Irish Steel Limited (Amendment) Bill, 1985: Second and Subsequent Stages.

Thursday, 19 December 1985

Seanad Eireann Debate
Vol. 110 No. 10

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Question proposed: “That the Bill be now read a Second Time.”

Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton): Information on John Bruton  Zoom on John Bruton  In July this year the Government decided to provide up to £6 million to Irish Steel in the period to December 1985 on condition that the company's employees accepted the board's proposals for a rationalisation package to reduce the company's operating costs. The rationalisation package involved: a pay freeze to the end of 1986; a redundancy scheme which would have the effect of reducing the company's labour costs by at least 10 per cent and the elimination of restrictive practices.

The Government deferred a decision until the end of the year on whether to [1082] invest the balance of the £24 million for which the approval of the European Commission had been sought.

Despite the very obvious difficulties which the rationalisation measures and, in particular the redundancies, posed for the company's employees, I am pleased that they were accepted. 117 redundancies were subsequently identified by the company and nearly all of these have now been effected. The realism and co-operation displayed by the employees in accepting the measures put forward by the board augur well for the future of the company. This is not to say that the company's problems have been solved once and for all. Indeed, one could say that the first major step has been taken. However, in order to ensure its long term future, Irish Steel will have to continue to improve its efficiency and productivity and to reduce its costs.

Following the acceptance by the workforce of the rationalisation package, the Government invested £6 million in Irish Steel in the period September-November 1985, £1m by way of share capital under the Irish Steel Limited Acts, 1960-1984, and £5 million by way of grant, paid from a Supplementary Estimate passed by Dáil Éireann on 10 July 1985.

The purpose of the Bill is: (i) to increase the authorised share capital of Irish Steel Limited from £120 million to £125 million; (ii) to provide, as a consequence, a similar increase in the value of the shares which the Minister for Finance may take up; (iii) to reduce the limit to which the Minister may guarantee borrowings by Irish Steel from £100 million to £32 million; and (iv) to enable the Minister for Finance to advance up to £18 million to the company from the Central Fund.

Senators will be aware that under Community rules governing State aid to steel undertakings, no operating or investment aid may be paid after 1985. I must make it clear that this precludes the guaranteeing by member states of any future borrowings. There must be no misunderstanding about the position. After this year Irish Steel will have to operate without any further financial assistance [1083] from the Government. Accordingly, the statutory limit to which the Minister may guarantee borrowings by Irish Steel will be reduced to bring it into line with existing guaranteed borrowings. I should explain that £68 million of the £89 million aid package invested in 1984 was used to reduce the company's borrowings. This accounts for the proposed reduction, from £100 million to £32 million in the level of guaranteed borrowings.

The additional £18 million will be provided to Irish Steel in the form of an advance from the Central Fund. Certain conditions are being attached to this advance which could not be done if the investment was by way of additional equity. For instance, the Exchequer will be able to recoup all or part of these funds in due course. I should stress that there is no set time for the repayment of the advance and that any demand for repayment will take account of the company's financial position at the time and its ability to make a repayment. Given the vast investment which the Government has already made in the company, it is only reasonable that Irish Steel should repay part or all of the £18 million to the Exchequer when the company's financial position so permits. As I indicated to the Dail, the £5 million already paid to Irish Steel under the Supplementary Estimate will be converted into share capital following the enactment of this Bill.

The additional £18 million will be used by the company to repay one of its State guaranteed loans. This will reduce the Exchequer's exposure. The funds will also be used to meet the increased working capital requirements which will arise as the company continues to increase its level of output and to cover capital expenditure items.

In taking its decision to invest a further £18 million in Irish Steel, the Government took into account several factors, including the acceptance by the Irish Steel employees of the company's rationalisation measures, a modest recovery in steel prices in 1985, a reduction in scrap prices since March, and the prospect that Irish Steel could secure its long term [1084] future and make some return over time on the Exchequer's investment in the company.

Nevertheless, the House should be under no illusion about the harsh reality of the task ahead. The Community steel market and, indeed, the world steel market, are still quite depressed and the outlook is not very encouraging. The European Commission estimates that there is still approximately 25 million tonnes excess steel production capacity in the Community, notwithstanding the fact that production capacity was reduced by some 28 million tonnes between 1980 and mid-1985. The crisis affecting the steel industry and the restructuring measures to deal with it are continuing to give rise to redundancies. Between 1980 and mid-1985 the Community steel industry reduced its workforce by 163,000, that is a reduction of over 27 per cent. In its document General Objectives Steel 1990, the Commission cautions that forecasting employment in the iron and steel industry in 1990 is hazardous owing to the many factors to be taken into consideration. Nevertheless, the Commission considers that employment in the steel industry in the five year period to 1990 will suffer further severe cutbacks.

The recent redundancies in Irish Steel must be seen in this context. They were essential for the survival of the company. In saying this I am not detracting in any way from the very real difficulties for the people concerned and their families. I made a formal application to the Commission for ECSC funding to assist the redundant employees. I am hopeful that the Commission will take a positive decision on the application in the very near future.

Senators may be aware that the Council of the European Communities has accepted the need to return, as soon as possible and in an orderly manner, to a market situation in which steel undertakings compete freely. This will involve the gradual dismantling of the production and delivery quota system. As a first step, it has been decided to remove the reinforcing bar, which is one of Irish Steel's products, and coated sheet from the [1085] quota system with effect from 1 January 1986. Depending on the market situation, the Commission intends to put forward other proposals before the end of 1986 for the further liberalisation of the quota system. The effect on the market of the removal of products from the quota system will be monitored on an ongoing basis and quotas may be reintroduced if the market becomes disrupted.

I have already indicated to the Dáil that scrap prices in the Community rose sharply in 1984 and in early 1985. This of course was bad for Irish Steel. This was due largely to a rise in the value of the US dollar and increased exports from the Community to third countries. As scrap accounts for a substantial portion of the cost of finished steel, any major development in the price of this basic raw material impacts quite significantly on Irish Steel's financial results. The price of scrap has an effect on some steel plants but not on all. Irish Steel is what is known as a mini-mill and is using scrap as its raw material. There are other continuous rolling mills which are using essentially iron generated within the same complex. They are buying iron on the home market and they are insulated against fluctuations in scrap prices, whereas Irish Steel is very sensitive to it as are other minimills. This is the relevance of these developments. Between March and November 1985, however, the scrap composite price, which is fixed in US currency, fell by about US $18 per tonne, a reduction of almost 21 per cent, reversing the previous trend. Scrap prices in other currencies have also declined significantly since March 1985. Although recent trends in prices are encouraging, it is not possible to predict with any degree of certainty how prices will develop in the future. What is certain, however, is that seasonal fluctuations will occur during the course of each year. In an effort to reduce operating costs I understand that Irish Steel is examining ways and means of using scrap in the most efficient manner possible.

For some months now the company's chairman and chief executive have had discussions, on my instructions, with potential joint venture partners. I have [1086] asked the company's chairman to continue to search for a partner. I would add that the Government's commitment to support Irish Steel with additional investment will improve the company's prospect of finding a potential partner.

I will now digress from the script and stress that the finding of a joint venture partner is extremely important to Irish Steel. The amount of equity that the Government is putting in at this stage is the maximum that is permitted under the European currency rules and it can put in no more. However, even with all that equity going in Irish Steel has still got far too heavy a load of borrowing. That means of course that they have far too heavy a load of interest which they have to meet at a regular period out of current revenue. If Irish Steel is to get itself back into a situation where it is really able to compete effectively and have a good chance of survival, it makes sense to use every possible means to bring in other equity that will reduce the borrowing — substituting perhaps cash in hands for cash borrowed from the banks.

That is why I have been encouraging Irish Steel to go out and get a venture partner. It is not because I am keen to sell off shares in Irish Steel for some reason of political principle which might engender a lot of heated and not enlightening debate, but because I want to guarantee, as far as it is within my power to guarantee, the survival prospects of the plant. The more equity we can get in the better is the chance that Irish Steel will not run into difficulties in the future. If at any time in the future, let us say three or four years from now, Irish Steel were to get into financial difficulties — in other words, that the amount of their outgoings exceeded to an undue degree the amount of their incomings and the banks were not prepared to bridge the gap without the benefit of a State guarantee — there is precisely nothing that you in this House or we in the Dáil could do about it because we would be precluded by EC rules from giving them any aid and it would just have to close. If, on the other hand, we could get equity from outside [1087] that would make it easier for the company to weather such a storm because it would be a company that would have a stronger equity base. It is in that context that I have been asking the company to look for a joint venture partner.

I am very glad to say that the chairman of the company in particular, Mr. Kevin McCourt, has devoted prodigious efforts to travelling all over the world to meet potential joint venture partners. No negotiations have been opened up with any of them at this point. The discussions are purely exploratory and the drafting of a negotiating brief or provision in legislation — if such were necessary, which it may not be — for shares to be transferred is something that is quite a distance down the road if it ever does occur. We are taking preliminary steps to do everything possible to enable this company to survive on a viable footing. It is an efficient mill in technical terms. It is one of the most modern in Europe. It is, as I said in an earlier interruption of my script, sensitive to variations in scrap prices in a fashion that some other mills are not. That is really the main point that I want to make in support of a joint venture: that a mill which is sensitive to external variables such as movements in scrap prices should have a stronger equity base to enable it to weather such storms than perhaps a mill which is relatively more impervious to outside variables.

The House will appreciate from what I have already said that the path ahead for Irish Steel will be far from easy. The future is full of uncertainties and it would be unrealistic to expect a dramatic improvement in the steel market in the foreseeable future. The surplus production capacity in Europe, combined with the liberalisation of the quota system, may well put a downward pressure on prices. The behaviour of exchange rates and, in particular, changes in the dollar rate can have a substantial impact on results, either in a favourable or in an unfavourable way. Irrespective of these and other uncertainties, Irish Steel will have to make significant efforts to [1088] increase its productivity and competitiveness.

I would also say that it is not in our interests — on the other hand, the quota system may keep prices up — or Irish Steel's interest to maintain a restrictive quota system because we are a small operator trying to break into the market. The tendency of the quota system would be to support the position of the large existing producers. As long as Irish Steel's financial situation is sound — and that is the relevance of this equity — it is better off in a relatively free steel market where it can make additional efforts in this regard.

Progress has already been made in the area of more flexible working practices. In addition, other improved working methods and procedures have been identified and the board and management are examining ways of achieving potential savings in all areas of the company's operation. The measures already taken and those in train are a good start but much more remains to be done. Maximum efficiency must be realised and costs must be cut to the minimum. There are no substitutes for efficiency and competitiveness.

In conclusion, I would make an earnest appeal to Irish Steel employees to give their total commitment and co-operation to the company so as to ensure that all the measures necessary to secure the future of Irish Steel are implemented without delay. Irish Steel's employees should remember at all times that the Government has sustained the company over many years at considerable cost to the taxpayer. The future of the company now rests with the board, the management and the workforce. I am of the view that, if the essential commitment and co-operation are readily forthcoming, the company can indeed have a long term future.

I am confident that the Bill will commend itself to the Seanad and I recommend it for approval.

Mr. E. Ryan: Information on Eoin David Senior Ryan  Zoom on Eoin David Senior Ryan  I think I can give a guarded welcome to this Bill. I say welcome, because I think Irish Steel does [1089] deserve what amounts really to a last chance of establishing itself satisfactorily. On the one hand one cannot with any enthusiasm agree to investing further amounts of this kind into a State-sponsored body the future of which is very problematical indeed. But on the other hand the amount that is proposed, although very large in its own way, is certainly limited now. It is considerably less than we were asked to give in the past. We know that there is not going to be any further funds to this company. Certainly it appears that this will be the last time we will be asked to give any funds to this body. For these reasons we can give a guarded welcome to it and hope that this will ensure that the company will not only survive but in due course be very successful.

I am glad to hear the Minister telling us that every effort is being made to find some partner for Irish Steel. That would be an excellent idea from the financial point of view and also excellent because that kind of partnership should strengthen the base of the company and establish contacts which should go a long way towards ensuring that the company would be successful in the future. That is an aspect of the situation which makes me more willing to welcome the proposals before us because this may be a development which will take some of the pressure off Irish Steel which, even with the help of these additional funds, would be very intense indeed if there was not some other development of the kind mentioned.

Irish Steel has gone through a great deal of vicissitudes and problems and I think that generally speaking it can be said that world conditions and the lack of demand for steel is the principal reason for its failure to make money up to now. While there were other problems of having too large a staff, work practices and so on, these have now nearly all been dealt with and a tremendous effort has been made to make Irish Steel a businesslike company. The existing management have done a great deal to ensure that it is as efficient as possible. On the other hand, great sacrifices have been made. [1090] Many people have been made redundant. Unions and workforce agreed to these redundancies. This was a considerable sacrifice and tribute must be paid to them for making these sacrifices to enable the company to survive. This is a very interesting case of a company which has been given a last chance. The moment of truth has come for Irish Steel. They are getting extra money. They have very largely put their house in order and now they must in the years ahead show that they are capable of discharging their obligations successfully and of showing that the money which has been put into it up to now was in all the circumstances well spent. It is, as I said, the moment of truth. They have made every possible effort and the State has certainly given everything they could be expected to give from a financial point of view to ensure its success in the future. At this stage all we can do is wish the company well.

Mr. Magner: Information on Patrick Magner  Zoom on Patrick Magner  Not too many months ago ——

Acting Chairman:  Senator O'Leary has indicated that he wants to speak.

Mr. O'Leary: Information on Sean A OLeary  Zoom on Sean A OLeary  Fine Gael have 26 Members in the House. I thought a member of the party would have been called next to speak.

Acting Chairman:  The practice would be to call a Labour Senator at this point.

Mr. O'Leary: Information on Sean A OLeary  Zoom on Sean A OLeary  On what basis?

Acting Chairman:  I will discuss it privately with the Senator afterwards but Senator O'Leary did not indicate to me that he wanted to speak; Senator Magner did.

Mr. O'Leary: Information on Sean A OLeary  Zoom on Sean A OLeary  I did indicate. That is no way to treat the largest party in this House.

Mr. Magner: Information on Patrick Magner  Zoom on Patrick Magner  It is not so many months ago that the trauma of Irish Steel in relation to Cork was a very live issue. On that occasion the pressure on the Government [1091] and on the various TDs and Senators in the Cork area was immense. The local newspapers took a view that the Minister was being bloodyminded on the one hand and, in fact, its editorial was changed from week to week. One week you would be charged with financial rectitude of a very high order and the following week you were so uncaring and unthinking and did not give a damn about people when you would not give X number of million pounds to an industry. I sincerely hope the Minister's statement today and some of the contributions in this House will be reported by the same newspaper so that we achieve some balance in the Cork region.

The employment level in Irish Steel a number of years ago was 1,100 people. It now stands at 535 and that includes management. Sacrifices have been made right across the board by the workers and management to achieve savings in almost every area. I understand that — perhaps the Minister would enlighten me — a consultant's report has been furnished to the Minister which looked into the effectiveness of the management structure and the purchasing and marketing strategy in Irish Steel, and I understand that that report is with the Minister. I suggest to the Minister that it would be in keeping with the new spirit in Irish Steel if the contents of that report — bearing in mind the need for commercial confidentiality and so on, that is the information I received this morning, it may be erroneous — are still to arrive I am urging the Minister that such a report should be made available on a confidential basis to the trade union representatives. It is usually very late in the day when management wishes to share a burden with the trade unions, it is usually at the 11th hour. As I understand it, this report is either completed or in the course of completion and I urge the Minister to involve the trade unions in any examination of that report. In that way we would guarantee that the spirit of realism and co-operation that exists in Irish Steel at the moment would be continued into the future.

[1092] The current information on Irish Steel is that the production levels are up, the sales books for 1986 look exceedingly healthy and that they are hopeful that 1986 and onwards will be good enough to enable Irish Steel to remain. I do not think anybody — certainly not the unions involved in Irish Steel — is under any illusion whatsoever in relation to what the Minister has said here this morning. They know full well it is the last throw of the dice. My concern in the main is that The Cork Examiner made that point. If the price of scrap, because of the value of the dollar, goes through the roof we will hear the same false cries applying pressure on us to spend taxpayers' money. They will lacerate us for doing so the following week. I hope that schizophrenic type of reporting by a powerful newspaper having almost a monopoly in the Cork area will be taken into account. All of the allegations made against the Minister personally at the time were not borne out by subsequent events and it is fair to say that.

There was an attempt to divide both parties in Government on the basis of an ideological split between the Minister particularly and the Labour Party. I think the Minister would be the last person to deny that we would not share every aspect of ideology on economic issues. That is not to say that the Minister, Deputy Bruton, does not share fully and comprehend fully the trauma of job losses in any industry whether they be in the State or private sector. One of the main reasons I spoke here today was to point out the lack of balance in the reporting that occurred right throughout the whole Irish Steel saga in the last few months and to hope that the moneys that are being voted on here and the Minister's explanation with regard to the final throw of the dice will be understood. The workers understand it because I have talked to their union officials. I am quite sure the management understand it, but in a democracy it is vitally important that the media and the print medium in particular would play the game fairly by reporting accurately what the actual situation is instead of pandering to some of [1093] their customers in this case, which is what they were doing in the past.

I am sorry that Senator O'Leary felt compelled to take umbrage at the numbers game in the House. I intended to be very brief. I welcome the Bill. I sincerely hope that ten years from now Irish Steel will be still repaying some of the money lent to them. That is my wish for Christmas for the workers. I wish to congratulate the Minister on all his efforts and on the Government's efforts to try to achieve a solution to what was a number of months ago, a crisis situation.

Mr. Fitzsimons: Information on Jack Fitzsimons  Zoom on Jack Fitzsimons  I will be very brief indeed. Like Senator Ryan, I, too, offer a guarded welcome to the Bill. I am particularly involved in the area where steel is used in the building industry, which is very important. Indeed I must be one of the few Members of the House who visited the Irish Steel works in Haulbowline on a number of occasions. I was part of a design team on a reinforced concrete ordnance jetty in Haulbowline. I saw at first hand, the works in progress there. I know that in the building industry generally steel is very important. The building industry, of course, is going through a bad patch at the moment. In this area perhaps more use of steel could be made, for example in foundations, footings. It could be considered mandatory to use reinforcement and indeed in modular-type buildings, which in the future will perhaps become more or less the norm, I am sure steel will become very important and therefore it is essential that we would have our own industry in this country. As Members have said, nearly everything that could be done to rationalise Irish Steel has been done. As Senator Magner has said this is the last throw of the dice and we all hope that it will be a success.

I simply want to welcome the Bill in so far as it may contribute to that success — and I believe that it will — and also to say to the Minister that perhaps promoting the wider use of steel might be considered by including in the standard specifications of the Department of the Environment and in all the Department specifications, a provision that the use of [1094] steel would be mandatory. It would in the short term mean a small increase on each individual building, but in the long run I believe it would contribute to the success of Irish Steel. I think it would be worth considering. With those few words I once again welcome the Bill.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  I also welcome the Bill. Within the last 18 months no other concern has got more approvals for extra moneys in this House than did Irish Steel. That has to be made clear. Indeed might I take the opportunity as a Cork man to thank the Minister involved? Over the last few months he personally got a lot of abuse about whether he was doing the right thing for Irish Steel. We would have to commend, not the management on their ideas over the years in Irish Steel, but certainly the getting together of the employees and the management over the last few months and the putting of their act together, and showing for the first time in the months of October and November that things were looking some way better in Irish Steel.

The Minister has come out very strongly with the idea that there is need for a joint venture in Irish Steel. It is only right and proper to say that if a joint venture idea can be set up, it would only be to the delight of everybody, and of course, the taxpayers of Ireland.

Could I just repeat a point I brought up on the last occasion when we were discussing Irish Steel, the question of creating shares employees? In view of all the money that has gone into Irish Steel from the taxpayer over the last few years — £89 million the first day, £12 million last year and £24 million again this year — could we not now be saying, that if we are seen to be putting our act together and if the employees, management and trade unions and everybody involved are now agreeing that there is a future for Irish Steel, they should put their money where their mouth is? The State perhaps should say that for the first time ever we are prepared to recognise the importance of the employees and indeed management, and suggest that a percentage of pay per week be asked from the [1095] employees and staff. It is unfortunate that we must distinguish between the staff and employees.

Is it possible or realistic to think that we now can be asking that shares be allocated to employees if they wish to purchase? You could put the argument to wives of employees, that in actual fact if you had shares in the company you work for, there might be a more realistic view taken by the husbands. Unfortunately, over the last few years, we did not have the greatest co-operation or the greatest thinking by work forces throughout the country. There is an opportunity now to prove what can be done if the State is prepared to give the opportunity to the employees of investing in their own company and emphasising in a short statement what is envisaged. As an example, if you have 500 employees in Irish Steel and you get an average of £10 per week from each employee, you are talking about £50,000 per week. You are talking about a lot of money in the end of the year to put against the interest. If that is pointed out and what it means over the years to the company it might be a life-saver. If you are trying to create a joint venture idea between somebody in the private sector and the State as regards Irish Steel, you have a better argument to make if all the employees, or the vast majority of them, hold shares in the company. It is quite obvious it is going to work.

I have seen this work in the Cork area with other private companies. The employees of that company were offered the shares on a very small basis for a minimum amount per week — the shares were worth much more — and the company found that to have their employees involved in managing the company produces better results for everybody concerned. When one listens to the employees — and they are the people I would mostly be listening to — one finds that for a worker to have a share in his work and have an interest in it, creates a lot of extra dedication.

Now Irish Steel more than ever want this interest by all. For far too long — I [1096] have already mentioned this — arguments and fighting were carried on by different groups down there for their own particular gain or indeed for individual gain. Only in the last few weeks, there was a situation there in which, even though the redundancies were agreed and the rationalisation plan was agreed, one person was going to stop the plant. There was a picket going on because of one person. How unrealistic can you be? That is a fact of life. I am glad to say it turned out otherwise, because of pressure put on by other unions and by other employees. That kind of thing must stop. Share investment is an area where we might be seen to improve with joint venture.

Mr. Kelleher: Information on Peter Kelleher  Zoom on Peter Kelleher  I would like to say a few words on this Bill. As a Cork Senator I welcome the Bill which enables the Government to give further funding for the continuation of Irish Steel. It would be devastating for the economic life of the Cork region if anything should go wrong with this company, particularly when we had so many closures in the Cork region during the past year. Having said that, I understand the responsibility of the Minister for the proper utilisation of taxpayers' money and I believe that the Government have always been very conscious of this.

Under the new terms of reference laid down by the Minister for investment, I believe it is a good decision to invest a further £18 million, to increase the authorised share capital from £120 million to £125 million and to reduce the limit to which the Minister may guarantee borrowings by Irish Steel from £100 million to £32 million. I congratulate the workforce of Irish Steel because basically the future of Irish Steel was solely in their hands and they were responsible enough to comply with the recommendations laid down by the Minister to enable him to make this investment.

As we are aware, there is a surplus of steel supplies and overproduction in the EC and a special case had to be made to Europe to allow this investment to be made. The rationalisation programme had to be part of this package. For that [1097] reason I welcome the decision taken by the workforce to reduce the staff by 117 people to enable Irish Steel to become competitive. It was important that the reduction in the labour force took place. Also a pay freeze for 1986 had to be introduced. It is hoped that the subsidy from EC funds for those made redundant will become available. I am sure that the Minister will do everything in his power to achieve this.

The threat of closure of Irish Steel has now gone, but it is worth remembering that the future will be difficult and will require a lot of commitment by management and workers to make a success of Irish Steel. The Government have stated that this company must become financially viable in the immediate future. The investment this year will now amount to £25 million, which is a sign that the Government have a commitment to Irish Steel and to the Cork region. Obviously, they expect a good return on this investment. Irish Steel, for its part, must continue to increase its volume of sales, reduce production costs and obtain realistic prices for its products. This will not be easy, particularly since the international steel market remains depressed and when many producers in the European Community are being compelled to reduce their production capacity because of the imbalance between supply and demand.

There will not be any further funding from the Exchequer for Irish Steel and the company will have to finance operations from now onwards in the normal commercial manner. Under EC rules no more money may be made available. The success of the company now rests with the management and the workforce. I believe that all concerned are fully aware of this and during the past year the volume of sales increased by 56 per cent and the value of exports is 64 per cent of total sales. The year ahead, however, will be decisive. There is a vital need to improve performance, to contain costs and in general to build on the progress achieved since the commissioning of the new plant in 1981. I am satisfied that this can be achieved. Irish Steel have the plant [1098] and the skills and have now been given the opportunity. It will require a supreme, sustained effort to ensure its success. In the end success or failure lies with the performance of the management, the board and the workforce.

Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton): Information on John Bruton  Zoom on John Bruton  I would like to thank the Senators for the welcome they have given to this legislation. I note the reservations that have been expressed on all sides of the House about giving more taxpayers' money to the company, given that it has already received a lot. The only point I would make — and it may in some way assuage the worries of Senator Ryan and others — is that a good part of this money is being used to repay debts owed by Irish Steel which are guaranteed by the taxpayer anyway. If Irish Steel where to close — God forbid — the money which we are now paying over would have to be paid over anyway. In respect of a good portion of the money, what we are giving essentially is not the money, because that money is due from us in some form ultimately, but we are essentially taking over the interest charges on it whereas the company, if it does not get the money from us and it is merely a guaranteed debt, is paying the interest. When we pay them equity we take over the interest and this has to be met out of the public sector borrowing requirement in respect of interest charges. That is the situation.

I would like to express strong agreement with the principle put forward by Senator Denis Cregan in regard to the notion of the workers in Irish Steel buying shares in the company on a basis that would be suitable, given their income situation. Clearly, every possible avenue must be pursued to bring additional equity into the company. There is no doubt that equity brought in in that way would have the benefit that it would improve further the working atmosphere of the company and would represent, as Senator Cregan suggested a valuable attraction for a joint venture partner. In view of what Senator Cregan has said, I intend in the next few days to write to [1099] the company asking them to consider carefully, with my strong favourable recommendation, the suggestion made by Senator Cregan. I think it is a valuable one and it certainly will, if it is successful, contribute to the future of the company. I thank the Senator for his suggestion.

I took note of what Senator Fitzsimons, my county colleague, had to say about the greater use of steel in the construction industry. I will, of course, discuss that with the Minister for the Environment. However, I have to say that Irish Steel is not producing all the possible types of steel that are used in the construction industry. It would be difficult, without being open to the accusation of discrimination, to prescribe steel solely in respect of those uses which Irish Steel could meet and not prescribe it in other uses in the industry. In the final analysis anything which increases the cost of building unnecessarily is bad for the construction industry.

Mr. Fitzsimons: Information on Jack Fitzsimons  Zoom on Jack Fitzsimons  It prolongs the life of the building.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That depends on the technical considerations. To the extent that it would prolong the life of the building that would be valuable. You have to weigh at all times the value of the prolongation of the life of the building against the cost, which reduces the total number of buildings that you can build and the total number you can employ.

Mr. Fitzsimons: Information on Jack Fitzsimons  Zoom on Jack Fitzsimons  Of course, in the case of modular buildings we are reducing the price anyway.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I was replying to the Senator in the context of conventional buildings. As far as modular buildings are concerned, that is a different situation entirely. In that situation steel would not need to be specified. I imagine it would tend to be used anyway without any incentive being provided because of the intrinsic merits of the materials.

I welcome what Senator Magner had to say in my own regard and agree with [1100] him that there has been a tendency for schizophrenic comment to be made on this matter in certain media. I would not intend to interfere with the board in regard to what they decide to do with any studies they have received. It is a matter for them to decide if it is appropriate or not that certain consultancy material should be released to the workforce. I have no doubt but that the board will be perusing this debate and will note Senator Magner's concern on this issue. I thank Senator Kelleher also for his contribution. It is fair to say that he is in full support of what we are doing.

Question put and agreed to.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  I understand that there is agreement with the other side of the House that, if there were any amendments to be made, we would take the other Stages later in the day. Do they wish all Stages to go through now?

An Leas-Chathaoirleach:  Are there amendments?

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  As there are not, we would like all Stages to be taken today.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for Final Consideration and passed.

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