I think it was The Sunday Business Post. They said:
ICG have succeeded in clinching what is regarded as one of the softest takeover deals in recent times.
Let us remember that this is the businessman's paper.
This deal is yet another classic example of a "sweetheart deal", which I find most reprehensible. My concern is shared by the B & I board and staff who quite legitimately are asking the Minister to explain why he did not consider options other than immediate sale which would give a better return to the Exchequer and there was not an effective process of competitive bids. They also wish to convey to the Minister their disappointment that he did not provide a forum in which the board, through the independent committee, could contribute to the process leading to decisions. They are also angry and dismayed and there is a widespread sense of disappointment at every level, from staff to management, at the manner in which the decision was made and announced.
We are now heading into what is usually a happy time for families — the Christmas season of goodwill. I will examine the implications of this deal for the B & I workforce. Did the Minister not consider the merit of the MSBO's proposals for jobs? Can he dismiss as unimportant the loss of 250 jobs, or can his mirror image, the Minister for "unemployment"— the Minister for Industry and Commerce, Deputy O'Malley — whose Ministery is usually associated with job creation, going out into the market place and generating jobs, and opportunities attracting foreign companies getting men off the dole, and getting the country moving? I am afraid the Minister has been a total failure in this regard; the Minister, Deputy O'Malley, has shown great enthusiasm for privatisation coupled with job losses and the history of privatisation in Ireland is invariably linked to job losses. Does either Minister consider that saving 100 extra jobs means that MSBO's proposals have merit. Many B & I workers must be asking themselves if all their sacrifices were in vain. They had not only agreed to shed 600 jobs for the company to survive but by their very survival, 250 more men and women are now destined to join the dole queues.
What will become of the £17 million surplus in the three pension funds? Will it also be handed over to ICG? Do B & I members not have the right to vote on what will happen to their pension money? What guarantees can the Minister give the workforce that practices in B & I under ICG will not revert to the pre-1987 position? Will he also give assurances in this House that the protection of the rights of individual staff members and the opportunities for staff participation will be guaranteed? When will we know the terms and the timing of the proposed completion of the sale to ICG?
Are there any proposals for industrial democracy? Will the new company be compelled to comply with modern industrial relations practices and allow trade union worker representation on the board of the company, as already exists in B & I? What promises are there to the workforce who, in the past, gave up pay increases and took reductions in wages, that their existing pay and conditions will not be adversely affected?
There are a large number of questions to be asked of the Minister if he is to mindlessly pursue this privatisation proposal. For example, what are the investment plans he has agreed with ICG? What are the details of the proposals? Would he inform the House what, if any, voluntary redundancy packages the workforce will be offered, with, sadly, 250 men and women facing the dole queues?
I see Deputy Stafford, who represents an inner city constituency and who is conscious of the role of the port and of B & I. I point to Fianna Fáil backbenchers, backbenchers who rely on working class support in Cork and in Dublin, and ask how any of them could support the Bill without the full knowledge of and a debate on the issues involved? For example, we should have clarified what was meant in the report featured in the Sunday Business Post of 8 December about the B & I buyers gaining by tax relief. What did that report mean when it stated that the Irish Continental Group would not have to pay corporation tax for two years following the purchase of the B & I Line because about £100 million in tax losses would be transferred as part of the deal? What did that same report mean when it stated that the ICG deal carried with it warranties and indemnities that could have a further cash exposure for the State at a later stage?
I do not pretend to know an awful lot about economics, but it does strike me that the Minister needs to explain more openly and in great detail not only to his own backbenchers but also to everyone in the House, just what kind of deal he has struck with ICG. I ask the Minister particularly to answer the question posed in the newspaper report about warranties and indemnities that could have further cash exposure for the State in the future. A simple reading of that statement to me implies that there is a likelihood that the State will not in fact receive the £8.5 million but will somehow end up being caught out — in the full knowledge of the Minister — with other liabilities further down the road. That question must be answered.
Again I look to the Fianna Fáil backbenchers who, as I said, relied so heavily on working class support and votes to get into the chamber in the first place, and ask them how they could support the Bill without knowing of, or having explained, a clearly defined investment programme? Such a programme should be spelt out in advance by any new partner or owner. There is also the question of security of tenure for those employees who elect to remain within the company. It will be important to know whether there is a guarantee to maintain the terms and conditions and company union agreements of B & I employees. More should be known about whether the Government at this stage intend to maintain a golden share in the new scenario and whether the industrial democracy that exists at present will be maintained.
I now wish to refer to the Minister's speech and in particular to the final sentence in his final paragraph:
I would also like to thank the Irish Congress of Trade Unions, with whom I share the same vision and goal for the development of a sound shipping industry which will sustain and expand employment for Irish mariners.
That the Irish Congress of Trade Unions and the Minister might see eye to eye will be a cause of some concern to workers — not only to workers in the B & I but also to workers in CIE for whom the Minister promises in the new year the fate now being handed out to B & I workers. So much for the Programme for Economic and Social Progress commitment to job creation. So much for the Irish Congress of Trade Unions' defence of the public sector. With such a trade union congress, who can find themselves comfortably on the same wavelength as any Minister in the present Coalition Government, the sad feelings of disillusionment experienced by so many ordinary union members are perfectly understandable.
I challenge the Irish Congress of Trade Unions to reject the claim made by the Minister that they share with him the same vision and goals. I challenge the Irish Congress of Trade Unions to reassure the workers in B & I that they do not support the Minister's proposals for them. I challenge the Irish Congress of Trade Unions to come out now in support of the workers in CIE who are facing privatisation as promised by the Minister in his Bus Competition Bill due in the new year and what we sadly see in the Minister's Christmas box to B & I. The CIE group of unions are, in the Minister's words, facing a bleak future, with the Minister's determination to privatise anything in which the State has a role.
The Minister has to be condemned for his attempt to excuse his role in using the management staff buy-out offer in some way or another to extract from ICG a better financial contribution. I place on record my belief that the Minister used the MSBO to get ICG to increase their bid. Without the MSBO, ICG would not have upped their offer of £6.5 million. The Minister used the MSBO as his stalking horse to edge on ICG to up their offer. He had already made a sweetheart deal with ICG. ICG knew that, the Minister knew it and ICG played the Minister along right up to the very end, right up to the expiry date of the memorandum of agreement, because they knew that they and they alone would be the only winners in the buy-out proposals. The Minister twisted their arm just a bit by viciously manipulating the scenario and involving the management staff buy-out offer at the eleventh hour, and he squeezed another £2 million out of ICG.
The record speaks for itself. It goes back two years, when the Minister's love relationship with the proposal to sell out the workers in B & I started.
The Government decision to sell the B & I Line to the Irish Continental Group is one of the worst this Administration have taken. Already it has been the subject of widespread criticism on the part of a variety of interests. I predict it will provoke even greater anger when the public begin to appreciate the size of the Christmas gift the Minister has given Irish Continental Lines. The manner in which the Minister took the decision and the contemptuous manner in which he dealt with worker/management buy-out has angered and alienated the workforce.
If the takeover goes ahead the new owners are likely to face a hostile management and workforce which is not what is needed if the company is to survive and prosper. The tragedy is that, through his obsessive ideological commitment to privatisation and his apparent refusal to accept that the workers and management could run their company successfully, the Minister may well turn out to be the person who will have finally torpedoed the B & I Line. What is happening in the case of the B & I Line is not even a normal type privatisation. Usually what happens in the case of privatisation is that a company's shares are floated and available for sale on the Stock Exchange so that those who have the money can buy them. That is what happened in the case of both the Irish Sugar Company and Irish Life. What is happening in the case of the B & I is a unique form of selective, privileged privatisation in which a State-owned company is to be sold lock, stock and barrel to a private company.
Nobody would claim that the B & I company was a shining example of a successful semi-State company. To put it mildly, the company have had a chequered career, some of their problems having been self-inflicted while others resulted from factors beyond the company's control. Some of those problems were set out in the report on the company produced by the Oireachtas Joint Committee on Commercial Semi-State Bodies. Among other problematic factors identified by that committee was over-expansion in the late seventies, adding enormously to their financial burden, major increases in fuel prices, general depression, intense competition, disruption of services caused by industrial disputes — by the way, mainly in the United Kingdom — and the reduction in air fares making sea travel a less attractive proposition for any passengers.
As the Minister always likes to remind the House, the company has cost the taxpayer a lot of money over the years. The total State involvement since it was bought by the State amounts to approximately £106 million, a lot of money by any standard. By the mid-eighties, resulting from these problems, the company was in a state of crisis. A rescue plan was drawn up calling for and receiving an exceptional level of commitment and sacrifice on the part of the workforce. Six hundred workers were made redundant, reducing the workforce from almost 1,500 to below 900. There was a three year pay freeze. In an unprecedented gesture the remaining workforce accepted a pay cut of 5 per cent.
The five year rescue plan has been exceptionally successful largely as a result of sacrifices on the part of the workforce and their enormous efforts. Since the rescue plan was adopted, the B & I have reported trading profits each year and would be in a healthy financial position now were it not for the high level of debt hanging over the company from previous years. From trading losses of £3.6 million in 1987, they returned trading profits of £1.76 million in 1988, £1.95 million in 1989, £1.59 million in 1990 and are expected to return profits of £2.5 million in the current year. The reward for their efforts in saving the company is that it is now to be primed for privatisation. Not alone that, but their proposed management/worker buy-out proposal has been rejected. They are to be handed over to a company whose only objective is the pursuit of profit, which has made it clear that there will be 250 compulsory redundancies, that there will be no room for any element of industrial democracy in the company and no guarantee given about the continuation of any routes.
In many respects the experience of the B & I workers is similar to that of the employees of the Irish Sugar Company. They, too, made tremendous sacrifices, accepted a huge level of redundancies and put great effort into restoring the company to profitability. They, too, were sacrificed to privatisation in a move that had nothing to do with meeting the needs of the workers or the public but rather was all about satisfying the avaricious demands of a group of senior executives and board members to accumulate even greater wealth. Given the experience of the workers in the B & I and the Irish Sugar Company, would it be surprising if public sector workers came to the conclusion that if one wants to avoid privatisation the last thing one should do is make any effort to make one's company successful.
Those who assume that privatisation is an automatic guarantee of success should look to the experience of Sealink in the United Kingdom. They operated as a successful, profitable company while owned by the British state. However, Thatcherite economic policy determined that it was offensive to have a state company which made profits and it was privatised. Initially it was sold to a Bermuda-based company, Sea Containers, and subsequently sold to the Swedish private firm, Stena. According to yesterday's Financial Times Sealink are now heading for losses of some £30 million in the current year and the company will be closed by the end of the month unless their workforce accept a drastic cost-cutting exercise.
The possibility of the closure of Sealink makes the prospect of the sale of B & I more serious still. With the completion of the channel tunnel in 1994, Ireland will be the only totally off-shore member of the EC, the only country totally dependent on sea and air links with other member states. The reliability of ferry and cargo services is absolutely crucial to our tourist industry and our position as a trading nation. Each year B & I carry approximately 300,000 passengers, the majority being tourists, and some 70,000 cars. They provide crucial cargo services to the Continent. If the company is handed over to Irish Continental Lines there is nothing the Government will be able to do to ensure the continuation of these services for example, if the new owners decide that certain routes are no longer profitable or that they can make greater profits by investing their money elsewhere, there will be nothing the Government or anybody else will be able to do to prevent them from so doing. For instance, if the company decide six months hence to sell the B & I to some other foreign company there will be nothing anybody can do to prevent it.
Even if one accepts the case for selling the B & I, it is astounding that the Government have not decided to retain a "golden share" which would have allowed it to influence the crucial decisions to be made about the company in the future. That was the course of action adopted when the Irish Sugar Company and Irish Life were sold off. Does the Minister consider that the B & I is of less strategic importance than the Irish Sugar Company or Irish Life? Even if the Government had taken an irrevocable decision that the B & I was to be sold off — and as we all know the sale to Irish Continental Lines was not the only option open to them — there was a viable proposition for a management/worker buy-out. After all, it was the combined effort of the management and workers which had put the B & I back into shipshape condition. Indeed, there is every evidence to suggest that that unique proposal would have meant a great success in their taking over the firm.
An earlier proposal on the part of management and workers had provided for the involvement of two Danish firms. The Minister used the non-participation by the Danes to effectively scupper the proposal. Even with the non-participation of the Danes the worker/management buy out would have been a viable proposition in many respects making it more attractive because it would have ensured 100 per cent Irish ownership. In addition, it would have ensured that the company would be run by the same team who had succeeded in turning it around. Given that the workers themselves would be putting up the money, and the proposal had the overwhelming support of the staff, very likely those involved would have left no stone unturned in making the buy-out a success. Instead, the workforce are now angry and disillusioned. They are convinced the Minister never gave their proposals any serious consideration. They believe, with good reason, he used their proposal simply to strengthen their bargaining position with Irish Continental Lines, and what a bargain they got.
The provisions of the Bill we are now being asked to pass will virtually wipe out the company's debts, the company and its assets being handed over to Irish Continental Lines for just £8 million. As I said earlier, The Irish Times described it as an exceptionally good deal for Irish Continental Lines, noting that once the B & I's debt burden is removed, when rationalising savings are effected, the B & I will be an extremely profitable shipping group. In addition, The Sunday Business Post, a paper not exactly known for a pro-worker or pro-State enterprise stance, said that the sale was made in undue haste and that, on the face of it, Irish Continental Lines had got a very good deal. The editorial stated that the £8.5 million price tag appears tiny in the context of what it could cost to assemble such a shipping line in current conditions. The Sunday Business Post also pointed out that ICG will not have to pay corporation tax for years because about £100 million in tax losses will be transferred as part of the deal. The newspaper puts a value of at least £20 million on the company which the Minister is presenting to ICG for £8.5 million.
What does this deal make of the solemn commitment given in the Programme for Economic and Social Progress that any change in the ownership structure of particular State companies will only take place if it is in the public interest and in the best interests of the company and their employees and following consultation with the social partners? The company and their employees clearly believe that what the Minister is proposing is not in their interest or in the public interest, yet the Government are going ahead. What consultation has there been with the social partners, especially with the trade union movement?
Lined up against the deal are all the Opposition parties in this House, the workers and management of the B & I, the board of the company, the trade union movement, most of the newspapers and the majority of those who use the services of the company. Lined up in favour are Fianna Fáil, the Progressive Democrats and the board of Irish Continental Lines. This may make the Minister the hero figure he clearly wants to be among what has been described as the small golden circle who control so much of our commercial and business life. It also means he will be remembered by the workers and the trade union movement as the Minister for betrayal and treachery who considers the objective of enhancing the profits of Irish Continental Lines to be far more important than ensuring the permanence of sea routes to and from this country or protecting the jobs of workers who have done so much to save the company.
I will summarise briefly the position of The Workers' Party. We support the notion of the State being involved in the strategic shipping lines operating between Ireland and Great Britain and the Continent. We believe primarily there should be a golden share, some influence on the decisions that will have to be made at some future date, because of the nature of our island State. Realistically we are being faced with two options. One is the sale to ICG and the other, the preferred option, is the worker-management buy-out. Those of us who are politically astute should not be surprised that the Minister has opted to sell the company to ICG, with the resulting effects on the workforce of 250 men and women in B & I for whom the news is very bad this Christmas.
We will be fighting this Bill tooth and nail. We will not stop battling on this Bill and on the future proposals for the privatisation of Dublin Bus and Bus Éireann. With a bit of luck, the ICTU will be seen to be on the side of the workers in battling with the Minister on these issues. I thank the Chair for his indulgence.
