The Minister has 15 minutes, the proposer of the motion has 12 minutes, each other Senator has eight minutes and the proposer, or a Senator nominated by him, has five minutes to reply at the conclusion of the debate.
Telecom Éireann: Motion.
I move:
That Seanad Éireann condemns the confusion over the future of Telecom Éireann caused by recent conflicting statements from the Government parties; in particular, Seanad Éireann requests clarification of the Government's attitude to part privatisation of State-sponsored bodies, in the light of the Tánaiste's statement of May 1993 and the recent bid for part of Telecom Éireann's business by Cable and Wireless.
The motion before the House is somewhat diluted. The first draft was one of congratulations to the Labour Party. That is not a normal sentiment on my part but I recognise a climb-down when I see it.
We can recognise a solo run when we see one.
It should be given fair recognition. The original motion congratulated the Labour Party's death-bed conversion to privatisation. I wish to recognise this tremendous shift of opinion within the Labour Party and the fact that it is prepared to make it public. I also congratulate the Minister on his realism in not saying "no" to the approach from Cable and Wireless last week. We have seen a striking clash of cultures between the Labour Party and Fianna Fáil on privatisation. Nowhere has it been more apparent than in the State-sponsored bodies sector.
The contortion which the Labour Party is going through about Telecom at present has only been surpassed by that party's contortions on other semi-State issues. I congratulate the party on seeing the opportunity here to avoid a problem of its own making and ideology.
It was surpassed by the Senator's conversion to Fine Gael.
There is no doubt that in the next few years we will see privatisation, Labour Party style. It will be a tremendous spectator sport for those who have long advocated privatisation to see this extraordinary variation — socialist privatisation. That is an oxymoron which only Senator Magner could support and promote.
What cruel barbs.
No doubt Senator Magner will do so with his usual versatility and articulation.
I have the file.
I have my own file, Senator Magner.
I got my file from Pittsburgh.
If I had time, I would go through the file in minute detail. Luckily for the Labour Party I do not have time tonight.
The Labour Party and this Government received enough warnings about semi-State bodies. We have had the Aer Lingus problem; we had the problem with TEAM Aer Lingus last week; Irish Steel, Bord na Móna and virtually every semi-State company has been in trouble and the Labour Party never learns until the last minute. The Labour Party learns when it is confronted by crisis. Their answer to the crisis is always the same — keep costs high and throw State money at it as fast as possible to keep it going for another year or so. This was about to happen to Telecom. However, Cable and Wireless must have presented some difficulties for the Labour Party because the company actually offered to take Telecom out of a hole. It is always difficult for those——
Which the Senator is trying to dig for it.
——who are overburdened with ideology when someone tries to help them. The Labour Party, being good socialists, do not want help.
The Senator wanted to sack 4,000 people.
They want to continue to sink into the semi-State mire.
Last week, Cable and Wireless made what the Minister described as a unilateral proposal — that is the Minister's way of denying initiating the proposal and the Government will have to consider the proposal. Unfortunately for us and fortunately for the Labour Party the proposal will remain secret. The reason it will remain secret is apparent to everybody involved. It is not because the Government is frightened that competitors will discover the content of the proposal, because there are no competitors at present; but because the Government does not want to tell the Labour Party backbenchers who will get difficult about it. It also does not want Mr. Begg of the Communications Workers' Union to see the proposal. If he does, he will make life very difficult for the Labour Party.
We have a wonderful scenario. People are trying to help Telecom which is in awful trouble. The Labour Party says that is all right, but do not let the backbenchers or Mr. Begg see the proposals which must be kept secret and they will be called something else; they will not be called "privatisation". The Labour Party warned Cable and Wireless against calling the proposals "privatisation".
What will we call it?
What does the Labour Party call it? It calls the proposals "strategic alliances". If one does not like to call them that, one can call them joint ventures. Cable and Wireless are prepared to pay amounts the Minister will not reveal to the House. It may be approximately between £200 million and £450 million. This is privatisation, but it will be called a strategic alliance. Cable and Wireless are a shrewd bunch of people, which is possibly one of the reasons the Labour Party do not like the organisation. It will not pay £450 million for nothing. What it will get is control over the biggest asset Telecom Éireann has to offer its overseas market.
Telecom Éireann is up for sale. Senator Magner, the Minister and everyone in this House knows that, but cannot say it. The Minister specifically said that all options must be considered. All options, I presume, include privatisation. Maybe not. Maybe the Minister should have said that all options except privatisation will be considered, but he did not. The reason he did not is because it is privatisation.
I would like to remind the House of the Tánaiste's statement on this matter last May, which was a masterpiece of ideology, considering the difficulties which he found himself in at the time, because there was some difficulty from the Labour Party backbenches. This was an unusual problem for it to have, but it could always get over it by issuing a statement. It issued such a statement on Monday, 24 May. I shall now read from it because it is reasonably amusing and, frankly, ridiculous when one considered what happened over the last week. It refers to the Programme for a Partnership Government containing an explicit guarantee. The sort of language being used nowadays is ridiculous. Senator Magner will no doubt tell the House the difference between an explicit and inexplicit guarantee. There is no such thing, but it makes it sound stronger to the troops. That statement also referred to the main strategic utilities. The word strategic has a great virtue. It is the most devalued word in the English language.
(Interruptions.)
The word "strategic" appears in every paragraph of this statement bar one. It is there every time some strength needs to be put into the sort of flat, meaningless statements it usually makes. It goes on to say that the utilities and enterprises will remain in the ownership of the Irish people. This has a ring of where, Senator Magner? Eastern Europe. Remember them? Senator Magner's comrades of former days. They used to talk about the ownership of the Soviet people.
Senator Ross is talking to himself.
This statement refers to the ownership of the Irish people while having the freedom to enter joint ventures with the private and co-operative sectors. This is a wonderful paradox. The Labour Party is in favour of State ownership and private enterprise at the same time. Mastery of language but nothing about ideology.
The Tánaiste then said that if Telecom Éireann wishes for strategic reasons to set up a joint venture with another company, that can be considered by the Government in due course on its merits. That is a totally——
Fine Gael, County Wicklow and Senator Shane Ross. That is strategic.
——meaningless phrase. However, it is still called a joint venture——
I am not so sure of that.
——which includes the loss of ownership of all or part of Telecom Éireann, which would be unacceptable and would represent a breach of the Programme for a Partnership Government and its guarantees. That is the distinguishing paragraph and it does not have the vital word "strategic" in it.
I hope Senator Magner did not write this statement for the Tánaiste, because he will not do it again. It goes on to say that it is the intention of the Labour Party to keep strategic State companies strong. What is a State company which is not a strategic——
Acting Chairman
Senator, you are moving into injury time. You have one minute left.
I have only started, Sir.
Acting Chairman
Time flies.
It states that Telecom Éireann is the property of the Irish people, that it does not belong to its management or anyone else. Did anyone ever claim that Telecom Éireann belonged to its management? It is a ridiculous statement. It is one of our most important assets and the Government would be failing in its duty if it were to be seen to be looking for a fast buck by selling off part of such an important strategic asset. That was a ridiculous holding statement by the Tánaiste nearly 12 months ago. That is no longer an operative statement because both the Tánaiste and the Labour Party are currently considering the privatisation of the firm.
Strategic privatisation.
We should look at the Telecom Éireann situation as it currently exists. Telecom Éireann is in deep trouble and everyone knows that. It is not in immediate trouble because it has made a small profit, but it has more employees per telephone line than any other comparable company in Europe. It has approximately 4,000-5,000 surplus employees. The Labour Party cosily refers to too many employees as a rather high cost base; wonderful stuff. It even admits occasionally that there is a need for rationalisation. Telecom Éireann has——
Acting Chairman
I have to call a halt to you, Senator. You are over the allotted time.
Give Senator Ross a few more minutes.
——a debt of approximately £950 million. It managed to repay £2 million of this amount the year before last. If the Labour Party gets it right, the debt will be repaid in 500 years.
And Senator Ross will still be in the Opposition.
The Labour Party euphemistically calls that State investment. Telecom Éireann has a monopoly, which is paradise for the Labour Party. It loves monopolies, as long as it owns them. That monopoly, unfortunately, is currently under threat.
Acting Chairman
You have gone well over your allotted time, Senator.
It calls that ownership of the Irish people.
It is against the rules of this House to applaud.
I wish to second the motion. Senator Ross is a hard act to follow.
You can write that down.
This is like Fossett's circus.
Senator Ross has made it clear — Senator Magner accepts it — that Telecom Éireann is up for sale and that all options are being considered. The implications of that move must be examined. The Government must be urged to ensure the downside effects of the privatisation of Telecom Éireann are headed off and that they do not damage the service it is giving to our people. I see equal access for all citizens, regardless of where they live, to the services of Telecom Éireann as highly important. It provides a social service to our rural areas. A person can apply for, and obtain, a telephone regardless of where they live. Telecom Éireann ensures that there are adequate payphones throughout the country.
Senator Neville's colleague disagrees with every word he said.
They must be protected in a privatisation situation.
They are protected at the moment.
The suggested proposal is that there will be a private involvement in Telecom Éireann.
A strategic alliance.
Senator Magner can call it what he likes. It is privatisation. In an agreement with any private operator the Government must ensure that the service which is being given to rural and remote areas is maintained.
But Senator Ross called that sort of service socialist.
Socialism is dead. Senator Magner may not have realised it. He should not speak ill of the dead.
Acting Chairman
Try to continue, Senator.
The Government must also ensure that services to industry — information and other services — are provided throughout the country. There are services provided by Telecom Éireann, especially in my own area of the mid west, which a private operator might base in the capital with its greater population. In privatising the organisation agreements must be made with the private operator to ensure that services are not removed from rural Ireland and that employment is maintained by providing the services, the information and data processing services which require the services of Telecom Éireann.
We must also ensure that the experiences in the UK when its Telecom services were privatised do not happen in our economy or affect our people. We can learn from what has happened in the UK and ensure it does not happen here. When privatisation occurred in the UK, prices to residential customers soared and local calls were significantly more expensive in the UK.
That is a new tune.
We must ensure that does not happen here.
That is a new tune from the Senator's side. Take Senator Ross out and have a chat with him. That is not what he had to say.
Senator Ross stated clearly that Telecom Éireann is being privatised. I am telling the Government what must not happen in the case of privatisation.
That is not what he had to say in May 1993.
I absolutely agree with Senator Neville, but Senator Ross does not.
Is this a Committee Stage debate, Sir?
Acting Chairman
Try to continue without interruption, Senator Neville.
Service quality in British Telecom collapsed after privatisation. So much so that the company invested £60 million in a new logo to improve the image. We must ensure that the service is maintained once privatisation occurs. In March 1992, 24,000 job losses were announced by British Telecom, profit figures reduced for that period by 12.5 per cent and further job losses took place subsequently.
I also wish to recall what happened when C&W moved into Hong Kong and took over the Hong Kong based telecommunications service. It immediately announced the redundancies of over 1,000 people. It refused to negotiate settlements, it would not meet the unions for negotiation and it presented a fait accompli to the unions. Obviously, the workers in Telecom Éireann are extremely concerned about the developing situation. They have voiced those concerns to many politicians around the country and I am sure the Members of the Government parties here are aware of their concerns. In any situation the concerns of the workers must be looked at. As somebody who has experience of takeovers and was made redundant after a takeover, I can fully empathise with the workers in the circumstances. I urge the Government in any negotiations to ensure that the workers are protected and that they have proper conditions of employment.
When C&W took over in Hong Kong they issued new conditions of employment to all the workers and refused to negotiate. The workers had a choice of accepting those conditions of employment or leaving their employment. That was an unfair choice for workers who had served for ten, 20 or 30 years. In the case of privatisation we must ensure that the customers are protected, that the services to all areas of the country are protected and that the employees are treated fairly.
I move amendment No. 1:
To delete all words after "Seanad Éireann" and substitute the following:
"notes the commitment in the programme for Government that the main strategic utilities and enterprises will remain in the ownership of the Irish people while having the freedom to enter joint ventures with the private sector. Seanad Éireann also notes that the Minister for Transport, Energy and Communications has received a unilateral proposal for a joint venture with Telecom Éireann and has asked the Board of Telecom Éireann to consider urgently all options for the future of the company and to report to him within six months."
I am delighted to have the opportunity to propose this amendment to reject the opportunistic and mischievous Fine Gael motion.
It is not a Fine Gael motion; it is Senator Ross' motion.
Fianna Fáil has a tradition of an ongoing commitment to semi-State bodies and to their employees and Telecom Éireann is no exception to this. It is this commitment that guides the Government's approach on this matter.
It is important to remind the House of the commercial and technological realities that form the context of this debate. We live in a time of radical technological change on a par with the Industrial Revolution. At the heart of this change is the revolution in information and telecommunications technology. Our newspapers are now referring to the information superhighways that will transverse the globe. Ireland must be part of this superhighway and, above all, we must not be left stalled on the hard shoulder.
Coming from the world of business, I would say that information technology, which this industry is about, is an invaluable asset and it is vital that Ireland be part of this new revolution. Put bluntly, if we do not keep pace with this process and these proposals to progress this company, it will perish. Future generations would not thank us if we sat idly by and did not help Telecom Éireann to develop and prosper into the next century and beyond. However, the Minister is determined to ensure a prosperous future for Telecom Éireann.
The organisation of telecommunications worldwide is faced with major technological and regulatory changes which are creating a global realignment in the industry. The telecommunications market is becoming increasingly aggressive. In this challenging context Telecom Éireann has rightly been examining how best to position itself to ensure a strong future for itself and the Irish telecommunications sector. It has had contacts with many possible business partners. However, any such linkages can only take place in line with the clear policy laid down in the Programme for Government, to which I would refer my Opposition colleagues. It states: "The main strategic initiatives and enterprises remain in the ownership of the Irish people, while having the freedom to enter joint ventures with the private... sector." This, as we all know, is the bottom line.
The telecommunications industry cannot operate on the level of the local corner shop. Telecommunications is a worldwide industry. Inevitably this leads to new alliances, mergers and acquisitions between competing companies and groups. It is not in the national interest that Telecom Éireann remains detached from these developments. As shareholder, the Government has recognised this fact. It has also been recognised by the board and staff of the company. However, this reality seems to have gone over the heads of the Opposition parties, who seem content to remain in a commercial fairyland where the market can be ignored.
It is in this context of global change that Cable and Wireless has submitted a proposal to enter into a strategic alliance with Telecom Éireann through a joint venture between the two companies in which Cable and Wireless would hold a minority stake. Despite what the Opposition seems to think, there is nothing especially unusual about this, rather it is a reflection of the current commercial atmosphere.
Nonetheless, it should be borne in mind that Cable and Wireless is only one of the overseas telecommunications companies expressing potential interest in a linkage with Telecom Éireann. The Minister has also asked the board of Telecom to consider options from other companies and has drawn up a list of potential partners. This will provide a corporate identikit to decide which company would fit best with the strategic mission of Telecom.
As we all know, any decision will be taken by the Minister and the Government as shareholder in the context of the aforementioned commitment to the Programme for Government. In any event, potential partners need to know the EU terms under which they enter into an alliance for a joint venture. Regarding Cable and Wireless, the Minister has already made abundantly clear that the views of Telecom Éireann will be obtained before any detailed consideration is given to any proposals that might arise from the approach.
The stance taken by the Minister and the Government is in keeping with the commitment in the Programme for a Partnership Government that the main structures, utilities and enterprises will remain in the ownership of the Irish people, while having the freedom to enter joint ventures with the private sector. It is a positive and constructive approach, far removed from that of other parties.
What exactly is the approach of the other parties to this matter? We know the stance taken by the Progressive Democrats towards semi-State companies. Their motto is: "If it moves, privatise it." Fianna Fáil does not subscribe to this shortsighted attitude. We believe our semi-State companies are an invaluable resource, not goods to be sold off to the highest bidder. As in so many other policy areas, it is hard to discern what Fine Gael policy is on the matter. Their approach seems to be purely reactive, attacking Government policy without offering a viable alternative.
The Opposition should adopt a more constructive approach within the context of the commitment under the Programme for Government. The future of Telecom is too important an issue to be used as a political football and I am glad of the opportunity to put this amendment before the House. It represents a positive response to the challenges faced by the telecommunications industry. We have an able young Minister of great mettle and I have every confidence this Government will carefully guide Telecom towards a prosperous future.
Acting Chairman
I call Senator Quinn.
I understood I was to second the amendment.
Acting Chairman
There is no need for a seconder for a Government amendment. I now have to go across the House and so I call Senator Quinn.
My apologies to Senator Roche. I welcome the Minister and I welcome the debate because I hope it will provide an opportunity to debate the long term interests of Telecom, its customers and the economy as a whole. To do that we should remind ourselves of a few facts of business life today, and I was glad to hear Senator Cassidy speak from a business standpoint.
We see here an important trend which has relevance far beyond Telecom Éireann. This is the trend towards the internationalisation of service industries, which have traditionally been sheltered from foreign competition. Increasingly those industries are being opened up to competition from outside. We cannot do anything to stop this trend and in the case of Telecom it is being actively encouraged by the EU.
There are two ways we can react to the trend. The first is the ostrich approach; we can put our heads in the sand, hope the problem goes away and act in what would have been the protectionist manner. We can desperately refuse to face the new reality and continue calling for public money to be poured into every enterprise to keep it viable on its own.
That is the shortsighted thinking which put us in so much trouble with Aer Lingus — the Minister has had experience of that. No one should be in any doubt that Telecom could turn into another Aer Lingus if we fail to face the real world at this time. The same factors are in place: a company that is too small to compete on its own internationally and a cost structure that is out of kilter with the present marketplace.
The other way to react to the irreversible trend towards internationalisation is to embrace it, prepare ourselves for it properly and do the utmost to create the greatest possible national advantage from it. We should not whine about possible foreign involvement in Telecom, as if our telephone service was an entity whose racial purity was to be preserved at all costs. Instead we should encourage Telecom to set up whatever strategic alliance it needs — and I have no problem with the phrase "strategic alliance". Such alliances must be made quickly because time is running out.
Not long ago, when the Aer Lingus controversy was at its height, the issue was not the ideological one of whether Aer Lingus should or should not be sold to a foreign party. One central problem which remains troublesome is that Aer Lingus could not find a partner. No one could be persuaded to come to the altar because the bride was not attractive enough to any potential suitor and the parent did not have a nice dowry to endow the union.
That is sexist; we cannot have that.
It is a nicer idea than a strategic alliance, but Senator Quinn has ruined Senator Ross's evening.
In traditional countries dowries are still given and, whether it is sexist or not, it is needed to sell off the bride. In this case, if one takes that traditional and perhaps sexist attitude, then Aer Lingus did not have the dowry and the bride was not sufficiently attractive. The parents could not find a suitable partner in life for her.
A Beijing bride.
The Senator should listen. He might learn something.
We should now concentrate on making Telecom Éireann attractive to a potential partner in a strategic alliance. That cannot be construed as sexist. The partner will not come in to bail out the company but to provide it with the means to make the most of what could be a bright future.
Telecom has two major disadvantages at this point which reduce its scope for manoeuvre. The first is the question of costs, which has been mentioned by Senator Ross. Telecom has reduced its costs but not by enough to ensure it will have a healthy future; nor has it reduced them quickly enough. It has dodged and prevaricated on this issue. The main reason is that reducing costs mean increasing redundancies and that is not a pleasant thing to do. People refuse to face up to the need for that until disaster faces them. The sad thing is that by postponing such a cost issue, it makes for far greater human misery at a later stage.
If cost reductions are planned early, rather than having them forced on us, it can be done in an orderly way and at a much reduced cost in terms of human misery. If we wait until impending disaster has forced our hand, then we end up losing more jobs more brutally. Take the example of Aer Lingus again. If that company had tackled its cost problems much earlier, it would now be employing more people.
Costs are only one side of the coin. The other thing that Telecom Éireann has not yet got right is a proper attitude to customers, who are its bread and butter. They could also be the jam if Telecom Éireann got its attitude right. The health of our telecommunications system into the next century will depend crucially on the extent to which the Irish people become above average users of telecommunications. This will affect the overall health of our economy because the potential for economic expansion, through the development of Telecom based industries, is enormous. Irish people should be making more use of the telephone system. The way the company behaved last year with the increase in charges, or the rebalancing of its charges as it called it, was a good example of how it seems to regard the customer, as somebody who can be cosseted when there is competition but exploited where there is not.
I hope we will be big enough, and realistic enough, about the future to appreciate the urgent need for Telecom Éireann to find a foreign partner in a strategic alliance. I also hope that issue will not divert us from the equally urgent fact that there is a need for the company to get its cost structure right now. Telecom Éireann urgently needs to develop a totally new attitude to its customers, an attitude that could help the company to grow and underpin its profitable expansion into the next century.
This debate arises from the proposal by Cable and Wireless which was received by my Department last week. I said in the Dáil last week, and I am happy to repeat it now, that I have asked the Board of Telecom Éireann to consider, as a clear priority and urgently, the options for the future of the company and in particular what type of arrangement or strategic alliance would in their view best fit the strategic mission of the company and the interests of the wider economy, of consumers and the employees of the company. I have asked the board to draw up a full list of potential partners which would represent a good balance with Telecom Éireann itself and fit its mission. I expect a report within six months. Telecom Éireann must also take on board the views and legitimate interests of its staff in this process.
The Board of Telecom Éireann and the senior management are engaged in the business and they are in the best position to consider in detail the strategic options. It is not for me to predetermine the choices in advance of receiving their considered views. It would be equally inappropriate to deal with such an important question in a precipitate manner or indeed, to accept the advances of the first suitor without evaluating other options. Nevertheless, any ultimate decision is a matter for me as the Minister responsible and for the Government. I expect to get full information on all possible options and not just a single recommendation or limited preferences.
It is important not to understate the complexity of the telecommunications business, where the regulatory environment and the strategic objectives of Government in relation to the sector have critical influence on the value of the company. We cannot afford to lose sight of the fact that Telecom Éireann is a very valuable asset owned by the State on behalf of the people. We have a clear duty to optimise the value of that asset arising from the significant levels of investment, notably by the State, put into the company to bring its infrastructure up to the best modern standards. This is a duty to the wider economy and to economic efficiency, and to the taxpayer who financed so much of the basic grid. The role of the major utilities is aptly described in the Programme for Competitiveness and Work wherein they are charged with “the delivery of services which are efficient, effective and able to compete in the markets they serve”.
Such is the pace of technological advance in the telecommunications sector that the investment requirement will continue to be quite high in the medium term. The right decisions and strategic choices must be made to take account of changes in technology and the business environment. Since vesting day, and throughout the major investment programme of the 1980s, Telecom Éireann as a company and its employees demonstrated competence and flexibility in the face of necessary major change. I am confident that these qualities will continue to serve the company and the country well. My intention is to facilitate any necessary change in such a way as to ensure the long term success and well being of the company and its employees, as well as its customers, the general telecommunications sector and the wider economy. As I said earlier, the views of staff representatives should and must also be canvassed in a consultative way.
On the international scene, there are significant, indeed major, changes in the structure of the telecommunications industry, particularly on both sides of the Atlantic and on a trans-Atlantic basis. Alliances, mergers and acquisitions are occurring at such a pace that it is difficult to stay in touch with them. This activity is driven by a variety of factors, some of which are related to advances in technology in the telecommunications sector itself and moves to create very large dominant alliances. The second major factor at work is the technology merger between computing, communications and the entertainment and information industries. These factors can bring exciting opportunities for this country. Given this background, it is reasonable to assume that other telecommunication companies, in addition to Cable and Wireless, would be weighing up prospects for investment in markets such as ours. The liberalisation agenda in the European Union is also moving ahead apace. This will make it easier for new companies to enter the market to capture existing and new business.
The international background raises serious questions for and about Telecom Éireann. Can it survive and thrive in isolation? What is its future given that the liberalisation of the European market is now not only inevitable but proceeding apace? What would be the consequences if we were to ignore the realities and take no strategic decision? Unfortunately, it is no longer tenable to take the complacent line that Telecom Éireann is trading profitably and paying regular dividends to its shareholder. It is critically important that the telecommunications sector go forward in Ireland with increasing momentum. Given its infrastructure, staff expertise and customer base, it is unthinkable that Telecom Éireann would not continue to be the major player. The bottom line is that this country must have efficient, wide ranging and competitive telecommunications services as a crucial element in economic development and job creation, both directly and indirectly.
The Government will consider the full range of options that will emanate from the directive I gave to the company last week, and which I outlined in detail in the Dáil. I have a clear determination to ensure that we make conscious strategic decisions after appropriate analysis and consideration. We cannot afford the consequences of policy drift in this area no more than in any other area. Neither should we look exclusively at the first offer that is made.
Given that a liberalised market in telecommunications is inevitable, I am pressing ahead in accordance with EU requirements with the determination of an appropriate regulatory regime. The procedures I have outlined, and which I have now put in place, are a pragmatic and realistic approach to ensure in a changing world that the interests of Telecom Éireann, its staff, customers and the public as owners of the company are best served by the solutions which will emerge.
When we are considering issues such as this, it is important to adopt a pragmatic approach based on partnership. The Programme for Competitiveness and Work clearly outlines the challenges of a modern economy. Thankfully there is the basis for economic stability and future progress in this country. There is also the basis for a partnership arrangement, where the social partners, those who have the interest of the economy at heart, whether they be employers, trade unions, Government or the farming representatives, have come together on the basis of trying to ensure that over the coming years and the years of the plan, parameters will be clearly set down and are available to everybody concerned, including those in indigenous industry and those from outside who wish to invest in this economy.
As Minister responsible for the commercial State sponsored sector, I believe we should never forget the huge contribution this sector has made and is making to the development of our economy. We must also be aware that the disciplines of the Single Market mean that we now have competitive challenges which we, as social partners, have agreed are the main issues with which we must contend and are the main challenges we must overcome. We will do that through partnership, which is the essence of what we are about.
The people involved in the telecommunications sector in Ireland are aware of international developments. They are aware of the realities; they have legitimate interests to protect and to represent and I have no doubt they will do so responsibly and in the long term interests of the company and the employees.
It is for management, and the Board of Telecom Éireann, who is the shareholder's representative on these issues, to enure that as far as we, the representative of the Irish people, are concerned, we have the full range of options to make proper, informed decisions which are likely to be in the strategic interests of the company in the years ahead. When that full range of options, of which there are many is considered and analysed, and once consultation with other potential interested parties is conducted, we will consider the situation in an informed, calm and collective way.
It must be remembered that all facts are friendly. I believe everybody must own the idea if the idea is to work. I do not believe in old, outdated, hierarchical structures which are no longer relevant in modern industrial relations or in modern industrial democracies. Once those facts are available to everybody, once everybody's interests have been put on the table and certain realities confronted, it is only by the application of common intelligence that certain solutions will emerge and these solutions will have the support of those who have the strategic interest of the company at heart.
This is something to which not only my party, or the parties in Government are committed; it is something to which all who have a stake in this economy have agreed. Under a social partnership, the issues of competitiveness will be confronted in a collective way. Any attempt to seek to invoke division or confrontation will not succeed because I can assure the House that in the discussions I have had in the past week with people in the telecommunications sector who represent both the interests of employers and employees, I am satisfied I have outlined the parameters and the framework within which we can work in principle over the coming months. This work can take place while recognising that there is an urgent agenda and a national agenda. The whole idea is to ensure that the corporate agenda and the strategic long term future of the company coincide with the national agenda, based on full information and consultation between all the partners who have a legitimate interest in the strategic future of this company.
That is not to say there are easy, pat decisions to be made, but I am satisfied, and based on my experience as a Minister for Labour in the past and now, as the Minister with responsibility for the commercial State sponsored sector, that it is only through the approach I have outlined that we can seek to solve the problems which are emerging. Whatever the hype or hysteria which Members may see to heighten, we are not in a crisis, but it is in our interests to confront these issues strategically, collectively and calmly. In doing so we may arrive at intelligent decisions which I believe will ensure that Telecom Éireann will continue to be a major player in Irish telecommunications.
Such decisions will, more importantly, also ensure that we have the kind of technology fit that is required for the wider economy, for industry, agriculture, the food industry and business generally to compete with others in the markets we serve, which is now not only a common market but a single market. It is a market which has huge opportunities for us which we must grasp immediately and in the coming months and years ahead. It is a market which has potential dangers, which we must have the courage to confront.
I believe the telecommunications sector understand this. I can assure the House that over the coming six months, while these issues are being dealt with, this will be the up front, open agenda of this Government. I will act on behalf of the Government and in compliance with the Programme for a Partnership Government and with the Programme for Competitiveness and Work, upon which we are all agreed not only to complete but to enhance for the benefit of future generations.
Acting Chairman
I call Senator Dardis.
Should a Member from this side of the House not speak first?
Acting Chairman
After Senator Dardis, I will go to the other side of the House to call Senator Magner. I will then call upon a Member from the other side of the House followed by a Member from your side Senator, and so on.
I call on Senator Dardis. I must advise the Senator that he will be unable to move his amendment to the motion.
I am aware of that, but it will not prevent me from quoting the amendment. I find myself in an unusual situation this evening, because, apart from one exception I agreed with everything the Minister said. This is a new phenomenon for me.
The proposed amendment by Senator Honan and me proposes to add to the motion the following:
"Additionally Seanad Éireann calls on the Government to seek bids from a number of companies for part of all Telecom Éireann's business and not just its overseas business which is already subject to competition; calls on the Government to make a decision on such sale within a month of receiving bids and to arrange that after such sale the proceeds be used to reimburse the Exchequer for the heavy public investment made in the telecommunications system."
I have no quarrel with the Minister's approach and he is to be commended upon it.
The Minister has many options but the worry is that, as time goes by, there will be fewer options and then, as in the case of Aer Lingus, there will be no options at all, following which, it will become another charge on the State to bail out an ailing company.
I am encouraged that the Minister advises that those in the telecommunications industry accept the realities; this means that everybody in the country accepts these realities, but does this apply to the Labour Party? I ask this as I am confused about its position on this issue.
In the last Seanad, the people who occupied the benches on this side of the House spoke vehemently and with commitment and passion of their resistance to the idea of privatising Greencore and Irish Life. I respected their position although I frequently disagreed with it.
In 1992 the Tánaiste made it clear that privatisation was ruled out by the Programme for a Partnership Government. The Tánaiste went on to state:
From the point of view of the Government and the two parties working together, it is just not on the agenda, and it is not going to be on the agenda. If Fianna Fáil insist on including it, they will not be in government with the Labour Party.
That is a remarkable statement and is consistent with everything we have heard. However, what is the position now? The Tánaiste's spokesperson, a faceless person who brings the message said — we shoot the messenger rather than the person who wrote the message — the Government is not considering privatisation; it is considering strategic alliances which are provided for in the Programme for a Partnership Government. We are back to the question of semantics when privatisation becomes strategic alliance. I do not know what "strategic alliance" becomes — perhaps it becomes "joint venture".
It becomes Barrington's hospital.
In recent debates I noticed that one can be sure the Government is under pressure when "Rottweiler Roche" and "Doberman Magner" are on the other side of the House.
I have not even spoken.
It is an indication the Government is under pressure.
We are confronted with a company with a £1 billion debt, which made a £50 million profit, less £10 million which the Government received. Some £200 million must be spent on international services if the company is to remain competitive. The Government went to Brussels on its behalf looking for the £200 million. What did it get? It got £27 million and we do not know if this is secure.
It is 8.5 per cent.
It may be 8.5 or 10 per cent or more, or it may not receive it at all.
The Senators cannot even agree on figures.
We would have no difficulty agreeing on figures if we knew what they were. The monopoly will go in nine years and I endorse remarks made by Senator Quinn in that regard. Many countries are privatising their telephone companies. If this country is to progress and if the telecommunications industry is to make the contribution it can to international telecommunications and communications in the EU, the unions must live in the real world.
I fear Telecom Éireann will turn into another Aer Lingus. Whatever attraction there is for outside investment in the company at present, it will disappear if we continue down this road. Now is the time to seek investment. One aspect of the Minister's speech with which I disagreed was when he said he would get a report in six months. He said he asked the board to draw up a full list of potential partners. I agree this should be done, but we should look at not only one partner, Cable and Wireless, but at all potential partners. Why will it take six months to compile this report? I believe I know the reason. It relates to 9 June; I do not know how the Labour Party can face the electorate in a European election——
Senator Dardis has an interest in this.
Of course I have an interest in this; I suspect everyone in this House has an interest in politics otherwise they would not be here. I was about to agree with what Senator Cassidy said about technology, but I am reviewing my position on that matter. This report will arrive after 9 June in order to avoid embarrassment for the Labour Party on door steps.
The Minister should allow a stake in the overall company, not only a 25 per cent stake. Whatever happens, the company should repay the Exchequer the £1.1 billion invested in 1979 — it would amount to approximately £2 billion today — which it borrowed and guaranteed. What is the status of the pension fund? What is the State's liability in this regard? How secure are those in that pension fund?
I agree with Senator Cassidy about technology. The world is changing, we are now involved in fibre optics and we will shortly be able to make telephone calls from airplanes in the sky — perhaps this can be done now. Technology is advancing at a considerable rate and if we are not part of that, we will be left behind. We must find partners because in 20 years I guarantee European telecommunications will be controlled by three or four companies and Telecom Éireann will be wiped out.
The problems which affected Aer Lingus and which now affect Irish Steel and the future of Telecom Éireann did not appear within the last year or two. They have been around for a long time. With respect to Senator Dardis, they were around when his party was in Government, but it talks a lot and does little. It did nothing about these problems; it hardly raised the matter when in Government. The Labour Party does not need lectures from Senator Dardis.
It does.
If I was to attack the Progressive Democrats on its broad range of polices and non-policies, I would not need a Rottweiler or a Doberman, but a mechanical Pekinese because it would have no problem dealing with it.
I refer to the independent wing of Fine Gael, Senator Ross. On each occasion State companies are examined in the House, Senator Ross arrives with a black cloak and a shovel to bury the company and its employees. We witnessed an amazing strategic alliance this evening between Senator Neville and Senator Ross. Senator Neville said the facilities enjoyed by the people, a telephone network and a telecommunications system of a high international standard, should be maintained and people in the west and in Kerry should have a good telephone system. That is something with which the Government agrees. On the other hand, Senator Ross said, if it does not pay, cut it out. That is what is done on the Stock Exchange. What kind of a strategic alliance was it when Senator Ross used that expression, which has not been lifted by the Labour Party?
The strategic alliance I spoke about when I interrupted the Senator was the alliance between Senator Ross and the Fine Gael Party, the strategy was to a win a seat. To win a seat Senator Ross had to use new terms which he did not understand——
This is pathetic.
An Leas-Chathaoirleach
The Senator is straying from the motion.
——for example, headage payments. In an article in the Sunday Independent of 23 May last Senator Ross wrote——
An Leas-Chathaoirleach
I ask Senator Magner to refer to the motion.
——that Telecom Éireann's belief in its public service role was revealed as a nonsense by its callous willingness to charge Ireland's little old ladies and gentlemen vicious increases.
I am worried about Senator Magner's constituency.
If anyone believes Senator Ross ever gave little old ladies and gentlemen more than three seconds of his time, I would like to meet them. The article also contained a good photograph of Senator Ross.
The independent wing of Fine Gael believes the Programme for a Partnership Government leaves the Labour Party open to some sort of assault. Obviously, the programme has not been read by Senator Ross or Senator Dardis from his high pinnacle.
I have read it.
The Programme for a Partnership Government states that the aim will be to ensure that Irish business and domestic subscribers have a first class telecommunications service at prices which are compatible with international competitors, to rebalance appropriately Telecom Éireann's domestic, international, trunk and local calls and to ensure that the service provided meets the highest standard of competition. We did that, it is in the Programme for a Partnership Government. Senator Ross would agree with that in his heart in spite of the Fine Gael line because it is solid business — you pay for what you get; there will be no charity here. We must take account of the real world. David Begg, the general secretary of the Communications Workers Union, is one of the most far seeing trade union leaders in the country, who has among his membership some of the most——
Give him the details of the deal.
An Leas-Chathaoirleach
Mr. Begg is not here to defend himself.
You were not in the Chair when Mr. Begg was mentioned in copious detail by Senator Ross.
An Leas-Chathaoirleach
He should not be mentioned and I would prefer if he were not.
I want to put it on record in fairness to David Begg that he is one of the finest——
An Leas-Chathaoirleach
He, or any other private individual, should not be mentioned here.
The Chair should get its act together because if it is allowable for one——
Senator Magner should withdraw that remark.
An Leas-Chathaoirleach
I am surprised the Senator made a remark like that.
I was surprised at the ruling.
An Leas-Chathaoirleach
I ask you to refrain from mentioning the names of private individuals.
I accept your ruling. The official in charge of this union has under his command one of the finest and most intelligent workforces in Ireland. They are highly skilled people, can read the papers, study international trends and know far better than Senator Ross or Fine Gael——
Tell them about the deal.
An Leas-Chathaoirleach
Senator Magner without interruption.
Why cannot this great man be told about the deal?
An Leas-Chathaoirleach
Senator Ross, you had your opportunity.
Our rebalancing of Telecom's charges was not easy or publicly acceptable for a while. Opposition to it was aided and abetted by Members on the other side. This was one of the first necessary steps to ensure Telecom remained in business in a competitive way but the move was totally and utterly derided by the Opposition. Senator Ross trooped through the division lobby with his head low because he did not believe in this stand. I do not blame him for this, we all have to do it from time to time but at least he does it with style.
In referring to Cable and Wireless, Senator Neville gave the example of Hong Kong of all places. The Chinese are outside the door and will be taking Hong Kong back. If I owned anything in Hong Kong I would be open to selling it and taking off. The idea that the conditions in which Cable and Wireless went into Hong Kong would apply to Ireland is nonsense. If Senator Neville wants to start scaremongering he should consult me and I will write something for him.
Senator Magner should not insult the Chinese, they are not here to defend themselves.
Senator Dardis should be quiet. The Progressive Democrats were fine until the closure of Barrington's Hospital in Limerick but that shook them fairly badly.
This debate is interesting and I welcome the Minister. It was noticeable that the Minister was comfortable with his script and Senator Magner had froth on his mouth when he finished.
All Dobermanns do.
He certainly is extremely uncomfortable with the position in which he finds himself at this stage.
The rabbit Senator Magner.
He managed to avoid any reference to the heart of the motion and the Labour Party's position on it. The fact that none of his colleagues bothered to come in this evening to support him is another example——
That is not true.
An Leas-Chathaoirleach
You should not refer to people who are not here.
They are Members of the House.
An Leas-Chathaoirleach
You should not refer to the absence of Members.
Obviously there are difficulties in the Government about this and no wonder because the Labour Party has a long record of putting its ideology before the people on this issue; until recently it did not harbour such ideas. It is incredible to watch its gymnastics. It says some of the company will be sold to private enterprise but this does not constitute privatisation. A whole new vocabulary will be developed over time and Labour will create a new political ethos in their efforts to paper over the cracks. The debate is interesting from this point of view. It gives Labour an opportunity to squirm further and to prove it is not in breach of the national plan or its ideology but it will fail on both counts. Most people can read and know exactly where Labour stands on issues like this and what is included in the Programme for a Partnership Government. Fianna Fáil is well practised in the affairs of Government, is well able to shift its ideology when it suits it and has got Labour into a serious position. Labour has added to this by not facing up to it. The intention is to sell a slice of Telecom into private hands. This means privatisation. We can call it all sorts of other names but it still means privatisation.
This debate gives us an opportunity to look at the semi-State sector, why things go wrong, why the public is convinced that it and the Civil Service are failures and that productivity is not possible at this level. This is a commonly held view.
By whom?
By people in general. Those who say this is not so are talking through their hats. One reason for this is that the Civil Service has to hide behind Ministers and politicians and never gets a chance to show its worth. It should be given this chance. We were promised open and a different approach to government. This should include allowing top civil servants to speak out on issues and options and to show they are intelligent beings, which they are. People never see or hear them. This is why people denigrate the Civil Service and the public sector in general. Civil servants are invisible, they are not able to put their personalities, views or options before the people and as a result, they come in for much criticism. It would be interesting if they were able to elucidate -
What is the Fine Gael position on Telecom?
We did not find out what Labour's one was so how can Senator Magner expect to be told what Fine Gael's is?
An Leas-Chathaoirleach
Senator Cotter without interuption.
If Senator Magner tells us Labour's position, we might tell him ours. We have an open mind on it.
What is the policy?
We have an open mind.
What is the policy?
Privatisation is not a dirty word to Fine Gael and neither is public ownership. We have no difficulty with it whatsoever. It is a shame that civil servants are in a position where people say they are not worth the money they are paid and nothing comes from them. We have very intelligent people in the Civil Service. They have a bank of ideas, which most of us never hear because they are not allowed to disclose them.
Senator Cotter should tell Senator Ross to stop attacking them every week in the Sunday Independent.
An Leas-Chathaoirleach
Senator Cotter, without interruption.
He does not actually. I would be critical——
An Leas-Chathaoirleach
Senator Magner had his opportunity when he was on his feet a few minutes ago. Senator Cotter, without interruption.
I would be quite critical of Telecom Éireann from various viewpoints and yet I have great respect for the people who work there. The workers and management of Telecom Éireann whom I know are fine people, are not allowed to manage the company properly on their own as they are subject to political masters. The same was the case in Aer Lingus where we were losing £1 million every week. It went on and on although everybody knew about it, because the politicians——
(Interruptions.)
——wanted it to be delayed until the time was right and enough leaks had been made so that people had lost interest and action could then be taken. Of course, the Labour Party had its own hang ups as a result of the meeting in hanger No. 4.
Aer Lingus is flying now in every sense of the word.
Aer Lingus is flying for sure and it is no fault of the Senator's.
It must cause the Senator great disappointment.
An Leas-Chathaoirleach
Senator Cotter, without interruption.
Why is the Senator being antagonistic?
I thought that the Minister had something to do with that.
Politicians must take responsibility for what happens. For various strategic and political reasons they interfere with management in companies such as Telecom Éireann and Aer Lingus and decisions which should be taken today are put off for another six or 12 months or until it is politically acceptable. This decision must be put off now because there would be quite a savage kick back, first, against the Labour Party, which it cannot wear it at this point in time, and, second, against the Government, which must be avoided because of the European elections next June. Therefore, decisions are put off until such time as it suits the people who are in power to allow them be made.
The Senator should finish with another reference to the Labour Party.
It is good to watch the Labour Party with froth on its mouth trying to get a grip of something which it finds very unpalatable. It is interesting to compare the attitude of the Minister, who is very comfortable with the brief he has in this area, and the Labour Party, which is quite heartbroken and sobbing its way to a difficult time at the polls next June as a result of this. It is no wonder that they cannot handle it.
The Senator sounds like Mills and Boon.
Anybody visiting this House for the first time to listen to this debate must be bemused by the standards adopted by the Opposition parties. When Senator Cotter began he was quite right for the first ten or 15 seconds. He illustrated that the whole purpose of this debate was not to deal with the issue of Telecom Éireann — what is good, bad or indifferent for the company — but to see the Labour Party squirm. That strikes me as the most extraordinary abuse of parliamentary debating time.
The single transferable speech has arrived.
The other element of the debate which was truly interesting was the wide gulf which now exists between the provisional and official wings of Fine Gael, to which I will return in a moment.
Whenever we come to this or the other House to discuss State enterprise it seems we continuously lose sight of why this nation got involved in State enterprise. It is worth reminding ourselves why from time to time. There is a whole variety of reasons. There is the failure of the private sector in the cases of ACC, ICC and the ESB; the need to develop resources with companies such as Bord na Móna; the need to give employment with companies such as the sugar company; to save employment with Irish Steel; to overcome the excesses of private capital, as in the case of NET. There is the lack of interest from the private sector, which was the reason we got into Aer Lingus; strategic considerations in the case of Irish Shipping; wealth distribution — and I could go on.
Pragmatism has always been at the base of this State's involvement in public enterprise. We have never been involved in the State sector for ideological reasons. I cannot understand why we should get excited about the prospect of a State company either involving or ultimately being sold to private capital. The relationship between this State and the commercial State enterprises has always been an ad hoc one.
The State enterprises have been undermined by three major considerations. The first was the control relationship between central Departments and the State sponsored bodies. It was never clearly established exactly how we were to handle our relationship with these strange beings. This confusion is seen nowhere more clearly than in the relationship between the Houses of the Oireachtas and the State sponsored bodies. We have a committee on State sponsored bodies and, as I understand it, we have discussed a report on only one occasion in the last 15 years. That is how much interest we take in the State-sponsored sector. Of course, we debate State-sponsored bodies when there is an opportunity for one party to embarrass another.
The second reality which the State-sponsored bodies have always had to deal with, particularly the commercial ones, are their historically poor financial performance. For most years the performance has been abysmal and over the last 15 or 20 years the contribution from our State-sponsored sector has been negative. It is time that we had a cold, hard, dispassionate look at this sector.
The third and most difficult reality which the State-sponsored sector has ever had to deal with is the appalling lack of a financial structure. We have always failed in this regard. The State and all parties have been willing to pat the State sponsored sector on the back but we have never been willing to give them the capital to get the job done. As a result we have State-sponsored bodies which are grotesquely over borrowed, with a huge burden of debt, and are capitalised in a way which is bizarre and could not exist if they were not under the State flag.
In the case of Telecom Éireann it is vital that alliances — or whatever other word we wish to use — be sought if the company is to hold its own, let alone enter competition when that becomes a reality because of EU interventions. If Telecom Éireann is to gear itself up to new technologies, let alone defend itself from competition, it is vital for it to look for strong partners.
We all know that Telecom Éireann can only get the money from one of three sources: its own resources — and we can imagine the screams and protests here if we tried to give Telecom Éireann a billing system which would allow it to build up its own resources — or borrowing from the marketplace and, as other Senators have said, the company is so heavily over borrowed that that is not a reality. Therefore, the only available option is capital injections. I would not go as far as Senator Dardis and suggest that we sell the lot, because that would be a fundamental mistake.
I did not say that.
Well, the Senator came very close to that.
I said "part of the lot".
I did not hear correctly. I thought that the Senator said "part or the lot", but I accept that he said "part of the lot". He said "the lot" at one stage, but we will leave that.
Clearly, the only option which anyone approaching this in a sane way sees as workable is to involve some form of outside capital in this company. A joint arrangement with a major player such as Cable and Wireless or some other player in the international communications industry is clearly an attractive option for Telecom Éireann. It is wrong, given that we do not know how this will ultimately pan out, that Members of this or the other House should try to scaremonger, cloud the issue and conjure up ghosts and ghouls which do not exist. It is a grave disservice to the nation and an even graver one to the people who work in Telecom Éireann because, as we all know, it is difficult for people to take a challenge to their position or security.
The whole approach to this debate has been not just ludicrous but mean spirited. All we have witnessed here tonight from the Opposition parties is an attempt to conjure up difficulties for Telecom Éireann which do not exist. The reality is not that they want to look after the interests of Telecom Éireann but that they want to embarrass a political party. Fine Gael's motion speaks of confusion. Nowhere was confusion more visible than in the first two contributions from that party. Senator Ross on one hand is quite willing — it is on the public record — to chop chunks off Telecom Éireann. If it is required, he suggests we should let 4,000 people go.
Is the Senator saying that we should not?
I am not saying that, but I am not being a hypocrite either.
I think you are.
Senator Neville then stood up and wrung his hands for 15 minutes. He spoke about his concern for the workers in Telecom Éireann.
And the Chinese.
He wrung his hands for the workers in Telecom Éireann.
In the context of privatisation. That is what he was speaking about.
In the context of privatisation, but your party is not against privatisation. Your party does not have any ideological——
We were not speaking against it.
We are again illustrating the confusion that exists in that party.
The Senator should listen more keenly.
I listened, although it was inimicable to my mental health, but the reality was I heard nothing worth hearing. What I did hear and what anybody who cares to read the record will see was confusion heaped upon confusion — state of the art confusion from that side of the House. Senator Ross's position is clear. If it were left to him he would chop Telecom Éireann in little bits and sell it off to anybody.
To little old women.
Then he speaks of his concern for little old women. As I know the little old woman in question in Bray who continuously rings both myself and Senator Ross, I would have to go along with him in that regard.
The reality is that the motion put forward by Fine Gael is pure humbug. We have to live in the real world and accept that companies like Telecom Éireann have to look for alliances. They have to look for strategic arrangements, otherwise those companies will go to the wall.
An Leas-Chathaoirleach
I call on Senator Ross to conclude the debate.
Does anybody else want to speak?
An Leas-Chathaoirleach
I was not aware that any of the Senators there wished to speak.
No, but there seems to be no support for the motion on the far side.
Fifty per cent of the Progressive Democrats spoke.
I thought for a moment that Senator Wright was going to speak but his duties obviously extend only to interrupting at this stage. I am not surprised at Senator Wright, but it is disappointing to see that is the only contribution he is prepared to make. I was interested in this debate not just because of the issue involved but, like Senator Roche and Senator Magner, I was interested in the cosmetics, which was the only element of the debate in which they were interested.
I pay tribute to my constituency colleague, Senator Roche, who nearly gave me a heart attack at the beginning of his speech because he started by being constructive. He actually began by talking about semi-State bodies and for the first time in this Chamber he spoke a few lines of sense, which will jump out from the pages of the Official Report when people read the history of this session. Senator Roche talked about pragmatism. I admire Senator Roche and his pragmatism. There is a case for pragmatism in semi-State bodies.
You bet.
It is a pity that Senator Magner and his party do not believe in pragmatism.
I believe in little old ladies and little old men.
"Rottweiler Magner".
If they believed in the pragmatic approach on which Senator Roche was lecturing them and to which they did not listen, they would not have an ideological hang up about semi-State bodies. They should note that semi-State bodies have had, what Senator Roche correctly called, a negative performance throughout the history of this State and act accordingly. Unfortunately, all we had from the Government side was an attack on the Opposition, because there is no Government policy on this. All we have from the two parties is the complacency which has existed in the semi-State sector since time immemorial. It is no good for either of them to say that we are contriving difficulties which do not exist.
That is a liquidation speech.
I am quoting Senator Roche. For Senator Magner to say that Aer Lingus's problems were evident years beforehand——
Here comes the shovel again. Let us bury it.
Senator Magner has realised that Aer Lingus was making a profit three or four years ago. Telecom Éireann is making a "profit" but it is doing so because it is paying off so little of its debt. If it paid off more of its debt, it would immediately go into a loss making situation. We have not considered the almost terminal situation which exists at Telecom Éireann. I was disheartened by the fact that Senator Roche was prepared to put his woolly head in the sand throughout the debate, as were all the others.
At least there is more wool on this head. Jealousy.
I should say touché to that, Senator Roche, but I will give you that. The complacency is disheartening. We have not faced the bare figures at Telecom Éireann which are so discouraging. Last year Telecom Éireann made a £50 million profit which could easily, with its figures and turnover, have turned into a loss. It apparently intends to pay no dividend to the Government, which should not make those who believe in State investment particularly happy.
Telecom Éireann excuses its small profit last year by saying it had to write off over £40 million following foreign exchange losses during devaluation. Why did Telecom Éireann not sell its Irish pounds like anybody with any sense did? The reason is simple. Telecom Éireann was not allowed to because it was under Government pressure, as are all semi-State bodies, to behave in a certain way. It was not allowed sell Irish pounds because that was what the Labour Party would have called unpatriotic. One has to sit on £40 million losses in order to be patriotic and the taxpayer pays the bill. That is not a commercial way of running a company.
Telecom Éireann is competing in what the Labour Party calls the market place with others who do not have to behave in that way. That is not a tolerable, commercial or viable way to behave in the commercial market. Telecom will have to mend its ways. It is also running a current problem which I have not seen properly addressed by anybody. The company admits that to keep up with modern technology, it has to make between £160 million and £200 million a year.
An Leas-Chathaoirleach
I have to ask the Senator to conclude.
I am concluding. Telecom applied, as a Member of the House said, for £240 million worth of EC funds and was refused. It was given £27 million.
Do not be so delighted.
I am horrified.
Why is the Senator so pleased about it? He sounds like a Lloyd's name.
It simply underlines the fact that, as the company stands, it is not viable.
(Interruptions.)
An Leas-Chathaoirleach
I must ask Senator Ross to conclude.
I will conclude. I am over time, but I have had an enormous number of interruptions.
An Leas-Chathaoirleach
It never stopped you before.
He is concluding the finalities.
We should welcome the proposal from Cable and Wireless because it is the only option on offer. It is the only possibility of rescuing Telecom from certain doom.
We will accept your apology.
Amendment put.
The Seanad divided: Tá, 26; Níl, 14.
Tá
- Byrne, Seán.
- Calnan, Michael.
- Cashin, Bill.
- Cassidy, Donie.
- Henry, Mary.
- Hillery, Brian.
- Kelleher, Billy.
- Lanigan, Mick.
- Lydon, Don.
- McGennis, Marian.
- McGowan, Paddy.
- Magner, Pat.
- Maloney, Sean.
- Daly, Brendan.
- Farrell, Willie.
- Finneran, Michael.
- Fitzgerald, Tom.
- Mooney, Paschal.
- Mullooly, Brian.
- Norris, David.
- O'Kennedy, Michael.
- O'Sullivan, Jan.
- Ormonde, Ann.
- Roche, Dick.
- Wall, Jack.
- Wright, G.V.
Níl
- Belton, Louis J.
- Cosgrave, Liam.
- Cotter, Bill.
- D'Arcy, Michael.
- Dardis, John.
- Doyle, Joe.
- Farrelly, John V.
- Howard, Michael.
- Manning, Maurice.
- Naughten, Liam.
- Neville, Daniel.
- Reynolds, Gerry.
- Ross, Shane P.N.
- Taylor-Quinn, Madeleine.
Tellers: Tá, Senators Mullooly and Magner; Níl, Senators Cosgrave and Belton.
Amendment declared carried.
Motion, as amended, agreed to.
When is it proposed to sit again?
Tomorrow at 10.30 a.m.