John Browne
Ceist:19 Mr. Browne (Wexford) asked the Minister for the Marine the plans, if any, he has to ensure that Irish Ferries maintains its winter sailings between Rosslare and France; and if he will make a statement on the matter. [19776/96]
Ceisteanna—Questions. Oral Answers. - Irish Ferries Continental Route.
Irish Ferries informed me by letter on 20 September that it intended to suspend sailings on its Ireland-France route from 3 November this year, resuming in spring 1997. The Deputy will be aware that a number of meetings occurred subsequent to this announcement by the company, arising from which my Department asked the Labour Relations Commission on 10 October to intervene. The company wrote to me on 18 October and sought an operating subsidy to allow it to continue sailings during the coming winter. This request was carefully considered but I decided that the grant of an operating subsidy would not be an appropriate Government response in the circumstances. I pointed out to the company, however, that I was actively reviewing a number of areas of potential assistance to the shipping sector. In particular, I drew attention to my agreement with the Minister for Finance to review the income tax and PRSI position of seafarers. I appealed to the company and the unions to work together to avoid damaging industrial action and, if at all possible, to maintain sailings during the winter while the issues I have mentioned are pursued.
I note that agreement was reached between the unions and the company last night which will, I hope, avoid disruptive industrial action. I regret it is virtually certain now that the route will close for the coming winter. I note, however, that the terms of last night's settlement will have the effect of maintaining the workforce intact for when the service resumes in March 1997 and provides for the commencement of negotiations early next year, under the auspices of the Labour Relations Commission, on longer term issues. I intend to keep closely in touch with all concerned over the coming months and to pursue in particular the tax and PRSI issue. I assure the Deputy I will do everything in my power to ensure these longer term issues are addressed so that the continental route is maintained as a viable operation over the coming years.
(Wexford): The Minister's reply is disgraceful. With the consent of the Minister and the Government, Irish Ferries has decided to isolate this country from the Continent for six months. This will have devastating effects on tourism and the live cattle trade. It will also lead to the downgrading of Rosslare with a consequent loss of jobs in a county which already has the highest rate of unemployment in the country.
How can the Minister square the Government's refusal to pay a subsidy on this route while the Channel Tunnel and Brittany Ferries are subsidised? The playing pitch in the EU is not level at present. The Minister has a duty to ensure the shipping service to the Continent is kept running. He should not allow Irish Ferries to go ahead with the closure. He should have discussions with the Minister for Finance to secure a subsidy is paid at this late stage.
When I met representatives of the company last week it was made clear that if a subsidy was made available they were prepared to maintain the route over the winter.
I cannot comment on the assurances the Deputy received but they were not in the letter I received. A subsidy was being sought by a private company which made a profit of £12 million or £13 million last year and is quoted on the Stock Exchange. We were asked to subsidise one route of their overall operation on the grounds that one ship would be maintained but without a guarantee over the longer term. As the Deputy is aware, there are two ships on that route at present. I resent the indication given that this was a matter for the Government. Irish Ferries is a private company making considerable profits and it took a commercial decision.
I share the Deputy's concern to ensure there is a sea link with the Continent through Rosslare. I am satisfied the void will be filled if a decision is made to withdraw the service. However, I make no apologies for not spending taxpayers' money to subsidise one route of one shipping company which is making large annual profits. I do not know what information the Deputy received but I can only go on the information in the letter I received. I can make a copy of it available to the Deputy if he so wishes.
I understand that cattle for export are carried by a number of operators. If there are difficulties in that area I am sure my colleague, the Minister for Agriculture, Food and Forestry, will ensure we are not stranded.
The Government's policy will ensure a level playing pitch for everyone in the maritime transport sector.
(Wexford): That is not happening.
Subsidies will not solve the problem as those with the most money will clearly subsidise more.
A complaint has been lodged with the Commission on the activities of Brittany Ferries and we are pressing for an early decision on it. Irish Ferries, for reasons best known to it, did not join as a party in this complaint and no formal complaints were made to the Department of the Marine. This complaint was made by two separate private companies. If the matter goes to court we will take up a position on what to do.
(Wexford): It is too late for Rosslare and Ireland.
I disagree totally with the Minister on the inevitability of this decision by Irish Ferries and his acceptance of it without question. This matter has been referred to the Labour Relations Commission. The 200 jobs involved are very vulnerable and the workforce is being bought off on the basis that it will receive social welfare. Does the Minister accept that this is more than a private company issue and is of national significance? The continental corridor between Ireland and France is a vital sea link and the Minister and his Minister of State should be actively involved in this matter.
On the issue of taxation and PRSI, will the Minister accept that the UK have used these systems imaginatively in terms of their seafarers? In his reply the Minister said he accepted the decision as a fait accompli but will he endeavour even at this late stage to keep the line open for the winter period? My colleague referred to Brittany Ferries. Will the Minister accept that in an EU context we have a case for support and mobile assets as a peripheral island? There will be no question of a knock-on effect if the matter is dealt with on that basis. The Minister must become involved in this issue and endeavour to keep the route open to avoid major economic and social consequences.
I did not decide to close this route; the decision was taken by a private company. The Government's policy on the shipping sector seeks to ensure that we can operate on a level playing pitch where either no subsidies are allowed or, where they can be given, it is on the basis of well defined, limited and transparent circumstances. One cannot decide to subsidise a line for no good reason. There are either no subsidies or Europe must decide the clearly defined basis on which they can be given. I do not accept that we did nothing about this matter.
(Wexford): The Government did absolutely nothing and the people of Wexford know that.
The Minister without interruption please.
I appealed to the private company which decided to close down this route for the winter to keep it open in the interests of the employees and to enable discussions to take place in a friendlier atmosphere. Given the company's strong profitable position, the route could have been kept open for the winter. There was no need to give six weeks' notice of the decision to close this route and to take off two ships. The company could have listened to the repeated requests by the Minister of State, Deputy Gilmore, and me to postpone the decision for this winter to allow for ongoing discussions and to see how matters evolved.
In this year's Finance Act the Government gave two other concessions to the shipping sector in terms of leasing to make it more attractive to lease new ships. In addition, we gave a grant to cadets to enable them to complete their training and to compete with their British counterparts. We have also taken up the matter of tax and PRSI with the Department of Finance.
Some of the Deputies opposite were in Government and they know one cannot say in October what will be in the budget in January. That is the reason I asked this private company to postpone its decision on the closure of the winter service for 1996. I do not accept that we were negligent in this matter as there was no reference to a subsidy when we first received notification of this proposal. If he had an opportunity to speak the Minister of State would state that there were clear indications the company did not want subsidies, and this is evident from its decision not to join the complaint against Brittany Ferries.
(Wexford): That is not what it told us.
It was only when a scapegoat was needed that pressure was put on the Government to give taxpayers' money to a company with a profit of £13 million to subsidise one route for a year. This ignored what was happening on the other routes. Fianna Fáil may want to go down the road of subsidies but that is not the position of the Government.
(Wexford): The Minister should have enough influence to have the decision deferred.
I accept that the Minister and Minister of State are concerned about the matter but will they make a final effort to convince the company it should keep this line open during the winter? The Minister said that the Government wants to give every assistance possible and he referred to the tax and PRSI systems. Will he give an assurance that he will make a final effort between now and Sunday to keep this route open?
Last Friday I left my office at approximately 9.30 p.m. having received a letter from Mr. Hickey of Irish Ferries at approximately 7.30 p.m. I again asked him to keep the service open for the winter so that discussions could continue and to see what could be done in terms of EU policy on subsidies, a matter of concern to me also. Europe has to decide whether we can have subsidies and, if so, under what conditions. We cannot have it both ways and Deputies know as well as I do that if we get into competition in terms of subsidies those who can pay the most will eventually win the war. A small country like Ireland will not win the war and it would be detrimental to fair competition if we reached the stage where subsidies were the dominant factor in deciding whether small companies survived in Europe. It would be detrimental to our shipping sector if it was a case of the biggest and strongest and who can pay the most money.
I am in the business of trying to ensure a fair playing pitch for all ship owners in Europe. In case anyone is under a misapprehension, I wish to state clearly that there was no reason for the company to state in a letter dated 20 September that it was closing this service on 3 November. The company is not in financial difficulties — it reported profits of between £12-£13 million last year — and it should have been possible to keep this route open during the winter. We are doing our best to deal with the problem of taxation for sea seafarers. I cannot guarantee I will be successful because, as the Deputy is aware from his period in Government, there could be knock-on effects, but I will do my best. I again appeal to the company to postpone its decision to close the route for this winter and allow discussions continue so that we can resolve the difficulties. That would be fair to the workforce and to us.