Ceisteanna — Questions. Oral Answers. - Semi-State Privatisation.

Tuesday, 28 February 1995

Dáil Éireann Debate
Vol. 449 No. 7

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  23.  Mr. Callely  Information on Ivor Callely  Zoom on Ivor Callely   asked the Minister for Finance  Information on Ruairí Quinn  Zoom on Ruairí Quinn   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: Information on Ruairí Quinn  Zoom on Ruairí 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. Callely: Information on Ivor Callely  Zoom on Ivor Callely  What companies has the Government considered for privatisation?

Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí Quinn  The Deputy did not specify any company in his question. If he wishes to put down a question about that I will be happy to answer it.

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael 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?

[1701]Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí 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: Information on Martin Cullen  Zoom on Martin 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: Information on Ruairí Quinn  Zoom on Ruairí 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: Information on Martin Cullen  Zoom on Martin 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.

[1702]Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí 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: Information on Mary O'Rourke  Zoom on Mary 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: Information on Ruairí Quinn  Zoom on Ruairí 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 [1703] 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: Information on Robert Molloy  Zoom on Robert 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: Information on Ruairí Quinn  Zoom on Ruairí 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. Molloy: Information on Robert Molloy  Zoom on Robert Molloy  Is the Minister saying there are circumstances in which the State will consider disposing of a commercial semi-State company or one of its subsidiaries in toto?

[1704]Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí Quinn  It would depend on the circumstances and the overall objective.

Mr. M. Ahern: Information on Michael Ahern  Zoom on Michael 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?

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  This is a very specific question with regard to Government policy which, if submitted to me for consideration on the Adjournment Debate this evening, will receive my attention.

Mr. M. Ahern: Information on Michael Ahern  Zoom on Michael Ahern  I am sure the Minister has the answer.

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  This question must be brought to finality.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie 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. Quinn: Information on Ruairí Quinn  Zoom on Ruairí Quinn  I do not have to remind the Deputy that, contrary to appearances, there is not a majority Labour Government. I am referring to Government policy.

Mr. Molloy: Information on Robert Molloy  Zoom on Robert Molloy  The policy has changed since last December.

Mr. McCreevy: Information on Charlie McCreevy  Zoom on Charlie McCreevy  And is changing.

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  Can we summarise by saying this Government will not privatise any semi-State company unless it decides that it will?

Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí Quinn  I have always admired the rhetorical skills of Deputy Michael McDowell.

[1705]Mr. Molloy: Information on Robert Molloy  Zoom on Robert Molloy  We are now witnessing a famous U-turn.

Mr. Callely: Information on Ivor Callely  Zoom on Ivor 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?

Mr. Quinn: Information on Ruairí Quinn  Zoom on Ruairí Quinn  It is Government policy to retain and maintain a majority shareholding.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  In all semi-State companies?

Mr. Molloy: Information on Robert Molloy  Zoom on Robert Molloy  Has the Minister approved the disposal of 100 per cent of the assets of Salmara Teoranta?

An Ceann Comhairle: Information on Seán Treacy  Zoom on Seán Treacy  That is a separate question.

Mr. Molloy: Information on Robert Molloy  Zoom on Robert Molloy  The Minister is shaking his head. This State company has been sold in toto.


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