I want to say unequivocally that it would be an act of national economic treachery for this Government to fail to respond in a coherent and considered way to the crisis facing Aer Lingus.
It may be asking a bit much to expect anything coherent and considered from this Government. This debate takes place on a day when the Taoiseach has deliberately accused one of his senior Ministers of, in effect, committing perjury at the tribunal of inquiry into the beef industry. It is hard to imagine any more serious charge being levelled by one Government Minister against another, and it would be impossible in any normal Government to imagine such a charge being levelled without a resignation either being sought or offered. However this is no normal Government.
This is a Government which fought and won a Supreme Court action to uphold the principle of Cabinet confidentiality, based as it is on the constitutional principle of collective Cabinet responsibility. Within weeks of securing that victory in the Supreme Court, this has become a Government which make a complete and total mockery of the principle it sought to uphold.
In this Government, there are two principal protagonists. They both see themselves as hurtling together towards a narrow door set in a brick wall. One of them is going to go through, and the other will crash headlong into the brick wall of political oblivion. All they care about is elbowing each other out of the way — the economy, the social fabric of our community, the major political issues of the day, even old fashioned concepts of political honour and integrity, all take second place in this headlong rush to secure political survival.
It has long since ceased to be in the national interest that this Government should survive. Indeed, I believe it is long past time that this sordid and disreputable Government should be removed.
Our main purpose this evening, however, is to try to persuade whatever shred of principle remains in this Government to start taking at least one issue seriously. The crisis facing Aer Lingus demands nothing less than a united response from this House and the Government.
At the commencement of my contribution this evening, I want to make the point that I do not see this motion in any way as a case of special pleading for Aer Lingus. I have always been, and will remain, a committed supporter of public enterprise. I believe that public enterprise has played a major role in the development of the Irish economy since the foundation of the State; and that it can, will, and must play a significant role in our recovery and future development.
I also believe very strongly that public enterprise must be just as accountable as any firm in the private sector; that it must be just as well managed; and that it must be rewarded for its best efforts and penalised for its mistakes. In short, it is essential to separate the social and commercial aspects of any public enterprise from each other and to make commercial decisions on the basis of the soundest possible commercial criteria.
There is one other criterion which must be applied in the consideration of any issue that affects public enterprise. That criterion is the public and national interest. There might well be times in the life of a public company when the public and national interest demands decisions that are not congenial or palatable to the company or its workforce.
Therefore, I want to make it abundantly clear that the Labour Party is not motivated in moving this motion by any consideration other than our best belief of where Ireland's national interest lies. Against that background, I will repeat my assertion that it would be economic and political sabotage of the national interest for the Government to allow Aer Lingus to face this crisis alone.
Over the last few years, the present Government and their immediate predecessor have followed a policy of forcing Aer Lingus to subsidise, albeit indirectly, the operations of a small private competitor. This policy was carried out in the name of competition, but was in fact a policy motivated by ideological spite towards the national airline. At least two of the present Minister's immediate predecessors have given direct instructions to Aer Lingus the sole purpose of which was to favour Ryanair at Aer Lingus's expense.
There is some evidence to suggest that the present Minister has brought the same attitude to bear in the recent dealings with Aer Lingus. Over the five years since 1987, and particularly since the Gulf War, it has become increasingly apparent that national aviation issues require a detailed policy response; and it has become increasingly clear that this Government have no interest in anything other than ad hoc crisis management.
It may not be fair to blame the present Minister entirely since she has been in the job only since February, and can be said to have inherited the bias of her predecessors. Of course, the Minister does work for a Taoiseach who believes that policy on major national issues can consist of off-the-cuff one-liners — it is only when he wants to insult and provoke his partners in Government that he resorts to scripted notes.
It is not possible however, to exonerate the Minister from responsibility entirely. Almost on the first day she came into office the Minister announced that she would be taking all the necessary decisions to put Ireland's tourism infrastructure on the best possible footing and particularly that decisions could be expected imminently from her in relation to the Shannon stop-over. I remember her saying, because this matter was of such vital importance to tourism and aviation in general, that the decision would definitely be made by her before Easter of this year but instead it has taken her until today to make an announcement that has been promised for months.
I welcome the Minister's announcement about the Shannon stop-over. I never believed that a Government decision to desert Shannon would help Aer Lingus and I have always argued that the Shannon issue should be treated as an issue of regional rather than aviation policy, but I condemn the dithering in which the Minister has indulged on this issue. She has allowed and encouraged fear of the future, and uncertainty about the prospects of economic survival, to prevail throughout the mid-west for far longer than was necessary and she has set one region of the country against another in a way that has been most unhelpful for the economic development of both regions.
Many people will be pleased that the Minister has preserved the Shannon stop-over, but how long can it last if there are no aircraft to fly in and out and no carrier to use the airport? The Minister on radio today said she believed in balanced regional development. In saying that she was accepting the onus, whether she likes it or not, of addressing the Aer Lingus crisis as seriously as the Shannon crisis has been belatedly addressed. The Minister has, of course, taken one other step which has greatly inhibited public debate and awareness in relation to these issues. She has effectively placed a gag on the boards of the State companies under her control and has prevented them from discussing issues of great public importance in the public arena. It is an inevitable consequence of this peculiar and somewhat undemocratic approach that a crisis, such as the crisis which is now confronting Aer Lingus, will unfortunately take the public unawares when it finally erupts as it is doing before our eyes. It would have been far better, from the point of view of the development of public policy, if it had been possible for companies moving into difficult positions to have been more open about those positions from an early stage.
No one in this House should doubt the fact that the future of Aer Lingus is in the balance. If Aer Lingus's financial position was far healthier than it is and if its fleet requirements for the mediumterm future had already been met, the position would still be difficult because of the advent of deregulation within Europe. Aer Lingus's problem is therefore a two-fold one: how to recover from its present difficult financial position and how best to equip itself to meet an infinitely more competitive future.
It is nonsense of the most gross kind to argue that the State has no role to play in resolving these two problems. If the State now turns its back on Aer Lingus, we will simply have no national airline in the very near future. I cannot think of one sane or rational reason anyone would argue that it would be in Ireland's national interest to allow its national airline to die.
In the years since it was founded the State has invested just under £70 million in Aer Lingus. In return the Irish taxpayer owns a company worth more than £600 million which employs almost 14,000 people world-wide, half of them in Ireland. To put it another way, that is an average investment by the State of £1 million in Aer Lingus per annum. In terms of Irish jobs, it represents a cost per job of £9,200. The State recouped almost 100 per cent of its total investment in Aer Lingus last year alone in PAYE and PRSI.
Whether that is looked at on the basis of investment strategy or industrial policy strategy, the return that the State has got from its investment in Aer Lingus is quite remarkable. In short, it is impossible to sustain an argument that the people of Ireland have not got value for their money. This takes no account of the balance of payments surplus that Aer Lingus has earned, of the enormous investment in Ireland by the Aer Lingus Pension Fund, worth over £200 million, of the spending on goods and services in Ireland, including the payment of airport charges directly to the State, which added up to £120 million last year alone.
Of course, figures only convey part of the picture. The economy at national, regional and local level depends on Aer Lingus and has benefited greatly from Aer Lingus. The tourism industry, which has been targeted by successive Governments as the single biggest area of our economy with growth potential, would be devastated without the input it receives from the national airline.
This Government have announced again and again that their first economic task is the regeneration of the economy to provide wealth and investment. Only this morning, at the beef tribunal, when he was not busy stabbing his Coalition partners in the back, the Taoiseach attempted to be very eloquent about the need for value-added in the economy. Every Fianna Fáil manifesto since 1987 has emphasised the same point.
Here we have a company which has led the way in adding value, not only through its tourism acquisitions in other parts of Europe and the United States, but also through the development of TEAM Aer Lingus, which has created 2,000 jobs at the very frontiers of high technology. Yet, the only response the Taoiseach can make, when asked about the future of the company, is to suggest that 49 per cent of it be flogged off to the highest bidder.
How is it possible for a Taoiseach, who has a track record as a successful businessman, to so easily dismiss all of the strategic issues that surround Aer Lingus and its development? If a management consultant were to have presented a report to the Taoiseach, during the years when he was building up his own business, that suggested to him that the way to solve any temporary financial problems was to strip the most lucrative assets away from his company and hand them over to his competitor, I would venture to suggest that that would be the last time the Taoiseach would ever employ that management consultant.
The Taoiseach's response to the crisis of Aer Lingus was sadly another unfortunate example of his glib, unthinking and cavalier approach to any issue of major importance. This Taoiseach, it appears, does not know the difference between partnership and privatisation, between strategic alliances and asset-stripping, or perhaps he just does not care at this stage. He is at his most revealing when saying the first thing that comes into his head and what he has revealed about his grasp of Ireland's national interest in this area does not bode well for the future of Aer Lingus and this country.
So let me make the point again for his benefit if nobody else's — the crisis facing Aer Lingus will not disappear with a wave of the Taoiseach's hand. It requires the Government to get stuck in with a coherent and considered response, and that response must include the recognition that if it takes several years to solve Aer Lingus's problem and to equip our national airline to face the future with confidence, then the Government must stand behind the company four square throughout that time.
The unions representing employees in Aer Lingus recognise the difficulties that the company faces. They recognise, and have said so explicitly, that in any package which is put together the unions can and will play their part as they have done in the past. They know that the cost structure of the company is one of the issues that has to be addressed and they are prepared to sit down with the company and negotiate, in a serious way, the measures necessary to ensure the company's viability in so far as they are within their control. The unions also insist, and they are quite right to do so, that they are not going to indulge in a game of cat-and-mouse with the Government. It is not possible for anyone to take the Government's position seriously until it is fully and comprehensively spelled out.
In spelling out that policy the Government cannot ignore the issue of equity. Additional funding is necessary to enable the company to modernise its fleet and equipment, and without that modernisation long term survival is not possible. Even if the answer were privatisation, and I would argue strenuously that it is not, additional equity would be essential to prepare the company for that eventuality. The Government should begin this process by saying clearly — I hope in this House — that they are willing to maintain the strength of Aer Lingus and their investment in Aer Lingus as part of whatever package is negotiated by agreeing to make the necessary injection of capital as part of next year's public capital programme and, if necessary, for the following two or three years in order to sustain our national airline.
We should not be under any illusion. I said earlier that if Aer Lingus was a cash-rich company it would still face many difficulties and challenges in the coming years. On 1 January next under a new era in European-wide deregulation every airline in Europe will have to effect cost reductions. Every airline in Europe will have to achieve a proper balance between cost and revenue, between brand image and the return on that image, between route management and all the social factors that must be taken into account. For some the strategy they will have to follow will be to seek to expand as fast as possible, probably gobbling up smaller airlines en route. For others, the only viable strategy will be to achieve a dominant position in what is known as the niche market which can be protected into the future through a combination of brand image and customer loyalty.
All of Europe's airlines will have to face certain realities in a deregulation environment and these can be fairly simply stated. The first is that airlines that keep their costs under tight control will have strong advantage; second, despite low costs airlines will have to continue to improve standards; third, there will be a lot more competition for passengers and customer loyalty will not survive excessively high fares; fourth, it will be a great deal easier to protect a niche in the market-place if the airline involved has a strong, highly developed tourism package backed up by the requisite infrastructure. Fifth, deregulation opens the way, to a far greater extent than ever before, for charter carriers to compete on the basis of lower prices and lower costs than all regular carriers. The bottom line in all of this is that it will be those airlines with the strongest financial and capital base that will be best equipped to meet these challenges.
Aer Lingus has been a net contributor to our economy for many years. The staff have made many sacrifices in the past to ensure that the company remained a net contributor to our economy. They have indicated their willingness to approach the future realistically and the least they are entitled to expect from this House and Government is an unequivocal statement of support as they face a difficult and challenging future.
In calling on the Government now to make that commitment, we demand that they set aside any ideological bias they have toward Aer Lingus. We demand that the Government recognise there is a bounden national responsibility on them to assist Aer Lingus in the most positive way possible, by reassuring the company that its capital base will be strengthened to the extent necessary to enable the company face the future with confidence.