I welcome this opportunity to speak on this Bill. I should say at the outset that if this Bill had been presented in the House in the mideighties Fianna Fáil Deputies, Ministers and their leader would not have been in favour of privatisation, partial or otherwise. The views of the Fianna Fáil Party in the eighties are well documented. They were absolutely opposed to privatisation, partial or otherwise, of the Irish Sugar Company or of any other company in the semi-State sector. However, they seemed to have changed their view in recent times, in particular since 1989.
Prior to the election in 1987 the Taoiseach and Fianna Fáil Ministers made it very clear that they were not looking for a mandate to enter into discussions on the privatisation of companies in the semi-State sector and that this matter was not on their agenda. As I said, it seems that they have changed their view, in particular since this Coalition Government were formed, and it would appear, regardless of whether Fianna Fáil Ministers or Deputies are prepared to admit it, that the Progressive Democrats are setting the agenda.
It has been well known for many years that the Progressive Democrats are strong exponents of privatisation and would like to see all semi-State companies privatised and sold off to the highest bidder as soon as possible. Some compromise had to be reached between the two parties in Government and we have now been presented with the Sugar Bill, 1990, which attempts to strike a balance between the concerns of both parties. I would submit that the Fianna Fáil Party would not be over-enthusiastic about the selling off of State assets; but the price of being in Government has to be met, which in this instance is a movement on the semi-State sector.
I am not going to dwell at length on the history of the Irish Sugar Company, since other speakers in this debate have done so, except to say that the Irish Sugar Company have made a major contribution to the economic life of this country and from their origin have been a major source of employment, particularly in those areas where their factories are located. They have also been of importance to the farmers, growers and suppliers in those hinterlands and surrounding counties. In more recent times, during the last ten years, the company have faced serious difficulties and hard decisions had to be made. These were not easy decisions for any political party and the Fianna Fáil Party took a long time to face up to and come to grips with these decisions. They also seemed to display a lack of appreciation of the serious difficulties which the rationalisation of the Irish Sugar Company presented in the eighties.
I am aware that the review group set up by the Minister for Finance and the Minister for Agriculture and Food to consider the future of the Irish Sugar Company were charged with certain undertakings — to examine their activities and structure, the question of partial or full privatisation and the commercial development of the company with the State retaining a degree of control. In one respect this debate goes beyond the Irish Sugar Company because I foresee us having many debates along these lines on other companies in the semi-State sector.
The question which needs to be asked is: who is going to control the assets of this company? I am not sure whether the review group was given a free hand or whether the Government wanted the review group to inform them that the company should continue under the present structures, with all due respect to those consultants we bring in, they tend to recommend what they have been charged to recommend in the first instance. The only reason this work was done is that the mood was in favour of privatisation of the Irish Sugar Company. The Minister for Agriculture and Food seems to be determined to do this.
The Sugar Company, as we know them, have one major asset and that is their sugar quota within the European Community. I wonder if the 200,000 tonnes of EC sugar quota is of itself the main attraction. Certainly in the past it has been regarded as a very attractive asset to companies both in Ireland and abroad and over the last number of years other companies have shown an interest in getting their hands on this quota. I wonder how much interest there is in developing the Sugar Company other than people getting their hands on this quota which obviously is of extreme value and its value will be enhanced over the coming years.
I am worried about the course the Government are going to pursue in privatisation. If changes have to be made I wonder if the question of the State retaining a majority shareholding was considered. Perhaps when the Minister comes to conclude he will outline to the House the weaknesses in the concept of the State retaining at least a 51 per cent share and if this has been considered. I feel it would have been a major bonus to the Government and the future of the Sugar Company if the State had retained a 51 per cent share in the company. The company have a major role to play in the commercial life of this country in relation to the asset, the EC sugar quota, and I would like to feel that guarantees will be given by the Minister for Agriculture and Food and his colleagues in relation to the future.
I have a particular interest in the preservation of jobs. The Sugar Company have been a very solid employer down through the years, having four centres now reduced to two. From what we have heard in this debate so far I could not be satisfied with the employment guarantees, which seem to be sadly lacking. The references to workers' rights in the context of the new company are indeed minimal in this debate so far on the Government's side as is the whole question of security of employment.
On the question of the amount of shares the Government want to hold on to, on Committee Stage we will be urging the Minister and trying to convince the Government and the Fine Gael Party, who seem to be accepting this Bill, that the State should retain a majority shareholding in this company. Given the history of the company and the importance of what is in effect a national asset, I do not believe it is in the best interests of the workers or, indeed, of the taxpayer that we concede majority shareholding in this company to the private sector. I am afraid my experience in dealing with the private sector and public assets has not exactly been what would give one much confidence in the private sector. The private sector has a far narrower motivation than we would expect to see in the commercial semi-State bodies. I am afraid their decisions are made strictly on the basis of the rate of return, and if the rate of return is not what they are looking for then they will pass on to the next industry which is ready for stripping and rationalisation. I am not convinced from what the Minister has been saying that he is taking adequate precautions to ensure that in the new arrangement adequate measures are going to be taken to build up this company and give them a chance and an opportunity of expanding. The Sugar Company should be able to expand if they wish to move into new areas. They have a solid base and they are in a healthy financial situation after many difficult decisions were made over the last number of years. The guarantees are lacking in the Minister's contribution and I do not see adequate emphasis being placed on employment, future employment, security of employment and terms of employment for the present employees.
I am aware some meetings have taken place since the Bill was introduced and I urge the Minister for Agriculture and Food and his colleagues that full consultation should take place with the workforce and with their representatives in the union prior to the implementation of this Bill. At the end of the day the Sugar Company are going to be as good as the performance of their workforce and it is extremely important that the workforce, the union leadership and the ICTU are fully supportive of the new moves which are being recommended by the Government and which, given the numbers within this House, will be cleared by this House and voted upon by the Government and the Fine Gael Party. These are matters on which we can seek to influence the Minister, on Committee Stage, when I think he has said he is prepared to look at these questions.
One aspect of the introduction of privatisation in the semi-State sector which fascinates me is the whole attitude being taken by the management of these companies. I like to feel there was a time when the senior management of public utilities and of the semi-State commercial bodies were proud to be working in the public sector, but I must question that in the present context. There seems to be a mad rush by public sector managers to get themselves into the private sector. I wonder if this rush is motivated by self interest or the interest of the companies. I have heard no convincing arguments from them why they must be privatised. We have heard of the restrictions in terms of management salaries by virtue of the Devlin report and other restrictions, but I wonder if these people are all that good. They feel they can make enormous salaries in the private sector; why then are they not going to the private sector? The ethos which was in the Sugar Company in the old days when people were proud to manage public sector semi-State bodies is sadly lacking in the managers we have in the eighties and nineties. This needs to be addressed. Also I do not consider it to be anything like sufficient argument that the remuneration of managers is so restrictive in the public sector that these companies have to be privatised to allow these people to be rewarded in the manner to which they feel they are entitled. There are simpler ways of doing that without changing the whole context and concept of the semi-State commercial bodies.
Obviously, the ICTU and the Government have had discussions about this whole group and the Central Review Committee are due to have a further look at the role and contribution the State companies can have in job creation. I find it difficult to understand why we are moving ahead on one aspect of privatisation while the review committee are looking at the possibility of further job creation in the State sector. Can the Minister inform the House what the prospects are in terms of job creation in the new company which will be set up? Are we going to see what we have seen all too often, even in recent days, that when the private sector take over State companies or in privatised State companies, the first thing, with or without Government consultation, is rationalisation? Jobs have to go and it seems the easy option is to bring about massive redundancies. I wonder if that is going to be the first bit of bad news we will get when this Bill goes through the House. If the Minister is confident that he is doing the right thing, that what he is doing holds out the best prospects for the development of the sugar industry, then he should spell out in detail from his discussions with the management of this company guarantees in relation to employment. At the end of the day if we cannot guarantee employment then we are setting out and accepting that there is failure from the word go.
Obviously jobs will be extremely important, as all of us who have been involved in their creation over the years are aware, trying to attract industry here. When we have our own industry, a valuable asset, which cannot be taken out of our hands at this stage, we should be ensuring that the Sugar Company are in a position to expand, that the jobs existing are secure and that others can be provided. I have not heard convincing arguments from the management of the company, the Minister or his colleagues in relation to those aspects of the proposal.
The option which I do not believe received any consideration by the group was that of increasing investment, or looking at the company in its public state and putting investment into the Sugar Company. One of the serious difficulties, the commercial semi-State sector has encountered in recent years has been the lack of investment capital. From my recollection the Government did not appear to consider this as an option. We have to assess the basis of the Telesis report and the necessity for having stand-alone, strong, independent companies capable of competing not just here but also within the European context. Surely the question of a capital injection into the Sugar Company should have received far more consideration than the mere scant references to it in the course of this debate? In summing up I would hope the Minister would let us have some details of whether that question was considered: what sort of capital investment would be required to put the Sugar Company on the requisite footing within the context of the European markets. That possibility for the future of the company does not appear to have been dealt with in any great detail.
In replying I should also like the Minister or his colleagues to address the whole question of the opportunities that will exist for the new company. For example, will we see the Sugar Company continue to operate, as it has been, in relatively restricted markets or will we see the company, under its new management and structures, looking further afield endeavouring to penetrate new markets? I should like to have some clarification from the Minister of what we can expect in that context.
I wonder just how much preparation and thinking the Fianna Fáil Party have done in relation to the part privatisation — which is what is happening — because it is not too long since the Taoiseach in this House was saying that he would regard any privatisation, part or otherwise, of any company in the semi-State sector as being a dismantling of the State sector. At that time the Taoiseach seemed to think that any suggestion of privatisation was something that was being waved by what he described as the new Right. Therefore, I wonder how the Taoiseach can come into this House now and reconcile his statements of the mid-eighties, to the effect that Fianna Fáil would take no hand, act or part in dismantling the semi-State sector since he said at that time he felt it would be the same as dismantling the State. There appears to have been a major change of heart on the part of the Government in relation to the commercial semi-State bodies.
From their most recent trading results the Sugar Company appear to have got their act together in recent years in relation to their commercial activity. It is rather ironic that it is at this time the Government are considering floating the Sugar Company in the private markets, when the company are in a healthy position and consistently made a profit in 1988, 1989 and 1990. From my understanding of the balance sheet of the Sugar Company it appears to be in a healthy state, in a position to remain healthy. Therefore I wonder why the Government have to consider the proposals enshrined in this Bill at this time.
The Minister has not been very specific or clear in the House with regard to what will happen to the funds raised in the context of shares in this company being sold. We have to question what is going to happen. I would like the Minister for Agriculture and Food and his colleagues to put on the record of this House exactly what the Government intend doing with the revenue realised in the course of this financial year from the sale of the assets of this company. Obviously there is a number of options open to them. For example, will the revenue to be realised be used to reduce the national debt which was part and parcel of the original debate offered by the Fianna Fáil Party and the Progressive Democrats as part of the reasoning for selling off State assets? In the context of the 1991 budget there appears to be a gap in the Government's revenue-raising potential somewhere in the region of £200 million to £300 million particularly in the context of a downward trend in economic growth. One must question whether the revenues raised from the sale of the Sugar Company and of Irish Life will be used to bridge that gap. As the Ministers for Agriculture and Food and Finance have gone around the country saying that any funds raised from these sales would be used to reduce the national debt, then we should have that tied down in the context of this debate because the statements to date have not been very convincing in relation to that aspect. Certainly I would wish that the Minister for Agriculture and Food, when replying, would clarify just exactly what will be done in this respect.
My strong objection to this process is the fact that the State, the many workers who have given their lives to the Sugar Company down through the years, at the end of the day, will lose out by virtue of the fact that the State is not retaining majority control. I would suggest that having 45 per cent control of this company is having no control at all; either one has 51 per cent control — when one can take decisions at management level — or, in effect, one has ceded any control over this company. For example, I contend that 49 per cent is as good as 10 per cent, 20 per cent or whatever but, effectively, the State is giving away control of a very important asset, what has been an asset since the foundation of the State, indeed what has been a very important part of life in this country in the various provinces.
Even at this late stage I would appeal to the Minister for Agriculture and Food and Finance and the Government to reconsider the amount of control they are ceding in this company. Were they to come back into this House and put forward the possibility of retaining, say, 51 per cent of this company, there might be some scope for examining this proposition in a different light. I am worried also in the context of what will follow, not just the Sugar Bill — we know what is the position vis-á-vis Irish Life — but in the various other areas where the Government, if the mood strikes them, will attempt to privatise as well. I am particularly worried that the Government have conceded that the Fianna Fáil Party, who over the years have had a strong commitment to the commercial semi-State bodies — who fought for them and their activities in Bord na Móna, Aer Lingus and the ESB down through the years — seem to be sadly lacking in that commitment as we go into the nineties. I have not seen the argument advanced or concrete proposals put forward in relation to this change of heart on the part of the Fianna Fáil Party.
Given the importance of the commercial semi-State sector, perhaps it is time the Taoiseach explained to his own party and to the House what has given him reason to change his mind in relation to statements which he made consistently throughout the eighties when any mention of privatisation was made. The Taoiseach made sound, firm commitments to Aer Lingus, Bord na Móna, CIE and indeed to all the commercial semi-State bodies down through the years. In the eighties the Taoiseach could not conceive privatisation either as a concept, as an economic possibility, or as an instrument of economic policy by any Government at any stage in Irish commercial life. I have not been able to follow from the Taoiseach's various statements when he had this Pauline conversion or when the bolt struck in relation to changing Fianna Fáil policy on commercial semi-State bodies. I am not at all convinced that what we are doing is in the best interests of the Sugar Company, of the workers or of the growers because the rules of the game will change considerably. I wonder in the context of the profits being made by the Sugar Company in recent years if it is in anybody's interests that the rules should change at this stage.
In relation to the question of control, I wonder why we have not sought to learn from the experience of the Nordic countries in relation to the activities of the commercial semi-State sector. The interaction between the commercial state sector and the private sector in the Nordic countries seems to be remarkably successful in terms of natural resources, in the oil industry, in forestry and so on. They seem to have struck the correct balance. One must accept that decisions have to be based on economic efficiency. Not anybody wishes to stand over inefficiencies, lack of competition or lack of energy in the context of producing the results in the semi-State sector. The semi-State sector must stand on its own feet and compete and should be better than the private sector.
In relation to the balance which should be struck, where the Government are determined to partially privatise an industry like the sugar industry, the Government are seriously erring in relation to ceding the majority control in the context of the Bill before us.
I would like if the Minister for Agriculture and Food would outline to the House the advice now available to the Government in relation to privatisation. Obviously, consultants and stockbrokers have to be involved; but I would like to know that the Minister is entirely satisfied that the advisers in this instance are independent. Needless to say, different interests have to be protected. There is the Government interest, the Sugar Company interest and private sector interests. I would like some more detail in relation to the actual stock market flotation on the Stock Exchange in the context of the advice available to the Government. I am particularly concerned that the advice available to the Government should be independent. As the advice is presently structured there seems to be a lack of independence in relation to the companies involved. Perhaps the Minister for Agriculture and Food will take the opportunity when he returns to the House to outline to us in detail how the flotation will take place, what advice is available to him and the Government in relation to the disposition of the shares and who will make the decisions at the end of the day in relation to the price of the shares.
I would also like an indication from the Minister as to where the money will go. Will the money be allowed back into central funds to be disposed of as the order of the day in the current side? There is no doubt from the way the budget was presented, and is being dismantled on a daily basis, that the Government will be looking for any cash they can get their hands on. There will certainly be a lack of buoyancy.
More questions were asked in the Minister's contribution than were answered. The review group who reported to the Government in relation to the future of the company did not consider with an open mind the three options they were given to consider. Obviously, there is a strong opinion in the private sector and in the world of management consultants that privatisation is the order of the day in relation to commercial activity here. From what we have seen of privatisation across the water I am not convinced of its success. I am extremely worried about the Government ceding control of a company which has a proud record in its contribution to the economy both at local and national level. In the future we will not have that control. Perhaps we can use as a precedent the recent example where the Minister for Telecommunications came into the House last Thursday saying he had no involvement with a semi-State commercial company and that it was not up to him to give them any directives or to tell them how to implement their rationalisation programme; but within ten days he could give them very strong advice. I suspect that the Minister for Agriculture and Food may well find that when the management of the new company is in situ he will be reminded very quickly that he has a 45 per cent interest in the company which does not entitle him to either give directions or voice his concern if the company should approach their commercial activities in a way which does not meet the wishes of the Government of the day.
I have reservations about this as this industry is very important to this country.
I have the same reservations about public utilities. Is it in our interests to privatise these companies? The attempted privatisation of the Dublin Gas Company makes me very sceptical of the motivation of the private sector and private investors. They wanted the State to put up all the money and to take all the risk, and they wanted all the profit. That is a very narrow economic proposition. I hope it will not be the sort of proposition we will be confronted with in the context of the privatisation of the Sugar Company. I hope the Government will reconsider.
This is all happening very quickly. I am not sure that this has received the amount of thought and consideration that it warrants. There are many other companies watching, companies perhaps in the same situation. This requires far greater consideration than we have had to date. In that context my main objective to what is before this House is the fact that the Government, who are custodians of the Sugar Company on behalf of all the people, are not acting in the best interests of the workers, the suppliers or the taxpayers generally, who have contributed to the Sugar Company down through the years by giving over majority control in this company.
