Tuesday, 28 February 1995
Dáil Éireann Debate
23. Mr. Callely asked the Minister for Finance the Government's policy regarding privatisation of semi-State companies or any of their services; and if he will make a statement on the matter. [4238/95]
Mr. Quinn: The Government's policy in this matter is set out in the policy document A Government of Renewal, which recognises that dramatic change will occur in some State companies. The twin drivers of technological change and EU competition rules will significantly affect what were once “natural monopolies” in the State sector. The Government's approach to these inevitable forces will be to ensure that all change in these companies will be managed in the best interests of employees, taxpayers and consumers. Employment maximisation within the competitive environment will be a key objective. State assets will not be sold except where this protects employment and is in the long term strategic interest of the company and its stakeholders. The Government will retain majority State ownership in these companies. Commercial State bodies will be given a clear commercial mandate and clarity in the financial targets which measure their performance. Opportunities for expansion to utilise the bank of skills in these companies will be encouraged.
Mr. M. McDowell: The Minister enunciated a general and universal principle that there will be a majority shareholding for the State if there is any change in an existing semi-State company.Does he think it ideal that the ESB and Bord Telecom Éireann should commission research into their future or should it be a Government decision? Does the majority shareholding rule apply to Irish Steel?
Mr. Quinn: The question refers to general policy regarding semi-State companies. I enunciated what is contained in the policy document A Government for Renewal. Each case will be looked at on its merits. We set out the principles that would guide our approach to the necessity for all State companies to manage and confront change. If the Deputy wants to put down a question on the ESB and Bord Telecom Éireann I will be happy to answer it. The country has been well served by both companies.
Mr. Cullen: Does the Minister accept that there is a contradiction in his answer in that he stated, quite rightly, that commercial long term viability and maintaining jobs should be at the core of decisions on semi-State companies? He also stated that he is blocking a clear commercial decision being made by a State company or an outside investor, either nationally or internationally, by limiting the scope of involvement of a potential investor within State company by insisting, before any discussions would take place, that the State would retain a majority shareholding.
Mr. Quinn: The question relates to the overall approach to semi-State companies.The Government, which is a coalition of three parties, has set out its approach to State companies in its policy document. It might not necessarily concur with the policy of the Deputy's previous party but it does with his present party.
Mr. Cullen: The Minister is aware of companies in the semi-State sector where the State did not retain a majority shareholding. Does he not think it unwise, given the complexity of the issue, to make such a statement in advance of the commercial decisions and discussions that must take place? I subscribe to the view that, where possible, the State should remain the majority shareholder but that may not be feasible in some companies.
Mr. Quinn: I was asked to outline in general terms the policy on semi-State companies and I have done so. I do not share the Deputy's view. Each case will be looked at on its merits within the framework of the principles set out in the policy document.
Mrs. O'Rourke: I understand what the Minister has just said but if my recollection is correct the first part of the policy A Government of Renewal document stated that the State would retain a majority shareholding in each company. Would he agree the argument arises because that objective is not capable of being implemented to the letter in the case of each company? Would the Minister give the House his views on any Government plans to hive-off a component within a State company, rendering it fully commercial, while the State retains its majority holding in the company overall? The Minister will be aware that I am referring to Telecom Éireann and the proposals floated in that regard. Would he agree that what is causing greatest upset and damage is the lack of information, that we are given fragmented information about possible or potential proposals for purchase, diminution of the State's shareholding or a sale? Would he agree that it would best serve employees and everybody else in the company if the position were made abundantly clear? I was refused information in this House, yet the chairman of the semi-State company was able to announce such information publicly the following day.
Mr. Quinn: We set out in our policy document our general policy in regard to semi-State companies. Obviously we are talking about commercial or commercially-oriented semi-State companies.There will be certain circumstances prevailing in relation to the parent or subsidiary of a particular semi-State body which perhaps in the future could form a strategic alliance with the private sector, within a minority or majority shareholding. All of this would have to be tailored to suit the circumstances in  which they found themselves. Although not wishing to evade the question, it would be impossible for me to go into specific details. For example, the Deputy will be aware that, in its former glory, Aer Lingus had a variety of different commercial relationships with its subsidiary companies and with private sector interests, while the parent company remained, as it continues to remain, 100 per cent State-owned. The House will see there are many ways in which the commercial State sector can interact with the private sector. It would be for the Government and the relevant Department to consider what would be in the best interests of the company. The Government's approach to these inevitable forces will be to ensure that all change in these companies will be managed in the best interest of employees, taxpayers and consumers, and employment maximisation within the competitive environment will be a key objective.
Mr. Molloy: In regard to the policy the Minister has enunciated — that the State will retain a majority shareholding in commercial semi-State companies — will this apply to their subsidiary companies wholly owned by the State?
Mr. Quinn: I cannot enunciate a detailed application of that policy until we investigate the particular circumstances.The question of ownership per se would have to be balanced against the survival of the company, its development, its need for access to new technology, the need for international strategic alliances and a whole range of other factors, perhaps even encompassing European competition regulations which might very well require a sharing of ownership.
Mr. M. Ahern: In view of the remarks of the chief executive of Irish Steel over the past weekend, is it the Minister's intention and that of his Government to retain the State shareholding in Irish Steel? If there is to be a partnership, would he say whether it is the intention of the State to hold a majority shareholding in Irish Steel?
Mr. McCreevy: Is the Minister saying it is Government policy to consider the sell-off of the State's interest in some commercial State-sponsored bodies? Is what he said in reply to supplementaries in conflict with Labour Party policy enunciated in the course of the November 1992 general election?
Mr. Callely: There have been some contradictions in the cross-fire across the floor of the House. In considering strategic alliances and the best interests of employees, taxpayers and consumers, will the Minister say whether the Government will continue to hold a majority shareholding in these semi-State companies?
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