From the beginning the whole idea was cracked and ideological. I am not saying that from the opposite ideological end of the spectrum but one has to analyse the benefit of consolidating three institutions under the rough control of the State into one bank and making it into a significant third force. The Labour Party, of course, thought this was some latter day resurrection of the National Development Corporation and that it was some other agency by which politicians, who know best how to invest people's moneys and what ordinary capital development companies do not know — which companies will succeed — could create an instrument whereby they could intervene in the economy to the benefit of the small entrepreneur. Just like the National Development Corporation, which itself was a foolish enterprise from the very beginning and an ideological Labour Party enterprise — this third force in banking was pregnant with all the possibility for disaster that its predecessors had experienced. Everybody knows that in the last analysis Fóir Teoranta ended up as a bale out agency for failing enterprise. Of course, there were some enterprises including a well known Midlands company which was mentioned earlier this afternoon — and I will not get more personal than that — that received large hand outs from it. Perhaps there is something more seemly in being baled out by Fóir Teoranta than by a foreign source but it seems that the idea that the State and the taxpayer should intervene in the economy to the extent of providing banking rescue services for individual companies is wrong in practice always and the principle always one which is never complied with.
The TSB is apparently about to be sold off. I agree generally with the remarks made by Deputy Yates that we should not get up in a heap about its sale. If the TSB is to be sold I agree that the taxpayers should get the best possible price bearing in mind the interest they have in preserving jobs and fostering competition. It is not a difficult decision and, quite frankly, I have no strong views as to which of the intending suitors is the better partner for this particular daughter of the Legislature. The management and employees of ACC and ICC are working hard to make them profitable commercial enterprises and obviously a great many of them fear that if their banks are sold off it will be like Cooley Distilleries, for the purpose of being closed down by somebody who wants to eliminate the competition rather than to build, make the enterprise grow into something better, create more economic activity and greater competition in our economy.
I am not like some ideological avenging angel but I simply query why it is thought that Deputies Rabbitte, Kenny, Ahern or I have any particular expertise in fixing borrowing limits for a bank. Many people accuse me on occasion of claiming omniscience and expertise in a whole series of subjects but I do not claim any expertise in banking and I have never seen anybody here who struck me as a proficient banker. For Members collectively to think that we are wiser than we are individually is wrong and the simple fact is that we do not need to be running companies of this kind. I believe the Chairman of AIB was fundamentally correct, if a little bit mischievous in the precise rhetorical stratagem he used. He was fundamentally correct in asking the Government to compete with them if it really believed their charges were excessive. He would not welcome a substantial player doing battle with him; he simply recognises that if the State attempted to do so, it would result in an almighty débâcle in which they would laugh at the departing army after a short competitive battle and the State would simply throw in the towel.
The observe side of the taunt made by Mr. Culliton is equally valid and to some extent reflects on the two largest banks. They need competition and the customer needs effective competition. If it does not come from within our economy it will come from outside it. If it does not come from banks which have traditionally functioned here, some big player will move into Ireland, take them on and provide genuine competition. Obviously, if possible, most people would prefer the competitor to be an Irish domiciled and controlled banking partner but looking to ACC, ICC, TSB and any other likely coalition of banking forces, there does not seem to be — even if they are all together — the bones of a significant competitor for the two larger banks.
That brings this House to the point that it is far more important to enforce anti-cartel and anti-competitive practice law against the two larger banks because there is not any sign of a large competitor or break into the banking duopoly now. It will not become a three cornered battle among equals in the foreseeable future and, therefore, the function of the State is to ensure that this duopoly, which effectively operates in most areas of the country, does not do so at excessive cost to the banking public.
One must take on board also that if the State is preaching lower margins, lower charges, lower manning levels and greater productivity to the larger banks, one only has to look to the State sector to see whether it is practising what it preaches and whether it is capable of doing so. That is yet another reason why it would be desirable to divest the State of its existing banking investments. To some extent, in the arguments with the AIB, the Bank of Ireland and the other large banks, the presence in the State "sheep pen" of the three State owned mini banks is a standing argument available to the top brass of the private banks whereby they could say: "if what you are saying is correct about us, why can't you practise it yourselves?"
On the proposal for a third sector bank, there is a danger of creating a body which would make political decisions on investment of moneys. One only has to imagine the pressure from a Government such as we have now, or one party of it, on such a third sector bank to make loans available to companies which were in difficulty. I am deeply against politically available credit and we must rid ourselves of the notion that that is a proper way to run a credit institution or that some of the 166 TDs in this House can, by pulling strings, get loans for this or that.
If we eventually have a number of competitive institutions here. I hope some type of effective banking customer ombudsman is established to ensure that people get fair service from the banks and that people who are vulnerable, especially when they are in a difficult financial circumstance or where their credit lines are extended, are not treated unfairly by banking institutions. Instead of devoting departmental time to supervising these agencies, auditing their accounts and so on, it would be far better if the equivalent departmental time was put into ensuring competition among banks and redress for people who are unfairly treated by them rather than inadequately attempting to compete in the market as is currently, the case.
I hope I have not been dismissive of the ACC Bank because I am pleased to see that it is a profitable body. If it is disposed of I hope its potential for profitability will determine its price and that we will get real value for money disposing of this bank, the ICC and the TSB to whoever wishes to invest in them. Profitable businesses are always the subject of potential takeovers and I do not see why there should not be a queue of potential suitors for the ACC Bank and ICC Bank.
I would ask the Labour Party, who went into this coalition Government arrangement trumpeting that there would be no privatisation, to grow up. Nobody in this House, including me, believes we should privatise everything. None of us would adopt the attitude that the State should only be concerned with running the police force, the army, the courts and some other services. The Labour Party is a prisoner of an out-of-date ideology. It is not doing battle with a Thatcherite Opposition in this House or a Thatcherite partner in Government in Fianna Fáil. It is not as if the higher echelons of the public service, who devise many of the policies which underly this Government's activities, have suddenly developed an appetite for Thatcherite privatisation. Nobody is suggesting that our water supply should be privatised tomorrow. Nobody is looking at aspects of Irish society with a view to privatising them immediately because it is wrong to have them under communal control. If that is the case, why is one party in this House saying that it will not allow privatisation under any circumstances, that Telecom is too important and that it wants a State interest in the banking field? Who does the Labour Party think it is kidding? It is shadow boxing. It is like Don Quixote and Sancho Panza — I do not know who is the Sancho Panza to Deputy Spring — and it is tilting at windmills. Nobody wants to undo this huge State sector because they are driven by some ideological compulsion to do so.
This country has matured to the point of realising that the Government is not a good and efficient shareholder of a banking company; the same applies to the aircraft maintenance industry. The Government appears not to be a very good shareholder or board member of these type of institutions. The Labour Party has to argue the merits of each company's case and it establishes that it would be better for the workforce or for the economy to allow a particular company to remain in State ownership, let it make that case but to say as it did before the last election that there will be no privatisation is entirely illusory and politically dishonest. It creates difficulties for many firms. If long term decisions are not made about huge areas of the semi State sector, such as Telecom Éireann and the ESB which face real competition in the next five years, based on a real appraisal of the requirements of the economy and the companies concerned with a view to deciding what the national good requires and not the private good of individual or collective investors or people who would tell Sid what they want to do with their private deals, there will be more casualties of the Irish Steel and TEAM Aer Lingus type.
Let us forget about ideology and stop listening to the Labour Party prating on about how they are protecting employees from privatisation. There is no virulent privatisation agenda on anyone's desk. The people have come to a realistic view of these matters. They do not believe they had to run Greencore and they are happy to have divested themselves of their responsibility there. They do not believe it was necessary for them to run Irish Life or that they profited from owning it. It was better to divest themselves of that ownership. The same applies to the banking sector. The time has come for the Labour Party to come off its ideological pedestal and prove one way or the other the implications of a merger between ACC, ICC and TSB. It should state publicly and coherently, where it is subject to challenge, what the advantages would have been of this mythical third sector, what decisions it would make under political ownership and control which other banks are not making now and why it would be better than Ulster Bank at dealing with customers.
I am tired of seeing specialist schemes stating there is £10 million or £20 million available in this or that bank for small enterprises. I welcome anything that helps enterprise but the fundamental role of Government is not to twist the arms of the banking sector to set up this or that fund — kiddies corner in economic terms — to promote this or that political or economic aim. What is needed is a Government which looks to the overall economic climate and asks if this is a challenge or an obstacle to innovation and enterprise here. In that context, I would be more impressed if the Minister for Enterprise and Employment, Deputy Quinn, spent more time making the case for tackling the tax wedge than he does making the case for special funds for Irish enterprise, courtesy of this or that bank. I would be more impressed if he were actively concerned with reducing electricity prices further by competition rather than posturing as being concerned with the interests of small industry by publishing glossy brochures and endless reports on their problems.
I would be happier if the Government looked at the economic regime it is imposing on Irish enterprise generally and see what it can do in that context rather than have a special tailor made scheme which looks good because one could bring out a report, have a press conference in the Shelbourne Hotel and have half a page in the The Irish Times devoted to it when one announces it. However, no one gets that kind of publicity for continuing in existence the anti-work system. It is easier to get credit for an innovative proposal in the financial media than to accept criticism for maintaining an anti-enterprise culture.
I will not ever be impressed by the Labour Party but I would be much less unimpressed if it faced up to what is really holding the economy back and basic facts such as the cost of employing people. It talks about being the party of labour but it has not suggested or politically supported reducing tax on work and has not done anything to further employment.
I am tired of our attitude towards the EU. We believe that it is always in our interest to support the Commission and say the Tories in Britain are wrong, their attitude to Europe is repugnant and we are more communitaire than others. We sign on for things such as the Social Chapter with gay élan and will go down the road of social control of the employment contract irrespective of its effect on the numbers in work.
Among the pile of glossy rubbish given to Deputies I saw an EU White Paper on employment prospects. I do not know who is responsible for it but it is a deplorable document. It acknowledges in passing the abject failure of Europe to deal with employment as an activity but goes on to elaborate on other plans to make the employment market in Europe more restrictive and difficult to operate. I would be much happier if an Irish Government stood up and said we are on the periphery of Europe; we have 270,000 people unemployed; we do not want more regulation of our labour market and do not want standards which Germany, Belgium or Holland feel are necessary for their highly regulated markets to be extended to us. The European disease has produced the lowest growth in employment despite Europe having one of the highest rates of economic growth over the last 30 years. We want to call a halt to that.
I would be impressed if an Irish Minister for Enterprise and Employment or Finance said: "I want to call a halt to increasing regulation and restriction of the labour market on a European level", if they had the courage to tell Commissioner Flynn "no, we have had enough. We do not need more regulation rather we need bright ideas about how to deregulate the labour market and get people into a position where they can participate in our economic life."
I would like Ireland to look to its own interests. These are not simply the interests of farmers but of employers and employees. I am glad IBEC has challenged the notion that being totally communitaire is in Ireland's economic interest. I am sorry it is the only group thus far which has had the courage to challenge the suffocating consensus in Ireland that whatever the Commission says is right and that whatever is handed down in the form of draft regulations which carry the little halo on top of them and is part of the Social Chapter or is socially cohesive, is necessarily in Ireland's interests.
I will be impressed when we cotton on to the fact that the European Union, of which we will remain a member, has the worst record in job creation and that imposing the European Union standards of economic failure on our economy at an increasing level carries with it the almost inevitable consequence that we will have less capacity to provide employment opportunities for our people. Instead of a Labour Party which says it is protecting, like a lonely group of stragglers in an ideological army, the commanding heights of the Irish economy, which is a laugh, we want a Government which will examine every aspect of economic life on a case by case basis and decide whether government is part of the problem rather than part of the solution.
I am very strongly of the view that this should be the last occasion on which this House is asked to change the borrowing limits for ACC Bank. The next time the House considers a Bill dealing with ACC it should be to sign off the State's interest in the bank and to launch it as a mutual organisation in the real world, with owners and managers who do not have to go to the Minister for Finance for permission to increase their borrowing limits but who will compete in the real market and achieve an increasing share of the credit market for their bank. This should be the last occasion this House is troubled with such a Bill. This debate is fundamentally a waste of time, a distraction from our real work.
I would love the Labour Party in particular to come to the view that it is prepared to examine the State sector on a case by case basis so as to decide what the national interest requires of those companies in the future. I fear this will not happen and that instead there will be much jersey pulling and shin kicking on the political pitch and that in the last analysis we will see an ideological tussle in which the Labour Party will not be motivated by the good of the institutions about which it is arguing but rather will be increasingly motivated between now and the next general election by its desire to be seen to be flexing its muscles and asserting its identity. This is what worries me most of all. I am afraid it will not care about the issue, just as it did not care who was appointed president of the High Court. It did not matter a damn what the issue was. The important thing was that it was seen to be flexing its muscles, asserting its identity and telling other people to take it for granted. Unfortunately, that coinage will be the stuff of the tussels within the Cabinet on the semi-State sector generally and the losers will be the people who the Labour Party claimed at the last election it would protect, the people who work in those institutions.
