number of changes have been made in the operation of sweepstakes, at the request of Hospitals' Trust, in order to adapt the schemes to what the company saw as being the changing market conditions. Changes in ticket prices were made on a number of occasions. In 1976, the statutory limit on the proportion of the proceeds payable as expenses was increased from 30 per cent to 40 per cent. The number of traditional type sweepstakes allowed per year was increased from four to six in 1978 — I am talking about the larger of the two types of sweepstakes. In 1980 the Shamrock Sweepstake was introduced. The Minister for Justice at the relevant times was associated with the company because he had statutory responsibility to sanction the schemes. In each case the changes were made in order to ensure the viability of the operations.

In recent years the business came under pressure from increasing competition from abroad, particularly North America. There has been acute competition since the introduction of state lotteries in a number of the US states and in Canada. It seems to me that that development must have been a big factor in the decision of the IHT not to run any sweepstakes since the last traditional one on the Irish Sweeps Hurdle on 11 January last.

As Deputy Brady pointed out, there has been correspondence between the company and me during the course of this year and although I dislike publicising correspondence between me, on a reasonably confidential business basis, and other people, Deputy Brady's concern requires that I do so on this occasion. I will illustrate briefly the main features of that correspondence.

Last January the company wrote to my predecessor outlining a scheme for sweepstakes to be run every two weeks. I replied on 19 March to the effect that the proposal had been examined in the context of the Government's decision to establish a national lottery and that it was considered that the operation of more than one lottery of the magnitude of the national lottery and the sweepstake they had proposed could result in wasteful duplication. I stated that in the circumstances I was not prepared to sanction the proposal. In June, the company submitted the outline of another scheme for sweepstakes to be run three or four times a year with a ticket price of £10 or £20. I replied on 16 July to the effect that in regard to the proposed ticket price of £10 or £20 and the coming into operation of the proposed national lottery I was not prepared to sanction that sweepstake.

The company wrote again on 18 July inquiring about the terms and conditions in which a proposal to run sweepstakes would be sanctioned. I replied on 6 August stating that there would be no objection to a further sweepstake or mini-sweepstake on traditional lines based on horse racing, and I said that if proposals were submitted within those parameters I would consider them. A letter dated 12 September from the company sought clarification on two specific points and I dealt with those in my reply of 10 October, stating that my overall position was that I could envisage sanctioning sweepstakes indefinitely provided that they did not become an alternative to the national lottery and provided, of course, that I could be satisfied that any proposed sweepstakes would be commercially viable.

The company wrote to me again on 31 October setting out a number of detailed arguments in favour of the proposal that had been made in June. They made the point that it remained to be seen whether market research would support their viewpoint in relation to that proposal. On 18 November I replied stating that in the light of the arguments put forward in their letter I was prepared to agree in principle to the proposals for sweepstakes set out in their letter of 5 June. I added that I thought the company would appreciate that I would have to consider any detailed scheme with particular reference to commercial viability. In that regard, the market research referred to in the company's letter of 31 October would be an important consideration in reaching a final decision on the detailed scheme. The company acknowledged that letter on 20 November stating that they would be in touch with me "at a future date when things have developed sufficiently to take the matter further".

The current position is that I have told HT that I am agreeable in principle to the running of further sweepstakes, and I have outlined the conditions in which a sweepstake scheme could be sanctioned by me. When a detailed scheme has been submitted to me I will give the company my decision on it at the earliest possible moment.

In regard to the workers, I would refer Deputy Brady to the general conditions for eligibility for unemployment benefit. I am not aware that the workers who were let go last January are being placed in any peculiar position in relation to eligibility for unemployment benefit. They are not being put into a particularly disadvantaged category, nor are they being put in any specially advantaged position. It is not in my power to say to workers or former workers of the company what their position will be. It is a matter for the company to decide what operation they will run within the parameters that I have set out.

Deputy Brady is aware that the company put forward proposals which they suggested should be considered when the Government were considering how the national lottery should be run. That proposal was considered seriously with others and the Government decision, announced at the time, was that a subsidiary company of An Post should run the national lottery. All of the company's proposals were given very careful consideration before the Government came to a conclusion.

On the other points raised by Deputy Brady, in so far as they have to do with the internal affairs of the company I cannot comment. It is a matter for the company to run its own internal affairs. The history of the year as I have outlined it shows very clearly that it has been my concern to ensure that any operation run by the company which could show itself to be commercially viable would not be of a nature to interfere or provide duplication with the national lottery. It is on that basis that we have approached the matter. I have said to the company what the parameters are within which schemes can be sanctioned and the House and the company can be assured that when a detailed scheme is put to me it will get my reaction at the earliest possible moment.

The Dáil adjourned at 10.45 p.m. until 10.30 a.m. on Wednesday, 3 December 1986.