Leaders’ Questions

Deputy Micheál Martin

Yesterday, Ryanair launched a third bid to buy the remaining shares of Aer Lingus. The Minister for Transport, Tourism and Sport, obviously conscious of Deputy Keaveney breathing down his neck, has responded by saying he will consult his Government colleagues. The Minister said earlier this year or last year that the sale of the 25% share of Aer Lingus would only go ahead to the right buyer at the right price. We did not know whether that implicitly ruled out Ryanair. It seemed to at the time and in the context of the remarks.

The fundamental question is whether the Government has assessed the competition issues surrounding such a bid, the strategic considerations and the impact on consumers. On the first occasion in 2007, the European Commission undertook an in-depth investigation and assessment of the Ryanair bid for the remaining share of Aer Lingus. At that time it came to definitive conclusions that such a takeover would be very harmful to competition and would create a dominant position on 35 routes operated by both parties, leading to increased fares for 14 million European Union passengers. There is a strong competition issue here and I would like to hear the Government's position on that aspect of the takeover.

From a strategic perspective, as an island nation, connectivity is key to economic recovery, exports and tourism. The Taoiseach himself in 2007 was strong on the strategic assets the Heathrow slots represented for Dublin, Shannon and Cork. Most people identified the Aer Lingus shares and the Heathrow slots as being of significant strategic value. Will the Taoiseach indicate to the Dáil if it is the Government's plan to sell the remaining shares in Aer Lingus and the Government's position on the Ryanair bid?

The Taoiseach

It should be borne in mind that when Fianna Fáil was in government, it made the decision to sell 75% of Aer Lingus and Ryanair could have been in a position to own this airline in its entirety. It is always good for Ministers to consult each other. We have had examples in the past of Ministers going on solo runs without reference to the responsibility they had in a collegiate sense.

The issue here is that the State holds a minority stake in this airline. The Government will consider the bid but it has not collectively considered the competition issue raised by the Deputy. We have made it perfectly clear that the Government, in accordance with the negotiations being worked out with the troika on the memorandum of understanding, is giving consideration to a list of State assets to be disposed of, and in the consideration of any such asset being disposed of, the Government will not be forced into any fire sale and will give proper and appropriate consideration to the right timing and the right price in the best interests of the country and the people.

As we meet this morning, I understand the regulatory authorities and the European Commission are meeting on this matter. Their position will be fundamental as far as regulation of this is concerned. The answer to the Deputy's question is that the Government would be concerned in terms of competition, consumer facilities in terms of price, access to the country and all of these things. It is, however, a minority share the Government has and we do not have any veto over this. We have no blocking rights. The details of the offer made by Ryanair have not yet been considered collectively by Government.

Deputy Micheál Martin

I find it extraordinary the Taoiseach would confirm to the House that he has not considered the competition dimension of this bid.

The Taoiseach

Collectively.

Deputy Micheál Martin

The Taoiseach just said he did not consider it and the Government did not consider it.

The Taoiseach

Collectively.

Deputy Micheál Martin

The European Commission did a thorough investigative analysis and assessment of the competition implications of a Ryanair takeover of Aer Lingus. That is central to this in terms of the impact on the country and the impact on consumers through the creation of a dominant monopoly position. It is an indictment of the Government, given it declared long before it came into office that it wanted to sell State assets. This was something to which the Government, particularly Fine Gael, committed itself. With the greatest of respect, the Tánaiste, Ministers of State such as Deputy O'Sullivan and Deputy Shortall, and many other Labour Party Deputies would be incandescent with rage if they were on this side of the House, demanding answers from Government. They had a clear position on the strategic importance of Aer Lingus and the impact on consumers and workers. The fundamental point is that it is incumbent on the Government to protect competition because Ryanair has been a success because of competition across the European zone and the creation of a competitive environment. The Government should oppose the bid to protect competition, protect consumers and ensure connectivity to this country at a reasonable rate of low fares on a continuing competitive basis.

The Taoiseach

The Government has a 25% share in Aer Lingus. It does not have a veto or blocking mechanism.

Deputy Micheál Martin

What is the Government's position on this?

The Taoiseach

I remind the Deputy that Fianna Fáil actually disposed of 75% of this airline.

Deputy Micheál Martin

We disposed of 60%.

Deputy Brendan Howlin

With the ESOP it was 75%. It disposed of the majority.

Deputy Micheál Martin

Which Fine Gael supported at the time.

Deputy Timmy Dooley

The company has thrived since.

The Taoiseach

The Government has looked in detail over the past six months at the question of a definitive list of State assets that can be disposed of from a regulatory point of view, a competitive point of view and an economic point of view. The Minister for Public Expenditure and Reform and the Minister for Finance, on behalf of the Government, have been involved in intense discussions and assessments regarding these issues.

This bid came in yesterday evening and, as we meet, I understand the European Commission, which has a specific responsibility in respect of competition and regulation, is meeting on it. When Deputy Martin asks the Government's position, the position is that the Government will publish its own definitive list of State assets for disposal. We have made it perfectly clear that in respect of each and every one of those, they would only be disposed of in accordance with best principles in the interests of the country and the people at the right time and at the appropriate price.

There may be other elements to an agenda in respect of this bid but I am concerned, as we would be, given this is an island, that the only access to here is by ferry or by air. Ryanair has done much good during the years in providing competition to ensure lower air fares for hundreds of millions of passengers, but clearly there are implications if there is a monopoly for the benefits of good competition for consumers in terms of air fares. Access by air to Ireland is important in terms of the way business is conducted. Therefore, from that point of view, these are fundamental matters to the economy. The Government will consider the bid, but we do not have a blocking mechanism or a veto.

Deputy Micheál Martin

What is the Taoiseach's position on the sale of Aer Lingus?

The Taoiseach

The disposal of the Government's shareholding, with all other State assets to be considered for disposal, will be carried out in the right way at the right time at the right price in the interests of the people and the country.

Deputy Micheál Martin

That is a no answer. It is a non-answer.

Deputy Frances Fitzgerald

That is the answer.

Deputy Gerry Adams

Tá gealltanas soiléir i bhForógra 1916 a léiríonn gur cóir cúram cothrom a thabhairt d'achan páiste sa náisiún, ach is soiléir go bhfuil an gealltanas sin scriosta. Bhí ionadh an domhain orm ar maidin nuair a léigh mé faoi na páístí a fuair bás agus iad i gcúram an Stáit.

It is deeply shocking that at the height of the Celtic tiger 196 young people died while in the care of the State or in contact with child protection services. This morning's media coverage of the report to be released later makes distressing reading. A total of 112 of these deaths were due to unnatural causes such as drug overdoses, suicides, unlawful killings or road traffic accidents and the report finds that earlier and more consistent intervention could have helped these children to overcome their vulnerabilities. Sinn Féin has warmly welcomed the work done by the Government, including the appointment of the Minister for Children and Youth Affairs. I commend the Minister, Deputy Fitzgerald's work and commend and welcome the publication of the heads of the Children First Bill, but these children and their families were failed by the State. It is a long way from cherishing all the children of the nation equally-----

Deputy Robert Dowds

We wanted the Deputy to think that about Jean McConville's family.

Deputy Gerry Adams

-----and it is an indictment of the refusal to invest during the boom years in adequate public services. Where is the equality for these families? Is the Taoiseach satisfied that the injustices identified in the report relating to the systems of care for vulnerable children and young people have been rectified? Have the required resources, including personnel such as social workers, been put in place to ensure the child protection services are fit for purpose, which is crucially important?

The Taoiseach

Go raibh maith again as ucht a cheist, a Theachta. This is obviously an independent report and I commend Dr. Geoffrey Shannon and Ms Norah Gibbons for their clarity and the research and analysis they carried out in what is a harrowing tale and litany of shame in many respects. I recall asking questions when in opposition during Leaders' Questions and so on about work that had been done principally by Deputy Alan Shatter at the time in trying to ascertain the numbers of children involved. There was great confusion about them. The answer given by the then Government was that the number was 20, 25 or 27, but we now know the facts. The independent inquiry was commissioned by the former Minister of State with responsibility for children, former Deputy Barry Andrews.

The report deals with the lives of 196 children who at some stage or other were known to the HSE. There were 112 unnatural deaths, of which 17 occurred while in the care of the HSE. The report will speak for itself when it is published by the Minister for Children and Youth Affairs later. This occurred, as the Deputy pointed out, during the so-called Celtic tiger days with their veneer of endless wealth. The report is an analysis of the lives of the children concerned. The Government has not put an end to all the difficulties clarified in it, but we have appointed a senior Minister with responsibility for children; given a guarantee to hold a referendum of the people in respect of child protection; made it mandatory to report child abuse; taken from the care of the HSE the matter of dealing of children and set up a new child protection agency which will commence its work with a separate budget on 1 January 2013; and put in place a new mechanism for dealing with children who find themselves in trouble.

The Minister for Children and Youth Affairs wanted the independent report to be published in order that the truth would be known. The names of the children are anonymised, but it is a story and a saga of shame in many respects dealing with the lives of 196 children. Arising from all the facts now known, we want to put in place procedures and practices that will ensure that, to the best extent possible, this will not happen again.

Deputy Gerry Adams

I thank the Taoiseach for that response. I also commend the authors of the reports. We have seen others reports, including the Ryan report and the Tracey Fay report, on these issues and it is an indictment of the State that this happened, but it will be an indictment of all of us, regardless of our party political allegiances, if we do not rectify these matters in this term. I make this appeal to every single Teachta Dála anseo. Sinn Féin has commended the work of the Minister and her appointment with special responsibility for children and young people. Can we be satisfied that the agency to be put in place will have the necessary resources? Last week I visited a care centre where I met some of the young people in it and talked to the staff. There is a resource issue with a huge difficulty around the capacity and availability of social workers and the resources being provided by the Government. I ask that we all commit ourselves to making sure we rectify this grave injustice. Will the Taoiseach give a commitment that resources will be supplied and capacity provided?

The Taoiseach

I should have said that 19 children had died of unnatural causes. It is clear from the report that complex social issues are involved such as family circumstances, the pressures on young people from drink or drugs, their background and the question of mental health. The Deputy referred to resources being made available. That is obviously important, but it is also important to point out that many of the children in question were the focus of attention for multiple agencies. It is not just a question of resources; it is also a question of providing an effective response for the taxpayer's money through the facilities made available under whatever agency for children. The Government in its own way will reflect on the budget. The Minister will have the new child protection agency in operation from 1 January next and, clearly, the Government will make its own decisions about the resources that will be made available. I stress, however, that we will not set up an agency which will not be effective in carrying out its responsibilities. Clearly, from reading the report, multiple agencies were involved in the past and children, unfortunately, were not the recipients of the care and attention they should have received in all these circumstances. It is an issue that we will be happy to debate in the House or at a committee whenever it is appropriate to do so. This is something that we really want to get right. In so far as the State can change its way and structures and oversee through the child protection agency the work, care and love that it will be necessary to give to children in order that they have a life, we will do whatever it is possible to do. This report brings clarity and reality to a very long and sad saga. It is the duty and responsibility of us all to ensure we take a different direction - a direction for the better - for all children in the future. The Deputy's comments and his party's contribution to that will be as welcome as anybody else's.

Deputy Shane Ross

The bid by Ryanair for Aer Lingus presents a double challenge to the Government. It presents a challenge on the financial front and it presents a political challenge as well. I note the Taoiseach's response to the leader of Fianna Fáil that it is not possible for the Government to veto the bid. On the financial side, it looks to me as if the €1.30 offer is pretty well a no brainer. I understand the Minister for Transport, Tourism and Sport has said that the minimum price the State would accept is €1. This bid of €1.30 per share puts the Government in the position where it presumably could accept the offer.

On the political level, however, it is a much harder decision for the Government to take, particularly because Ryanair has played such an extraordinarily beneficial part in the country's prosperity. The chief executive officer is a poacherpar excellence in terms of commercial activity. This deal has the potential to convert the company from an aggressive, lean, mean, independent and challenging airline into a mega gamekeeper in terms of Irish aviation. I would like to hear the Taoiseach’s opinion and position on this. I accept the State does not have a veto, but it would be very dangerous if this Government, by the sale of its 25% stake to Ryanair, were to facilitate a position whereby any airline would have the sort of dominance which the competition authorities in the EU forbade on the last occasion. Very little has changed since that time. It would be useful if the Taoiseach would knock this particular proposal on its head here and now by saying that the Government will not facilitate - the word “allow” might not be right - any airline from anywhere getting into a position where it holds 80% of the air traffic and controls 35% of the routes into this country. Will the Taoiseach state specifically that he will not allow a monopoly or a dominant position in airlines in this country, any more than it would be allowed in any other sector?

The Taoiseach

I repeat that the State has a 25% stake in Aer Lingus and, as the Deputy is well aware, we do not have a blocking mechanism that would allow us to prevent this bid. The Deputy asked whether the Government would facilitate the situation by a sale of its shareholding. We have made it perfectly clear that the Government, through the Minister for Finance and the Minister for Public Expenditure and Reform, has had detailed discussions in recent months in respect of the regulatory, competitive and economic aspects of giving consideration to assets that might be disposed of by the State. The Government will publish its definitive list in due course. I override that by saying that every one of those sales would only be finalised and decided upon in the best interests of the country and the people.

From the perspective of the buck that was passed on the previous occasion, this is an improved offer from Ryanair for the value of the company. It does not, however, change the fact that Government will consider the potential disposal of any asset on its merits in respect of what it means for the country and the people. Clearly, the European Commission will make its views known in this regard and, as I said to Deputy Martin, I understand a meeting is taking place this morning. We must have consideration of what is in the best interests of passengers, consumers and business people and what is the best value for the taxpayer. Within the responsibility the Government has of 25% ownership of the company, we will give that proper consideration.

I wish to be very clear in saying, once again, that we will not be pushed into a corner in terms of having to have a fire sale because €175 million is put on the value of the Government's 25% shareholding in Aer Lingus. Obviously, the regulatory authorities will give their view in respect of the competitive element of this. While the director of Ryanair is a person who has made very important moves in the past in the sense of bringing real competition and access to and from this country for hundreds of millions of passengers, the fact is that the Government has a 25% stake in Aer Lingus and there are other players in the field. The Government will consider the bid but, in respect of the disposal of any of our assets, very careful consideration will be given and a decision will only be made on the basis of what is in the best interests of the country and the people.

Deputy Shane Ross

I wish to accentuate the dangers of an 80% dominance in a sector of this type. There was a madcap proposal some ten years ago where Bank of Ireland wanted to merge with AIB, the consequences of which would have been catastrophic. The principle applies equally to the airlines. Thankfully that proposal went west, with, as I recall, the then Government's approval. I hope the Government will see that this particular proposal goes under as well.

The question does arise as to whether we are all dancing to the wrong tune this morning in discussing the Ryanair bid. Has the Government considered whether it is an attempt by Michael O'Leary to sell his shares in Aer Lingus? Is he setting a price of €1.30 because that will raise the value of the assets on his balance sheet? The market seems to regard it as such this morning because the share price has only gone to €1.15. If there is a 29% shareholding overhanging the market - that is what is really going on, in my view - will the Taoiseach consider refusing the bid and bringing forward the sale of the Government's holding to get a better price? If there is a huge overhang of shares in the market, then the Government, in its own interests, should sell out before Ryanair does and not leave it until next year.

The Taoiseach

The Government would be concerned about dominance of that scale in the market. In respect of its ownership of the 25% share, the Government will not be forced into a situation where we must sell now and at a particular price. We have not, collectively, as a Government, considered the bid that came in last night.

Deputy Timmy Dooley

Has it been considered by individuals within Government?

The Taoiseach

The Government will consider the definitive list of State assets to be disposed of and, in that regard, we are interested in getting the very best price for any of those assets, at the right time, in the appropriate way and in the best interests of the people and the country. It is not a case of the Government reacting to the bid last night and saying we will now put our 25% share up for sale this week to see if we can get a better price. The entire area must be considered in terms of its regulatory, competitive and economic value. The Government will make its own decision in due course on the matter.

I take Deputy Ross's point that there are other players and there may well be interest expressed by others in making offers. I do not speak for Michael O'Leary or Ryanair. Business sometimes operates in peculiar ways.

Dáil Éireann díospóireacht -
Wednesday, 20 Jun 2012