Vol. 397 No. 5
18 Mr. Rabbitte asked the Minister for Labour if he will assure the staff of the Great Southern Hotel Group that the Government will continue to honour the undertaking he gave personally to their union representatives that the group will be retained in public ownership; and if he will make a statement on the matter.
58 Mr. T. O'Sullivan asked the Minister for Labour if he will give a report on efforts to sell the Great Southern Hotels Group; and if he will make a statement on the matter.
I propose to take Questions Nos. 18 and 58 together.
Since my appointment as Minister for Labour I have had numerous meetings with representatives of the staff in Great Southern Hotels, the most recent of which was on 1 February. At all these meetings I have clearly stated that my primary concern is to secure the long-term future of the group and its employees.
With the commitment and effort of all those involved — the board, management and staff — the group has now reached the stage where a substantial capital injection is needed to maintain its commercial momentum, to increase profitability and to enable it to make its full contribution to tourist development. This, in turn, should help to maintain and increase employment and to provide a solid basis for further growth.
While retained profits can be a partial source of funding they are not sufficient to provide the necessary capital to carry through the board's proposed development programme. Thus, other avenues have to be explored. The board has put forward certain proposals and I am considering them at the moment. As I stated in this House on 8 February, there are several possible options such as joint venture or Stock Exchange flotation — each with its own particular merits. I am looking at all possibilities.
I am on record as saying that we shall do all we can to hold the group in majority State ownership. I have explained the position in detail to the staff representatives and others concerned.
I am also on record as saying that my plans for the group will be entirely in accordance with the Programme for National Recovery and the Programme for Government.
I hope to be in a position to put proposals to the Government shortly which will be in accordance with the assurances I have given to the staff representatives.
I am reminded of the reply given by a previous Government to a question on the Great Southern Hotels Group which was that they felt obliged to privatise it because it was running up losses, but now that it has returned to profitability and making a major contribution to the tourism industry, apparently that is being reconsidered.
I was the Minister who saved it.
The Deputy saved it because the trade union movement did not give him any other option.
We made a decision to save it.
Does the Minister agree that the specific undertaking given by the Taoiseach to the workers in Galway is being abrogated by him in the House today? Would he further agree that it would be in breach of the Programme for National Recovery to contemplate privatising the hotel group in whole or in part?
Neither is true. The group has been turned around from a loss making position. This was achieved through the investment of £16 million of taxpayers' money by the previous Government to save the hotels. The board have drawn up a development programme the final cost of which has not been notified to me, but it will be well in excess of £10 million. The Deputy seems to be indicating that he is in favour of development but we either forget about that, putting jobs in jeopardy and letting buildings, which are old, decline, or we look elsewhere for money. The Department of Finance have made it clear that they do not have another £16 million to give the group and have suggested that we look elsewhere. I am considering this option which is totally in line with the aim of developing State enterprises and increasing employment in them. In fact, it would be irresponsible of me if I did nothing, which is what the Deputy seems to be indicating.
A brief question, Deputy, please as there are two other questions to be disposed of.
The same old conservative Marxism from The Workers' Party.
I do not think Deputy Mitchell has anything to be proud of with regard to the Great Southern Hotels Group.
Every company was in profit when I left office.
This is leading to argument.
Would the Minister agree that the £16 million investment of taxpayers' money which he talked about to a very large extent came from the proceeds of the sale of a number of other Great Southern Hotels, including the hotel at Mulrany, County Mayo, the hotel in Donegal and the Russell Court Hotel in Belfast, which were sold for a song? Will he give an undertaking to the House today that the majority share-holding in this hotel group will not pass out of the State's hands?
Let me repeat what I said to this House on 8 February. It is my intention in the proposals I will put to Government that the majority of shares, which as the Deputy is aware are lodged with CERT, will remain in the hands of the State. The right thing to do is to seek additional funds elsewhere, which is in keeping with the policy of Congress, the Programme for National Recovery and the Programme for Government, to try to ensure that the company will continue to make profits and is kept viable. I am aware that a number of the hotels were sold for a song but it is debatable whether they would be as successful if they had remained in the hands of the group.
Question No. 19, please.
Specifically, in relation to majority ownership, is the Minister——
Next question.
In relation to majority ownership——
The Deputy will resume his seat. I have called the next question.
A brief supplementary.
I am sorry, Deputy Rabbitte——
Is the Minister conceding that majority ownership will be retained?
The Deputy has asked that question already.
The Minister did not reply to it.
I am sorry, but I have no control over Ministers' replies.
The majority will.
Thank you.
